Securities and Exchange Commission,
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
MASON OIL COMPANY, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
575315 20 5
(CUSIP Number)
P. Christian Anderson
HOLME, ROBERTS & OWEN LLP
111 East Broadway, Suite 1100
Salt Lake City, Utah 84111
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications)
October 21, 1996
(Date of Event Which Requires Filing of This Statement)
If the Filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) and (4), check the following
box.
Check the following box if the fee is being paid with this statement:
. (A fee is not required only if the reporting person: (1) Has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class. (See Rule 13d-7).
CUSIP NO. 575315 20 5
(1) Names of Reporting persons S.S. or IRS Identification Nos. of above
persons
Paul B. Ingram
John L. Naylor
(2) Check the appropriate box if a member of a group (see instructions)
(a)
(b) X
(3) SEC use only
(4) Source of funds (see instructions)
SC
(5) Check if disclosure of legal proceedings is required pursuant to Items
2(d) and 2(e).
(6) Citizenship or place of organization
Paul B. Ingram U.S.
John L. Naylor Australia
Number of shares beneficially owned by each reporting person with:
(7) Sole voting power
Paul B. Ingram 3,700,000; 40.1%
John L. Naylor 3,700,000; 40.1%
(8) Shared voting power
N/A
(9) Sole dispositive power
Paul B. Ingram 3,700,000; 40.1%
John L. Naylor 3,700,000; 40.1%
(10) Shared dispositive power
N/A
(11) Aggregate amount beneficially owned by each reporting person.
Paul B. Ingram 3,700,000
John L. Naylor 3,700,000
(12) Check if the aggregate amount in Row (11) excludes certain shares (see
instructions).
(13) Percent of class represented by amount in Row (11)
Paul B. Ingram 40.1%
John L. Naylor 40.1%
(14) Type of reporting person (see instructions)
IN; IN
SCHEDULE 13D
Item 1. Security and Issuer.
--------------------
Title of the Class of Equity Securities to Which this Settlement Relates.
-------------------------------------------------------------------------
Common Stock.
Name and Address of the Principal Executive Offices of the Issuer.
------------------------------------------------------------------
Mason Oil Company, Inc.
6337 Ravenwood Drive
Sarasota, Florida 34243
Item 2. Identity and Background.
------------------------
(a) Names of Reporting Persons.
---------------------------
Paul B. Ingram and John L. Naylor.
(b) Residence or Business Address of Reporting Persons.
---------------------------------------------------
Paul B. Ingram
6337 Ravenwood Drive
Sarasota, Florida 34243
John L. Naylor
33 Agusan Circle
Insular Village, Ph.1
Davao City, 8000
Philippines
(c) Present Principal Occupation or Employment of Reporting Persons.
----------------------------------------------------------------
Paul B. Ingram: Retired.
John L. Naylor: Geologist/Consultant
33 Agusan Circle
Insular Village, Ph.1
Davao City, 8000
Philippines
(d) Convictions in Criminal Proceedings.
------------------------------------
Paul B. Ingram: None; not applicable.
John L. Naylor: None; not applicable.
(e) Civil Proceedings Within Last Five Years Resulting in Order
-----------------------------------------------------------
Pertaining to Securities Laws.
------------------------------
Paul B. Ingram: None; not applicable.
John L. Naylor: None; not applicable.
(f) Citizenship.
------------
Paul B. Ingram: U.S.
John L. Naylor: Australia
Item 3. Source and Amounts of Funds or Other Consideration.
---------------------------------------------------
The securities which are the subject of this Schedule 13D were acquired
by Messrs. Paul B. Ingram and John L. Naylor pursuant to a Stock Purchase and
Sale Agreement dated October 14, 1996, among Mason Oil Company, Inc., a Utah
corporation ("Mason Oil"), Mr. Ingram and Mr. Naylor (the "Agreement"). At
the closing of the Agreement on October 21, 1996, Mason Oil acquired all of
the outstanding stock of IAN Holdings, Inc., a Cayman Islands corporation
("IAN Holdings") in exchange for 3,000,000 shares of its common stock to each
Mr Ingram and Mr. Naylor. IAN Holdings is the owner of all of the outstanding
shares of Hemley Exploration Pty. Ltd., an Australian corporation ("Hemley").
Hemley is the beneficiary of certain petroleum exploration licenses, regarding
rights to certain petroleum exploration activities in Australia, identified as
Petroleum Exploration Licenses Nos. 61 and 63 (the "PELs"), issued by the
Australia Ministry for Mines and Energy, subject to an 3% overriding royalty
obligation to Messrs. Ingram and Naylor. Mason Oil's Board of Directors
approved all aspects of the transaction and specifically determined that the
consideration given in exchange for the IAN Holdings stock fairly and
adequately reflected the value received.
Item 4. Purpose of Transaction.
-----------------------
The reporting persons have acquired the subject securities of the issuer
for the following purposes, plans or proposals:
(a) To increase their equity position in the issuer, in consideration
for the transfer to the issuer of assets that might serve as the basis for the
issuer's proposed petroleum exploration business; and
(b) To engage in the exploitation of the PELs issued to IAN Holdings by
the Australia Ministry of Mines and Energy, and to explore opportunities for
contractual relationships with petroleum sale and distribution companies.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a) Aggregate Securities Beneficially Owned by Each Reporting Person.
-----------------------------------------------------------------
Paul B. Ingram: 3,700,000 shares common stock; 40.1% of total
outstanding common stock.
John L. Naylor: 3,700,000 shares common stock; 40.1% of total
outstanding common stock.
(b) Number of Shares as to which There Is Sole Voting or Disposition
----------------------------------------------------------------
Power For Each Reporting Person Named in Paragraph (a). Each reporting
person named in paragraph (a) holds sole power to vote or direct the vote, and
sole power to dispose or to direct the disposition of, all shares beneficially
owned by each of them.
(c) Transactions in the Reported Securities Involving the Reporting
---------------------------------------------------------------
Persons Effected During the Past Sixty Days or since the Most Recent Schedule
- -----------------------------------------------------------------------------
13D.
- ----
As referenced above, a Stock Purchase and Sale Agreement dated October 14,
1996, was entered among the issuer, and Messrs. Ingram and Naylor, pursuant to
which the issuer agreed to acquire from Messrs. Ingram and Naylor all of the
outstanding stock of IAN Holdings, Inc., a Cayman Islands corporation ("IAN
Holdings") in exchange for 6,000,000 shares of its common stock.
(d) Other Persons Known To Have Rights in Such Securities.
------------------------------------------------------
None; not applicable.
(e) Date on which Reporting Persons Ceased as Beneficial Owners of More
-------------------------------------------------------------------
Than Five Percent of the Common Stock of Issuer.
- ------------------------------------------------
None; not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
-------------------------------------------------------------
Respect to the Securities of the Issuer.
- ----------------------------------------
(a) Pursuant to a Stock Purchase Agreement, dated September 10, 1996, by
and between Craig Carpenter, the issuer, and Messrs. Ingram and Naylor, Mr.
Carpenter granted to Messrs. Ingram and Naylor an irrevocable proxy to vote
100,000 shares that are the subject of a one-year irrevocable option described
in Item 6(c) of the Schedule 13D filed in paper form with the Securities and
Exchange Commission on September 20, 1996, attached hereto as Exhibit 1, for
the effective period of such option.
(b) By document entitled General Power of Attorney, dated September 13,
1996, Mr. Naylor appointed Mr. Ingram as his true and lawful agent and
attorney-in-fact. This agency encompasses actions pertaining to the voting of
Mr. Naylor's shares in the common stock of the issuer. The General Power of
Attorney will expire on September 30, 1997.
(c) By document entitled Proxy Appointment Form, dated September 13,
1996, Mr. Naylor appointed Mr. Ingram as proxy to represent Mr. Naylor at any
meeting of the issuer's shareholders. This proxy is valid for eleven months,
but is revocable at any time.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Exhibit 1. Schedule 13D, filed in paper form with the Securities and
Exchange Commission on September 20, 1996, is attached hereto for filing in
electronic format pursuant to 17 CFR 240.13d-2(c) (excluding exhibits appended
thereto, in accordance with such rule).
Exhibit 2. Stock Purchase Agreement, dated September 10, 1996, by and
between Craig Carpenter, Mason Oil Company, Inc., Paul B. Ingram and John L.
Naylor, without attachments.
Exhibit 3. General Power of Attorney, dated September 13, 1996, executed
by John L. Naylor.
Exhibit 4. Proxy Appointment Form, dated September 13, 1996, executed by
John L. Naylor.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: October 28, 1996
Signature: /S/ Paul B. Ingram
Name/Title: Paul B. Ingram, Director/President
Date: October 28, 1996
Signature: /S/ John L. Naylor
Name/Title: John L. Naylor, Director/Secretary, by Paul B.
Ingram, his attorney-in-fact
EXHIBIT 1
Schedule 13D, filed with Securities and Exchange Commission on September 20,
1996
Securities and Exchange Commission,
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. N/A )*
MASON OIL COMPANY, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
575315 20 5
(CUSIP Number)
P. Christian Anderson
HOLME, ROBERTS & OWEN, LLP
111 East Broadway, Suite 1100
Salt Lake City, Utah 84111
(Name, Address and Telephone Number of Person
(Authorized to Receive Notice and Communications)
September 12, 1996
(Date of Event Which Requires Filing of This Statement)
If the Filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) and (4), check the following
box. .
Check the following box if the a fee is being paid with this statement:
. (A fee is not required only if the reporting person: (1) Has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class. (See Rule 13d-7)).
CUSIP NO. _______________
(1) Names of Reporting persons S.S. or IRS Identification Nos. of above
persons
Paul B. Ingram
John L. Naylor
(2) Check the appropriate box if a member of a group (see instructions)
(a)
(b) X
(3) SEC use only
(4) Source of funds (see instructions)
PF
(5) Check if disclosure of legal proceedings is required pursuant to Items
2(d) and 2(e).
(6) Citizenship or place of organization
Paul B. Ingram U.S.
John L. Naylor Australia
Number of shares beneficially owned by each reporting person with:
(7) Sole voting power
Paul B. Ingram 700,000; 21.7%
John L. Naylor 700,000; 21.7%
(8) Shared voting power
N/A
(9) Sole dispositive power
Paul B. Ingram 700,000; 21.7%
John L. Naylor 700,000; 21.7%
(10) Shared dispositive power
N/A
(11) Aggregate amount beneficially owned by each reporting person.
Paul B. Ingram 700,000 shares
John L. Naylor 700,000 shares
(12) Check if the aggregate amount in Row (11)excludes certain shares (see
instructions).
(13) Percent of class represented by amount in Row (11)
Paul B. Ingram 21.7%
John L. Naylor 21.7%
(14) Type of reporting person (see instructions)
IN; IN
SCHEDULE 13D
Item 1. Security and Issuer.
Common Stock
Mason Oil Company, Inc.
6337 Ravenwood Drive
Sarasota, Florida 34243
Item 2. Identity and Background.
(a) Name.
Paul B. Ingram
(b) Residence or business address.
6337 Ravenwood Drive
Sarasota, Florida 34243
(c) Present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which such
employment is conducted.
Retired.
(d) Whether or not, during the last five years, such person has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) and, if so, give the dates, nature of conviction, name and
location of court, any penalty imposed, or other disposition of the case.
None; not applicable.
(e) Whether or not, during the last five years, such person was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgement, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws; and, if so, identify
and describe such proceedings and summarize the terms of such judgment, decree
or final order.
None; not applicable.
(f) Citizenship.
U.S.
(a) Name.
John L. Naylor
(b) Residence or business address.
33 Agusan Circle
Insular Village, Ph.1
Davao City, 8000
Philippines
(c) Present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which such
employment is conducted.
Geologist/Consultant
33 Agusan Circle
Insular Village, Ph.1
Davao City, 8000
Philippines
(d) Whether or not, during the last five years, such person has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) and, if so, give the dates, nature of conviction, name and
location of court, any penalty imposed, or other disposition of the case.
None; not applicable.
(e) Whether or not, during the last five years, such person was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgement, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws; and, if so, identify
and describe such proceedings and summarize the terms of such judgment, decree
or final order.
None; not applicable.
(f) Citizenship.
Australia
Item 3. Source and Amounts of Funds or Other Consideration.
1,300,000 shares of common stock of the issuer (650,000 shares by each
reporting person) were acquired for and in consideration of a total amount of
$35,000, paid out of personal funds. The reporting persons also hold an
irrevocable option to purchase an additional 100,000 (50,000 shares by each
reporting issuer) on or before September 10, 1997, for and in consideration of
a total amount of $25,000, to be paid out of personal funds.
Item 4. Purpose of Transaction.
The reporting persons have acquired the securities of the issuer for the
following purposes, plans or proposals:
(a) To acquire control of the issuer, and to elect new members of the
board of directors of the issuer;
(b) To effect a private placement of the common stock of the issuer; and
(c) To facilitate the transfer to the issuer of certain petroleum
exploration licenses issued by the Australia Ministry of Mines, and to engage
in the exploitation of such licenses.
Item 5. Interest in Securities of the Issuer.
(a) Aggregate number and percentage of the class of securities
identified in Item 1 beneficially owned by each person named in Item 2.
Paul B. Ingram 700,000 shares common stock; 21.7%.
John L. Naylor 700,000 shares common stock; 21.7%
(b) For each person named in response to paragraph (a), indicate the
number of shares as to which there is sole power to vote or to direct the
vote, sole power to dispose or to direct the disposition, or shared power to
dispose or to direct the disposition. Provide the applicable information
required by Item 2 with respect to each person with whom the power to vote or
to direct the vote or to dispose or direct the disposition is shared.
Each reporting person named in paragraph (a) holds sole power to vote or
direct the vote, and sole power to dispose or to direct the disposition of,
all shares beneficially owned by each of them.
(c) Describe any transactions in the class of securities reported on
that were effected during the past sixty days or since the most recent filing
of Schedule 13D, whichever is less, by the person named in response to
paragraph (a).
Pursuant to a Stock Purchase Agreement, dated September 10, 1996, by and
between Craig Carpenter, Mason Oil Company, Inc. ("Mason Oil"), Paul B. Ingram
("Ingram") and John L. Naylor ("Naylor"), Ingram and Naylor purchased from
Craig Carpenter 1,300,000 shares of the common stock of Mason Oil (650,000
shares each) for and in consideration of the amount of $35,000. By the same
instrument, Ingram and Naylor also acquired from Craig Carpenter a one-year
irrevocable option to purchase an additional 100,000 shares of the common
stock of Mason Oil (50,000 shares each) for $25,000. The closing of these
transactions occurred in Salt Lake City, Utah on September 12, 1996.
(d) If any other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale
of, such securities, a statement to that effect should be included in response
to this item and, if such interest relates to more than five percent of the
class, such person should be identified. A listing of the shareholders of an
investment company registered under the Investment Company Act of 1940 or the
beneficiaries of an employee benefit plan, pension fund or endowment fund is
not required.
Not applicable.
(e) If applicable, state the date on which the reporting person ceased
to be the beneficial owner of more than five percent of the class of
securities.
Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to the Securities of the Issuer.
(a) Pursuant to the Stock Purchase Agreement, dated September 10, 1996,
by and between Craig Carpenter ("Carpenter"), Mason Oil Company, Inc. ("Mason
Oil"), Paul B. Ingram ("Ingram") and John L. Naylor ("Naylor"), Carpenter
granted to Ingram and Naylor an irrevocable proxy to vote the 100,000 shares
that are the subject of the one-year irrevocable option described in Item 6(c)
above, during the effective period of such option.
(b) By document titled General Power of Attorney, dated September 13,
1996, John L. Naylor has appointed Paul B. Ingram as his true and lawful agent
and attorney-in-fact. This agency would encompass actions pertaining to the
voting of Mr. Naylor's shares in the common stock of the issuer. The General
Power of Attorney will expire on September 30, 1997.
(c) By document entitled Proxy Appointment Form, dated September 13,
1996, John L. Naylor appointed Paul B. Ingram as proxy to represent Naylor at
any meeting of Mason Oil shareholders. This proxy is valid for eleven months,
but is revocable at any time.
Item 7. Material to be Filed as Exhibits.
Exhibit 1. Stock Purchase Agreement, dated September 10, 1996, by and
between Craig Carpenter, Mason Oil Company, Inc., Paul B. Ingram and John L.
Naylor.
Exhibit 2. General Power of Attorney, dated September 13, 1996, executed
by John L. Naylor.
Exhibit 3. Proxy Appointment Form, dated September 13, 1996, executed by
John L. Naylor.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date:________September 18, 1996_____________
Signature:_______/S/ Paul B. Ingram_______________
Name/Title: _____Paul B. Ingram, Director/President___
Date:_______September 18, 1996_____________
Signature:_______/S/ John L. Naylor_______________
Name/Title:_____John L. Naylor, Director/Secretary___
EXHIBIT 2
Stock Purchase Agreement, dated September 10, 1996
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 10th day
of September, 1996, by and among CRAIG CARPENTER ("Seller"), MASON OIL
COMPANY, INC., a Utah corporation ("Mason Oil"), PAUL B. INGRAM ("Ingram"),
and JOHN L. NAYLOR, by and through his attorney-in-fact, Paul B. Ingram
("Naylor"). Ingram and Naylor are collectively referred to herein as "Buyer."
R E C I T A L S:
A. Seller owns 1,956,300 shares of the common stock of Mason Oil,
which shares constitute approximately sixty and seven-tenths percent (60.7%)
of the issued and outstanding stock of Mason Oil.
B. Seller desires to sell 1,400,000 of such shares ("Shares") to
Buyer and to retain ownership of 556,300 shares.
C. Buyer desires to purchase 1,300,000 of such Shares ("Block I
Shares") from Seller and to acquire an option to purchase an additional
100,000 of such Shares ("Block II Shares") from Seller, all on the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and the premises and
the mutual promises and covenants herein set forth, the parties agree as
follows:
1. Recitals. The foregoing recitals are true and correct.
2. Purchase and Sale; Closings.
2.1 Purchase and Sale. Subject to the terms and conditions hereof,
Seller agrees to sell, convey, transfer and assign to Buyer, and Buyer agrees
to purchase, accept and acquire from Seller, all of the Block I Shares. After
all of the conditions precedent to Closing set forth in Section 8 below have
been satisfied, Seller shall sell the Block I Shares to Buyer. Such purchase
shall occur at the First Closing (as defined below). The purchase price for
the purchase of the Block I Shares shall be Thirty-Five Thousand Dollars
($35,000), which sum shall be payable by certified check at the First Closing.
At the First Closing, Seller shall grant to Buyer an
irrevocable option ("Option") to purchase the Block II Shares for the sum of
Twenty-Five Thousand Dollars ($25,000). Such Option shall continue for twelve
(12) months ("Option Period") and shall be exercisable by Buyer giving written
notice during the Option Period in the form and manner prescribed under
Section 13.2 below to Seller that Buyer intends to purchase the Block II
Shares. The Closing on such Block II Shares ("Second Closing") shall occur on
the later of the date that is thirty (30) days after such notice is given or
the last day of such Option Period. During such Option Period, Seller
irrevocably grants Seller's proxy to Buyer for Buyer to vote the Block II
Shares in any manner Buyer deems appropriate. The certificate representing
the Block II Shares shall be held in escrow by Ron Harrington, as Escrow
Agent, pursuant to the Escrow Agreement attached hereto as Schedule 2.1, until
the conclusion of the Option Period (if no notice is given by Buyer to Seller)
or the purchase of the Block II Shares by the Buyer. In the event Buyer fails
to exercise its Option and purchase the Block II Shares, the Option shall
terminate at the end of the Option Period (or sooner if Buyer renounces the
Option in writing prior thereto), and the certificates representing the
Block II Shares shall be returned to Seller and Seller shall regain all voting
rights connected therewith. The purchase price for the Block II Shares shall
be payable by certified check at the Second Closing.
Seller shall retain ownership of 556,300 shares.
2.2 Closings.
2.2.1 The First Closing shall occur on or before September 12,
1996, at the offices of Holme Roberts & Owen LLC, 111 East Broadway, Suite
1100, Salt Lake City, Utah, or at such other time, date and location as the
parties agree. At Buyer's option, the First Closing may occur prior to such
scheduled date if Buyer first gives notice as provided in Section 13.2 below
that Buyer wishes to close the purchase of the Block I Shares fifteen (15)
days after the date of such notice.
2.2.2 The Second Closing shall be the closing on the purchase
of the Block II Shares and shall occur, as provided in Section 2.1 above, on
the date that is thirty (30) days after the notice provided therein is given
(but not later than the last day of the Option Period), or on such other date
as the parties may agree. The Second Closing shall occur at the offices of
Holme Roberts & Owen LLC, 111 East Broadway, Suite 1100, Salt Lake City, Utah,
or at such other location as the parties agree.
The First Closing and the Second Closing are sometimes collectively
referred to herein as the "Closings," and individually as a "Closing."
3. Representations and Warranties of Mason Oil and Seller. As an
inducement to Buyer to enter into this Agreement and to consummate the
transactions contemplated herein, Seller and Mason Oil, jointly and severally,
represent and warrant to and covenant with Buyer that the following are true
and correct and will be true and correct at the First Closing:
3.1 Corporate Existence of Mason Oil, Absence of Subsidiaries.
Mason Oil is duly organized, validly existing and in good standing under the
laws of the State of Utah. It has full power and authority to enter into this
Agreement. Mason Oil has the corporate power and authority to own and use its
properties and to transact the business in which it is engaged, holds all
franchises, licenses and permits necessary therefor and is duly licensed or
qualified to do business in every state and legal jurisdiction in which such
licenses or qualifications are required, and carries on its business in all
respects in accordance with the laws applicable in each such state or
jurisdiction. Mason Oil has no subsidiaries and no investments in any other
firm or person. A true and correct copy of Mason Oil's Articles of
Incorporation and Bylaws are attached hereto as Schedule 3.1.
3.2 Stock. The authorized capital stock of Mason Oil consists
of 50,000,000 shares of common stock, $0.001 par value per share. The total
number of shares of authorized capital stock of Mason Oil issued and
outstanding is 3,225,454, all of which, at the First Closing, will be duly
authorized, validly issued, fully paid and non-assessable. Of such issued and
outstanding shares of capital stock, 1,956,300 are owned by Seller. The
Block I Shares and the Block II Shares, which are the subject matter of
Buyer's purchase hereunder, will bear the standard investment legend and will
be owned and held by Seller free and clear of all security interests, liens,
encumbrances, claims and charges. There are no outstanding warrants, options,
contracts, calls or other rights of any kind with regard to any authorized or
issued but not outstanding shares of common stock in Mason Oil. The business
of Mason Oil is conducted entirely in Mason Oil and no other entity or
affiliate of Mason Oil owns any assets used in the business or conducts any
part of the business of Mason Oil. Of the issued and outstanding shares of
capital stock of Mason Oil, 1,269,154 shares are publicly traded shares, duly
registered with the Securities and Exchange Commission ("SEC") and listed on
the Bulletin Board for NASDAQ sales of stock. All shares of Mason Oil common
stock which are publicly traded were sold to bona-fide members of the
investing public. Neither Mason Oil, the Seller, nor any other officers,
directors or principal shareholders of Mason Oil have the power to direct the
voting or investment decisions of any other shareholders of Mason Oil; no
officer, director, principal shareholder or other affiliate of Mason Oil has
any option, agreement or arrangement to reacquire any of the publicly traded
shares of common stock; such officers, directors, principal shareholders, or
other affiliates did not provide, directly or indirectly, any of the funds
utilized by shareholders of record to purchase shares sold to the public; and,
to the best knowledge of Mason Oil and Seller, all of the persons named on
Mason Oil's shareholder lists as holding shares of Mason Oil capital stock are
the sole beneficial owners thereof, and unless otherwise indicated on such
lists, a copy of which have been provided to Buyer. The issued and
outstanding shares of Mason Oil common stock that do not currently bear a
restrictive legend are tradeable in the public market. The common shares of
Mason Oil are currently qualified to trade in the states set forth in
Schedule 3.2 attached hereto.
3.3 Public Filings. Mason Oil has heretofore delivered to
Buyer its Form 10-SB statement as filed by Mason Oil with the SEC on May 31,
1996, the SEC'S comment letter, and the response of attorney Branden T.
Burningham to such comment letter, and has delivered to Buyer its Form 10-QSB
Statement as filed by Mason Oil with the SEC on July 22, 1996 (collectively,
the "Mason Oil Public Filings"). The Mason Oil Public Filing is attached
hereto as Schedule 3.3 and made a part hereof. Mason Oil has made all
required filings in a timely manner. As of their respective dates, such
reports and statements did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The audited financial statements of Mason Oil
included in such reports have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto), and fairly
present the financial position of Mason Oil as of the dates thereof and the
results of operations and changes in financial positions for the periods then
ended. The unaudited interim financial statements of Mason Oil included in
such reports have been prepared on a basis consistent with such audited,
consolidated financial statements, subject to normal year-end adjustments, and
in accordance with the requirements of Form 10-SB and Form 10-QSB. Since the
date of such financial statements, there have been no material adverse changes
in the assets, liabilities or financial position of Mason Oil.
Except as disclosed on Schedule 3.3, the SEC has not issued any
order preventing or suspending the transfer of securities of Mason Oil, and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of Mason Oil or Seller, are contemplated by the SEC.
3.4 No Violations of Law. Mason Oil is not in default under or
in violation of, any applicable federal, state or local laws, including those
relating to the employment of labor, and there are no controversies pending or
threatened between Mason Oil and its employees.
3.5 Taxes. Mason Oil has duly filed all federal, state and
local income taxes and other returns and reports required to have been filed
up to the date hereof, and has paid all taxes, penalties and interest required
to have been paid with respect thereto. Mason Oil has either paid or made
adequate disclosure in the aforementioned financial statements for the payment
of all taxes with respect to the conduct of its businesses up to and through
the date of its said financial statements. No disputes or proceedings are
pending with respect to any material amount of taxes, penalties or interest
due or alleged to be due from Mason Oil. Mason Oil is not currently the
subject of any audit for any federal, state or local income taxes, nor has
Mason Oil received any notice that any such audit is pending or threatened.
Mason Oil has not consented to the extension of any period for any such audit.
3.6 Agreements. Except for agreements described in Schedule 3.6
attached hereto or otherwise disclosed in this Agreement, Mason Oil is not a
party to or bound by any agreement, contract or commitment, including but not
limited to any agreement involving sales representation or distribution,
employment or consulting, noncompetition or the limiting of the ability of
Mason Oil to market its services, license agreements to or for Mason Oil,
labor agreements, leases for personal or real property, discount or allowance
agreements, guaranties or indemnities, loan agreements and security
agreements. To the best of Seller's and Mason Oil's knowledge, there are no
defaults by other parties thereto. All such agreements were entered into in
the ordinary course of business and none of such agreements are materially
disadvantageous to Mason Oil. Each of the contracts and agreements to which
Mason Oil is a party is a valid and binding obligation of the parties thereto
in accordance with its terms and conditions. No party to such contract or
agreement is in default with respect to any term or condition thereof nor has
any event occurred which, through the passage of time or the giving of notice,
or both, would constitute a default thereunder or would cause the acceleration
of any obligations, term or condition thereof, constitute a default
thereunder, or cause the creation of a lien or encumbrance upon any asset of
Mason Oil. To the extent any such agreement exists, and except as set forth
in Schedule 3.6, neither Seller nor Mason Oil is in breach thereof and neither
Seller nor Mason Oil has received any notice of any threatened or pending
termination thereof.
3.7 Insurance. Schedule 3.7 attached hereto contains a true and
complete list of all policies of fire, life, liability, worker's compensation
and other forms of insurance maintained by Mason Oil. All such policies are
valid and in full force and effect as of the date hereof, and all premiums
payable on such policies are current as to payment and will be current as of
the close of business on the date of the First Closing. To the best of
knowledge of Seller and Mason Oil, no such policy has been terminated since
June 30, 1996, and there exists no threatened attempt to terminate any such
policy.
3.8 Litigation. There are no actions, claims, suits or
proceedings pending or threatened against or affecting Mason Oil or its assets
or business, or Seller. Neither Mason Oil nor Seller is in violation of any
rule, regulation, order, writ, injunction or decree of any court, and Mason
Oil has not received any notice from any insurer or any board of fire
underwriters having jurisdiction of any work required to be performed at its
premises.
3.9 Title to Assets. Schedule 3.9 attached hereto lists all of
Mason Oil's assets, including all patents, applications for patents, trademark
registrations, applications for trademark registrations, trade names and
copyrights, mineral and drilling rights, and licenses under any of the
foregoing, used, owned or granted by or to Mason Oil, which list comprises all
of such material items required for the operation of the businesses of Mason
Oil presently conducted or planned. Except as set forth on Schedule 3.9,
Mason Oil has the exclusive rights to each such item; all such items are valid
and subsisting; good and marketable title to all such items (together with all
common law rights to the subject matter thereof) is owned by Mason Oil free
and clear of all options, adverse claims, defenses, liens, charges, security
interests, covenants, conditions, agreements, restrictions and other
encumbrances; and there exists no restriction on the use or transfer of any
such item. There are no interferences, challenges, proceedings or
infringement suits pending or threatened with respect to any such item. Mason
Oil has not granted any license to any other party with respect to any such
item. Mason Oil is not infringing upon the right of any other person under
any patent, trademark, copyright or similar right in the conduct of their
respective businesses. All property owned and/or leased by Mason Oil which is
currently used in its business is in good operating condition and no repair is
required for its use in Mason Oil's business as presently conducted (ordinary
wear and tear excepted), and conforms in all material respects to all
applicable laws.
3.10 No Violations. The execution of this Agreement and
consummation of the transactions contemplated hereby will not result in or
constitute any of the following:
3.10.1 A default, breach or violation of the Articles of
Incorporation or Bylaws of Mason Oil, or of any lease, license, promissory
note, conditional sales contract, commitment, indenture, mortgage, deed of
trust or other agreement, instrument or arrangement to which Seller or Mason
Oil are parties or by which any of them or the property of any of them is
bound;
3.10.2 An event that would permit any party to terminate
any agreement or to accelerate the maturity of any indebtedness or other
obligation of Mason Oil; or
3.10.3 The creation or imposition of any lien, charge or
encumbrance on any of the properties of Mason Oil.
3.11 Bank Accounts; Safe Deposit Boxes. Schedule 3.11 is a list
of all bank accounts maintained by Mason Oil, together with the names of
authorized signatories on each such account, and the location of all safe
deposit boxes maintained by Mason Oil, together with the names of the persons
authorized to have access thereto.
3.12 Licenses. Schedule 3.12 attached hereto is a true and
correct list of all licenses held by Mason Oil, each of which is presently in
full force and effect and has never been revoked.
3.13 Disclosures. No representation contained herein or in any
lease, certificate, instrument, document or other writing furnished pursuant
to the provisions hereof or in connection with the transactions contemplated
herein contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements therein not misleading.
3.14 Labor Agreements, Employee Benefit Plan and Employee
Agreements. Mason Oil is not a party to any of the following types of
agreements, whether written or unwritten:
3.14.1 Any qualified or nonqualified profit sharing
deferred compensation, bonus, stock option stock purchase, retainer,
consulting, health, welfare or incentive plan or agreement (whether any are
legally binding or not).
3.14.2 Any qualified or nonqualified employee pension plan
or agreement.
3.14.3 Any plan or policy providing for employee benefits,
including but not limited to, vacation, disability, sick leave, medical,
hospitalization, life insurance and other insurance plans and related
benefits.
3.14.4 Any employment agreement.
3.15 Terminated Plans. There are no retirement plans which
Mason Oil has terminated or taken action to terminate. Mason Oil has no
liability to any person or entity, including without limitation the PBGC, any
other governmental agency or any participant in or beneficiary of any
retirement plan, and Mason Oil is not liable for any excise, income or other
tax or penalty as a result of such termination.
3.16 Books and Records. The books of account, minute books
and other corporate records of Mason Oil properly and fairly reflect all
material transactions considered by its board of directors to date, the stock
record books are complete, all such books are complete, and all such books and
records have been maintained in accordance with good business practices. At
the First Closing, Seller shall deliver to Buyer all files, minute books,
books of account, financial and personnel records, and all other documents and
records (collectively "Records") of Mason Oil. Upon reasonable advance notice
to Mason Oil, Seller shall have the right to inspect, review and copy the
Records.
3.17 Accounts Receivable. Schedule 3.17 sets forth all aged
accounts receivable of Mason Oil at the execution hereof. Subject to
reasonable and customary reserves for bad debts, the accounts receivable
currently owned and held by Mason Oil, and all accounts receivable
subsequently accruing through the First Closing will be (except those which
have been collected since the date of this Agreement) valid, genuine and
subsisting, subject to no defenses, set-offs or counterclaims and current and
reasonably believed to be collectible within ninety (90) days following the
First Closing.
3.18 Financial Information; Absence of Certain Changes. Seller
and Mason Oil have provided to Buyer copies of Mason Oil's unaudited financial
statements for the period ended June 30, 1996. The financial information set
forth therein is complete and accurate and has been prepared in accordance
with generally accepted accounting principles, consistently applied. Since
June 30, 1996, and except as otherwise set forth herein, Mason Oil has not:
3.18.1 Issued, sold or delivered or agreed to issue, sell
or deliver any additional shares of capital stock or any options, warrants or
rights to acquire any such capital stock, or securities convertible into or
exchangeable for such capital stock.
3.18.2 Incurred any obligation or liability, whether
absolute, accrued, contingent or otherwise, other than in the ordinary course
of business.
3.18.3 Mortgaged, pledged or subjected to any lien, lease,
security interest or other charge or encumbrance any asset or property,
whether tangible or intangible except in the ordinary course of business.
3.18.4 Acquired or disposed of any asset or property, or
entered into any agreement or other arrangement for any such acquisition or
disposition, except in the ordinary course of business.
3.18.5 Declared, made, paid or set apart any sum for any
dividend or other distribution to shareholders or purchased or redeemed any
shares of capital stock or any option, warrant or right to purchase any
capital stock, or reclassified such capital stock.
3.18.6 Increased by more than three percent (3%) in
aggregate the wages, salaries, rate of compensation, pension or other benefits
payable to all employees or granted any excessive severance or compensation,
pension or other benefits payable to all employees or granted any excessive
severance or termination pay.
3.18.7 Entered into any employment agreement with any
officer or salaried employee which is not terminable by Mason Oil without
cause and without penalty upon notice of thirty (30) days or less.
3.18.8 Forgiven or canceled any debt or claim, or waived
any right of material value.
3.18.9 Entered into any transaction other than in the
ordinary course of business.
3.18.10 Sold, assigned, transferred or granted any right or
license under any trademark, trade name, patent or copyright.
3.18.11 Suffered any adverse change in its business,
condition, sales, income, assets or liabilities, other than changes in the
ordinary course of business which have not been, either in any case or in the
aggregate, materially adverse.
3.18.12 Suffered any damage, destruction or loss of
property (whether or not covered by insurance) materially adversely affecting,
either in any case or in the aggregate, its business, prospects, condition,
properties or assets.
3.18.13 Changed the method of maintaining its books and
records.
3.18.14 Failed to timely file all filings with each
federal, state and local securities regulation agency.
3.19 Brokers. No broker or finder, or other party or agent
performing similar functions, has been retained by Mason Oil or Seller, or is
entitled to be paid based upon any agreements, arrangements or understandings
made by Mason Oil or Seller in connection with the transactions contemplated
by this Agreement, and no brokerage fee or other commission has been agreed to
be paid by Mason Oil or Seller on account of the transactions contemplated
hereby.
3.20 Price Stabilization and Manipulation. Neither Mason Oil
nor Seller has taken within the past year, or shall take prior to the
consummation of the First Closing, directly or indirectly, any action designed
to, or that might in the future reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of Mason Oil.
4. Representations and Warranties of Buyer. As an inducement to
Seller to enter into this Agreement and to consummate the transactions
contemplated herein, each of Ingram and Naylor hereby represents and warrants
to Seller, as to himself, that the following are true and correct and will be
true and correct at the First Closing.
4.1 Legal Capacity. Such Buyer has the legal capacity and
ability to enter into and perform his obligations arising under this Agreement
and to purchase Shares from Seller as provided for herein. Such Buyer is not
subject to any order, judgment or decree issued by any court or state or
federal administrative agency in which fraud or deceit was found, or which
prohibits, denies or revokes the use of any exemption regarding the
registration of securities, or which restrains or enjoins such Buyer from
engaging in or continuing any conduct or practice in connection with the
registration, purchase or sale of securities. Such Buyer has not been
convicted of any felony or misdemeanor in connection with the offer, purchase
or sale of any security.
4.2 Intent to Transfer Rights to Mason Oil. Buyer is acquiring
the Shares in anticipation of utilizing Mason Oil as a vehicle in connection
with the exploitation of certain petroleum exploration opportunities in
Australia. Ingram and Naylor, directly or through affiliated entities, are
the owners of all outstanding shares of Hemley Exploration Pty. Ltd.
("Hemley"), an Australian corporation, which is the beneficiary of certain
petroleum exploration licenses, regarding rights to certain petroleum
exploration activities in Australia, identified as Petroleum Energy Licenses
Nos. 61 and 63 (the "Energy Licenses"). It is the current intention of Buyer
to cause Hemley to engage in one or more transactions (the "Transactions")
that would result in Mason Oil acquiring, directly or indirectly, not less
than 80% of the net royalty interests arising from the Energy Licenses.
Promptly after the First Closing, Buyer will use reasonable best efforts to
implement the Transactions.
5. Conduct of Business Prior to the First Closing. Following the
execution of this Agreement and prior to the First Closing, Seller shall cause
Mason Oil to conduct operations under the direction of its officers and
directors according to its ordinary course of business. Seller shall permit
Buyer and its legal counsel, accountants and other representatives to have
full access during normal business hours to all properties, books, accounts,
records, contracts and documents of and relating to Mason Oil, subject to
prior arrangement by Seller as to time and place to minimize any negative
impact such actions may have on the employees of Mason Oil.
Following the execution of this Agreement and prior to the First
Closing, without the prior agreement of Buyer, Mason Oil shall not:
5.1 Incur any indebtedness of any amount.
5.2 Acquire or agree to acquire any asset or dispose of or agree
to dispose of any asset.
5.3 Merge or consolidate with, or agree to merge or consolidate
with, any business or any business organization.
5.4 Merge or consolidate with, or agree to merge or consolidate
with, any business or any business organization.
5.5 Increase the compensation of any of its employees, officers,
directors or agents nor commit to any employment agreement not cancelable at
will, nor to any collective bargaining agreement.
5.6 Enter into any employee welfare, pension or other benefit
plan, including, as an example and without limitation, any bonus, medical,
hospitalization or life insurance plan.
5.7 Fail to use its best efforts to cause Mason Oil to carry on
its business activities diligently in substantially the manner as previously
carried out, including continuation of insurance coverages and maintenance of
relationships with employees, customers and suppliers.
5.8 Change any accounting policies or practices.
5.9 Declare or pay any dividend on, or make any distribution
with respect to, the capital stock of Mason Oil.
5.10 Purchase or redeem any capital stock of Mason Oil, or enter
any agreement to sell shares, grant options and warrants.
5.11 Amend its certificate or articles of incorporation or bylaws.
5.12 Enter into any contract, agreement, commitment or arrangement
other than in the ordinary course of business.
5.13 Fail to pay any and all taxes when same shall become due.
5.14 Fail to comply with any applicable law.
5.15 Fail to maintain its properties in good working condition,
ordinary wear and tear excepted.
5.16 Issue or sell, or enter into any contract, agreement,
commitment or arrangement to issue or sell, any shares of the capital stock of
Mason Oil, or issue or grant any stock appreciation rights, or any option,
warrant, conversion or other right to purchase or acquire any such shares or
any securities convertible into or exchangeable for such shares.
5.17 Effect any stock split, stock dividend, stock combination,
reorganization, recapitalization or reclassification affecting any of its
authorized or issued and outstanding securities.
5.18 Fail to timely file all filings with each federal, state and
local securities regulation agency.
6. Confidentiality.
6.1 Seller's Confidential Information. In connection with this
transaction, Buyer has requested and may request from Mason Oil and Seller
certain documents and other pertinent material including, without limitation,
certain customer lists, market information, financial data, computer software
and hardware information and other trade secrets, and other information
relating to Mason Oil and/or Seller, which Mason Oil and Seller consider to be
confidential (collectively, "Seller's Confidential Information"). All of
Seller's Confidential Information shall at all times prior to the First
Closing be the property of Mason Oil and/or Seller, as the case may be. Buyer
shall obtain no rights in any of Seller's Confidential Information, unless and
until the transactions contemplated by this Agreement are consummated;
provided, however, that all such Seller's Confidential Information that is
personal as to Seller and should not be considered information of Mason Oil
shall at all times be and remain the property of Seller, even after First
Closing. Buyer and Mason Oil agree as follows:
6.1.1 Except as may be required by applicable laws or as
Seller or Mason Oil, as the case may be, may from time to time consent to in
writing, Buyer shall not, at any time, disclose Seller's Confidential
Information, or any part thereof, to any person, firm, corporation,
association, or other entity for any reason or purpose whatsoever.
6.1.2 Except as otherwise required herein, at such other
time or times as Seller or Mason Oil, as the case may be, may request, Buyer
shall immediately return to Seller or Mason Oil, as the case may be, all of
Seller's Confidential Information and shall not retain any copies thereof and
shall continue to refrain from any use whatsoever of Seller's Confidential
Information.
6.1.3 In the event Buyer takes any action or fails to take
any action in contravention of this Section 6.1, Buyer shall indemnify and
hold harmless Seller and/or Mason Oil from any damage or claim that may arise
as a result of such action or inaction. In addition, Seller and/or Mason Oil
shall be entitled to collect from Buyer all costs incurred in obtaining such
indemnification, including all attorney and court costs. Buyer shall take any
and all legal actions necessary to minimize any damages resulting from such
disclosure, to retrieve such disclosed Seller's Confidential Information, and
to return same to Seller upon Seller's direction.
6.2 Buyer's Confidential Information. In connection with this
transaction, Seller has requested and may request from Buyer certain documents
and other information relating to Buyer which Buyer considers to be
confidential (collectively, "Buyer's Confidential Information"). All of
Buyer's Confidential Information shall at all times be the property of Buyer.
Seller and Mason Oil shall obtain no rights in any of Buyer's Confidential
Information, except as otherwise required to enforce the terms hereof. Seller
agrees as follows:
6.2.1 Except as may be required by applicable laws or as
Buyer may from time to time consent to in writing, Seller shall not, at any
time, disclose Buyer's Confidential Information, or any part thereof, to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever.
6.2.2 Except as otherwise required herein, at such other
time or times as Buyer may request, Seller shall immediately return to Buyer
all of Buyer's Confidential Information and shall not retain any copies
thereof and shall continue to refrain from any use whatsoever of Buyer's
Confidential Information.
6.2.3 In the event Seller takes any action or fails to take
any action in contravention of this Section 6.2, Seller shall indemnify and
hold harmless Buyer from any damage or claim that may arise as a result of
such action or inaction. In addition, Buyer shall be entitled to collect from
Seller all costs incurred in obtaining such indemnification, including all
attorneys' fees and court costs. Seller shall take any and all legal actions
necessary to minimize any damages resulting from such disclosure, to retrieve
such disclosed Buyer's Confidential Information, and to return same to Buyer
upon Buyer's direction.
7. Indemnification.
7.1 Indemnification by Seller. Seller agrees to indemnify,
defend and hold harmless Buyer from and against, and to reimburse Buyer with
respect to, any and all demands, claims, actions or causes of action,
assessments, cost, expense (including reasonable attorneys' fees and court
costs), damage, liability, loss or deficiency incurred by Buyer, as finally
determined by any court proceeding or an arbitrator, by reason of or arising
out of or in connection with any:
7.1.1 Breach of any covenant, representation or warranty of
Seller contained herein or any certificate delivered to Buyer pursuant to this
Agreement. All statements of fact contained in any written attachment
(including financial statements), deed, certificate, Schedule or other
document delivered to Buyer by Seller pursuant to this Agreement shall be
deemed representations and warranties of Seller pursuant to this Agreement.
7.1.2 Failure of Seller to perform or observe any term,
provision, covenant, agreement or condition contained herein.
7.1.3 Any income tax liability (including penalties and
interest) that may be assessed against Mason Oil, any other transferee, or
Buyer with respect to the operations of Mason Oil for all periods ending on or
prior to the First Closing.
7.1.4 Any and all awards and/or judgments to which Buyer or
Mason Oil (after the First Closing) may become subject under the Securities
Act of 1933, as amended ("1933 Act"), the Securities Exchange Act of 1934, as
amended ("1934 Act"), or any other federal or state statute, at common law or
otherwise, insofar as said liabilities, claims and lawsuits (including awards
and/or judgments) arise out of or are in connection with any of Mason Oil's
public filings made prior to the First Closing or a breach of this Agreement,
other than any liability that arises out of an untrue statement or omission
made in reliance on information provided by Buyer.
All covenants, agreements, representations and warranties made
by Seller pursuant to this Agreement or in connection with Buyer's purchase of
the Shares shall survive the First and Second Closings and remain effective
regardless of any investigations at any time made by or on behalf of Buyer or
of any information Buyer may have in respect thereof.
7.2 Cooperation; Control of Litigation. If, after First
Closing, Buyer or Mason Oil becomes involved in any litigation or written
threats thereof or claim or demand of any kind (hereinafter called
"litigation") in which an adverse result or claim or demand of any kind would
or may constitute a breach of any representation or warranty of the Seller
(the "indemnifying party") contained in this Agreement or any certificate
delivered pursuant to this Agreement, such party will give prompt written
notice to the indemnifying party of the pendency of any such litigation and
the following provisions shall be applicable:
7.2.1 The indemnifying party shall have the right to
participate in and, with the consent of the other party, which consent shall
not be unreasonably withheld, to control the contest, defense and/or
settlement of such litigation at the indemnifying party's own cost and
expense, including the cost and expense of attorneys' fees in connection with
such cost, defense and/or settlement, and in such case the other party will
assist the indemnifying party to such extent as is reasonable in such contest,
defense and/or settlement of such litigation. If Seller shall be the party
controlling such litigation, Buyer shall make available to Seller, his
attorneys and accountants, at reasonable times, all books and records of Mason
Oil relating to such suit, claim or proceeding.
7.2.2 In the event that the indemnifying party does not
assume control of the contest and defense of the litigation, then the other
party may use, but shall not be obligated to use, its best efforts to contest,
defend and/or settle such litigation at the indemnifying party's cost and
expense and in such case the indemnifying party will assist the other party to
such extent as is reasonable in the contest and defense of and/or the
reasonable settlement of such litigation.
7.2.3 The party in control of the litigation shall inform
the other party of the progress of the litigation at such times and in such a
manner as is reasonable in the circumstances.
7.3 Determination of Loss. In determining the amount of any
loss, damage, liability, cost or expense for purposes of indemnification there
shall first be taken into account and deducted from the claim the amount of
any insurance proceeds which the indemnified party or parties shall have
received as to the date that payment of the indemnification is made.
Upon the payment in full of any indemnification hereunder,
which shall be made within thirty (30) days after written demand therefor
shall be made, the indemnifying party or parties shall be subrogated to and/or
shall be deemed to receive an assignment of, any and all rights of the
indemnified party or parties with respect to the subject matter which gave
rise to the indemnification payment unless such subrogation and/or assignment
would be inequitable to the indemnified party or parties, subject to any and
all subrogation clauses which may be required by the insurer of the
indemnified party pursuant to any and all applicable insurance policies.
7.4 Reductions of Loss Amount. By way of limiting the
application of this indemnity, in determining the amount of any such losses,
damages, liabilities, costs and expenses ultimately determined to have been
incurred, there shall also be taken into account any offsetting tax benefit
which the party to be indemnified may reasonably be expected to receive as a
result of the portion of such losses, damages, liabilities, costs and
expenses, and any benefits arising from the conduct of the business in normal
course, arising out of such damages.
7.5 Set-Off. If any amount shall be due and payable by Seller
pursuant to this indemnification, Buyer shall have the right to set-off such
liability against any and all amounts due Seller hereunder.
7.6 Time Limits. All liabilities pursuant to this Section 7
shall cease absolutely after the expiration of four (4) years from the First
Closing, except insofar as specific particulars of any claim or alleged claim
arising in respect of such failure or alleged failure have been pleaded in any
litigation with respect to third parties or arbitration with respect to the
parties brought prior to the expiration of the said four (4) year period, and
except to the extent any set-off is to be made against an amount to be paid
thereafter.
7.7 Indemnification by Buyer. Each Buyer agrees to indemnify,
defend and hold harmless Seller from and against, and to reimburse Seller with
respect to, any and all demands, claims, actions or causes of action,
assessments, costs, expense (including reasonable attorneys' fees and court
costs), damage, liability, loss or deficiency incurred by Seller, as finally
determined by any court proceeding or an arbitrator, by reason of or arising
out of or in connection with any breach by such Buyer of any covenant,
representation or warranty of such Buyer contained herein. The procedures,
terms and conditions of such indemnification by Buyer shall be substantially
the same as those applicable to Seller's indemnification of Buyer, as set
forth above.
8. Conditions Precedent To Obligations Of Buyer. The obligations of
Buyer to purchase the Shares, unless otherwise waived in writing by Buyer, are
subject to the satisfaction at or before applicable Closing of the following:
8.1 All representations and warranties by Seller set forth in
this Agreement shall be true and correct on and as of the applicable Closing
as though made at that time.
8.2 Seller shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be
performed or complied with on or before the applicable Closing, including
delivery of the documents as provided in Section 10.1 hereof.
8.3 During the period from December 31, 1995, to the date of the
applicable Closing, there shall not have been any material adverse change in
the financial condition or the results of operations of Mason Oil, and Mason
Oil shall not have sustained any material loss or damage to its assets,
whether or not insured, that materially affects its ability to conduct a
material part of its businesses.
8.4 All filings with any federal, state or local securities law
agency shall be current as of the applicable Closing and shall not be subject
to any material comments from any such organization which, in the sole and
absolute discretion of Buyer, may be adverse to Buyer's purchase of the
Shares.
8.5 Buyer shall have completed its due diligence review of Mason
Oil and shall be satisfied, in its sole, absolute discretion, of all its
findings therein.
8.6 All purchases of the Shares by Buyer shall be made one-half
(1/2) by each of Ingram and Naylor, and both parties shall purchase their
appropriate portion thereof.
8.7 All required actions shall have been taken to constitute
Ingram and Naylor as the sole officers and directors of Mason Oil as of the
First Closing.
9. Conditions Precedent To Obligations Of Seller. The obligations of
Seller to sell the Shares, unless otherwise waived in writing by Seller, are
subject to the satisfaction at or before the applicable Closing of the
following:
9.1 All representations and warranties by Buyer set forth in
this Agreement shall be true and correct on and as of the applicable Closing
as though made at that time.
9.2 Buyer shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be
performed or complied with on or before the applicable Closing date, including
delivery of the documents as provided in Section 10.2 hereof.
10. Duties at Closing.
10.1 Duties of Seller. At First Closing, Seller shall deliver
to or procure the delivery to Buyer of all of the following:
10.1.1 The Articles of Incorporation, Bylaws, seals and
corporate minute books of Mason Oil, all the books, records and ledgers of
Mason Oil, whether written or in other form, including magnetic disk, tapes
and the like, and any other documents Buyer may reasonably request relating to
the existence of Mason Oil.
10.1.2 Certificates representing all of the Block I
Shares. Such certificates shall be duly endorsed for transfer or with duly
executed Stock Powers attached, together with all other documents as may be
required, necessary or otherwise desirable to effect the valid transfer of
such Shares. All of the Shares transferred pursuant to this Agreement shall,
at First Closing, be free and clear of all liens, pledges, and claims (other
than the standard transfer restrictions).
10.1.3 A certificate signed by Seller dated as of the
First Closing and subject to no qualification certifying that the conditions
set forth in Section 8 hereof have been fully satisfied.
10.1.4 Certificates representing all of the Block II
Shares shall be delivered to Ron Harrington, as Escrow Agent, to be held
pursuant to the Option granted under Section 2.1 hereof. Such certificates
shall be duly endorsed for transfer or have duly executed Stock Powers
attached thereto, together with all other documents as may be required,
necessary or otherwise desirable to effect the valid transfer of such Block II
Shares. All of the Block II Shares transferred pursuant hereto shall, at the
First Closing and the Second Closing, be free and clear of all liens, pledges,
claims and restrictions.
10.1.5 An opinion of Seller's legal counsel in form
satisfactory to Buyer.
10.1.6 Duly adopted resolutions of the directors of Mason
Oil authorizing the entry into this Agreement and the consummation of the
transactions contemplated herein.
10.1.7 An Escrow Agreement duly executed by Seller in the
form attached hereto as Schedule 2.1, escrowing the Block II Shares pursuant
to the terms thereof until the Second Closing.
10.1.8 Documents executed by all current directors and
officers of Mason Oil, pursuant to which they: (i) resign all positions as
officers and directors of Mason Oil effective as of the First Closing; and
(ii) elect Ingram and Naylor as directors and officers of Mason Oil, effective
as of the First Closing, to fill the vacancies caused by their resignations,
with Ingram to serve as President and Chairman of the Board and Naylor to
serve as Secretary and Treasurer. After the taking of such action effective
as of the First Closing, Ingram and Naylor will be the sole officers and
directors of Mason Oil, and there will be one vacancy on the Mason Oil Board
of Directors.
10.2 Duties of Buyer. At each Closing, Buyer shall deliver to
or procure the delivery to Seller of all of the following:
10.2.1 The purchase price for the shares being acquired by Buyer
at such Closing.
10.2.2 A certificate signed by Buyer dated as of such Closing and
subject to no qualification certifying that the conditions set forth in
Section 9 hereof have been fully satisfied.
11. Public Statement and Press Releases. Buyer will hold in strict
confidence any data or information regarding Mason Oil that has not already
been placed into the public domain by Mason Oil. All notices to third parties
and all other publicity concerning the transactions contemplated by this
Agreement shall be planned and coordinated by the unanimous consent of all
parties hereto. All such notices shall be in form and substance as necessary
to comply with all applicable laws and regulations. The parties agree to
promptly cooperate in connection with the preparation and dissemination of a
press release regarding the transactions described in this Agreement and the
filing of a report on Form 8-K with respect thereto.
12. Survival of Representations and Warranties; Additional Security.
All Representations and Warranties of Seller and Buyer shall survive the First
and Second Closings until the expiration of the period set forth in Section
7.6 above.
13. Miscellaneous.
13.1 Waivers. No waivers, express or implied, by either party
of any breach of any of the covenants, agreements, or duties hereunder of the
other party shall be deemed to be a waiver of any other breach thereof or the
waiver of any other covenant, agreement or duty.
13.2 Notices. All notices required to be given under this
Agreement shall be in writing, sent by certified mail, return receipt
requested, postage prepaid, to the following addresses:
If to Mason Oil, then to:
Mason Oil Company, Inc.
1787 East Fort Union Boulevard, #108
Salt Lake City, Utah 84121
Attention: President
If to Seller, then to:
Craig Carpenter
7412 Rosalind Circle
Salt Lake City, Utah 84121
With a copy to:
Branden T. Burningham, Esquire
455 East Fifth South, Suite 205
Salt Lake City, Utah 84111
If to Buyer, then to:
Paul B. Ingram
6337 Ravenwood Drive
Sarasota, Florida 34243
John L. Naylor
c/o Paul B. Ingram
6337 Ravenwood Drive
Sarasota, Florida 34243
With copies to:
Kirk Pinkerton, P.A.
720 South Orange Avenue
Sarasota, Florida 34236
Attention: David M. Silberstein, Esq.
P. Christian Anderson
Holme Roberts & Owen LLC
111 East Broadway, Suite 1100
Salt Lake City, Utah 84111
The foregoing addresses may be changed by any of the
aforesaid persons, and additional persons may be added thereto by notifying
all of the other parties hereto in writing and in the manner hereinabove set
forth.
13.3 Assignment. No party hereto shall have the right to assign
this Agreement without the prior written consent of the other party.
13.4 Further Documents and Actions. The parties shall deliver
such other documents or take such other actions as any other party may
reasonably request in connection with the consummation of or evidencing the
transactions contemplated in this Agreement.
13.5 Counterparts. This Agreement may be executed in
counterparts, all of which, when taken together, shall constitute one and the
same original. For purposes of execution of this agreement, a facsimile copy
of any original signature shall constitute an original and may be relied upon
as such by any party hereto; provided, however, that all documents required at
each Closing shall be originals.
13.6 Termination of Agreement. This Agreement and the
transactions contemplated hereby may be terminated only as follows:
13.6.1 By mutual consent of the Seller, Mason Oil and
Buyer.
13.6.2 By Buyer on the date fixed by paragraph 2.2.1 above
for the First Closing, if the conditions contained in Section 8 hereof have
not been fulfilled by such date.
13.6.3 By Seller on the date fixed by paragraph 2.2.1
above for the First Closing, if the conditions contained in Section 9 hereof
have not been fulfilled by such date.
13.6.4 If this Agreement is terminated pursuant to this
Section 13.6, all obligations of Mason Oil, Seller and Buyer hereunder shall
terminate, subject to other remedies permitted at law and in equity.
13.7 Modification. Neither this Agreement nor any provision
hereof shall be amended or modified (or deemed amended or modified), except by
an agreement in writing duly executed and acknowledged with the same formality
as this Agreement.
13.8 Interpretation. No provision of this Agreement shall be
interpreted for or against any party because that party or that party's legal
representative drafted that provision.
13.9 Governing Law. All matters relating to the corporate
governance of Mason Oil shall be governed by the laws of the State of Utah.
All other matters affecting the interpretation of this Agreement and the
rights of the parties hereto shall be governed by the laws of the State of
Florida. In the event of any dispute with respect to this Agreement, the
transaction contemplated hereby, or the rights and obligations of the parties
arising hereunder, each of the parties expressly agrees that any legal action
initiated by Buyer against Seller will be filed in the State of Utah, and any
legal action initiated by Seller against Buyer will be filed in the State of
Florida. Counterclaims and cross claims may be filed in the same jurisdiction
as the original action to which they relate.
13.10 Independent Covenants. Each of the respective rights and
obligations of the parties hereunder shall be deemed independent and may be
enforced independently irrespective of any of the other rights and obligations
set forth herein.
13.11 Entire Understanding. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and no
amendment, modification or waiver of any provision shall be effective unless
in writing executed by the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
In the presence of: SELLER
__/s/ Leonard W. Burningham _____ _____/s/ Craig
Carpenter___________________
CRAIG CARPENTER
______________________________
Attest: MASON OIL COMPANY, INC., a Utah
corporation
__/s/ Leonard W. Burningham______ By:____/s/Craig
Carpenter__________________
, Secretary _____President____________________,
its Authorized Representative
In the presence of: BUYER
_____/s/ P. Christian Anderson______ ______/s/ Paul B.
Ingram___________________
PAUL B. INGRAM
______________________________
_____/s/ P. Christian Anderson______ _____/s/ John L.
Naylor____________________
JOHN L. NAYLOR, by Paul B. Ingram, his
______________________________ attorney-in-fact
EXHIBIT 3
General Power of Attorney, dated September 13, 1996
GENERAL POWER OF ATTORNEY
The undersigned, John L. Naylor, a resident of the Philippines, hereby
irrevocably constitutes and appoints Paul B. Ingram, a resident of Sarasota,
Florida, as the true and lawful agent and attorney-in-fact of the undersigned,
in the undersigned's individual and representative capacities, with full
right, power and authority for the undersigned and the undersigned's name,
place and stead, and for the undersigned's use and benefit. Paul B. Ingram is
hereby given a general power of attorney that shall not be affected by the
undersigned's disability, infirmity or state of mind.
The above-named attorney-in-fact may act with respect to any matter with
full right, power and authority for and on behalf of the undersigned, and in
the undersigned's name, place and stead, in whatever capacity, to execute and
deliver all such contracts, agreements, instruments and documents in
connection therewith as the said attorney-in-fact may deem advisable, in such
form as said attorney-in-fact may deem advisable, in such form as said
attorney-in-fact may determine, and to do and perform each and every act,
deed, matter, and thing whatsoever with respect thereto as fully as the
undersigned might or could do if personally present and acting. The above-named
attorney-in-fact may appoint a substitute to act hereunder with the same
power and authority as said attorney-in-fact would have if personally acting.
This Power of Attorney shall remain valid and in full force and effect
until September 30, 1997.
The undersigned hereby ratifies and confirms all that any attorney-in-
fact acting pursuant to this Power of Attorney or any substitute appointed as
provided herein may do by virtue hereof.
Witness the due execution hereof at Salt Lake City, Utah, this 13th day
of September, 1996.
Signature:_______/s/ John L. Naylor__________
John L. Naylor
STATE OF UTAH )
:
COUNTY OF SALT LAKE )
On this 13th day of September, 1996, before me, the undersigned, a Notary
Public in and for said State, personally appeared John L. Naylor, known to me
to be the person who executed the foregoing instrument, who duly acknowledged
to me that he executed the same.
_____/s/ Doreen Weyland_____________
NOTARY PUBLIC
Residing at ____Salt Lake
County_________
My commission expires:
____August 6, 1999________
EXHIBIT 4
Proxy Appointment Form, dated September 13, 1996
PROXY APPOINTMENT FORM
The undersigned shareholder of Mason Oil Company, Inc. a Utah corporation
(the "Company"), hereby appoints Paul B. Ingram, with full power of
substitution, as the proxy of the undersigned to represent the undersigned at
any meeting of the shareholders of the Company or by executing any action by
written consent of the shareholders of the Company. As proxy for the
undersigned, Mr. Ingram or his successor may vote and otherwise represent all
shares of the Company which the undersigned would be entitled to vote if then
and there personally present, in such manner as such proxy may determine to be
appropriate, in his sole discretion.
This proxy appointment is valid for a period of eleven months commencing
from the date set forth below. The proxy appointment is revocable by the
undersigned, and will be revoked upon the death or incapacity of the
undersigned, in accordance with the provisions of Section 722 of the Utah
Revised Business Corporation Act.
Dated: September 13, 1996
________/s/ John L. Naylor ________________
John L. Naylor
