Document:

Exhibit 10.2

 

FORM OF

 

TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

HUNTSMAN CORPORATION

 

AND

 

VENATOR MATERIALS PLC

 

DATED AS OF [·], 2017

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
Page No.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article I
    	
 
    	
DEFINITIONS
    	
 
    	
1
    
	
Section 1.1
    	
 
    	
Definitions
    	
 
    	
1
    
	
Section 1.2
    	
 
    	
Interpretation
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article II
    	
 
    	
SERVICES
    	
 
    	
6
    
	
Section 2.1
    	
 
    	
Services
    	
 
    	
6
    
	
Section 2.2
    	
 
    	
Additional Services
    	
 
    	
6
    
	
Section 2.3
    	
 
    	
Service Providers
    	
 
    	
6
    
	
Section 2.4
    	
 
    	
Cooperation and Service Coordinators
    	
 
    	
8
    
	
Section 2.5
    	
 
    	
Local Agreements
    	
 
    	
9
    
	
Section 2.6
    	
 
    	
Service Boundaries and Scope
    	
 
    	
9
    
	
Section 2.7
    	
 
    	
Standard of Performance; Limitation of Liability
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article III
    	
 
    	
SERVICE CHARGES
    	
 
    	
13
    
	
Section 3.1
    	
 
    	
Compensation
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article IV
    	
 
    	
PAYMENT
    	
 
    	
14
    
	
Section 4.1
    	
 
    	
Payment
    	
 
    	
14
    
	
Section 4.2
    	
 
    	
Payment Disputes
    	
 
    	
15
    
	
Section 4.3
    	
 
    	
Review of Charges; Error Correction
    	
 
    	
15
    
	
Section 4.4
    	
 
    	
Taxes
    	
 
    	
16
    
	
Section 4.5
    	
 
    	
Records
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article V
    	
 
    	
TERM
    	
 
    	
16
    
	
Section 5.1
    	
 
    	
Term
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article VI
    	
 
    	
DISCONTINUATION OF SERVICES
    	
 
    	
17
    
	
Section 6.1
    	
 
    	
Discontinuation or Termination of Services
    	
 
    	
17
    
	
Section 6.2
    	
 
    	
Procedures Upon Discontinuation or Termination of Services
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article VII
    	
 
    	
DEFAULT
    	
 
    	
18
    
	
Section 7.1
    	
 
    	
Termination for Default
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article VIII
    	
 
    	
INDEMNIFICATION, WAIVER AND INSURANCE
    	
 
    	
18
    
	
Section 8.1
    	
 
    	
Waiver of Consequential Damages
    	
 
    	
18
    
	
Section 8.2
    	
 
    	
Services Received
    	
 
    	
18
    
	
Section 8.3
    	
 
    	
Express Negligence
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article IX
    	
 
    	
CONFIDENTIALITY
    	
 
    	
19
    
	
Section 9.1
    	
 
    	
Confidentiality
    	
 
    	
19
    
	
Section 9.2
    	
 
    	
System Security
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article X
    	
 
    	
FORCE MAJEURE
    	
 
    	
20
    
	
Section 10.1
    	
 
    	
Performance Excused
    	
 
    	
20
    

 

i

 

	
Section 10.2
    	
 
    	
Notice
    	
 
    	
21
    
	
Section 10.3
    	
 
    	
Cooperation
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Article XI
    	
 
    	
MISCELLANEOUS
    	
 
    	
21
    
	
Section 11.1
    	
 
    	
Entire Agreement
    	
 
    	
21
    
	
Section 11.2
    	
 
    	
Binding Effect; No Third-Party Beneficiaries
    	
 
    	
21
    
	
Section 11.3
    	
 
    	
Amendment; Waivers
    	
 
    	
21
    
	
Section 11.4
    	
 
    	
Notices
    	
 
    	
22
    
	
Section 11.5
    	
 
    	
Counterparts
    	
 
    	
22
    
	
Section 11.6
    	
 
    	
Severability
    	
 
    	
22
    
	
Section 11.7
    	
 
    	
Governing Law
    	
 
    	
22
    
	
Section 11.8
    	
 
    	
Dispute Resolution
    	
 
    	
22
    
	
Section 11.9
    	
 
    	
Performance; Time of the Essense
    	
 
    	
23
    
	
Section 11.10
    	
 
    	
Relationship of Parties
    	
 
    	
23
    
	
Section 11.11
    	
 
    	
Regulations
    	
 
    	
24
    
	
Section 11.13
    	
 
    	
Assignment of Agreement
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exhibits
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exhibit A
    	
 
    	
FEE SCHEDULE
    	
 
    	
 
    
	
Exhibit [·]
    	
 
    	
[·]
    	
 
    	
 
    

 

ii

 

FORM OF TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT,  dated [·], 2017 (this “Agreement”), is by and between Huntsman Corporation, a Delaware corporation (“Huntsman”), and Venator Materials PLC, a public limited company incorporated and registered under the laws of England and Wales with company number 10747130 and a wholly owned indirect subsidiary of Huntsman (“Venator”).  Huntsman and Venator are sometimes referred to herein individually as a “Party,” and collectively as the “Parties.”

 

RECITALS

 

A.                                    The board of directors of Huntsman has determined that it is in the best interest of Huntsman and the Huntsman shareholders to separate the Venator Business from the other businesses conducted by Huntsman and its subsidiaries.

 

B.                                    In furtherance of this goal, Huntsman or its Subsidiary will make an offer and sale to the public of Ordinary Shares, which will take place pursuant to a registration statement on Form S-1 filed with the SEC (the “IPO”).

 

C.                                    The new company that is formed as part of the IPO is referred to as “Venator”; together with its Affiliates that are the result of the IPO, Venator is referred to as “Venator Group”.

 

D.                                    Huntsman and Venator have entered into a certain separation agreement as of the date hereof (the “Separation Agreement”).

 

E.                                     In order to ensure an orderly transition under the Separation Agreement, the Parties agree that it will be advisable for the Huntsman Group to provide to the Venator Group, and for the Venator Group to provide to the Huntsman Group, certain goods and services described herein for a transitional period.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.1                                    Definitions.  Unless otherwise defined in this Agreement, all capitalized terms used in this Agreement shall have the same meaning as in the Separation Agreement.  The following capitalized terms used in this Agreement shall have the meanings set forth below:

 

“2017 Operating Plan” means the 2017 budget and operating plan, based on the operating run-rate at the end of 2016 and excluding anticipated cost increases estimated for the operation of Venator Group on a stand-alone basis, as implemented by the Venator Group for purposes of managing and tracking expenditures for 2017.

 

“Additional Services” has the meaning set forth in Section 2.2.

 

 

“Accessing Party” has the meaning set forth in Section 9.2(a).

 

“Affiliate” means, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”), when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. From and after the Effective Date, (a) no member of the Venator Group shall be deemed to be an Affiliate of any member of the Huntsman Group and (b) no member of the Huntsman Group shall be deemed to be an Affiliate of any member of the Venator Group.

 

“Agreement” has the meaning set forth in the preamble.

 

“Business Day” means a day other than a Saturday, a Sunday or a day on which banking institutions located in the State of Texas are authorized or obligated by applicable Law or executive order to close.

 

“Direct Costs” means the sum of (a) an allocated portion of the fully burdened cost (including salary, hourly costs, or overtime costs and benefits) of Huntsman Group’s employees who provide the applicable Service, where such allocation is based upon the number of hours each such employee provides Services under this Agreement during the applicable month as reasonably estimated by Huntsman Group and previously communicated to and agreed by Venator Group, (b) actual out-of-pocket expenses of personnel performing the Services to the extent incurred in connection with providing Services (including travel, accommodations and meal expenses in accordance with the Huntsman Group’s policies), (c) the actual cost (without markup) of all materials, spare parts, tools, equipment, consumables and supplies of Huntsman Group (including freight, taxes or warehouse handling charges) that are associated with provision of the applicable Service (based upon the portion of time and to the extent used in providing such Services if not consumed entirely in providing such Services), (d) other actual out-of-pocket expenses that are incurred in connection with providing the Services, including any third party costs for express mail, long distance charges, facsimile charges, reproduction, postage, license fees and other similar third-party costs, and (e) taxes and all excise fees applicable to the Services or Fees (other than taxes based upon the net income or revenue of Huntsman Group).

 

“Dispute” has the meaning set forth in Section 11.8.

 

“Exhibits” means the Exhibits attached hereto.

 

“Force Majeure Event” has the meaning set forth in Section 10.1.

 

“Huntsman” has the meaning set forth in the preamble.

 

“Huntsman Group” means Huntsman and, to the extent related to the Services to be provided, its Affiliates (excluding, for the avoidance of doubt, Venator).

 

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“Initial Services” has the meaning set forth in Section 2.1.

 

“Person” means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

 

“Pigments and Additives Business” means the pigments and additives segment of Huntsman as described in Huntsman’s Annual Report on Form 10-K for the period ended December 31, 2016.

 

“Security Regulations” has the meaning set forth in Section 9.2(a).

 

“Separation Agreement” has the meaning set forth in the recitals.

 

“Service Coordinator” has the meaning set forth in Section 2.4(b).

 

“Service Provider” means any member of the Huntsman Group or the Venator Group, as applicable, when it is providing Services to any member of the other Party’s Group.

 

“Service Provider Group” means the Huntsman Group or the Venator Group, as applicable, when it is providing Services to any member of the other Party’s Group.

 

“Service Recipient” means any member of the Venator Group or the Huntsman Group, as applicable, when it is receiving Services from any member of the other Party’s Group.

 

“Service Recipient Group” means the Venator Group or the Huntsman Group, as applicable, when it is receiving Services from any member of the other Party’s Group.

 

“Services” means the Initial Services, the Supplemental Services, and any Additional Services agreed to by the Parties in accordance with Section 2.2.

 

“Signing Date” means the date that the Separation Agreement was entered into by the parties thereto.

 

“Subsidiary” or “subsidiary” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such Person, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

 

“Supplemental Services” has the meaning set forth in Section 2.1(b).

 

“Systems” has the meaning set forth in Section 9.2(a).

 

“Tax” has the meaning set forth in Section 4.5.

 

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“Third Party Costs” means any costs incurred by the Service Provider Group in providing the applicable Service that is paid to a Third Party Provider.

 

“Third Party License” has the meaning set forth in Section 2.7(b).

 

“Third Party Provider” means a third party that is not an Affiliate of the applicable Service Provider that the applicable Service Provider retains to provide any portion of the Services under this Agreement, including any consultants, agents, contractors or subcontractors.

 

“Venator” means Venator and each of its respective Subsidiaries.

 

“Venator Business” means (a) the business and operations that comprise the Pigments and Additives Business and activities and operations directly and primarily supporting such business and operations and (b) without limiting the foregoing clause (a) and except as otherwise provided in this Agreement, any other terminated, divested or discontinued businesses, Assets or operations that were of such a nature that they would be a part of the Pigments and Additives Business had they not been terminated, divested or discontinued.

 

“Venator Group” means Venator and, to the extent related to the Services to be provided, its Affiliates (excluding, for the avoidance of doubt, Huntsman or Huntsman’s Subsidiaries).

 

Section 1.2                                    Interpretation.  In this Agreement, unless the context clearly indicates otherwise:

 

(a)                                 words used in the singular include the plural and words used in the plural include the singular;

 

(b)                                 if a word or phrase is defined in this Agreement, its other grammatical forms, as used in this Agreement, shall have a corresponding meaning;

 

(c)                                  reference to any gender includes the other gender and the neuter;

 

(d)                                 the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”;

 

(e)                                  the words “shall” and “will” are used interchangeably and have the same meaning;

 

(f)                                   the word “or” shall have the inclusive meaning represented by the phrase “and/or”;

 

(g)                                  relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”;

 

(h)                                 all references to a specific time of day in this Agreement shall be based upon Central Standard Time or Central Daylight Savings Time, as applicable, on the date in question;

 

(i)                                     whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified;

 

4

 

(j)                                    accounting terms used herein shall have the meanings historically ascribed to them by Huntsman and its Subsidiaries, including Venator for this purpose, in its and their internal accounting and financial policies and procedures in effect immediately prior to the date of this Agreement;

 

(k)                                 reference to any article, section, or Exhibit means such article or section of, or such Exhibit to, this Agreement, as the case may be, and references in any section or definition to any clause means such clause of such section or definition;

 

(l)                                     the words “this Agreement,” “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular section or other provision of this Agreement;

 

(m)                             reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and not prohibited by this Agreement;

 

(n)                                 reference to any Law (including statutes and ordinances) means such Law (including any and all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;

 

(o)                                 references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; a reference to such Person’s “Affiliates” shall be deemed to mean such Person’s Affiliates following the IPO; and any reference to a third party shall be deemed to mean a Person who is not a Party or an Affiliate of a Party;

 

(p)                                 if there is any conflict between the provisions of the main body of this Agreement and the Exhibits hereto, the provisions of the main body of this Agreement shall control unless stated otherwise in such Exhibit;

 

(q)                                 unless otherwise specified in this Agreement, all references to dollar amounts herein shall be in respect of lawful currency of the U.S.;

 

(r)                                    the titles to articles and headings of sections contained in this Agreement, in any Exhibit and in the table of contents to this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement; and

 

(s)                                   any portion of this Agreement obligating a Party to take any action or refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to cause its relevant Affiliates to take such action or refrain from taking such action, as the case may be.

 

5

 

ARTICLE II
 SERVICES

 

Section 2.1                                    Services.

 

(a)                                 Upon the terms and subject to the conditions of this Agreement, the Parties agree to provide or to cause to be provided the services set forth in Exhibits [·] through [·] to the applicable member of the Venator Group or Huntsman Group, as applicable (collectively with the Supplemental Services described below, the “Initial Services”).

 

(b)                                 If, after the date hereof, either Party determines that the services described in the Exhibits do not fully or accurately reflect all the necessary services that were provided to the Venator Business by Huntsman, or were provided by the Venator Business to the Huntsman Group prior to the transaction or transactions that are the subject of the Separation Agreement and such services are not provided by any other agreement between any member of the Huntsman Group and any member of the Venator Group, then upon request by the Venator Group or Huntsman Group, as applicable, the other Party agrees to provide or cause their Affiliates to provide such services (the “Supplemental Services”) at charges that are consistent with the charges for similar services hereunder.

 

(c)                                  The Parties agree and acknowledge that the right to receive any Services (or portions thereof) may be assigned, allocated and/or contributed, in whole or in part, to any Affiliate(s) of a relevant Party.  To the extent so assigned, allocated and/or contributed, the relevant Affiliate shall be deemed the Service Recipient with respect to the relevant portion of such Services.

 

Section 2.2                                    Additional Services.  The Service Recipient may request additional transitional Services (the “Additional Services”) in addition to the Initial Services and the Supplemental Services from the Service Provider by providing written notice.  The Service Provider shall use commercially reasonable efforts to accommodate such request; it being understood, however, that the Service Provider shall not be required to provide any Additional Services if the Parties are unable to reach agreement on the terms thereof.  Upon the mutual written agreement as to the nature, cost, duration and scope of such Additional Services, the Parties shall supplement in writing the Exhibits hereto to include such Additional Services.  A Service Provider’s obligations with respect to providing any such Additional Services shall become effective only upon a new Exhibit or an amendment to an existing Exhibit being duly executed by the Parties as provided in the preceding sentence.

 

Section 2.3                                    Service Providers.

 

(a)                                 Subject to Section 2.3(b), the Service Provider shall have the right (i) to provide the Services either directly and/or through its Affiliates and their respective employees, agents, contractors or Third Party Providers designated by any of them and (ii) to select the particular personnel and working hours of such personnel in providing the Services; provided that any provision of services through contractors or Third Party Providers shall not relieve the Service Provider of its obligations under this Agreement and shall not affect the service charges for such

 

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Services or materially decrease the quality or level of the Services provided to the Service Recipient.

 

(b)                                 The Service Provider may determine, in its reasonable discretion, which of its or its Affiliates’ employees, agents, contractors or third parties will provide the applicable Services; provided that the Service Provider shall consult with the Service Recipient and take into consideration any reasonable requests of the Service Recipient in making such determinations.  Without limiting the above and the provisions of Section 2.6(a), the Service Provider shall take into consideration the following in making its determination in this regard:

 

(i)                                     The Service Provider shall consult in good faith with the Service Recipient regarding the proposed hiring of any Third Party Provider that has not previously been involved in the activities relating to such Service prior to the IPO; provided that, in the event that the Service Provider intends to subcontract a material portion of any of the Services set forth in one or more of the Exhibits hereto where such subcontracting is inconsistent with the practice applied by the Service Provider generally from time to time within its own organization, the Service Provider shall give notice to the Service Recipient of its intent to subcontract any portion of the Services and the Service Recipient shall have 20 days (or such lesser period set forth in the notice as may be practicable in the event of exigent circumstances) to determine, in its sole discretion, whether to permit such subcontracting or whether to cancel such Service in accordance with Article VI hereof.  If the Service Recipient opts to cancel a Service pursuant to the proviso of the immediately preceding sentence, it shall not be liable to the Service Provider pursuant to Section 6.1 for any costs or expenses the Service Provider or any member of the Service Provider Group remains obligated to pay to the third-party subcontractor identified in the notice provided by the Service Provider as described above.  The Service Provider shall not be required to give notice of its intent to subcontract Services to any Third Party Provider currently providing such Services to the Service Recipient, nor shall the Service Recipient have any right to cancel any Service subcontracted to any such listed party without paying for any termination fees caused by such termination (provided that this sentence shall not prevent the Service Recipient from cancelling any Service pursuant to Section 6.1), and the Parties agree that any such Third Party Providers are capable of providing a quality or level of Services comparable to that provided by the Service Provider.

 

(ii)                                  Except as provided on any Exhibit, the Service Provider shall take into consideration any reasonable requests of the Service Recipient with regard to attempting to maintain as much continuity of personnel or representatives that provide any of the applicable Services as is reasonably practicable; provided that the Service Provider will retain the right to determine which personnel or representatives will provide the Services in its reasonable discretion taking into consideration any of its competing needs and requirements for its businesses.  Each Service Provider shall be solely responsible for the payment of all benefits and any other direct and indirect compensation for such Service Provider personnel assigned to perform Services for it under this Agreement, as well as such personnel’s worker’s compensation insurance, employment taxes, and other employer liabilities relating to such personnel as required by Law.

 

(c)                                  Unless expressly provided otherwise in this Agreement, although the Service Provider will direct the performance of its employees and contractors and will consult and advise

 

7

 

with the Service Recipient regarding the performance of the Services in accordance with this Agreement, the Service Recipient will be responsible for decision-making on behalf of any member of the Service Recipient Group. Furthermore, nothing in this Agreement shall provide the Service Provider, or its employees and contractors that are performing the Services, the right directly or indirectly to control or direct the operations of the Service Recipient Group.  Such employees and contractors shall not be required to report to management of any member of the Service Recipient Group nor be deemed to be under the management or direction of any member of the Service Recipient Group. The Service Recipient acknowledges and agrees that, except as may be expressly set forth herein as a Service (including any Additional Services provided in accordance with Section 2.2) or otherwise expressly set forth in the Separation Agreement or an Ancillary Agreement, no member of the Service Provider Group shall be obligated to provide, or cause to be provided, any service or goods to any member of the Service Recipient Group.

 

Section 2.4                                    Cooperation and Service Coordinators.

 

(a)                                 Subject to the confidentiality provisions set forth in Article IX, during the term of this Agreement and for so long as any Services are being provided to the Service Recipient Group under this Agreement, the Service Recipient will provide the Service Provider and its authorized representatives reasonable access, during regular business hours and upon reasonable notice, to the Service Recipient Group and their employees, representatives, facilities and books and records, as the Service Provider and its representatives may reasonably require in order to perform such Services.

 

(b)                                 Each Party shall select in writing a representative to act as the primary contact with respect to the provision of the Services and the resolution of disputes under this Agreement (each such person, a “Service Coordinator”). The initial Service Coordinators shall be Sean Douglas, for Huntsman, and Rob Portsmouth, for Venator.  The Service Coordinators shall meet as expeditiously as possible to resolve any dispute arising hereunder; and any dispute that is not resolved by the Service Coordinators within 45 days shall be resolved in accordance with the dispute resolution procedures set forth in Section 11.8 of this Agreement.  Each Party may treat an act of a Service Coordinator of the other Party which is consistent with the provisions of this Agreement as being authorized by such other Party without inquiring behind such act or ascertaining whether such Service Coordinator had authority to so act; provided, however, that no such Service Coordinator shall have authority to amend this Agreement.  Each Party shall advise each other promptly (in any case within no more than three Business Days) in writing of any change in their respective Service Coordinators, setting forth the name of the replacement, and stating that the replacement Service Coordinator is authorized to act for such Party in accordance with this Section 2.4(b).  In addition, the Parties may select service coordinators for individual Services, which shall be set forth in the applicable Exhibit for such Services.

 

(c)                                  In addition to the Service Coordinators described above, each Party will nominate its representatives for the Services provided under each Exhibit (each a “Service Representative”), which representatives shall act as the principal contact person with respect to all issues relating to the provision of such particular Services.  The Service Representatives for such Services shall hold regular review meetings by telephone or in person, at times to be mutually agreed, to discuss any issues relating to any Service for which they are a Service Representative (“Review Meetings”).  In the Review Meetings, such Service Representatives

 

8

 

shall be responsible for discussing any problems identified with the provision of the relevant Services and, to the extent changes in the provision of the Services are agreed upon by the Parties, for the implementation of such changes.  Any unresolved issues should be referred to the Service Coordinators for resolution.

 

(d)                                 The Service Provider will devote such time and personnel as is reasonably necessary to carry out its obligations under this Agreement.  The Service Provider and the Service Recipient shall cooperate with one another and provide such further assistance as the other Party may reasonably request in connection with the provision of Services hereunder.

 

Section 2.5                                    Local Agreements.

 

(a)                                 With respect to any Services that are delivered in a particular country, the Service Provider and the Service Recipient may cause their respective Affiliates located in such country to enter into one or more local services agreements (each a “Local Agreement”), for the purpose of memorializing the implementation of this Agreement in that country, to address Services delivered locally in that country and payments for such Services.  Unless and to the extent an individual Local Agreement expressly provides otherwise, each Local Agreement shall incorporate by reference the terms and conditions of this Agreement and shall not be construed as altering or superseding the rights and obligations of the Parties under this Agreement.

 

(b)                                 Each Party shall be fully responsible and liable for all obligations of its Affiliates under each Local Agreement, in each case to the same extent as if such failure to perform or comply was committed by such Party.

 

(c)                                  The Service Coordinators (and/or their respective designees(s)) shall remain responsible for the administration of this Agreement and the individual Local Agreements on behalf of each Party respectively.  No changes to any Local Agreement shall be made without the knowledge of each Service Coordinator and the agreement of the local Affiliate(s) who are parties to the Local Agreement in a written amendment to the Local Agreement.

 

(d)                                 Each Party shall have the right to enforce this Agreement (including the terms of all Local Agreements) on behalf of each of its Affiliates that has entered into a Local Agreement, and to assert all rights and exercise and receive the benefits of all remedies (including damages) of each such Affiliate, to the same extent as if such Party were a direct party to the Local Agreement, subject to the limitations of liability applicable under this Agreement.

 

Section 2.6                                    Service Boundaries and Scope.

 

(a)                                 Except as provided in an Exhibit for a specific Service: (a) the Service Provider shall be required to provide, or cause to be provided, the Services only at the locations such Services are being provided by any member of the Service Provider Group for any member of the Service Recipient Group immediately prior to the IPO; provided, however, that, to the extent any such Service is to be provided by an employee of the Service Provider who works in the corporate headquarters of the Service Provider, such Service shall, to the extent feasible, only be provided by such employee from the corporate headquarters of the Service Provider; and (b) the Services shall be available only for purposes of conducting the business of the Service Recipient Group substantially in the manner it was conducted immediately prior to the IPO.

 

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(b)                                 Except as provided in an Exhibit for a specific Service, in providing, or causing to be provided, the Services, the Service Provider shall not be obligated to: (i) maintain the employment of any specific employee or hire additional employees or Third Party Providers; (ii) purchase, lease or license any additional equipment (including computer equipment, furniture, furnishings, fixtures, machinery, vehicles, tools and other tangible personal property), software or other assets, rights or properties; (iii) make modifications to its existing systems or software; (iv) provide any member of the Service Recipient Group with access to any systems or software other than those to which it has authorized access immediately prior to the IPO; (v) pay any costs related to the transfer or conversion of data of any member of the Service Recipient Group and (vi) unless otherwise provided on the Exhibit applicable to a particular Service, devote the efforts of any particular personnel providing the Services exclusively for the benefit of the Service Recipient, recognizing that such personnel may engage in other activities the Service Provider considers appropriate.

 

(c)                                  The Service Recipient acknowledges (on its own behalf and on behalf of the other members of the  Service Recipient Group) that the employees of the Service Provider or any other members of the Service Provider Group who may be assisting in the provision of Services hereunder are at-will employees and, as such, may terminate or be terminated from employment with the Service Provider or any of the other members of the Service Provider Group providing Services hereunder at any time for any reason (it being understood that, except as specifically provided in an Exhibit to this Agreement, nothing in this Agreement shall preclude or in any way effect the any right of a Service Provider to terminate any of its employees, including those who may be assisting in the provisions of Services hereunder, whether such employee is or was employed at-will or otherwise).

 

(d)                                 For the avoidance of doubt and except as may hereafter be designated as Additional Services in accordance with Section 2.2, the Services do not include any services required for or that may result from any business acquisitions, divestitures, start-ups or terminations by the Service Recipient Group occurring following the IPO.  To the extent that the Service Recipient desires the Service Provider to provide any services in connection with any such acquisitions, divestitures, start-ups or terminations, the Service Recipient shall follow the procedures for requesting Additional Services pursuant to Section 2.2.

 

(e)                                  Subject to Sections 2.2, 2.6 and 2.7, the Parties acknowledge the transitional nature of the Services and that the Service Provider may make changes from time to time in the manner of performing the Services, provided that such changes do not materially decrease the quality or level of the Services provided to the Service Recipient.

 

Section 2.7                                    Standard of Performance; Limitation of Liability.

 

(a)                                 Unless otherwise provided to the contrary in an Exhibit, the Services to be provided hereunder shall be performed with the same general degree of care, at the same general level and at the same general degree of accuracy and responsiveness, as when performed within the Huntsman organization prior to the IPO.  It is understood and agreed that the Service Provider and the members of the Service Provider Group are not professional providers of the types of services included in the Services and that the Service Provider personnel performing

 

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Services have other responsibilities and will not be dedicated full-time to performing Services hereunder.

 

(b)                                 Notwithstanding anything to the contrary in this Agreement, the Service Provider and members of the Service Provider Group shall not be required to perform Services hereunder or take any actions relating thereto that conflict with or violate any applicable Law, contract, license, authorization, certification or permit or the Service Provider’s Code of Business Conduct or other governance policies, as they may be amended from time to time.  Without limiting the above, the provision of the Services may require consents, waivers, or approvals from certain third parties under permits, licenses and agreements to which the Service Provider or one of its Affiliates is a party (a “Third Party License”) to enable the Service Provider to provide the Services.  The Service Provider shall promptly notify the Service Recipient in writing, setting forth in reasonable detail any specific impairment in its ability to provide any Services by reason of the limitations described in this Section 2.7(b).  The Parties will use commercially reasonable efforts to develop a resolution that enables the Service Provider to continue the provision of the Services, including obtaining any required consents, waivers or approvals of a Third Party License, with the costs of obtaining such consents, waivers or approvals being the responsibility of the Service Recipient.  If no commercially reasonable resolution is available within 60 days of receipt of notice from the Service Provider of such impairment, either Party may immediately terminate the affected Service as provided in Article VI hereof.  To the extent permitted by any applicable contracts of the Service Recipient, the Service Recipient hereby grants to the Service Provider performing Services under this Agreement a limited, nontransferable license, without the right to sublicense (except to an Affiliate of the Service Provider or a sub-contractor who is providing Services on the Service Provider’s behalf, solely to the extent necessary for such Affiliate or sub-contractor to provide the Services), for the term of this Agreement to use the intellectual property owned by the Service Recipient solely to the extent necessary for the Service Provider to perform its obligations hereunder.

 

(c)                                  Subject to Section 2.7(h), in the event the Service Provider or any member of the Service Provider Group fails to provide, or cause to be provided, the Services in accordance with the standard of service set forth in Section 2.7(a), then at the Service Recipient’s request, the Service Provider shall use commercially reasonable efforts to re-perform such Services as soon as reasonably practicable, with the same degree of care used in correcting a failure of a similar service for itself, at no additional cost to the Service Recipient.  The foregoing sets forth the sole and exclusive remedy of the Service Recipient with respect to the performance of Services by the Service Provider and the Service Provider’s liabilities under this Section 2.7(c) are subject to the liability cap set forth in Section 2.7(h); provided, that in the event the Service Provider defaults in the manner described in clause (ii) of Section 7.1, the Service Recipient shall have the further rights set forth in Article VII.

 

(d)                                 Notwithstanding anything to the contrary in this Agreement, except to the extent caused by a Service Provider and to the extent such Service Provider is otherwise liable under this Agreement, the Service Provider shall not be liable to the Service Recipient for any breach of any agreement by a Third Party Provider; provided that the Service Provider shall use commercially reasonable efforts to enforce the terms of such agreements.

 

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(e)                                  The Parties agree that, should a third party require the Parties or their respective Affiliates to be other than severally liable to such third party in respect of a Third Party License, the Parties will cooperate with one another in good faith to reach an agreement setting forth the indemnification obligations of the Parties to each other with respect to such liability.

 

(f)                                   The Parties recognize that some of the Services will be provided by the Service Provider in conjunction with the employees of the Service Recipient Group.  To the extent that the Service Recipient Group does not make those employees available to provide the Services in conjunction with the Service Provider, then the Service Provider shall be relieved of its obligations to provide such Services to the extent that such services were dependent on the availability of such employees of the Service Recipient Group.

 

(g)                                  Notwithstanding anything to the contrary contained herein, the Parties recognize that some of the Services will be provided by the Service Provider utilizing one or more individuals who have unique knowledge or skills related to a particular Service that is provided only to the Service Recipient.  To the extent that the Service Provider believes that such individuals may leave its employment prior to the completion of the relevant Services, or that such individuals may require retention bonuses or similar incentives to stay through the completion of the relevant services, the Service Provider will so advise the Service Recipient; and Service Provider agrees to take such reasonable actions as may be requested by the Service Recipient to retain such individuals, including paying such retention bonuses or incentives as the Service Recipient may reasonably request and for which the Service Recipient agrees to reimburse the Service Provider.  In the event that any such individual cannot be retained by the Service Provider to provide the relevant services hereunder, the Service Provider will use its reasonable efforts to mitigate the impact of such loss; and to the extent that such service cannot be reasonably continued by the Service Provider, the Service Provider shall be relieved of its obligation to provide such Services and the Service Provider will reduce the applicable charges to reflect such reduction in Services.

 

(h)                                 EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2.7, NO REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND, EXPRESSED OR IMPLIED (INCLUDING THE WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION), ARE MADE BY ANY SERVICE PROVIDER PROVIDING SERVICES UNDER THIS AGREEMENT OR ANY MEMBER OF THE SERVICE PROVIDER GROUP WITH RESPECT TO THE SERVICES PROVIDED UNDER THIS AGREEMENT AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY WAIVED AND DISCLAIMED.  EXCEPT AS SET FORTH IN THIS SECTION 2.7, ANY  SERVICE RECIPIENT UNDER THIS AGREEMENT (ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER MEMBER OF THE SERVICE RECIPIENT GROUP) HEREBY EXPRESSLY WAIVES ANY RIGHT SUCH SERVICE RECIPIENT OR ANY MEMBER OF THE SERVICE RECIPIENT GROUP MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW OR IN EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE PERFORMANCE, FAULTY PERFORMANCE OR OTHER FAILURE OR BREACH BY SERVICE PROVIDER OR ANY MEMBER OF THE

 

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SERVICE PROVIDER GROUP UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OF SERVICE PROVIDER OR ANY MEMBER OF THE SERVICE PROVIDER GROUP OR ANY THIRD PARTY SERVICE PROVIDER AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT, UNDER FEDERAL, STATE OR NON U.S. LAWS OR OTHER STATUTE OR OTHERWISE; PROVIDED, HOWEVER, THAT THE FOREGOING WAIVER SHALL NOT EXTEND TO COVER, AND SERVICE PROVIDER SHALL BE RESPONSIBLE FOR, AND SHALL DEFEND AND INDEMNIFY SERVICE RECIPIENT GROUP FROM AND AGAINST, SUCH LOSSES CAUSED BY THE WILLFUL MISCONDUCT OF SERVICE PROVIDER OR ANY MEMBER OF THE SERVICE PROVIDER GROUP.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE SERVICE PROVIDER GROUP BE LIABLE TO THE SERVICE RECIPIENT GROUP WITH RESPECT TO CLAIMS ARISING OUT OF THIS AGREEMENT FOR AMOUNTS IN THE AGGREGATE EXCEEDING THE AGGREGATE SERVICE CHARGES PAID HEREUNDER BY THE SERVICE RECIPIENT GROUP.

 

ARTICLE III
 SERVICE CHARGES

 

Section 3.1                                    Compensation.

 

(a)                                 Subject to the specific terms of this Agreement, the compensation to be received by the Service Provider for each Service provided hereunder will be the fees set forth in Exhibit A or as otherwise set forth in Exhibits [·] through [·], subject to any escalation provided for in this Agreement.  In consideration for the provision of a Service, each member of the Service Recipient Group receiving such Service shall pay to the Service Provider or, at the election of the Service Provider, the member of the Service Provider Group providing such Service, the applicable fee for such Service as set forth in the attached Exhibits.  Each Party understands and agrees that the Fees are the sole consideration for any provision of the Services hereunder and are exclusive of applicable taxes, duties and other similar fees.

 

(b)                                 If Huntsman Group incurs any reasonable out-of-pocket expenses (including any incremental license fees incurred by Huntsman Group in connection with performance of the Services and any travel expenses incurred at the request or with the consent of Venator Group) or remits funds to a third party on behalf of Venator Group, in either case in connection with the rendering of Services, then Huntsman Group shall include such amount on its monthly invoice to Venator Group, with reasonable supporting documentation, and Venator Group shall reimburse that amount to Huntsman Group as part of its next monthly payment.

 

(c)                                  Huntsman represents, warrants and covenants that it has not changed the allocation of costs to the Venator Group for the Services for the period from the Signing Date through the IPO.  Huntsman acknowledges that the allocation of costs, including internal costs and Third Party Costs, to the Venator Group for the Services is consistent with the allocation methodology implemented effective January 1, 2017, and does not exceed the monthly allocation amount allocated in accordance with the 2017 Operating Plan.

 

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ARTICLE IV
 PAYMENT

 

Section 4.1                                    Payment.

 

(a)                                 Huntsman Group shall deliver to Venator Group, on a monthly basis, an invoice for the Fees associated with the Services provided by Huntsman Group for the previous month (the “Monthly Invoice”), which Monthly Invoice shall provide a description of the Services provided and the corresponding Fees.  Any Fees based on Huntsman Group’s Direct Cost will be estimated by Huntsman Group and Venator Group shall pay such estimated amounts when due.  All estimates of Direct Costs are subject to the reconciliation process set forth in Section 4.3 below.

 

(b)                                 With respect to any Service that is terminated during a month, the Fees related to that Service will be prorated on a daily basis to reflect the reduction in Services provided as of the termination date of the terminated Service(s).

 

(c)                                  Venator Group shall pay to Huntsman Group the amount set forth on each Monthly Invoice within twenty (20) days of its receipt of the same.

 

(d)                                 Each invoice shall be directed to the Service Recipient’s Service Coordinator or such other person designated in writing from time to time by such Service Coordinator. The invoice shall set forth in reasonable detail the Services rendered and the invoice amount for the Services rendered for the period covered by such invoice. All timely payments under this Agreement shall be made without early payment discount. Any preexisting obligation to make payment for Services provided hereunder shall survive the termination of this Agreement.

 

(e)                                  Notwithstanding anything to the contrary above, the Service Provider shall have the option to forward the invoices of any Third Party Provider that are approved by the Service Recipient or are otherwise payable under an Exhibit directly to the Service Recipient for its payment to the Third Party Provider, rather than the procedures set forth in Sections 4.1(a)-(d).  If the Service Provider makes such election, then the Service Recipient shall be responsible to pay the Third Party Provider directly in accordance with the terms of the applicable agreement the Service Provider has with (and the invoice from) the Third Party Provider.

 

(f)                                   For any Services for which the applicable Exhibit provides for billings based upon projected costs to be incurred in the next month or other defined subsequent period, then no later than the tenth day of each month, the Service Provider shall deliver to the Service Recipient a statement (each a “Estimated Invoice”) that sets forth:

 

(i)                                     an itemized list of projected costs, fees or other compensation for Services that the Service Provider is entitled to invoice based upon estimates for the following month or other defined subsequent period;

 

(ii)                                  the difference, if any, between the actual amounts owed for such Service in the preceding month (or other applicable period) and the estimated amount paid by the Service Recipient for such period; and

 

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(iii)                               the amount due to the Service Provider for the following month (or other defined subsequent period), which amount shall be the amount set forth in (i) above and adjusted for any overpayment or underpayment of the applicable amounts owed for the preceding month (or other applicable period) as set forth in (ii) above.

 

Section 4.2                                    Payment Disputes.  The Service Recipient may object to any amounts for any Service at any time before, at the time of, or after payment is made, provided such objection is made in writing to the Service Provider according to the procedures set forth in Section 4.3. The Service Coordinators shall meet as expeditiously as possible to resolve any such dispute. Any dispute that is not resolved by the Service Coordinators within forty-five (45) days shall be resolved in accordance with the dispute resolution and arbitration procedures set forth in Section 11.8. Neither Party (nor any member of its respective Group) shall have a right of set-off against the other Party (or any member of its respective Group) for billed amounts hereunder. Upon written request, the Service Provider will provide to the Service Recipient reasonable detail and support documentation to permit the Service Recipient to verify the accuracy of an invoice.

 

Section 4.3                                    Quarterly Reconciliation; Objection to Invoiced Amounts.

 

(a)                                 Huntsman Group shall maintain accurate books and records (including invoices of third parties) related to the Services sufficient to calculate, and allow Venator Group to verify, the amounts owed under this Agreement.

 

(b)                                 Unless otherwise noted in Exhibit A or as otherwise set forth in Exhibits [·] through [·], the Fees are based upon estimated Direct Costs to be incurred in performing the Services, subject to any escalation provided for in this Agreement.

 

(c)                                  Within thirty (30) days after the end of each Calendar Quarter, Huntsman Group will prepare and deliver to Venator Group a reconciliation of the actual Direct Costs incurred in connection with the provision of the Services compared with the estimated Direct Costs for such Services that were invoiced by Huntsman Group for Services in such Calendar Quarter.  Venator Group shall have the right to review, and Huntsman Group shall provide access to, such books and records to verify the accuracy of any adjustments to the Direct Costs.  Each such review shall be conducted during normal business hours and in a manner that does not unreasonably interfere with the operations of Huntsman Group.

 

(d)                                 If, as a result of any such review, Venator Group objects to Huntsman Group’s determination of actual Direct Costs, then Venator Group must deliver to Huntsman Group, within thirty (30) days of its receipt of such reconciliation report, a written objection to such determination specifying the basis for such objection and Venator Group’s proposed adjustment with reasonable detail and justification for its proposed adjustment.  If Venator Group fails to deliver such written objection to Huntsman Group within such 30-day period, then Venator Group shall have waived its right to object to such adjustments, and all such adjustments will be final and binding on the Parties.

 

(e)                                  If Venator Group duly delivers such written objection to Huntsman Group within such 30-day period, then the Project Coordinators shall review the written objections and use good faith efforts to resolve all disagreements.

 

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Section 4.4                                    Review of Charges; Error Correction.  From time to time until 120 days following the termination of this Agreement, the Service Recipient shall have the right to review, and the Service Provider shall provide access to, such books and records to verify the accuracy of such amounts, provided that such reviews shall not occur more frequently than once per calendar quarter. Each such review shall be conducted during normal business hours and in a manner that does not unreasonably interfere with the operations of the Service Provider. If, as a result of any such review, the Service Recipient determines that it overpaid any amount to the Service Provider, then the Service Recipient may raise an objection pursuant to the provisions of Section 4.2. The Service Recipient shall bear the cost and expense of any such review. The Service Provider shall make adjustments to charges as required to reflect the discovery of errors or omissions in charges.

 

Section 4.5                                    Taxes.  All transfer taxes, excises, fees or other charges (including value added, sales, use or receipts taxes, but not including a tax on or measured by the income, net or gross revenues, business activity or capital of a member of the Service Provider Group), or any increase therein, now or hereafter imposed directly or indirectly by law upon any fees paid hereunder for Services, which a member of the Service Provider Group is required to pay or incur in connection with the provision of Services hereunder (“Tax”), shall be passed on to the Service Recipient as an explicit surcharge and shall be paid by the Service Recipient in addition to any Service fee payment, whether included in the applicable Service fee payment, or added retroactively.  If the Service Recipient submits to the Service Provider a timely and valid resale or other exemption certificate acceptable to the Service Provider and sufficient to support the exemption from Tax, then such Tax will not be added to the Service fee payable pursuant to Article III; provided, however, that if a member of the Service Provider Group is ever required to pay such Tax, the Service Recipient will promptly reimburse the Service Provider for such Tax, including any interest, penalties and attorney’s fees related thereto. The Parties will cooperate to minimize the imposition of any Taxes.

 

Section 4.6                                    Records.  The Service Provider shall maintain true and correct records of all receipts, invoices, reports and such other documents relating to the Services hereunder in accordance with its standard accounting practices and procedures, consistently applied. The Service Provider shall retain such accounting records and make them available to the Service Recipient’s authorized representatives and auditors for a period of not less than 1 (one) year from the closing of each calendar year; provided, however, that the Service Provider may, at its option, transfer such accounting records to the Service Recipient upon termination of this Agreement.

 

ARTICLE V
 TERM

 

Section 5.1                                    Term.  Subject to Section 5.2 and Articles VI and VII, the Service Provider Group shall provide the specific Services to the Service Recipient Group pursuant to this Agreement for the time period set forth in the Exhibit relating to the specific Service.  In accordance with the Separation Agreement and Article VI of this Agreement, except as otherwise provided in an Exhibit for a specific Service, the Service Recipient shall use commercially reasonable efforts to provide to itself and members of the Service Recipient Group, and to terminate as soon as reasonably practicable, the Services provided to the Service Recipient Group hereunder. Except

 

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as otherwise provided in Section 5.2 or in an Exhibit for a specific Service or group of related Services, all Services provided for hereunder shall terminate two (2) years from the date of this Agreement.  Subject to Section 5.2 and except as otherwise expressly agreed or unless sooner terminated, this Agreement shall commence upon the IPO and shall continue in full force and effect between the Parties for so long as any Service set forth in any Exhibit hereto is being provided to the Service Recipient or members of the Service Recipient Group and this Agreement shall terminate upon the cessation of all Services provided hereunder; provided that Articles I, IV, VIII, IX and XI and Section 2.7(h) will survive the termination of this Agreement and any such termination shall not affect any obligation for the payment of fees for Services rendered prior to termination.

 

ARTICLE VI
 DISCONTINUATION OF SERVICES

 

Section 6.1                                    Discontinuation or Termination of Services.  Unless otherwise provided in the relevant Exhibit for a particular Service, at any time after the IPO, the Service Recipient may, without cause and in accordance with the terms and conditions hereunder and the Separation Agreement, discontinue or terminate any one or more specific Service (or part of a Service) by giving the Service Provider at least 30 days’ prior written notice.  Furthermore, any such discontinuation or termination will affect the amounts payable to the Service Provider under this Agreement in the following manner:  (i) to the extent that the charges for the discontinued or terminated Services have been separately identified in the applicable Exhibit, such separately identified charges shall not apply following the actual discontinuation or termination of the provision of those Services; and (ii) from month to month, the Service Coordinators shall discuss and mutually agree upon the percentage reduction in Services and a commensurate percentage reduction in the amounts payable by the Service Recipient with respect to any Services which have been partially discontinued or terminated or for which the scope or amount has been narrowed.  The Service Recipient shall be liable to the Service Provider for all costs and expenses the Service Provider or any member of the Service Provider Group remains obligated to pay in connection with any discontinued or terminated Service or Services (including to a Third Party Provider), except in the case of a Service terminated by the Service Recipient pursuant to Section 2.3(b) or clause (ii) of the first sentence of Section 7.1 hereof. The Parties shall cooperate as reasonably required to effectuate an orderly and systematic transfer to the Service Recipient Group of all of the duties and obligations previously performed by the Service Provider or a member of the Service Provider Group under this Agreement.

 

Section 6.2                                    Procedures Upon Discontinuation or Termination of Services.  Upon the discontinuation or termination of a Service hereunder, this Agreement shall be of no further force and effect with respect to such Service, except as otherwise provided in an Exhibit for a specific Service and except as to obligations accrued prior to the date of discontinuation or termination; provided, however, that Articles I, IV, VIII, IX and XI and Section 2.7(h) of this Agreement shall survive such discontinuation or termination. Each Party and the applicable member(s) of its respective Group shall, within 60 days after discontinuation or termination of a Service, deliver to the other Party and the applicable member(s) of its respective Group originals of all books, records, contracts, receipts for deposits and all other papers, documents or electronic records or data in its possession which pertain exclusively to the business of the other Party and relate to such Service, in such format as the Service Recipient may reasonably request; provided that a

 

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Party may retain copies of material provided to the other Party pursuant to this Section 6.2 as it deems necessary or appropriate in connection with its financial reporting obligations or internal control practices and policies.

 

ARTICLE VII
 DEFAULT

 

Section 7.1                                    Termination for Default.  In the event (i) of a failure of the Service Recipient to pay for Services in accordance with the terms of this Agreement, or (ii) any Party shall default, in any material respect, in the due performance or observance by it of any of the other terms, covenants or agreements contained in this Agreement, then the non-defaulting Party shall have the right, at its sole discretion, to terminate the Service with respect to which the default occurred; provided that the defaulting Party shall have the right to cure such default within 30 days of receipt of the written notice of such default. The Service Recipient’s right to terminate this Agreement pursuant to this Article VII and the rights set forth in Section 2.7 shall constitute the Service Recipient’s sole and exclusive rights and remedies for a breach by the Service Provider hereunder (including any breach caused by an Affiliate of the Service Provider or a Third Party Provider).

 

ARTICLE VIII
 WAIVER, INDEMNIFICATION AND INSURANCE

 

Section 8.1                                    Waiver of Consequential Damages.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES (INCLUDING IN RESPECT OF LOST PROFITS OR REVENUES), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING SOLE, JOINT OR CONCURRENT NEGLIGENCE ) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN THIS AGREEMENT.

 

Section 8.2                                    Services Received.  The Service Recipient hereby acknowledges and agrees that:

 

(a)                                 the Services to be provided hereunder are subject to and limited by the provisions of Section 2.7, Article VII and the other provisions hereof, including the limitation of remedies available to the Service Recipient that restricts available remedies resulting from a Service not provided in accordance with the terms hereof to non-payment and, in certain circumstances, the right to terminate this Agreement;

 

(b)                                 the Services are being provided solely to facilitate the transition of each of Huntsman and Venator as separate companies as a result of the IPO;

 

(c)                                  it is not the intent of the Service Provider and the other members of the Service Provider Group to render, nor of the Service Recipient and the other members of the Service Recipient Group to receive from the Service Provider and the other members of the  Service Provider Group, professional advice or opinions, whether with regard to tax, legal, treasury,

 

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finance, employment or other business and financial matters, or technical advice, whether with regard to information technology or other matters; the Service Recipient shall not rely on, or construe, any Service rendered by or on behalf of the Service Provider as such professional advice or opinions or technical advice; and the Service Recipient shall seek all third-party professional advice and opinions or technical advice as it may desire or need, and in any event the Service Recipient shall be responsible for and assume all risks associated with the Services, except to the limited extent set forth in Section 2.7 and Article VII;

 

(d)                                 with respect to any software or documentation within the Services, the Service Recipient shall use such software and documentation internally and for their intended purpose only, shall not distribute, publish, transfer, sublicense or in any manner make such software or documentation available to other organizations or persons, and shall not act as a service bureau or consultant in connection with such software; and

 

(e)                                  a material inducement to the Service Provider’s agreement to provide the Services is the limitation of liability and the release provided by the Service Recipient in this Agreement.

 

ACCORDINGLY, EXCEPT WITH REGARD TO THE LIMITED REMEDIES EXPRESSLY SET FORTH HEREIN, THE SERVICE RECIPIENT SHALL ASSUME ALL LIABILITY FOR AND SHALL FURTHER RELEASE, DEFEND, INDEMNIFY AND HOLD THE SERVICE PROVIDER, ANY MEMBER OF THE SERVICE PROVIDER GROUP AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS AND AGENTS (ALL AS INDEMNIFIED PARTIES) FREE AND HARMLESS FROM AND AGAINST ALL LOSSES RESULTING FROM, ARISING OUT OF OR RELATED TO THE SERVICES PROVIDED BY ANY MEMBER OF THE SERVICE PROVIDER GROUP TO ANY MEMBER OF THE SERVICE RECIPIENT GROUP, HOWSOEVER ARISING AND WHETHER OR NOT CAUSED BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE OF THE SERVICE PROVIDER, ANY MEMBER OF THE SERVICE PROVIDER GROUP OR ANY THIRD PARTY SERVICE PROVIDER, OTHER THAN THOSE LOSSES CAUSED BY THE WILLFUL MISCONDUCT OF THE SERVICE PROVIDER OR ANY MEMBER OF THE SERVICE PROVIDER GROUP.

 

Section 8.3                                    Express Negligence.  THE INDEMNITY, RELEASES AND LIMITATIONS OF LIABILITY IN THIS AGREEMENT (INCLUDING ARTICLES II AND VIII) ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.

 

ARTICLE IX
 CONFIDENTIALITY

 

Section 9.1                                    Confidentiality.  The Service Recipient and the Service Provider each acknowledge and agree that the terms of Article VII of the Separation Agreement shall apply to

 

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information, documents, plans and other data made available or disclosed by one Party to the other in connection with this Agreement.

 

Section 9.2                                    System Security.

 

(a)                                 If any Party (or its Affiliates, representatives, agents or contractors) is given access to the other Party’s computer systems or software (collectively, the “Systems”) in connection with the Services, the Party given access (the “Accessing Party”) shall comply with, and shall cause its Affiliates, representatives, agents and contractors who are given access on its behalf to comply with, all of the other Party’s system security policies, procedures and requirements that have been provided to the Accessing Party in advance and in writing (collectively, “Security Regulations”), and shall not tamper with, compromise or circumvent any security or audit measures employed by such other Party. The Accessing Party (or its Affiliates, representatives, agents or contractors, as applicable) shall access and use only those Systems of the other Party for which it has been granted the right to access and use.

 

(b)                                 Each Party shall use commercially reasonable efforts to ensure that only those of its personnel who are specifically authorized to have access to the Systems of the other Party gain such access, and shall use commercially reasonable efforts to prevent unauthorized access, use, destruction, alteration or loss of information contained therein, including notifying its personnel of the restrictions set forth in this Agreement and of the Security Regulations.

 

(c)                                  If, at any time, the Accessing Party (or its Affiliates, representatives, agents or contractors) determines that any of its personnel has sought to circumvent, or has circumvented, the Security Regulations, that any unauthorized Accessing Party personnel has accessed the Systems, or that any of its personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of data, information or software of the other Party, the Accessing Party shall promptly terminate any such person’s access to the Systems and immediately notify the other Party. In addition, such other Party shall have the right to deny personnel of the Accessing Party (or its Affiliates, representatives, agents or contractors) access to its Systems upon notice to the Accessing Party in the event that the other Party reasonably believes that such personnel have engaged in any of the activities set forth above in this Section 9.2(c) or otherwise pose a security concern. The Accessing Party shall use commercially reasonable efforts to cooperate with the other Party in investigating any apparent unauthorized access to such other Party’s Systems.

 

ARTICLE X
 FORCE MAJEURE

 

Section 10.1                             Performance Excused.  Continued performance of a Service may be suspended immediately to the extent the fulfillment of such Service is prevented, frustrated, hindered or delayed by any event or condition beyond the reasonable control of the Party suspending such performance (and not involving any willful misconduct of such Party), including acts of God, pandemics, floods, fire, earthquakes, labor or trade disturbances, strikes, war, acts of terrorism, civil commotion, electrical shortages or blackouts, breakdown or injury to computing facilities, compliance in good faith with any Law (whether or not it later proves to be invalid), unavailability of materials or bad weather (a “Force Majeure Event”). Unless the Service

 

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Provider Group incurs costs under agreements with its Third Party Providers, the Service Recipient shall not be obligated to pay any amount for Services that it does not receive as a result of a Force Majeure Event (and the Parties shall negotiate reasonably to determine the amount applicable to such Services not received).  In addition to the reduction of any amounts owed by the Service Recipient hereunder, during the occurrence of a Force Majeure Event, to the extent the provision of any Service has been disrupted or reduced, during such disruption or reduction, (a) the Service Recipient may replace any such affected Service by providing any such Service for itself or engaging one or more third parties to provide such Service at the expense of the Service Recipient and (b) the Service Provider shall cooperate with, provide such information to and take such other actions as may be reasonably required to assist such third parties to provide such substitute Service.

 

Section 10.2                             Notice.  The Party claiming suspension due to a Force Majeure Event will give prompt notice to the other of the occurrence of the Force Majeure Event giving rise to the suspension and of its nature and anticipated duration.

 

Section 10.3                             Cooperation.  Upon the occurrence of a Force Majeure Event, the Parties shall cooperate with each other to find alternative means and methods for the provision of the suspended Service.

 

ARTICLE XI
 OTHER PROVISIONS

 

Section 11.1                             Entire Agreement.  This Agreement, together with the documents referenced herein (including the Separation Agreement and any Ancillary Agreement), constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof. To the extent any provision of this Agreement conflicts with the provisions of the Separation Agreement or any Ancillary Agreement, the provisions of this Agreement shall be deemed to control with respect to the subject matter hereof.

 

Section 11.2                             Binding Effect; No Third-Party Beneficiaries.  This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns; and nothing in this Agreement, express or implied, is intended to confer upon any other person or entity any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

 

Section 11.3                             Amendment; Waivers.  No change or amendment may be made to this Agreement except by an instrument in writing signed on behalf of both of the Parties, which is expressly identified as an amendment and which references the portions of the Agreement which are being changed or amended. Either Party may, at any time, (i) extend the time for the performance of any of the obligations or other acts of the other, (ii) waive any inaccuracies in the representations and warranties of the other contained herein or in any document delivered pursuant hereto, and (iii) waive compliance by the other with any of the agreements, covenants or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby and expressly identified as a waiver or an

 

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extension, but not in any other manner.  Subject to Section 11.9 hereof, no failure or delay on the part of either Party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement contained herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.

 

Section 11.4                             Notices.  Unless otherwise expressly provided herein, all notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to be duly given (i) when personally delivered or (ii) if mailed by registered or certified mail, postage prepaid, return receipt requested, on the date the return receipt is executed or the letter is refused by the addressee or its agent or (iii) if sent by overnight courier which delivers only upon the signed receipt of the addressee, on the date the receipt acknowledgment is executed or refused by the addressee or its agent or (iv) if sent by facsimile or electronic mail, on the date confirmation of transmission is received (provided that a copy of any notice delivered pursuant to this clause (iv) shall also be sent pursuant to clause (i), (ii) or (iii)), addressed to the attention of the addressee’s General Counsel at the address of its principal executive office or to such other address or facsimile number for a Party as it shall have specified by like notice.

 

Section 11.5                             Counterparts.  This Agreement, including the Schedules and Exhibits hereto and the other documents referred to herein, may be executed in multiple counterparts, each of which when executed shall be deemed to be an original but all of which together shall constitute one and the same agreement.

 

Section 11.6                             Severability.  If any term or other provision of this Agreement or the Schedules and Exhibits attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this 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 materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

 

Section 11.7                             Governing Law.  THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES (INCLUDING ANY CLAIMS MADE IN CONTRACT, TORT OR OTHERWISE RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

Section 11.8                             Dispute Resolution.  The procedures for mediation and binding arbitration set forth in Sections 4.3 and 4.4 of the Separation Agreement shall apply to any dispute, controversy or claim (whether sounding in contract, tort or otherwise) that arises out of or relates to this

 

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Agreement, any breach or alleged breach hereof, the transactions contemplated hereby (including all actions taken in furtherance of the transactions contemplated hereby on or prior to the date hereof), or the construction, interpretation, enforceability or validity hereof (a “Dispute”).

 

Section 11.9                             Performance; Time of the Essence.  Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party.  TIME IS OF THE ESSENCE in the performance of each Service by the Service Provider Group.

 

Section 11.10                      Relationship of Parties.

 

(a)                                 Subject to the provisions of Section 11.10(b), in the performance of this Agreement, a Service Provider (and any other member of the Service Provider Group which performs Services hereunder, as well as all Persons performing such Services, including agents, temporary employees and Third Party Providers) will at all times act in its own capacity as an independent contractor, and nothing contained herein may be construed to make a Service Provider (or any other member of the Service Provider Group which performs Services hereunder) an agent, partner, fiduciary or joint venturer of, to or with any member of a Service Recipient Group.  The employees of a Service Provider Group which perform Services under this Agreement (a) will remain personnel of the Service Provider, (b) will not by reason of the performance of Services under this Agreement become employees of the Service Recipient Group and (c) will not be entitled to participate in any of the Service Recipient’s employee benefit plans, including pension, 401(k), profit sharing, retirement, deferred compensation, medical, health, group, insurance, disability, bonus, vacation pay, severance pay and other similar plans, programs and agreements, whether reduced to writing or not, except to the limited extent (if any) that Service Provider is providing those benefit services to Service Recipient under Exhibit “D” of this Agreement.  Similarly, any employees of a Service Recipient Group that perform Services under this Agreement pursuant to Section 2.7(f), (a) will remain personnel of the Service Recipient, (b) will not by reason of the performance of Services under this Agreement become employees of the Service Provider Group and (c) will not be entitled to participate in any of the Service Provider’s employee benefit plans, including pension, 401(k), profit sharing, retirement, deferred compensation, medical, health, group, insurance, disability, bonus, vacation pay, severance pay and other similar plans, programs and agreements, whether reduced to writing or not.  Each Party (the “Indemnifying Party”) will indemnify and hold harmless the other Party and its Affiliates and their officers, directors, employees, agents, successors and permitted assigns (the “Indemnified Party”) from and against all losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind (including reasonable attorneys’ fees) arising out of or resulting from any claims asserted by, on behalf of, or in relation to the employees of the Indemnifying Party that such employees are employed by the Indemnified Party or one of its affiliates, including any assertions of contingent worker or co-employment relationships, and including any responsibility or liability to any employee or governmental authority for alleged misclassification of any employment relationship.

 

(b)                                 In all cases where the Service Provider’s (or its Affiliates’) employees (which shall be defined to include, but not be limited to, direct, borrowed, special or statutory employees) are covered by the Louisiana Worker’s Compensation Act, La. R.S. 23:1021 et seq. (the “Louisiana Exception”):  (i) the Parties agree that all Services performed by the Service

 

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Provider and its (or its Affiliates’) employees pursuant to this Agreement are an integral part of and are essential to the ability of the Service Recipient to generate its goods, products and services for purposes of La. R.S. 23:1061(A)(1); (ii) the Service Recipient agrees that it is the principal or statutory employer of the Service Provider’s (or its Affiliates’) employees who are performing services for the Service Recipient pursuant to this Agreement for purposes of La. R.S. 23:1061(A)(3); and (iii) this provision is included for the sole purpose of establishing a statutory employer relationship to gain the benefits expressed in La. R.S. 23:1031 and La. R.S. 23:1061(A), and it is not intended to create an employer-employee relationship for any other purpose.

 

Section 11.11                      Regulations.  All employees of a Service Provider and the members of the Service Provider Group shall, when on the property of the Service Recipient, conform to the rules and regulations of the Service Recipient concerning safety, health and security which are made known to such employees in advance in writing.

 

Section 11.12                      Assignment of Agreement.  Except as otherwise provided in Sections 2.1 and 2.3 of this Agreement with respect to the assignment of certain rights and obligations to a Party’s Affiliates, this Agreement may not be assigned by either Party, except with the prior written consent of the other Party, which consent shall not be unreasonably withheld.  No such assignment shall relieve such assignor of any of its obligations hereunder.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

 

	
 
    	
HUNTSMAN   CORPORATION:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
VENATOR   MATERIALS PLC:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    

 

1mmex_ex101.htm

EXHIBIT 10.1

 

EQUITY PURCHASE AGREEMENT

 

This equity purchase agreement is entered into as of June 12, 2017 (this "Agreement"), by and between MMEX Resources Corporation, a Nevada corporation (the "Company"), and Crown Bridge Partners, LLC, a New York limited liability company (the "Investor").

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase up to Three Million Dollars ($3,000,000) of the Company’s Common Stock (as defined below);

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

CERTAIN DEFINITIONS

 

Section 1.1 DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

"Agreement" shall have the meaning specified in the preamble hereof.

 

“Average Daily Trading Value” shall mean the average trading volume of the Company’s Common Stock in the seven (7) Trading Days immediately preceding the respective Put Date multiplied by the lowest traded price of the Company’s Common Stock in the seven (7) Trading Days immediately preceding the respective Put Date.

 

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

"Claim Notice" shall have the meaning specified in Section 9.3(a).

 

“Clearing Costs” shall mean all of the Investor’s broker and Transfer Agent fees, excluding commissions. 

 

“Clearing Date” shall be the date on which the Investor receives the Put Shares as DWAC Shares in its brokerage account.

 

"Closing" shall mean one of the closings of a purchase and sale of shares of Common Stock pursuant to Section 2.3.

 

"Closing Certificate" shall mean the closing certificate of the Company in the form of Exhibit B hereto.

 

	 
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“Closing Date” shall mean the date of any Closing hereunder. 

 

“Commitment Note” shall mean the 8% convertible promissory note in the principal amount of $80,000.00, attached as Exhibit C hereto, issued by the Company to the Investor on June 12, 2017. 

 

"Commitment Period" shall mean the period commencing on the Execution Date, and ending on the earlier of (i) the date on which the Investor shall have purchased Put Shares pursuant to this Agreement equal to the Maximum Commitment Amount, (ii) the date in which the Registration Statement is no longer effective, or (iii) 24 months after the initial effectiveness of the Registration Statement.

 

"Common Stock" shall mean the Company's common stock, $0.001 par value per share, and any shares of any other class of common stock whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets (upon liquidation of the Company).

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. 

 

"Company" shall have the meaning specified in the preamble to this Agreement.

 

“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

"Damages" shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys' fees and disbursements and costs and expenses of expert witnesses and investigation).

 

"Dispute Period" shall have the meaning specified in Section 9.3(a).

 

“DTC” shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.

 

“DTC/FAST Program” shall mean the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC” shall mean Deposit Withdrawal at Custodian as defined by the DTC.

 

“DWAC Eligible” shall mean that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements, including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Underlying Shares or Put Shares, as applicable, are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Underlying Shares or Put Shares, as applicable, via DWAC.

	 
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“DWAC Shares” means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified DWAC account with DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same function. 

 

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exchange Cap” shall have the meaning set forth in Section 7.1(c).

 

"Execution Date" shall mean the date of this Agreement.

 

"FINRA" shall mean the Financial Industry Regulatory Authority, Inc.

 

"Investment Amount" shall mean the Put Shares referenced in the Put Notice multiplied by the Purchase Price minus the Clearing Costs.

 

"Indemnified Party" shall have the meaning specified in Section 9.2.

 

"Indemnifying Party" shall have the meaning specified in Section 9.2.

 

"Indemnity Notice" shall have the meaning specified in Section 9.3(e).

 

"Investor" shall have the meaning specified in the preamble to this Agreement.

 

“Lien” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

"Market Price" shall mean the lowest traded price on the Principal Market for any Trading Day during the Valuation Period, as reported by Bloomberg Finance L.P or other reputable source.

 

"Material Adverse Effect" shall mean any effect on the business, operations, properties, or financial condition of the Company and the Subsidiaries that is material and adverse to the Company and the Subsidiaries and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to enter into and perform its obligations under any Transaction Document.

 

"Maximum Commitment Amount" shall mean Three Million Dollars ($3,000,000).

	 
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"Person" shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

"Principal Market" shall mean any of the national exchanges (i.e. NYSE, NYSE AMEX, Nasdaq), or principal quotation systems (i.e. OTCQX, OTCQB, the OTC Bulletin Board), or other principal exchange or recognized quotation system which is at the time the principal trading platform or market for the Common Stock.

 

"Purchase Price" shall mean 80% of the Market Price on such date on which the Purchase Price is calculated in accordance with the terms and conditions of this Agreement.

 

"Put" shall mean the right of the Company to require the Investor to purchase shares of Common Stock, subject to the terms and conditions of this Agreement.

 

"Put Date" shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).

 

"Put Notice" shall mean a written notice, substantially in the form of Exhibit A hereto, to Investor setting forth the Put Shares which the Company intends to require Investor to purchase pursuant to the terms of this Agreement.

 

"Put Shares" shall mean all shares of Common Stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of this Agreement.

 

"Registration Statement" shall have the meaning specified in Section 6.4. 

 

"Regulation D" shall mean Regulation D promulgated under the Securities Act.

 

“Required Minimum” shall mean, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion in full of the Commitment Note (including Underlying Shares issuable as payment of interest on the Commitment Note), ignoring any conversion limits set forth therein, and assuming that the conversion price is at all times on and after the date of determination 100% of the then conversion price on the Trading Day immediately prior to the date of determination. 

 

"Rule 144" shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.

 

"SEC" shall mean the United States Securities and Exchange Commission.

 

“SEC Documents” shall have the meaning specified in Section 4.5.

	 
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“Securities" means, collectively, the Put Shares, the Commitment Note and the Underlying Shares.

 

"Securities Act" shall mean the Securities Act of 1933, as amended.

 

“Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

 

“Subsidiary” means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.

 

"Third Party Claim" shall have the meaning specified in Section 9.3(a).

 

“Trading Day” shall mean a day on which the Principal Market shall be open for business.

 

“Transaction Documents” shall mean this Agreement and the Commitment Note and all schedules and exhibits hereto and thereto.

 

"Transfer Agent" shall mean TranShare Corporation, the current transfer agent of the Company, with a mailing address of 2200 E. 104th Avenue, Suite 201, Thornton, CO 80233, and any successor transfer agent of the Company. 

 

“Transfer Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue the Put Shares and the Underlying Shares pursuant to the Transaction Documents, in the form of Exhibit D attached hereto. 

 

“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion of the Commitment Note and issued and issuable in lieu of the cash payment of interest or principal on the Commitment Note in accordance with the terms of the Commitment Note.

 

"Valuation Period" shall mean the period of seven (7) Trading Days immediately following the Clearing Date associated with the applicable Put Notice during which the Purchase Price of the Common Stock is valued. 

 

ARTICLE II

PURCHASE AND SALE OF COMMON STOCK

 

Section 2.1 PUTS. Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), the Company shall have the right, but not the obligation, to direct the Investor, by its delivery to the Investor of a Put Notice from time to time, to purchase Put Shares (i) in a minimum amount not less than $15,000 and (ii) in a maximum amount (the “Maximum Amount”) up to the lesser of (a) $100,000 or (b) 150% of the Average Daily Trading Value; provided that such minimum amount of Put Shares may be decreased and such maximum amount of Put Shares may be increased subject to the Investor’s approval. In addition to beneficial ownership limitations as provided herein, for purposes of calculating the maximum Put Shares in each Put Notice, the Company shall divide the respective Maximum Amount by 80% of the average of the three (3) lowest trading prices of the Company’s Common Stock in the seven (7) Trading Days immediately preceding the respective Put Date. 

	 
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Section 2.2 MECHANICS.

 

(a) PUT NOTICE. At any time and from time to time during the Commitment Period, the Company may deliver a Put Notice to Investor, subject to satisfaction of the conditions set forth in this Agreement, including but not limited to Section 7.2. The Company shall deliver, or cause to be delivered, the Put Shares as DWAC Shares to the Investor within two (2) Trading Days following the Put Date. 

 

(b) DATE OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the Trading Day it is received by email by the Investor if such notice is received on or prior to 9:00 a.m. New York time or (ii) the immediately succeeding Trading Day if it is received by email after 9:00 a.m. New York time on a Trading Day or at any time on a day which is not a Trading Day. The Valuation Period will commence one (1) Trading Day following the Clearing Date. The Company may not deliver another Put Notice to the Investor at any time while the Investor holds any of the Put Shares.

 

Section 2.3 CLOSINGS. The Purchase Price for the respective Put Shares shall be established at the end of the applicable Valuation Period. If the value of the Put Shares delivered to the Investor causes the Company to exceed the Maximum Commitment Amount, then immediately after the Valuation Period the Investor shall return to the Company the surplus amount of Put Shares associated with such Put and the Purchase Price with respect to such Put shall be reduced by any Clearing Costs related to the return of such Put Shares. The Closing of a Put shall occur within two (2) Trading Days following the end of the Valuation Period, whereby the Investor shall deliver the Investment Amount by wire transfer of immediately available funds to an account designated by the Company. In addition, on or prior to such Closing, each of the Company and the Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF INVESTOR

 

The Investor represents and warrants to the Company that:

 

Section 3.1 INTENT. The Investor is entering into this Agreement for its own account and the Investor has no present arrangement (whether or not legally binding) at any time to sell the Securities to or through any Person in violation of the Securities Act or any applicable state securities laws; provided, however, that the Investor reserves the right to dispose of the Securities at any time in accordance with federal and state securities laws applicable to such disposition.

	 
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Section 3.2 NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

Section 3.3 ACCREDITED INVESTOR. The Investor is an accredited investor as defined in Rule 501(a)(3) of Regulation D, and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Securities. The Investor acknowledges that an investment in the Securities is speculative and involves a high degree of risk.

 

Section 3.4 AUTHORITY. The Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the other Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization of the Investor is required. Each Transaction Document to which it is a party has been duly executed by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

 

Section 3.5 NOT AN AFFILIATE. The Investor is not an officer, director or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of the Company.

 

Section 3.6 ORGANIZATION AND STANDING. The Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and the other Transaction Documents. 

 

Section 3.7 ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, (b) violate any provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which the Investor is subject or to which any of its assets, operations or management may be subject.

	 
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Section 3.8 DISCLOSURE; ACCESS TO INFORMATION. The Investor had an opportunity to review copies of the SEC Documents filed on behalf of the Company and has had access to all publicly available information with respect to the Company.

 

Section 3.9 MANNER OF SALE. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertising.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Investor that, except as disclosed in the SEC Documents or except as set forth in the disclosure schedules hereto:

 

Section 4.1 ORGANIZATION OF THE COMPANY. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

Section 4.2 AUTHORITY. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents. The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required. Each of this Agreement and the other Transaction Documents has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

	 
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Section 4.3 CAPITALIZATION. Except as set forth on Schedule 4.3, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule 4.3 and except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investor) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

Section 4.4 LISTING AND MAINTENANCE REQUIREMENTS. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration. The Company has not, in the twelve (12) months preceding the date hereof, received notice from the Principal Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Principal Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

Section 4.5 SEC DOCUMENTS; DISCLOSURE. Except as set forth on Schedule 4.5, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents when filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments). Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Investor will rely on the foregoing representation in effecting transactions in securities of the Company. 

	 
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Section 4.6 VALID ISSUANCES. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid, and non-assessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. 

 

Section 4.7 NO CONFLICTS. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Put Shares and the Underlying Shares, do not and will not: (a) result in a violation of the Company’s or any Subsidiary’s certificate or articles of incorporation, by-laws or other organizational or charter documents, (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, instrument or any "lock-up" or similar provision of any underwriting or similar agreement to which the Company or any Subsidiary is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect) nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or the other Transaction Documents (other than any SEC, FINRA or state securities filings that may be required to be made by the Company subsequent to any Closing or any registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein.

 

Section 4.8 NO MATERIAL ADVERSE CHANGE. No event has occurred that would have a Material Adverse Effect on the Company that has not been disclosed in subsequent SEC filings.

 

Section 4.9 LITIGATION AND OTHER PROCEEDINGS. Except as disclosed in the SEC Documents or as set forth on Schedule 4.9, there are no actions, suits, investigations, inquiries or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties, nor has the Company received any written or oral notice of any such action, suit, proceeding, inquiry or investigation, which would have a Material Adverse Effect. No judgment, order, writ, injunction or decree or award has been issued by or, to the knowledge of the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any Subsidiary or any current or former director or officer of the Company or any Subsidiary. 

 

Section 4.10 REGISTRATION RIGHTS. Except as set forth on Schedule 4.10, no Person (other than the Investor) has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

	 
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ARTICLE V

COVENANTS OF INVESTOR

 

Section 5.1 COMPLIANCE WITH LAW; TRADING IN SECURITIES. The Investor's trading activities with respect to shares of Common Stock will be in compliance with all applicable state and federal securities laws and regulations and the rules and regulations of FINRA and the Principal Market.

 

Section 5.2 SHORT SALES AND CONFIDENTIALITY. Neither the Investor, nor any affiliate of the Investor acting on its behalf or pursuant to any understanding with it, will execute any Short Sales during the period from the date hereof to the end of the Commitment Period. For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares of Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale. The Investor shall, until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company in accordance with the terms of this Agreement, maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents. 

 

ARTICLE VI

COVENANTS OF THE COMPANY

 

Section 6.1 RESERVATION OF COMMON STOCK. The Company shall maintain a reserve from its duly authorized shares of Common Stock equal to 300% of the Required Minimum to satisfy its obligation to issue the Put Shares and the Underlying Shares in accordance with the terms of this Agreement and the Commitment Note, respectively.

	 
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Section 6.2 LISTING OF COMMON STOCK. The Company shall promptly secure the listing of all of the Put Shares and Underlying Shares to be issued to the Investor hereunder on the Principal Market (subject to official notice of issuance) and shall use commercially reasonable best efforts to maintain, so long as any shares of Common Stock shall be so listed, the listing of all such Put Shares and Underlying Shares from time to time issuable hereunder. The Company shall use its commercially reasonable efforts to continue the listing and trading of the Common Stock on the Principal Market (including, without limitation, maintaining sufficient net tangible assets) and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of FINRA and the Principal Market.

 

Section 6.3 [Intentionally Omitted].

 

Section 6.4 FILING OF CURRENT REPORT AND REGISTRATION STATEMENT. The Company agrees that it shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange Act, relating to the transactions contemplated by, and describing the material terms and conditions of, the Transaction Documents (the “Current Report”). The Company shall permit the Investor to review and comment upon the final pre-filing draft version of the Current Report at least two (2) Trading Days prior to its filing with the SEC, and the Company shall give reasonable consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon the final pre-filing draft version of the Current Report within one (1) Trading Day from the date the Investor receives it from the Company. The Company shall also file with the SEC, within 45 calendar days from the date hereof, a new registration statement (the “Registration Statement”) covering the resale of the Put Shares. The Company shall use its best efforts to cause the Registration Statement to become effective within 90 calendar days from the date hereof.

 

ARTICLE VII

CONDITIONS TO DELIVERY OF

PUT NOTICES AND CONDITIONS TO CLOSING

 

Section 7.1 CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO ISSUE AND SELL PUT SHARES. The right of the Company to issue and sell the Put Shares to the Investor is subject to the satisfaction of each of the conditions set forth below:

	 
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(a) ACCURACY OF INVESTOR'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Investor shall be true and correct in all material respects as of the date of this Agreement and as of the date of each Closing as though made at each such time.

 

(b) PERFORMANCE BY INVESTOR. Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Investor at or prior to such Closing.

 

(c) PRINCIPAL MARKET REGULATION. The Company shall not issue any Put Shares, and the Investor shall not have the right to receive any Put Shares, if the issuance of such Put Shares would exceed the aggregate number of shares of Common Stock which the Company may issue without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange Cap”).

 

Section 7.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The obligation of the Investor hereunder to purchase Put Shares is subject to the satisfaction of each of the following conditions:

 

(a) EFFECTIVE REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall remain effective for the resale by the Investor of the Put Shares and (i) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension of the use of, or withdrawal of the effectiveness of, such Registration Statement or related prospectus shall exist.

 

(b) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects as of the date of this Agreement and as of the date of each Closing (except for representations and warranties specifically made as of a particular date). 

 

(c) PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company.

 

(d) NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by the Transaction Documents, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by the Transaction Documents.

	 
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(e) ADVERSE CHANGES. Since the date of filing of the Company's most recent SEC Document, no event that had or is reasonably likely to have a Material Adverse Effect has occurred.

 

(f) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the Principal Market or FINRA, or otherwise halted for any reason, and the Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market. In the event of a suspension, delisting, or halting for any reason, of the trading of the Common Stock, as contemplated by this Section 7.2(f), the Investor shall have the right to return to the Company any remaining amount of Put Shares associated with such Put, and the Purchase Price with respect to such Put shall be reduced accordingly.

 

(g) BENEFICIAL OWNERSHIP LIMITATION. The number of Put Shares then to be purchased by the Investor shall not exceed the number of such shares that, when aggregated with all other shares of Common Stock then owned by the Investor beneficially or deemed beneficially owned by the Investor, would result in the Investor owning more than the Beneficial Ownership Limitation (as defined below), as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder. For purposes of this Section 7.2(g), in the event that the amount of Common Stock outstanding, as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder, is greater on a Closing Date than on the date upon which the Put Notice associated with such Closing Date is given, the amount of Common Stock outstanding on such Closing Date shall govern for purposes of determining whether the Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement, would own more than the Beneficial Ownership Limitation following such Closing Date. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable pursuant to a Put Notice.

 

(h) PRINCIPAL MARKET REGULATION. The issuance of the Put Shares shall not exceed the Exchange Cap.

 

(i) NO KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing the Registration Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading Days following the Trading Day on which such Put Notice is deemed delivered).

	 
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(j) NO VIOLATION OF SHAREHOLDER APPROVAL REQUIREMENT. The issuance of the Put Shares shall not violate the shareholder approval requirements of the Principal Market.

 

(k) OFFICER’S CERTIFICATE. On the date of delivery of each Put Notice, the Investor shall have received the Closing Certificate executed by an executive officer of the Company and to the effect that all the conditions to such Closing shall have been satisfied as of the date of each such certificate.

 

(l) DWAC ELIGIBLE. The Common Stock must be DWAC Eligible and not subject to a “DTC chill.” 

 

(m) SEC DOCUMENTS. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Exchange Act.

 

(n) TRANSFER AGENT INSTRUCTION LETTER. The Transfer Agent Instruction Letter shall have been executed and delivered by the Company to the Transfer Agent and acknowledged and agreed to in writing by the Transfer Agent. 

 

(o) RESERVE. The Company shall have reserved sufficient shares of its Common Stock for the Investor, pursuant to the terms of this Agreement and all other contracts between the Company and Investor.

 

(p) MINIMUM PRICING. The lowest traded price of the Company’s Common Stock for the twenty-five (25) trading days immediately prior to the date of the respective Put Notice shall be greater than $0.001, unless waived by the Investor.

 

(q) CURRENT INFORMATION. The Company must be subject to the Exchange Act and current in all of its filing obligations under the Exchange Act.

 

ARTICLE VIII

LEGENDS

 

Section 8.1 NO RESTRICTIVE STOCK LEGEND. No restrictive stock legend shall be placed on the share certificates representing the Put Shares.

 

Section 8.2 INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall affect in any way the Investor's obligations hereunder to comply with all applicable securities laws upon the sale of the Common Stock.

	 
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ARTICLE IX

NOTICES; INDEMNIFICATION

 

Section 9.1 NOTICES. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (a) personally served, (b) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (c) delivered by reputable air courier service with charges prepaid, or (d) transmitted by hand delivery, telegram, or email as a PDF, addressed as set forth below or to such other address as such party shall have specified most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery by email at the address designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service or on the fifth business day after deposited in the mail, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

 

The addresses for such communications shall be: 

 

If to the Company:

 

MMEX RESOURCES CORPORATION

3616 Far West Blvd., #117-321

Austin, TX 78731

E-mail: jack.hanks@mmexresources.com

 

If to the Investor:

 

CROWN BRIDGE PARTNERS, LLC

1173a 2nd Avenue, Suite 126

New York, NY 10065

Email: Info@CrownBridgeCapital.com

 

Either party hereto may from time to time change its address or email for notices under this Section 9.1 by giving at least ten (10) days' prior written notice of such changed address to the other party hereto.

	 
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Section 9.2 INDEMNIFICATION. Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result primarily from the Indemnified Party's failure to perform any covenant or agreement contained in this Agreement or the Indemnified Party's negligence, recklessness or bad faith in performing its obligations under this Agreement; provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto, or any preliminary prospectus or final prospectus (as amended or supplemented).

 

Section 9.3 METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party under Section 9.2 shall be asserted and resolved as follows:

 

(a) In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against or sought to be collected from such Indemnified Party by a Person other than a party hereto or an affiliate thereof (a "Third Party Claim"), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party's claim for indemnification that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party's ability to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending thirty (30) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the "Dispute Period") whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.

	 
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(i) If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party's delivery of the notice referred to in the first sentence of this clause (i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided, further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified Party may takeover the control of the defense or settlement of a Third Party Claim at any time if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third Party Claim.

 

(ii) If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party(with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party's defense pursuant to this clause (ii) or of the Indemnifying Party's participation therein at the Indemnified Party's request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this clause (ii), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

	 
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(iii) If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

(b) In the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an "Indemnity Notice") with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate. 

 

(c) The Indemnifying Party agrees to pay the Indemnified Party, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.

 

(d) The indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.

	 
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ARTICLE X

MISCELLANEOUS

 

Section 10.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada without regard to the principles of conflicts of law. Each of the Company and the Investor hereby submits to the exclusive jurisdiction of the United States federal and state courts located in the City of New York, New York with respect to any dispute arising under the Transaction Documents or the transactions contemplated thereby.

 

Section 10.2 JURY TRIAL WAIVER. The Company and the Investor hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with the Transaction Documents.

 

Section 10.3 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and the Investor and their respective successors. Neither this Agreement nor any rights of the Investor or the Company hereunder may be assigned by either party to any other Person.

 

Section 10.4 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and the Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as set forth in Section 9.3.

 

Section 10.5 TERMINATION. The Company may terminate this Agreement at any time by written notice to the Investor, except during any Valuation Period. In addition, this Agreement shall automatically terminate on the earlier of (i) the end of the Commitment Period; (ii) the date that the Company sells and the Investor purchases the Maximum Commitment Amount; (iii) the date in which the Registration Statement is no longer effective; or (iv) the date that, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors; provided, however, that the provisions of Articles III, IV, V, VI, IX and the agreements and covenants of the Company and the Investor set forth in Article X shall survive the termination of this Agreement.

 

Section 10.6 ENTIRE AGREEMENT. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the Company and the Investor with respect to the matters covered herein and therein and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

	 
	20
	

 
	 

 

Section 10.7 FEES AND EXPENSES. Except as expressly set forth in the Transaction Documents or any other writing to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investor. The Commitment Note shall be earned in full upon the execution of this Agreement, and the Commitment Note is not contingent upon any other event or condition, including but not limited to the effectiveness of the Registration Statement or the Company’s submission of a Put Notice to the Investor.

 

Section 10.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto by email of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.

 

Section 10.9 SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

 

Section 10.10 FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 10.11 NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

Section 10.12 EQUITABLE RELIEF. The Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Investor. The Company therefore agrees that the Investor shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

	 
	21
	

 
	 

 

Section 10.13 TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered in construing or interpreting this Agreement.

 

Section 10.14 AMENDMENTS; WAIVERS. No provision of this Agreement may be amended or waived by the parties from and after the date that is one (1) Trading Day immediately preceding the initial filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, (i) no provision of this Agreement may be amended other than by a written instrument signed by both parties hereto and (ii) no provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

 

Section 10.15 PUBLICITY. The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement, other than as required by law, without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other party with prior notice of such public statement. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Investor without the prior written consent of the Investor, except to the extent required by law. The Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be "material contracts," as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities Act or the Exchange Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.

 

[Signature Page Follows]

	 
	22
	

 
	 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

 

	
 
	
MMEX RESOURCES CORPORATION
	
		
   
		
	
 
	
By: 
	
/s/ JACK W. HANKS
	
	
 
	
Name: 
	
Jack Hanks
	
	
 
	
Title:
	
Chief Executive Officer
	
		
    
	   	
	
 
	
CROWN BRIDGE PARTNERS, LLC
	
		
   
		
	
 
	
By: 
		
	
 
	
Name:
		
	
 
	
Title:
		

 

[Signature Page to equity purchase agreement]

	 
	23
	

 
	 

 

DISCLOSURE SCHEDULES TO 

EQUITY PURCHASE AGREEMENT

 

Schedule 4.3 – Capitalization

 

None.

 

Schedule 4.5 – SEC Documents 

 

None.

 

Schedule 4.9 – Litigation 

 

None.

 

Schedule 4.10 – Registration Rights 

 

None.

	 
	24
	

 
	 

 

EXHIBIT A

 

FORM OF PUT NOTICE

 

TO: CROWN BRIDGE PARTNERS, LLC

DATE: ____________________

 

We refer to the equity purchase agreement, dated June 12, 2017 (the “Agreement”), entered into by and between MMEX Resources Corporation and you. Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.

 

We hereby:

 

1) Give you notice that we require you to purchase Put Shares based on an initial put amount of $ (the actual Investment Amount to be received by the Company shall be calculated at the end of the Valuation Period); and

 

2) Certify that, as of the date hereof, the conditions set forth in Agreement, including but not limited to Section 7.2, are satisfied.

 

 

	 	MMEX RESOURCES CORPORATION	
	 	    	 	 
		By:		
	
 
	
Name: 
	Jack Hanks	 
	 	Title:	Chief Executive Officer	 

 
	 
	25
	

 
	 

 

EXHIBIT B

 

FORM OF OFFICER’S CERTIFICATE 

OF MMEX RESOURCES CORPORATION

 

Pursuant to Section 7.2(k) of that certain equity purchase agreement, dated June 12, 2017 (the “Agreement”), by and between MMEX Resources Corporation (the “Company”) and Crown Bridge Partners, LLC (the “Investor”), the undersigned, in his capacity as Chief Executive Officer of the Company, and not in his individual capacity, hereby certifies, as of the date hereof (such date, the “Condition Satisfaction Date”), the following:

 

1. The representations and warranties of the Company are true and correct in all material respects as of the Condition Satisfaction Date as though made on the Condition Satisfaction Date (except for representations and warranties specifically made as of a particular date) with respect to all periods, and as to all events and circumstances occurring or existing to and including the Condition Satisfaction Date, except for any conditions which have temporarily caused any representations or warranties of the Company set forth in the Agreement to be incorrect and which have been corrected with no continuing impairment to the Company or the Investor; and

 

2. All of the conditions precedent to the obligation of the Investor to purchase Put Shares set forth in the Agreement, including but not limited to Section 7.2 of the Agreement, have been satisfied as of the Condition Satisfaction Date.

 

Capitalized terms used herein shall have the meanings set forth in the Agreement unless otherwise defined herein.

 

IN WITNESS WHEREOF, the undersigned has hereunto affixed his hand as of the June 12, 2017.

		By:		
	
 
	
Name:
	Jack Hanks	 
	 	Title:	Chief Executive Officer	 

 

	 
	26
	

 
	 

 

EXHIBIT C

 

COMMITMENT NOTE

 

 

 

 

 

 

 

 

	 
	27
	

 
	 

 

EXHIBIT D

 

FORM OF TRANSFER AGENT

INSTRUCTION LETTER

 

 

 

 

 

 

 

	
28

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