Exhibit 4.4
Registration Rights Agreement
Document is Copied.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of October 17, 2000, by and among Tidelands Oil & Gas Corporation, a
corporation duly incorporated and existing under the laws of the State of Nevada
(the "Company"), and the investor as named on the signature page hereto
(hereinafter referred to as "Investor").
RECITALS:
WHEREAS, pursuant to the Company's offering ("Offering") of up to
Twenty Million Dollars ($20,000,000) of Common Stock of the Company, pursuant to
that certain Investment Agreement of even date herewith (the "Investment
Agreement") between the Company and the Investor, the Company has agreed to sell
and the Investor has agreed to purchase, from time to time as provided in the
Investment Agreement, shares of the Company's Common Stock for a maximum
aggregate offering amount as described above;
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to issue to the Investor the Commitment Warrants and, from time to
time, the Purchase Warrants, each as defined in the Investment Agreement, and in
certain events Additional Warrants (as defined in the Warrant Antidilution
Agreement between the Company and the Investor) to purchase a number of shares
of Common Stock, exercisable for ten (10) years from their respective dates of
issuance (collectively, the "Warrants"); and
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to provide the Investor with certain registration rights with respect
to the Common Stock to be issued in the Offering and the Common Stock issuable
upon exercise of the Warrants as set forth in this Agreement.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Certain Definitions. As used in this Agreement (including the
Recitals above), the following terms shall have the following meanings (such
meanings to be equally applicable to both singular and plural forms of the terms
defined):
"Additional Registration Statement" shall have the meaning set
forth in Section 3(b).
<PAGE>
"Additional Warrants" shall have the meaning ascribed to it
the Warrant Antidilution Agreement between the Company and the Investor.
"Amended Registration Statement" shall have the meaning set
forth in Section 3(b).
"Business Day" shall have the meaning set forth in the
Investment Agreement.
"Closing Bid Price" shall have the meaning set forth in the
Investment Agreement.
"Common Stock" shall mean the common stock, par value $0.001,
of the Company.
"Due Date" shall mean the date that is one hundred twenty
(120) days after the date of this Agreement.
"Effective Date" shall have the meaning set forth in Section
2.3.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.
"Filing Deadline" shall mean the date that is forty-five (45)
days after the date of this Agreement.
"Ineffective Period" shall mean any period of time after the
Effective Date during the term hereof that the Registration Statement or any
Supplemental Registration Statement (each as defined herein) becomes ineffective
or unavailable for use for the sale or resale, as applicable, of any or all of
the Registrable Securities (as defined herein) for any reason (or in the event
the prospectus under either of the above is not current and deliverable).
"Investment Agreement" shall have the meaning set forth in the
Recitals hereto.
"Investor" shall have the meaning set forth in the preamble to
this Agreement.
"Holder" shall mean Investor, and any other person or entity
owning or having the right to acquire Registrable Securities or any permitted
assignee.
"Piggyback Registration" and "Piggyback Registration
Statement" shall have the meaning set forth in Section 4.
"Put" shall have the meaning as set forth in the Investment
Agreement.
"Register," "Registered," and "Registration" shall mean and
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act and pursuant
to Rule 415 under the Securities Act or any successor rule, and the declaration
or ordering of effectiveness of such registration statement or document.
"Registrable Securities" shall have the meaning set forth in
Section 2.1.
<PAGE>
"Registration Statement" shall have the meaning set forth in
Section 2.2.
"Rule 144" shall mean Rule 144, as amended, promulgated under
the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.
"Supplemental Registration Statement" shall have the meaning
set forth in Section 3(b).
"Warrants" shall have the meaning set forth in the above
Recitals.
"Warrant Shares" shall mean shares of Common Stock issuable
upon exercise of any Warrant.
2. Required Registration.
2.1 Registrable Securities. "Registrable Securities"
shall mean those shares of the Common Stock of the Company together with any
capital stock issued in replacement of, in exchange for or otherwise in respect
of such Common Stock, that are: (i) issuable or issued to the Investor pursuant
to the Investment Agreement, (ii) issuable or issued upon exercise of the
Warrants, or (iii) issued or issuable pursuant to the Warrant Antidilution
Agreement between the Company and the Investor; provided, however, that
notwithstanding the above, the following shall not be considered Registrable
Securities:
(a) any Common Stock which would otherwise be deemed
to be Registrable Securities, if and to the extent that those shares of Common
Stock may be resold in a public transaction without volume limitations or other
material restrictions without registration under the Securities Act, including
without limitation, pursuant to Rule 144 under the Securities Act; and
(b) any shares of Common Stock which have been sold
in a private transaction in which the transferor's rights under this Agreement
are not assigned.
2.2 Filing of Initial Registration Statement. The Company
shall, by the Filing Deadline, file a registration statement ("Registration
Statement") on Form SB-2 (or other suitable form, at the Company's discretion,
but subject to the reasonable approval of Investor), covering the resale of a
number of shares of Common Stock as Registrable Securities equal to at least
Twenty Five Million (25,000,000) shares of Common Stock and shall cover, to the
extent allowed by applicable law, such indeterminate number of additional shares
of Common Stock that may be issued or become issuable as Registrable Securities
by the Company pursuant to Rule 416 of the Securities Act. In the event that the
Company has not filed the Registration Statement by the Filing Deadline, then
the Company shall pay to Investor an amount equal to $500, in cash, for each
Business Day after the Filing Deadline until such Registration Statement is
filed, payable within ten (10) Business Days following the end of each calendar
month in which such payments accrue. In addition, anytime the Company has issued
Additional Warrants to the Investor totaling 300,000 shares which are not
registered for resale, the Company shall promptly file a registration statement
(on Form SB-2, or other suitable form, at the Company's discretion, but subject
to the reasonable approval of Investor), covering the resale of a number of
shares of Common Stock as Registrable Securities equal to at least the number of
Additional Warrant shares that are not registered for resale and shall cover, to
the extent allowed by applicable law, such indeterminate number of additional
shares of Common Stock that may be issued or become issuable as Registrable
Securities by the Company pursuant to Rule 416 of the Securities Act.
<PAGE>
2.3 Registration Effective Date. The Company shall use
its best efforts to have the Registration Statement declared effective by the
SEC (the date of such effectiveness is referred to herein as the "Effective
Date") by the Due Date.
2.4 Shelf Registration. The Registration Statement shall
be prepared as a "shelf" registration statement under Rule 415, and shall be
maintained effective until all Registrable Securities are resold pursuant to the
Registration Statement.
2.5 Supplemental Registration Statement. Anytime the
Registration Statement does not cover a sufficient number of shares of Common
Stock to cover all outstanding Registrable Securities, the Company shall
promptly prepare and file with the SEC such Supplemental Registration Statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all such Registrable Securities and shall use its best
efforts to cause such Supplemental Registration Statement to be declared
effective as soon as possible.
3. Obligations of the Company. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously and reasonably possible:
(a) Prepare and file with the Securities and Exchange
Commission ("SEC") a Registration Statement with respect to such Registrable
Securities and use its best efforts to cause such Registration Statement to
become effective and to remain effective until the earlier of (i) the date that
all Registrable Securities are resold pursuant to such Registration Statement,
or (ii) the date that is one (1) year after the Termination Date (as defined in
the Investment Agreement).
(b) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement ("Amended Registration Statement") or prepare
and file any additional registration statement ("Additional Registration
Statement," together with the Amended Registration Statement, "Supplemental
Registration Statements") as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such Supplemental Registration Statements or such prior registration statement
and to cover the resale of all Registrable Securities.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus (if applicable), in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
<PAGE>
(d) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of the jurisdictions in which the Holders are located, of such
other jurisdictions as shall be reasonably requested by the Holders of the
Registrable Securities covered by such Registration Statement and of all other
jurisdictions where legally required, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
(e) [Intentionally Omitted].
(f) As promptly as practicable after becoming aware of such
event, notify each Holder of Registrable Securities of the happening of any
event of which the Company has knowledge, as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits 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, use its best efforts
promptly to prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Holder as such Holder may reasonably
request.
(g) Provide Holders with notice of the date that a
Registration Statement or any Supplemental Registration Statement registering
the resale of the Registrable Securities is declared effective by the SEC, and
the date or dates when the Registration Statement is no longer effective.
(h) Provide Holders and their representatives the opportunity
and a reasonable amount of time, based upon reasonable notice delivered by the
Company, to conduct a reasonable due diligence inquiry of Company's pertinent
financial and other records and make available its officers and directors for
questions regarding such information as it relates to information contained in
the Registration Statement.
(i) Provide Holders and their representatives the opportunity
to review the Registration Statement and all amendments or supplements thereto
prior to their filing with the SEC by giving the Holder at least five (5)
business days advance written notice prior to such filing.
(j) Provide each Holder with prompt notice of the issuance by
the SEC or any state securities commission or agency of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceeding for such purpose. The Company shall use its best efforts to
prevent the issuance of any stop order and, if any is issued, to obtain the
removal thereof at the earliest possible date.
(k) Use its best efforts to list the Registrable Securities
covered by the Registration Statement with all securities exchanges or markets
on which the Common Stock is then listed and prepare and file any required
filing with the NASD, American Stock Exchange, NYSE and any other exchange or
market on which the Common Stock is listed.
<PAGE>
4. Ineffective Period.
(a) Ineffective Period Payment. Within five (5) Business Days
of the last day of any Ineffective Period, the Company will pay to the Investor
in cash ("Ineffective Period Payments"), as liquidated damages for such
suspension and not as a penalty, an amount equal to the number of shares of
Common Stock issued to the Investor in any Put with a Pricing Period End Date
(as defined in the Investment Agreement) that is thirty (30) business days or
less prior to the date that the Ineffective Period commences, multiplied by the
difference of
(i) the highest closing price of the
Company's Common Stock for any trading day during the
Ineffective Period,
minus
(ii) the lowest closing price of the
Company's Common Stock for the five (5) trading days including
and immediately following the last trading day of such
Ineffective Period.
(b) Liquidated Damages. The parties hereto acknowledge and
agree that the sums payable as Ineffective Period Payments shall give rise to
liquidated damages and not penalties. The parties further acknowledge that (i)
the amount of loss or damages likely to be incurred by the Holder is incapable
or is difficult to precisely estimate, (ii) the amounts specified bear a
reasonable proportion and are not plainly or grossly disproportionate to the
probable loss likely to be incurred by the Investor, and (iii) the parties are
sophisticated business parties and have been represented by sophisticated and
able legal and financial counsel and negotiated this Agreement at arm's length.
5. Piggyback Registration. If anytime prior to the date that the
Registration Statement is declared effective or during any Ineffective Period
(as defined in the Investment Agreement) the Company proposes to register
(including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its Common Stock under the
Securities Act in connection with the public offering of such securities solely
for cash (other than a registration relating solely for the sale of securities
to participants in a Company stock plan or a registration on Form S-4
promulgated under the Securities Act or any successor or similar form
registering stock issuable upon a reclassification, upon a business combination
involving an exchange of securities or upon an exchange offer for securities of
the issuer or another entity), the Company shall, at such time, promptly give
each Holder written notice of such registration (a "Piggyback Registration
Statement"). Upon the written request of each Holder given by fax within ten
(10) days after mailing of such notice by the Company, the Company shall cause
to be included in such registration statement under the Securities Act all of
the Registrable Securities that each such Holder has requested to be registered
("Piggyback Registration") to the extent such inclusion does not violate the
registration rights of any other security holder of the company granted prior to
the date hereof; provided, however, that nothing herein shall prevent the
Company from withdrawing or abandoning such registration statement prior to its
effectiveness.
<PAGE>
6. Limitation on Obligations to Register under a Piggyback
Registration. In the case of a Piggyback Registration pursuant to an
underwritten public offering by the Company, if the managing underwriter
determines and advises in writing that the inclusion in the related Piggyback
Registration Statement of all Registrable Securities proposed to be included
would interfere with the successful marketing of the securities proposed to be
registered by the Company, then the number of such Registrable Securities to be
included in such Piggyback Registration Statement, to the extent any such
Registrable Securities may be included in such Piggyback Registration Statement,
shall be allocated among all Holders who had requested Piggyback Registration
pursuant to the terms hereof, in the proportion that the number of Registrable
Securities which each such Holder seeks to register bears to the total number of
Registrable Securities sought to be included by all Holders. If required by the
managing underwriter of such an underwritten public offering, the Holders shall
enter into an agreement limiting the number of Registrable Securities to be
included in such Piggyback Registration Statement and the terms, if any,
regarding the future sale of such Registrable Securities.
7. Dispute as to Registrable Securities. In the event the Company
believes that shares sought to be registered under Section 2 or Section 5 by
Holders do not constitute "Registrable Securities" by virtue of Section 2.1 of
this Agreement, and the status of those shares as Registrable Securities is
disputed, the Company shall provide, at its expense, an Opinion of Counsel,
reasonably acceptable to the Holders of the Securities at issue (and
satisfactory to the Company's transfer agent to permit the sale and transfer),
that those securities may be sold immediately, without volume limitation or
other material restrictions, without registration under the Securities Act, by
virtue of Rule 144 or similar provisions.
8. Furnish Information. At the Company's request, each Holder
shall furnish to the Company such information regarding Holder, the Registrable
Securities held by it, and the intended method of disposition of such securities
to the extent required to effect the registration of its Registrable Securities
or to determine that registration is not required pursuant to Rule 144 or other
applicable provision of the Securities Act. The Company shall include all
information provided by such Holder pursuant hereto in the Registration
Statement, substantially in the form supplied, except to the extent such
information is not permitted by law.
9. Expenses. All expenses, other than commissions and fees and
expenses of counsel to the selling Holders, incurred in connection with
registrations, filings or qualifications pursuant hereto, including (without
limitation) all registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company, shall be
borne by the Company.
10. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
<PAGE>
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers, directors, partners, legal counsel,
and accountants of each Holder, any underwriter (as defined in the Securities
Act, or as deemed by the Securities Exchange Commission, or as indicated in a
registration statement) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of Section 15 of the Securities
Act or the Exchange Act, against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements or omissions: (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or (ii) the omission
or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading, and the
Company will reimburse each such Holder, officer or director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability, or action to the extent that it arises out of or is
based upon a violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, officer, director, underwriter or controlling
person; provided however, that the above shall not relieve the Company from any
other liabilities which it might otherwise have.
(b) Each Holder of any securities included in such
registration being effected shall indemnify and hold harmless the Company, its
directors and officers, each underwriter and each other person, if any, who
controls (within the meaning of the Securities Act) the Company or such other
indemnified party, against any liability, joint or several, to which any such
indemnified party may become subject under the Securities Act or any other
statute or at common law, insofar as such liability (or actions in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which securities were registered under the
Securities Act at the request of such Holder, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto, or
(ii) any omission or alleged omission by such Holder to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, amendment or
supplement thereto in reliance upon and in conformity with information furnished
in writing to the Company by such Holder specifically for use therein. Such
Holder shall reimburse any indemnified party for any legal fees incurred in
investigating or defending any such liability; provided, however, that such
Holder's obligations hereunder shall be limited to an amount equal to the
proceeds to such Holder of the securities sold in any such registration; and
provided further, that no Holder shall be required to indemnify any party
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is corrected
in the final prospectus or for any liability which arises out of the failure of
such party to deliver a prospectus as required by the Securities Act.
(c) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume, the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the reasonably incurred fees and
expenses of one such counsel to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 10, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 10.
<PAGE>
(d) In the event that the indemnity provided in paragraphs (a)
and/or (b) of this Section 10 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company and each Holder agree to
contribute to the aggregate claims, losses, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Holders may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and the Holders in connection with the statements
or omissions which resulted in such Losses. Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates to
information provided by the Company or by the Holders. The Company and the
Holders agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of or
civilly liable for fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of or civilly liable for such fraudulent misrepresentation.
For purposes of this Section 10, each person who controls a Holder of
Registrable Securities within the meaning of either the Securities Act or the
Exchange Act and each director, officer, partner, employee and agent of a Holder
shall have the same rights to contribution as such holder, and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act and each director and officer of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) The obligations of the Company and Holders under this
Section 10 shall survive the resale, if any, of the Common Stock, the completion
of any offering of Registrable Securities in a Registration Statement under this
Agreement, and otherwise.
11. Reports Under Exchange Act. With a view to making available to
the Holders the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144; and
(b) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.
<PAGE>
12. Amendments to Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the written
consent of each Holder affected thereby. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each Holder, each future
Holder, and the Company. The Company will provide the Investor five (5) business
days notice prior to filing any amendment to the Registration Statement or any
amendment or supplement to the Prospectus and shall give the Investor the
opportunity to review and comment on any such amendment or supplement. Failure
of the Investor to comment within five (5) business days shall not preclude the
Company from filing such amendment or supplement after such notice period has
expired.
13. Notices. All notices required or permitted under this
Agreement shall be made in writing signed by the party making the same, shall
specify the section under this Agreement pursuant to which it is given, and
shall be addressed if to (i) the Company at: Tidelands Oil & Gas Corporation,
Attn: Michael R. Ward, President & CEO, 13330 Leopard Street, Suite 26, Corpus
Christi, Texas 78410; Telephone:(361) 241-2244, Facsimile: (361) 241-2244(or at
such other location as directed by the Company in writing) and (ii) the Holders
at Swartz Private Equity, LLC, 300 Colonial Center Parkway, Suite 300, Roswell,
GA 30076, or such other address as requested in writing by the Holder. Any
notice, except as otherwise provided in this Agreement, shall be made by fax and
shall be deemed given at the time of transmission of the fax.
14. Termination. This Agreement shall terminate on the date all
Registrable Securities cease to exist (as that term is defined in Section 2.1
hereof); but without prejudice to (i) the parties' rights and obligations
arising from breaches of this Agreement occurring prior to such termination (ii)
other indemnification obligations under this Agreement.
15. Assignment. No assignment, transfer or delegation, whether by
operation of law or otherwise, of any rights or obligations under this Agreement
by the Company or any Holder, respectively, shall be made without the prior
written consent of the majority in interest of the Holders or the Company,
respectively; provided that the rights of a Holder may be transferred to a
subsequent holder of the Holder's Registrable Securities (provided such
transferee shall provide to the Company, together with or prior to such
transferee's request to have such Registrable Securities included in a
Registration, a writing executed by such transferee agreeing to be bound as a
Holder by the terms of this Agreement), and the Company hereby agrees to file an
amended registration statement including such transferee as a selling security
holder thereunder; and provided further that the Company may transfer its rights
and obligations under this Agreement to a purchaser of all or a substantial
portion of its business if the obligations of the Company under this Agreement
are assumed in connection with such transfer, either by merger or other
operation of law (which may include without limitation a transaction whereby the
Registrable Securities are converted into securities of the successor in
interest) or by specific assumption executed by the transferee.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia applicable to
agreements made in and wholly to be performed in that jurisdiction, except for
matters arising under the Securities Act or the Exchange Act, which matters
shall be construed and interpreted in accordance with such laws. Any dispute
arising out of or relating to this Agreement or the breach, termination or
validity hereof shall be finally settled by the federal or state courts located
in Fulton County, Georgia.
<PAGE>
17. Execution in Counterparts Permitted. This Agreement may be
executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one (1) instrument.
18. Specific Performance. The Holder shall be entitled to the
remedy of specific performance in the event of the Company's breach of this
Agreement, the parties agreeing that a remedy at law would be inadequate.
19. Indemnity. Each party shall indemnify each other party against
any and all claims, damages (including reasonable attorney's fees), and expenses
arising out of the first party's breach of any of the terms of this Agreement.
20. Entire Agreement; Written Amendments Required. This Agreement,
including the Exhibits attached hereto, the Investment Agreement, the Common
Stock certificates, and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 17th day of October, 2000.
TIDELANDS OIL & GAS CORPORATION
By:
Michael R. Ward, President & CEO
Address: 13330 Leopard Street
Suite 26
Corpus Christi, Texas 78410
Telephone: (361) 241-2244
Facsimile: (361) 241-5292
INVESTOR:
SWARTZ PRIVATE EQUITY, LLC.
By: ________________________________
Eric S. Swartz, Manager
Address: 300 Colonial Center Parkway
Suite 300
Roswell, GA 30076
Telephone: (770) 640-8130
Facsimile: (770) 640-7150
