-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K25ix2ojhjgYDRUCDyK9FLDtfjoRySkmsmt5IfYWcuUoYms38lqg4VWU1Fi3xq+d YwF6cK/h43Kgi8mIeKCO0w== 0000950103-08-001807.txt : 20080707 0000950103-08-001807.hdr.sgml : 20080704 20080707163711 ACCESSION NUMBER: 0000950103-08-001807 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20080707 DATE AS OF CHANGE: 20080707 GROUP MEMBERS: GPC MANAGING PARTNER II, L.P. GROUP MEMBERS: GREENHILL CAPITAL PARTNERS (CAYMAN) II, L.P. GROUP MEMBERS: GREENHILL CAPITAL PARTNERS (EMPLOYEES) II, L.P. GROUP MEMBERS: GREENHILL CAPITAL PARTNERS (EXECUTIVES) II, L.P. GROUP MEMBERS: GREENHILL CAPITAL PARTNERS II, L.P. GROUP MEMBERS: GREENHILL CAPITAL PARTNERS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Crusader Energy Group Inc. CENTRAL INDEX KEY: 0001024109 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 880349241 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-78906 FILM NUMBER: 08941288 BUSINESS ADDRESS: STREET 1: 4747 GAILLARDIA PARKWAY CITY: OKLAHOMA CITY STATE: OK ZIP: 73142 BUSINESS PHONE: 4052857555 MAIL ADDRESS: STREET 1: 4747 GAILLARDIA PARKWAY CITY: OKLAHOMA CITY STATE: OK ZIP: 73142 FORMER COMPANY: FORMER CONFORMED NAME: WESTSIDE ENERGY CORP DATE OF NAME CHANGE: 20040401 FORMER COMPANY: FORMER CONFORMED NAME: EVENTEMP CORP DATE OF NAME CHANGE: 19961002 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GREENHILL & CO INC CENTRAL INDEX KEY: 0001282977 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 510500737 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 300 PARK AVENUE STREET 2: 23RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-389-1500 MAIL ADDRESS: STREET 1: 300 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D 1 dp10560_sc13d.htm
 
 
 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.      )*
 
CRUSADER ENERGY GROUP INC.
(Name of Issuer)
 
Common Stock, $0.01 Par Value
(Title of Class of Securities)
 
228834107
(CUSIP Number)
 
Jodi Ganz
Greenhill & Co., Inc.
300 Park Avenue
New York, NY 10022
(212) 389-1500
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
 
June 26, 2008
(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 that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-l(f) or 240.13d-l(g), check the following box. o 
 
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
 
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 

 
Page 1 of 15

 
CUSIP No.
228834107
 
1.
Names of Reporting Persons.
 
Greenhill & Co., Inc.
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  o
(b)  x
3.
SEC Use Only
 
4.
Source of Funds
 
SC
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
o
 
6.
Citizenship or Place of Organization
 
Delaware
 
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
7.
Sole Voting Power
 
0
8.
 
Shared Voting Power
 
172,916,667*
9.
 
Sole Dispositive Power
 
0
10.
 
Shared Dispositive Power
 
100,100,000
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
 
172,916,667*
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
x
 
13.
Percent of Class Represented by Amount in Row (11)
 
87.6% (see Item 5)
14.
Type of Reporting Person
 
CO
 
Page 2 of 15

 
CUSIP No.
228834107
 
1.
Names of Reporting Persons.
 
Greenhill Capital Partners, LLC
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  o
(b)  x
3.
SEC Use Only
 
4.
Source of Funds
 
SC
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
o
 
6.
Citizenship or Place of Organization
 
Delaware
 
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
7.
Sole Voting Power
 
0
8.
 
Shared Voting Power
 
172,916,667*
9.
 
Sole Dispositive Power
 
0
10.
 
Shared Dispositive Power
 
100,100,000
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
 
172,916,667*
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
x
 
13.
Percent of Class Represented by Amount in Row (11)
 
87.6% (see Item 5)
14.
Type of Reporting Person
 
OO
 
Page 3 of 15

 
CUSIP No.
228834107
 
1.
Names of Reporting Persons.
 
GPC Managing Partner II, L.P.
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  o
(b)  x
3.
SEC Use Only
 
4.
Source of Funds
 
SC
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
o
 
6.
Citizenship or Place of Organization
 
Delaware
 
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
7.
Sole Voting Power
 
0
8.
 
Shared Voting Power
 
172,916,667*
9.
 
Sole Dispositive Power
 
0
10.
 
Shared Dispositive Power
 
100,100,000
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
 
172,916,667*
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
x
 
13.
Percent of Class Represented by Amount in Row (11)
 
87.6% (see Item 5)
14.
Type of Reporting Person
 
PN
 
Page 4 of 15

 
CUSIP No.
228834107
 
1.
Names of Reporting Persons.
 
Greenhill Capital Partners II, L.P.
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  o
(b)  x
3.
SEC Use Only
 
4.
Source of Funds
 
SC
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
o
 
6.
Citizenship or Place of Organization
 
Delaware
 
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
7.
Sole Voting Power
 
0
8.
 
Shared Voting Power
 
172,916,667*
9.
 
Sole Dispositive Power
 
0
10.
 
Shared Dispositive Power
 
100,100,000
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
 
172,916,667*
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
x
 
13.
Percent of Class Represented by Amount in Row (11)
 
87.6% (see Item 5)
14.
Type of Reporting Person
 
PN
 
Page 5 of 15

 
CUSIP No.
228834107
 
1.
Names of Reporting Persons.
 
Greenhill Capital Partners (Cayman) II, L.P.
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  o
(b)  x
3.
SEC Use Only
 
4.
Source of Funds
 
SC
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
o
 
6.
Citizenship or Place of Organization
 
Cayman Islands
 
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
7.
Sole Voting Power
 
0
8.
 
Shared Voting Power
 
172,916,667*
9.
 
Sole Dispositive Power
 
0
10.
 
Shared Dispositive Power
 
100,100,000
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
 
172,916,667*
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
x
 
13.
Percent of Class Represented by Amount in Row (11)
 
87.6% (see Item 5)
14.
Type of Reporting Person
 
PN
 
Page 6 of 15

 
CUSIP No.
228834107
 
1.
Names of Reporting Persons.
 
Greenhill Capital Partners (Executives) II, L.P.
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  o
(b)  x
3.
SEC Use Only
 
4.
Source of Funds
 
SC
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
o
 
6.
Citizenship or Place of Organization
 
Delaware
 
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
7.
Sole Voting Power
 
0
8.
 
Shared Voting Power
 
172,916,667*
9.
 
Sole Dispositive Power
 
0
10.
 
Shared Dispositive Power
 
100,100,000
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
 
172,916,667*
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
x
 
13.
Percent of Class Represented by Amount in Row (11)
 
87.6% (see Item 5)
14.
Type of Reporting Person
 
PN
 
Page 7 of 15

 
CUSIP No.
228834107
 
1.
Names of Reporting Persons.
 
Greenhill Capital Partners (Employees) II, L.P.
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  o
(b)  x
3.
SEC Use Only
 
4.
Source of Funds
 
SC
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
o
 
6.
Citizenship or Place of Organization
 
Delaware
 
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
7.
Sole Voting Power
 
0
8.
 
Shared Voting Power
 
172,916,667*
9.
 
Sole Dispositive Power
 
0
10.
 
Shared Dispositive Power
 
100,100,000
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
 
172,916,667*
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
x
 
13.
Percent of Class Represented by Amount in Row (11)
 
87.6% (see Item 5)
14.
Type of Reporting Person
 
PN
 
_______________
* By virtue of the Voting Agreement (as hereinafter defined), the Reporting Persons (as hereinafter defined) may be considered members of a “group” for purposes of this Schedule 13D.  The amounts disclosed under “Shared Voting Power” and “Aggregate Amount Beneficially Owned by Each Reporting Person” do not include an aggregate of 23,170,000 shares of Common Stock (as hereinafter defined) issuable upon the exercise of options exercisable as of June 26, 2008 by certain of the Other Voting Agreement Parties (as hereinafter defined).  The Reporting Persons expressly disclaim beneficial ownership of the 72,816,667 shares of Common Stock held by the Other Voting Agreement Parties (as hereinafter defined).
 
Page 8 of 15

 
 
Item 1.  Security and Issuer
 
This statement relates to the common stock, par value $0.01 per share (the “Common Stock”), of Crusader Energy Group Inc., a Nevada corporation formerly known as Westside Energy Corporation (the “Company”).  The Company’s principal executive office is located at 4747 Gaillardia Parkway, Oklahoma City, OK 73142.
 
Item 2.  Identity and Background
 
(a)  This Statement is being jointly filed pursuant to Rules 13d-1(a) and 13d-1(k) under the Securities Exchange Act of 1934 (the “Exchange Act”) by (i) Greenhill Capital Partners II, L.P., a Delaware limited partnership (“GCP II”), (ii) Greenhill Capital Partners (Executives) II, L.P., a Delaware limited partnership (“GCP Executives II”), (iii) Greenhill Capital Partners (Employees) II, L.P., a Delaware limited partnership (“GCP Employees II”), (iv) Greenhill Capital Partners (Cayman) II, L.P., a Cayman Islands limited partnership (“GCP Cayman II”), (v) GCP Managing Partner II, L.P., a Delaware limited partnership (“GCPMP II”), in its capacity as the sole general partner of each of GCP II, GCP Executives II, GCP Employees II and GCP Cayman II, (vi) Greenhill Capital Partners, LLC, a Delaware limited liability company (“GCP LLC”), in its capacity as the sole general partner of GCPMP II, and (vii) Greenhill & Co., Inc., a Delaware Corporation (“Greenhill & Co.”), in its capacity as the sole member of GCP LLC.  Each of the entities described in items (i) through (iv) are a “Fund” and are referred to herein collectively as the “Funds”.  The Funds are members of Knight Energy Group I Holding Co., LLC (“Knight I Holding”) and share voting and investment control over Knight I Holding’s direct beneficial ownership of 50.7% of the Company’s outstanding Common Stock.  The entities described in items (i) through (vii) are referred to herein as the “Reporting Persons.
 
By virtue of a Voting Agreement dated as of December 31, 2007 (the “Voting Agreement”) among the Funds and David D. Le Norman, Robert J. Raymond, Knight I Holding, Knight Energy Group II Holding Company LLC and Hawk Energy Fund I Holding Company, LLC (collectively, but excluding the Funds, the “Other Voting Agreement Parties”), the Reporting Persons may be deemed to be a “group” (within the meaning of Section 13(d)(3) and Rule 13d-5(b)(1) of the Exchange Act) with the Other Voting Agreement Parties for purposes of the Exchange Act.  Although the Reporting Persons do not affirm that such a group has been formed, this disclosure is being made to ensure compliance with the Exchange Act.  On the basis of information provided to the Reporting Persons by the Other Voting Agreement Parties, the Reporting Persons believe that the Other Voting Agreement Parties are the beneficial owners of an aggregate of 196,086,667 shares of Common Stock, including an aggregate of 23,170,000 shares of Common Stock issuable upon the exercise of options exercisable as of June 26, 2008 by certain of the Other Voting Agreement Parties.
 
(b)  The principal business address of each of the Reporting Persons is 300 Park Avenue, New York, NY 10022.
 
(c)  The principal business of each of GCP II, GCP Executives II, GCP Employees II and GCP Cayman II is making private equity investments.  The principal business of GCPMP II is serving as the sole General Partner of each of GCP II, GCP Executives II, GCP Employees II and GCP Cayman II.  The principal business of GCP LLC is serving as a General Partner of certain merchant banking funds.  The principal business of Greenhill & Co. is serving as a holding company for certain businesses engaged in financial services and merchant banking.
 
(d)  During the last five years, none of the Reporting Persons, and to the best knowledge of the Reporting Persons, none of the Listed Persons (hereinafter defined), has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
 
(e)  During the last five years, none of the Reporting Persons, and to the best knowledge of the Reporting Persons, none of the Listed Persons (hereinafter defined), was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, 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.
 
Page 9 of 15

 
 
(f)   Information concerning each executive officer, director and controlling person of Greenhill & Co. and GCP LLC (the “Listed Persons”) is listed on Annex A attached hereto, and is incorporated by reference herein.  To the knowledge of the Reporting Persons, except as set forth in Annex A, all of the Listed Persons are citizens of the United States.
 
Item 3.  Source and Amount of Funds or Other Consideration
 
Pursuant to a Contribution Agreement (the “Contribution Agreement”) dated as of December 31, 2007 and disclosed in the proxy statement filed by Westside Energy Corporation with the Securities and Exchange Commission on May 28, 2008 (the “Proxy Statement”), on June 26, 2008, Knight Energy Group, LLC, a subsidiary of Knight I Holding, along with six other privately held companies, was acquired by Westside Energy Corporation and, in consideration therefor, Knight I Holding received 100,100,000 shares of Common Stock.
 
Item 4.  Purpose of Transaction
 
Pursuant to the Contribution Agreement, on June 26, 2008, Knight I Holding acquired 100,100,000 shares of Common Stock, representing approximately 50.7% of the outstanding Common Stock of the Company.
 
Except as set forth in this Schedule 13D, none of the Reporting Persons nor, to the best knowledge of the Reporting Persons, none of the Listed Persons, has formulated any plans or proposals that relate to or would result in: (a) the acquisition of additional securities of the Company or the disposition of securities of the Company, (b) an extraordinary corporate transaction, such as merger, reorganization or liquidation, involving the Company or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries, (d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board of Directors of the Company, (e) any material change in the Company’s present capitalization or dividend policy, (f) any other material change in the Company’s business or corporate structure, (g) changes in the Company’s certificate of incorporation, bylaws or instruments corresponding thereto or other actions that may impede the acquisition or control of the Company by any person, (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system or a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to any of those enumerated above.
 
Item 5.  Interest in Securities of the Issuer
 
(a)   The Funds are members of Knight I Holding and share voting and investment control over Knight I Holding’s direct beneficial ownership of 100,100,000 shares of Common Stock.  As a result, each of the Reporting Persons beneficially owns, indirectly, an aggregate of 100,100,000 shares of Common Stock (approximately 50.7% of the Company’s outstanding Common Stock).
 
By virtue of the Voting Agreement, the Reporting Persons and the Other Voting Agreement Parties may be considered members of a “group,” within the meaning of Section 13(d)(3) and Rule 13d-5(b)(1) of the Exchange Act.  As a result, each Reporting Person may be deemed, in its capacity as a member of a “group” to beneficially own in the aggregate 172,916,667 shares of Common Stock, or approximately 87.6% of the outstanding shares of Common Stock, which amount includes 72,816,667 shares of Common Stock attributable to the Other Voting Agreement Parties and excludes an aggregate of 23,170,000 shares of Common Stock issuable upon the exercise of options exercisable as of June 26, 2008 by certain of the Other Voting Agreement Parties.
 
Each of the Reporting Persons expressly disclaims beneficial ownership of the shares of Common Stock owned by the Other Voting Agreement Parties.  The foregoing calculations of percentage ownership are based on 197,394,957 shares of Common Stock issued and outstanding as of June 26, 2008, as disclosed in the Company’s Current Report on Form 8-K filed with the SEC on June 26, 2008.
 
Page 10 of 15

 
 
(b)   The Reporting Persons share power to vote and to dispose of 100,100,000 shares of Common Stock.  By virtue of the Voting Agreement, however, each of the Reporting Persons may be deemed to have shared power to vote 172,916,667 shares of Common Stock.
 
(c)   Except as described in Items 3, 4 and 6 hereto, none of the Reporting Persons and, to the best of each Reporting Persons’ knowledge, none of the Listed Persons has effected a transaction in shares of Common Stock during the past 60 days.
 
(d)   Except as described herein, the Reporting Persons are not aware of any other person with the right to receive or the power to direct the receipt or dividends from, or the proceeds from the sale of, any of the shares of Common Stock beneficially owned by the Reporting Persons.
 
(e)   Not applicable.
 
 
The Funds have entered into the Voting Agreement, a copy of which is attached hereto as Exhibit 2, which requires the Funds to vote all shares of Common Stock owned or controlled by them to:
 
(a)   elect one designee of the Funds to the Company’s board of directors so long as the Funds own no fewer than 33.33% of the outstanding membership interests in Knight I Holding and Knight I Holding holds not fewer than 30% of the outstanding shares of Common Stock or the Funds hold directly not fewer than 10% of the outstanding shares of Common Stock;
 
(b)   elect three individuals (one of whom will be Mr. Le Norman and two of whom will be independent) designated by Mr. Le Norman to the Company’s board of directors, provided Mr. Le Norman remains chief executive officer of the Company or holds or controls directly or indirectly 10% of the outstanding shares of Common Stock;
 
(c)   elect three individuals (one of whom will be Mr. Raymond and two of whom will be independent) designated by Mr. Raymond to the Company’s board of directors, provided Mr. Raymond remains chairman of the board of the Company or holds or controls directly or indirectly 10% of the outstanding shares of Common Stock;
 
(d)   maintain the board members designated by the Funds, Mr. Le Norman and Mr. Raymond on the board of directors unless the Funds, Mr. Le Norman or Mr. Raymond approve the removal of one of their designees from the board in which event the Funds will vote for the replacement director designated by the Funds, Mr. Le Norman or Mr. Raymond, as applicable, so long as the replacement is reasonably acceptable to a majority of the board members; and
 
(e)   to maintain a compensation committee of the Company’s board of directors and to cause the Funds’ designee to be on that committee.
 
The Voting Agreement is to remain in effect until the earlier of (i) a change in control of the Company or (ii) December 31, 2011.
 
The foregoing description of the Voting Agreement is not intended to be complete and is qualified in its entirety by reference to the full text of the Voting Agreement, a copy of which is attached as Exhibit 2.
 
The Funds also entered into a letter agreement, a copy of which is attached as Exhibit 3, pursuant to which the Funds agreed to vote all of the shares of Common Stock that they control, and take all other action within their control, in support of the approval of the services agreement with Mr. Raymond and the employment agreement with Mr. Le Norman.
 
Item 7.  Material to be Filed as Exhibits
 
Exhibit 1:
Joint Filing Agreement, dated as of July 7, 2008 by and among the Reporting Persons
Filed herewith
 
Page 11 of 15

 
 
 
 
Exhibit 2
Voting Agreement dated as of December 31, 2007
Filed herewith
Exhibit 3
Letter Agreement
Filed herewith
Exhibit 4
Contribution Agreement dated as of December 31, 2007
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on January 7, 2008
 
Page 12 of 15

 
SIGNATURE
 
After reasonable inquiry and to the best of the knowledge and belief of each of the undersigned, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated:  July 7, 2008

 
GREENHILL & CO., INC.
 
By:
/s/ Jodi Ganz
 
Name:
Jodi Ganz
 
Title:
Acting General Counsel and Secretary
 

 
GREENHILL CAPITAL PARTNERS, LLC
 
By:
/s/ Jodi Ganz
 
Name:
Jodi Ganz
 
Title:
Secretary
 

 
GCP MANAGING PARTNER II, L.P.
By:Greenhill Capital Partners, LLC, its general partner
 
By:
/s/ Jodi Ganz
 
Name:
Jodi Ganz
 
Title:
Secretary
 
 
GREENHILL CAPITAL PARTNERS II, L.P.
GREENHILL CAPITAL PARTNERS (CAYMAN) II, L.P.
GREENHILL CAPITAL PARTNERS (EXECUTIVES) II, L.P.
GREENHILL CAPITAL PARTNERS (EMPLOYEES) II, L.P.
 
By:  GCP Managing Partner II, L.P., as managing general partner of each of the foregoing partnerships
By:Greenhill Capital Partners, LLC, its general partner
 
By:
/s/ Jodi Ganz
 
Name:
 Jodi Ganz
 
Title:
 Secretary
 
Page 13 of 15

 
Annex A
 
 
GREENHILL & CO., INC
 
Executive Officers
 
Name:
Title:
Citizenship:
Robert F. Greenhill
Chairman
United States
Scott L. Bok
Co-Chief Executive Officer
United States
Simon A. Borrows
Co-Chief Executive Officer
United Kingdom
Robert H. Niehaus
Chairman, Greenhill Capital Partners
United States
Richard J. Lieb
Chief Financial Officer and Assistant Treasurer
United States
Harold J. Rodriguez, Jr.
Chief Administrative Officer
United States
Jodi Ganz
Acting General Counsel and Secretary
United States

 
Address
 
Each of such executive officers can be reached c/o: Jodi Ganz, 300 Park Avenue, 23rd Floor, New York, NY 10022.
 
Directors
 
John C. Danforth is a Director of Greenhill & Co., Inc.  Mr. Danforth is a Partner in the law firm of Bryan Cave LLP.  The principal address of Bryan Cave LLP is One Kansas City Place, 1200 Main Street, Suite 3500, Kansas City, Missouri 64105-2100.
 
Steven F. Goldstone is a Director of Greenhill & Co., Inc.  Mr. Goldstone manages the Silver Spring Group, a private investment firm.  The principal address of the Silver Spring Group is 570 Lexington Avenue, New York, NY 10022.
 
Stephen L. Key is a Director of Greenhill & Co., Inc.  Mr. Key is the sole proprietor of Key Consulting, LLC, a consulting firm.  The principal address of Key Consulting, LLC is 222 Richmond St., Suite 202, Providence, RI 02903.
 
Isabelle V. Sawhill is a Director of Greenhill & Co., Inc.  Dr. Sawhill is a Senior Fellow of Economic Studies at the Brookings Institution.  The Brookings Institution is a private nonprofit organization devoted to independent research and policy solutions.  The principal address of the Brookings Institution is 1775 Massachusetts Ave., NW, Washington, DC 20036.
 
Page 14 of 15

 
GREENHILL CAPITAL PARTNERS, LLC
 
Executive Officers
 
Name:
Title:
Citizenship:
Robert H. Niehaus
Chairman, Member of Investment Committee
United States
Robert F. Greenhill
Managing Director, Member of Investment Committee
United States
Scott L. Bok
Managing Director, Member of Investment Committee
United States
V. Frank Pottow
Managing Director, Member of Investment Committee
United States, Canada
Harold J. Rodriguez
Chief Financial Officer, Chief Compliance Officer and Treasurer
United States
Simon A. Borrows
Member of Investment Committee
United Kingdom
Kevin A. Bousquette
Managing Director, Member Of Investment Committee
United States
Jodi Ganz
Secretary
United States

 
Address
 
Each of such executive officers can be reached c/o: Jodi Ganz, 300 Park Avenue, 23rd Floor, New York, NY 10022.
 
 
Page 15 of 15

 
 
EX-99.1 2 dp10560_ex1.htm
 
Exhibit 1
 
 
JOINT FILING AGREEMENT
 
JOINT FILING AGREEMENT, dated as of the 7th day of July, 2008 among (i) Greenhill & Co., Inc., (ii) Greenhill Capital Partners, LLC, (iii) GCP Managing Partner II, L.P., (iv) Greenhill Capital Partners II, L.P., (v) Greenhill Capital Partners (Cayman) II, L.P., (vi) Greenhill Capital Partners (Executives) II, L.P., and (vii) Greenhill Capital Partners (Employees) II, L.P. (collectively, the “Joint Filers”).
 
WHEREAS, pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the parties hereto desire to satisfy any filing obligation under Section 13(d) of the Exchange Act by a single joint filing;
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Joint Filers hereby agree and represent as follows:
 
1.   The Schedule 13D with respect to the common stock, par value $0.01 per share, of Crusader Energy Group Inc. (to which this Joint Filing Agreement is an exhibit) is filed on behalf of each of the Joint Filers.
 
2.   Each of the Joint Filers is eligible to use Schedule 13D for the filing of information therein.
 
3.   Each of the Joint Filers is responsible for the timely filing of Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning such persons contained therein, provided that each such person is not responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate.
 
4.   This Joint Filing Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.
 

 
IN WITNESS WHEREOF, each of the undersigned has caused this Joint Filing Agreement to be duly executed and delivered as of the date first above written.
 

 
GREENHILL & CO., INC.
 
By:
/s/ Jodi Ganz
 
Name:
Jodi Ganz
 
Title:
Acting General Counsel and Secretary
 

 
GREENHILL CAPITAL PARTNERS, LLC
 
By:
/s/ Jodi Ganz
 
Name:
Jodi Ganz
 
Title:
Secretary
 

 
GCP MANAGING PARTNER II, L.P.
By:Greenhill Capital Partners, LLC, its general partner
 
By:
/s/ Jodi Ganz
 
Name:
Jodi Ganz
 
Title:
Secretary
 

 
GREENHILL CAPITAL PARTNERS II, L.P.
GREENHILL CAPITAL PARTNERS (CAYMAN) II, L.P.
GREENHILL CAPITAL PARTNERS (EXECUTIVES) II, L.P.
GREENHILL CAPITAL PARTNERS (EMPLOYEES) II, L.P.
 
By:  GCP Managing Partner II, L.P., as managing general partner of each of the foregoing partnerships
By:Greenhill Capital Partners, LLC, its general partner
 
By:
/s/ Jodi Ganz
 
Name:
 Jodi Ganz
 
Title:
 Secretary
 
 
2

 
 
EX-99.2 3 dp10560_ex2.htm
 
Exhibit 2
 
VOTING AGREEMENT

THIS VOTING AGREEMENT (this “Agreement”) is made and entered into as of December 31, 2007, by and among Knight Energy Group I Holding Co., LLC, a Delaware limited liability company (“Knight I Parent”), Knight Energy Group II Holding Company, LLC, a Delaware limited liability company (“Knight II Parent”), Hawk Energy Fund I Holding Company, LLC, an Oklahoma limited liability company (“Hawk Parent”), David D. Le Norman (“Le Norman”), Robert J. Raymond (“Raymond”) and Greenhill Capital Partners II, L.P., Greenhill Capital Partners (Cayman) II, L.P., Greenhill Capital Partners (Executives) II, L.P., and Greenhill Capital Partners (Employees) II, L.P. (“GCP” and together with Knight I Parent, Knight II Parent and Hawk Parent, Le Norman and Raymond, the “Parties”).

RECITALS
 
A. Concurrently with the execution of this Agreement, the Crusader Parent Entities (as defined in the Contribution Agreement), Westside Energy Corporation, a Nevada corporation (the “Company”), and the Crusader Operating Entities (as defined in the Contribution Agreement) have entered into a Contribution Agreement (as may be amended from time to time, the “Contribution Agreement”), which provides for the acquisition by the Company of all of the outstanding equity interest of each of the Crusader Operating Entities (the “Acquisition”) in exchange for common stock, par value $0.01 per share, of the Company (the “Company Common Stock”) or cash, as set forth in the Contribution Agreement.
 
B. In connection with the Acquisition, the Crusader Parent Entities have agreed to vote their shares of Company Common Stock in the manner set forth in this Agreement.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained herein, the Parties agree as follows:

1. Voting Agreement.
 
1.1 Board Composition.  Each Party shall vote all shares of Company Common Stock owned or controlled by such Party, whether now owned or hereafter acquired or which such Party may be empowered to vote (together the “Shares”), from time to time and at all times, at each annual or special meeting of stockholders at which an election of directors is held or pursuant to any written consent of the stockholders, in favor of the election of the following persons to the Board of Directors (the “Board”) of the Company:
 
(i)    one individual designated by GCP so long as GCP holds not fewer than 33.3333% of the outstanding Investor Units (as defined in the Limited Liability Company Agreement of Knight I Parent dated as of even date herewith, as hereafter amended) in Knight I Parent and Knight I Parent holds not fewer than 30% of the
 
 
 

 
 
outstanding Company Common Stock or Greenhill holds directly not fewer than 10% of the outstanding shares of Company Common Stock, which individual shall initially be Robert Niehaus;
 
(ii)   three individuals designated by Le Norman, provided (A) Le Norman remains chief executive officer of the Company or holds or controls directly or indirectly not fewer than 10% of the outstanding shares of Company Common Stock, (B) one of the initial designees shall be Le Norman, and (C) two of the designees shall in all instances qualify as an "independent director" within the meaning of the applicable rules and regulations of the American Stock Exchange or other national stock exchange on which the Company common stock is listed or admitted; and

(iii)  three individuals designated by Raymond, provided (A) Raymond remains chairman of the board of the Company or holds or controls directly or indirectly not fewer than 10% of the outstanding shares of Company Common Stock, (B) one of the initial designees is Raymond, and (C) two of the designees shall in all instances qualify as an "independent director" within the meaning of the applicable rules and regulations of the American Stock Exchange or other national stock exchange on which the Company common stock is listed or admitted.

1.2 Size of the Board.  Each Party shall vote all of his, her or its Shares from time to time and at all times, in whatever manner shall be necessary to cause the size of the Board to be set and to remain at seven (7) directors.
 
1.3 Removal of Board Members.  Each Party shall vote all Shares owned or controlled by such Party from time to time and at all times in whatever manner as shall be necessary to ensure that (i) no director elected pursuant to Section 1.1 of this Agreement may be removed from office unless (A) such removal is directed or approved by the Party having the right under Section 1.1 to designate that director or (B) the Party originally entitled to designate or approve such director pursuant to Section 1.1 is no longer so entitled to designate or approve such director; and (ii) any vacancies created by the resignation, removal or death of a director elected pursuant to Section 1.1 shall be filled pursuant to the provisions of Section 1.1; provided, that, any such replacement nominee is reasonably acceptable to a majority of the Board members.  All Parties agree to execute any written consents required to effectuate the obligations of this Agreement.
 
1.4 Compensation Committee.  Each Party shall vote all Shares owned or controlled by such Party from time to time and at all times in whatever manner as is necessary and shall take all other necessary or desirable actions within its reasonable control, so that (i) the Board establishes and maintains a compensation committee, and (ii) so long as GCP has the right hereunder to designate an individual to serve on the Board and such individual qualifies as an “independent director” within the meaning of the applicable rules and regulations of the American Stock Exchange or other national stock exchange on which the Company’s common stock is listed or admitted, such GCP designee will be a member of the compensation committee.
 
 
2

 
 
2. Term.  This Agreement shall take effect on the date of the closing of the transaction contemplated by the Contribution Agreement (the “Effective Date”) and shall continue in effect until and shall terminate upon the earlier to occur of (a) a Change in Control of the Company, and (b) December 31, 2011.  As used herein, a “Change in Control” shall mean the occurrence of any of the following events:
 
(i)      The acquisition by any person or group of beneficial ownership of forty percent (40%) or more of either (x) the then outstanding shares of Company Common Stock (the “Outstanding Company Stock”) or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Section 2(i), the following acquisitions (whether the acquiring person or group acquires beneficial ownership of forty percent (40%) or more of the Outstanding Company Stock or any such acquisition results in any other person or group (other than the acquiring person or group) owning forty percent (40%) or more of the Outstanding Company Stock) shall not constitute a Change in Control:  (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (4) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) or (C) of paragraph (iii) below; or
 
(ii)     Members of the then incumbent Board cease to constitute at least a majority of the members of the Board; or
 
(iii)    Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets of another company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the persons who were the beneficial owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (B) no person or group (excluding any employee benefit plan (or related trust) of the Company or the entity resulting from such Business Combination) beneficially owns, directly or indirectly, forty percent (40%) or more of, respectively, the then outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership results solely from ownership of the Company that existed prior to the Business Combination, and (C)
 
 
3

 
 
at least a majority of the members of the board of directors or similar governing body of the entity resulting from such Business Combination were members of the then incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
 
(iv)    Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
 
Notwithstanding the foregoing clause (i) of this definition: (x) the following acquisitions (whether the acquiring Person or Group acquires Beneficial Ownership of forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities or any such acquisition results in any other Person or Group (other than the acquiring Person or Group) Beneficially Owning forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities) shall not constitute a Change in Control unless, following such acquisition, any Person or Group (other than the acquiring Person or Group effecting the acquisition pursuant to the following clauses (A) through (D)) who becomes the Beneficial Owner of forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities as a result of one or more of such acquisitions shall thereafter acquire any additional shares of Company Securities and, following such acquisition, Beneficially Owns forty percent (40%) or more of either the Outstanding Company Stock or Outstanding Company Voting Securities, in which case such acquisition shall constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (D) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of the foregoing clause (iii) of this definition; and (y) the acquisition of Beneficial Ownership of shares of Common Stock by the Crusader Parent Entities pursuant to the Contribution Agreement, the corresponding acquisition of Beneficial Ownership of shares of Common Stock by any other Person or Group deemed to Beneficially Own the Common Stock so acquired by the Crusader Parent Entities (any such Person and/or Group, collectively with the Crusader Parent Entities and the Crusader Distributees, the "Crusader Group") and the acquisition of Beneficial Ownership of shares of Common Stock as a result of the distribution by a Crusader Parent Entity to Crusader Distributees of shares of Common Stock acquired pursuant to the Contribution Agreement or directly from the Company prior to the date of the Contribution Agreement shall not constitute a Change of Control, provided that if, (1) for so long as the shares of Common Stock Beneficially Owned by any member of the Crusader Group equals or exceeds forty percent (40%) of the Outstanding Company Stock or the Outstanding Company Voting Securities, such member of the Crusader Group shall obtain Beneficial Ownership of shares of Common Stock (other than as a result of any acquisition described in the foregoing clauses (A) through (D) of this paragraph or pursuant to an award issued under any equity based compensation plan of the Company, including without limitation the 2008 LTIP) representing one percent (1%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities or (2) at any time after such member of the Crusader Group shall cease to Beneficially Own forty percent (40%) or more of the Outstanding Company Stock and Outstanding Company Voting Securities, such member of the Crusader Group shall obtain Beneficial Ownership of shares of Stock (other than as a result of any acquisition described in the foregoing clauses (A) through (D) of this paragraph
 
 
4

 
 
or pursuant to an award issued under any equity based compensation plan of the Company, including without limitation the 2008 LTIP) representing forty percent (40%) or more of either the Outstanding Company Stock or Outstanding Company Voting Securities, then in the case of either (1) or (2) a Change of Control shall be deemed to occur.
 
3. Specific Enforcement.  Each Party acknowledges and agrees that each Party hereto will be irreparably damaged in the event any of the provisions of this Agreement are not performed by the Parties in accordance with their specific terms or are otherwise breached.  Accordingly, it is agreed that each Party shall be entitled to an injunction to prevent breaches of this Agreement and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction, in addition to any other remedy to which the Parties may be entitled at law or in equity.
 
4. Miscellaneous.
 
4.1 Transfers, Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties.  Nothing in this Agreement, express or implied, is intended to confer upon any Party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.  Notwithstanding the foregoing, each transferee or assignee of the Shares subject to this Agreement shall take such Shares free and clear of the terms of this Agreement, unless such transferee or assignee is a Party hereto or an Affiliate thereof.  As used in this Section 4.1, the term “Affiliate” shall have the meaning set forth in the Contribution Agreement except that this Section 4.1 shall not apply to D.E. Shaw Synoptic Portfolios, L.L.C.; Crusader Energy Group Holding Company, L.L.C. or Knight Energy Parent as a result of a distribution of Shares to any of these listed entities from a Party in which they hold an interest, nor shall this Section 4.1 apply to any member of one or more of these entities who receives a distribution of Shares from one or more of the listed entities in the employee-member’s capacity as a member of one or more of the entities.
 
4.2 Governing Law.  This Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Nevada as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of Nevada, without regard to its principles of conflicts of laws.
 
4.3 Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 
 
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4.4 Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
 
4.5 Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the Party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent to the respective Parties at their address as set forth on the signature page, or to such email address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 4.5.
 
4.6 Amendment.  This Agreement may be amended, modified or terminated and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by the holders of 90% of the Shares at any such time subject to this Agreement whether or not such person entered into or approved such amendment or waiver.
 
4.7 Severability.  The invalidity of unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
 
4.8 Delays or Omissions.  No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
 
4.9 Entire Agreement.  This Agreement (including the exhibits hereto, if any), constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.
 
4.10 Manner of Voting.  The voting of Shares pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law.
 
 
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4.11 Costs of Enforcement.  If any Party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings, the non-prevailing Party shall pay all costs and expenses incurred by the prevailing Party, including, without limitation, all reasonable attorneys’ fees.
 

[Remainder of Page Intentionally Left Blank]
 
 
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IN WITNESS WHEREOF, the Parties have executed this Voting Agreement as of the date first above written.
 
KNIGHT ENERGY GROUP I HOLDING CO., LLC
By:  Crusader Energy Group Holding Co., LLC,
its Manager


By:   /s/ David D. Le Norman
David D. Le Norman, Manager

KNIGHT ENERGY GROUP II HOLDING COMPANY, LLC
By:  Knight Energy Management Holding
Company, LLC, its Manager


By:   /s/ David D. Le Norman
David D. Le Norman, Manager

By:   /s/ Robert J. Raymond
Robert J. Raymond, Manager

HAWK ENERGY FUND I HOLDING COMPANY, LLC
By:  Hawk Holdings, LLC, its Manager


By:   /s/ David D. Le Norman
David D. Le Norman, Manager


/s/ David D. Le Norman
David D. Le Norman


/s/ Robert J. Raymond
Robert J. Raymond


[Signature Page to Voting Agreement]
 
 
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Greenhill Capital Partners II, L.P.
Greenhill Capital Partners (Cayman, II, L.P.
Greenhill Capital Partners (Executive), II, L.P.
Greenhill Capital Partners (Employees), II, L.P.
By:  GCP Managing Partner II, L.P.,
Managing General Partner of each of the
foregoing partnerships
By:  Greenhill Capital Partners, LLC,
General Partner of GCP Managing Partner,
II, L.P.


By:   /s/ V. Frank Pottow

Name:  V. Frank Pottow

Title:     Managing Director

 

[Signature Page to Voting Agreement]
 
 
 
9

 
 
EX-99.3 4 dp10560_ex3.htm
 
Exhibit 3
 
To:
David D. Le Norman
 
Robert J. Raymond
 
c/o Crusader Management Corporation
 
210 Park Avenue, Suite 3000
 
Oklahoma City, Oklahoma 73102
 
Reference is herein made to that certain Contribution Agreement dated as of even date herewith by and among Westside Energy Corporation, Knight Energy Group I Holding Co., LLC, Knight Energy Group II Holding Co., LLC, Knight Energy Management Holding Company, LLC, Hawk Energy Fund I Holding Company, LLC, RCH Energy Opportunity Fund I, L.P., David D. Le Norman, Crusader Energy Group Holding Co., LLC, Knight Energy Group, LLC, Knight Energy Group II, LLC, Knight Energy Management, LLC, Hawk Energy Fund I, LLC, RCH Upland Acquisition, LLC, Crusader Management Corporation, and Crusader Energy Group, LLC (the “Contribution Agreement”). Capitalized terms used herein but not defined herein shall have the respective meanings assigned to them in the Contribution Agreement.
 
This will confirm that the undersigned entities will vote all shares of Common Shares owned or controlled by them from time to time and shall take all other necessary or desirable actions within their reasonable control in support of the approval by the Company of the execution and delivery of (i) that certain Employment Agreement by and between the Company and David D. Le Norman, substantially in the form attached hereto as Annex I in all material respects, and (ii) that certain Services Agreement by and between the Company and Robert J. Raymond, substantially in the form attached hereto as Annex II in all material respects.
 
This letter is dated the date of the Contribution Agreement.
 
[Remainder of Page Initially Left Bank—Signature Page Follows]
 
 

 
 
David D. Le Norman
Robert J. Raymond
c/o Crusader Management Corporation
210 Park Avenue, Suite 3000
Oklahoma City, Oklahoma 73102
 
 
 
Yours very truly,
 
Greenhill Capital Partners II, L.P.
Greenhill Capital Partners (Cayman) II, L.P.
Greenhill Capital Partners (Executives) II, L.P.
Greenhill Capital Partners (Employees) II, L.P.
 
 
  By:   GCP Managing Partner II, L.P., Managing General Partner of each of the foregoing partnerships
     
  By: Greenhill Capital Partners, LLC, General Partner Of GCP Managing Partner II, L.P.
 
By:
/s/ V. Frank Pottow
 
Name:
V. Frank Pottow
 
Title:
Managing Director
 

 
 
2

 
Annex I
 
Execution Copy
 
 
EMPLOYMENT AGREEMENT
 
 
by and between
 
 
Westside Energy Corporation
 
 
and
 
 
David D. Le Norman
 
 

 

EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into effective as of the closing of the transaction contemplated by the Contribution Agreement (as defined below) (the “Effective Date”), by and between Westside Energy Corporation, a Nevada corporation (the “Company”), and David D. Le Norman (the “Employee”).
 
RECITALS:
 
A.           The Employee possesses valuable skills and knowledge in the field of business of the Company and desires to be employed by the Company on the terms and conditions set forth in this Agreement.
 
B.           The Company desires to employ the Employee on the terms and conditions set forth in this Agreement.
 
AGREEMENTS:
 
In consideration of the premises and of the mutual covenants and agreements contained herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
 
1.           Certain Definitions. As used in this Agreement, the following terms have the meanings set forth below:
 
(a)           “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with the Person in question. As used in this definition of “Affiliate,” the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Securities, by contract, or otherwise.
 
(b)           “Board” means the Board of Directors of the Company and any committee thereof.
 
(c)           “Cause” means Employee’s
 
(i)           commission of an act of fraud, embezzlement, misappropriation, willful misconduct, bad faith or dishonesty against the Company;
 
(ii)          material breach of this Agreement which is not remedied within 30 days after receipt of written notice from the Company specifically identifying the manner in which the Company believes that Employee has materially breached this Agreement;
 
 

 
 
(iii)         conviction, plea of no contest or nolo contendere, deferred adjudication or unadjudicated probation for any felony or any crime involving moral turpitude; or
 
(iv)         violation of the Company’s substance abuse policy.
 
(d)           “Change in Control” means the occurrence of any of the following events:
 
(i)           Subject to the last paragraph of this definition, the acquisition by any Person or Group of Beneficial Ownership of forty percent (40%) or more of either (x) the then outstanding shares of Common Stock (the “Outstanding Company Stock”) or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors or similar governing body (the “Outstanding Company Voting Securities” and, together with the Outstanding Company Stock, the “Company Securities”); or
 
(ii)          Members of the Incumbent Board cease to constitute at least a majority of the members of the Board; or
 
(iii)         Consummation of a reorganization, merger, consolidation, sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets of another company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the Persons who were the Beneficial Owners of Company Securities immediately prior to such Business Combination Beneficially Own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock or common equity interests and the combined voting power of the then outstanding Voting Securities, as the case may be, of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Company Securities, (B) no Person or Group (excluding any employee benefit plan (or related trust) of the Company or the entity resulting from such Business Combination) Beneficially Owns, directly or indirectly, forty percent (40%) or more of, respectively, the then outstanding shares of common stock or common equity interests of the entity resulting from such Business Combination or the combined voting power of the then outstanding Voting Securities of such entity except to the extent that such ownership results solely from ownership of the Company that existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors or similar governing body of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial
 
 
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agreement, or of the action of the Board, providing for such Business Combination; or
 
(iv)         Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
 
Notwithstanding the foregoing clause (i) of this definition: (x) the following acquisitions (whether the acquiring Person or Group acquires Beneficial Ownership of forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities or any such acquisition results in any other Person or Group (other than the acquiring Person or Group) Beneficially Owning forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities) shall not constitute a Change in Control unless, following such acquisition, any Person or Group (other than the acquiring Person or Group effecting the acquisition pursuant to the following clauses (A) through (D)) who becomes the Beneficial Owner of forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities as a result of one or more of such acquisitions shall thereafter acquire any additional shares of Company Securities and, following such acquisition, Beneficially Owns forty percent (40%) or more of either the Outstanding Company Stock or Outstanding Company Voting Securities, in which case such acquisition shall constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (D) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of the foregoing clause (iii) of this definition; and (y) the acquisition of Beneficial Ownership of shares of Common Stock by the Crusader Parent Entities pursuant to the Contribution Agreement, the corresponding acquisition of Beneficial Ownership of shares of Common Stock by any other Person or Group deemed to Beneficially Own the Common Stock so acquired by the Crusader Parent Entities (any such Person and/or Group, collectively with the Crusader Parent Entities and the Crusader Distributees, the “Crusader Group”) and the acquisition of Beneficial Ownership of shares of Common Stock as a result of the distribution by a Crusader Parent Entity to Crusader Distributees of shares of Common Stock acquired pursuant to the Contribution Agreement or directly from the Company prior to the date of the Contribution Agreement shall not constitute a Change of Control, provided that if, (1) for so long as the shares of Common Stock Beneficially Owned by any member of the Crusader Group equals or exceeds forty percent (40%) of the Outstanding Company Stock or the Outstanding Company Voting Securities, such member of the Crusader Group shall obtain Beneficial Ownership of shares of Common Stock (other than as a result of any acquisition described in the foregoing clauses (A) through (D) of this paragraph or pursuant to an award issued under any equity based compensation plan of the Company, including without limitation the 2008 LTIP) representing one percent (1%) or more of the
 
 
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Outstanding Company Stock or Outstanding Company Voting Securities or (2) at any time after such member of the Crusader Group shall cease to Beneficially Own forty percent (40%) or more of the Outstanding Company Stock and Outstanding Company Voting Securities, such member of the Crusader Group shall obtain Beneficial Ownership of shares of Stock (other than as a result of any acquisition described in the foregoing clauses (A) through (D) of this paragraph or pursuant to an award issued under any equity based compensation plan of the Company, including without limitation the 2008 LTIP) representing forty percent (40%) or more of either the Outstanding Company Stock or Outstanding Company Voting Securities, then in the case of either (1) or (2) a Change of Control shall be deemed to occur.
 
(e)           “Compensation Committee” means the Compensation Committee of the Board.
 
(f)           “Contribution Agreement” means the Contribution Agreement among the Company and Crusader Management Corporation, David D. Le Norman, Knight Energy Management Holding Company, LLC, Knight Energy Group II Holding Company, LLC, Knight Energy Group I Holding Co., LLC, Crusader Energy Group Holding Co., LLC, Hawk Energy Fund I Holding Company, LLC, RCH Energy Opportunity Fund I, L.P., Knight Energy Group, LLC, Knight Energy Group II, LLC, Knight Energy Management, LLC, Hawk Energy Fund I, LLC, RCH Upland Acquisition, LLC and Crusader Energy Group, LLC dated as of December ___, 2007.
 
(g)           “Disability” means Employee’s inability to perform, with or without reasonable accommodations, the essential functions of Employee’s position hereunder for a period of 180 consecutive days due to mental or physical incapacity, as determined by mutual agreement of a physician selected by the Company or its insurers and a physician selected by Employee; provided, however, that if the opinion of the Company’s physician and Employee’s physician conflict, the Company’s physician and Employee’s physician shall together agree upon a third physician, whose opinion shall be binding. The foregoing definition of “Disability” is not intended to and shall not affect the definition of “disability” or any similar term in any insurance policy the Company or any of its Subsidiaries may provide. Notwithstanding the foregoing definition of Disability, the Employee will not be considered to have a Disability under any provision of this Agreement that would trigger the payment of deferred compensation within the meaning of Section 409A of the Code unless the Employee’s Disability also meets the Section 409A definition of Disability.
 
(h)           “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
 
 
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(i)           “Good Reason” means, subject to the terms and provisions of this Agreement, the occurrence of one or more of the following events:
 
(i)           any removal of Employee from the offices of President and Chief Executive Officer of the Company except, in any such case, in connection with the termination of Employee’s employment hereunder by the Company for Disability or for Cause or by the Employee other than for Good Reason;
 
(ii)           any termination or material reduction of a material benefit under any Investment Plan or Welfare Plan in which Employee participates unless (A) there is substituted a comparable benefit that is economically substantially equivalent to the terminated or reduced benefit prior to such termination or reduction or (B) benefits under such Investment Plan or Welfare Plan are terminated or reduced with respect to all employees previously granted benefits thereunder;
 
(iii)          any reduction in Employee’s Annual Base Salary;
 
(iv)          any failure by the Company to comply with any of the provisions of Section 3(b);
 
(v)           the relocation or transfer of Employee’s principal office to a location more than 20 miles from Employee’s work address as of the Effective Date in the city of Oklahoma City, Oklahoma without Employee’s consent;
 
(vi)          without limiting the generality of the foregoing, any material breach by the Company of this Agreement other than an isolated, insubstantial, and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Employee; or
 
(vii)         a Change in Control,
 
(j)           “Person” means any individual, partnership, limited liability partnership, joint venture, corporation, limited liability company, trust, association, or other entity or organization.
 
(k)           “Pro Rata Bonus” means the amount equal to the product of (i) the amount of the Annual Bonus (as defined in Section 3(b)(ii)), if any, to which Employee would have been entitled for the calendar year in which Employee’s Date of Termination occurs if Employee’s employment were not terminated during such calendar year, multiplied by (ii) a fraction, the numerator of which is the number of days that have elapsed since the beginning of such calendar year through (but not including) Employee’s Date of Termination, and the denominator of which is the total number of days in such calendar year. The
 
 
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amount, if any, of the Annual Bonus to which Employee would have been entitled for the calendar year in which the Date of Termination occurs shall be determined by the Compensation Committee in its sole reasonable discretion; provided, however, that for purposes of determining the amount of the Pro Rata Bonus in connection with a termination of Employee’s employment upon a Change of Control, Employee shall be deemed to have been entitled to an Annual Bonus of not less than the amount of the last Annual Bonus awarded to Employee prior to such Change in Control, and provided further however that any determination by the Compensation Committee as to satisfaction of a performance standard shall be made in the same manner as such determination is made for the other executive officers of the Company.
 
(l)           “Subsidiary” means, with respect to any Person, any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.
 
(m)         “Voting Securities” means any securities that vote generally in the election of directors, in the admission of general partners, or in the selection of any other similar governing body.
 
(n)          “Without Cause” means a termination by the Company of Employee’s employment during the Term at the Company’s sole discretion for any reason other than a termination based upon Cause, death or Disability; provided that, “without Cause” does not include termination of this Agreement and Employee’ s employment pursuant to Section 2.
 
2.           Term of Employment; Non-Renewal of Term. Subject to the terms and provisions of this Agreement, the Company hereby agrees to employ Employee, and Employee hereby agrees to be employed by the Company, for the period (the “Term”) commencing on the Effective Date and, unless Employee’s employment hereunder is sooner terminated in accordance with the terms hereof, expiring at 5:00 p.m., Oklahoma City, Oklahoma time, on December 31, 2011; provided, however, that on January 1, 2009, and on each January 1 occurring thereafter, the Term shall automatically (without any action by either party) be extended for one additional calendar year unless, at least 30 days prior to each such January 1, the Company or Employee shall have given written notice (a “Non-Renewal Notice”) that it or Employee, as applicable, does not wish to extend this Agreement (a “Non-Renewal”). Either party may elect not to renew this Agreement. The term “Term,” as utilized in this Agreement, shall refer to the Term as so automatically extended. The Term shall expire as a result of any Non-Renewal at 5:00 p.m., Oklahoma City, Oklahoma time, on the last day of the Term during which a Non-Renewal Notice is given, and Employee’s employment shall terminate at that time.
 
 
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3.           Terms of Employment.
 
(a)           Position and Duties.
 
(i)           During the Term, Employee shall serve as President and Chief Executive Officer of the Company. In so doing, Employee shall have such powers and duties (including holding officer positions with one or more Subsidiaries of the Company) as may be assigned from time to time by the Board, so long as such powers and duties are reasonable and customary for president and chief executive officers of an enterprise comparable to the Company. Employee shall report to the Board, and shall also be a Board member.
 
(ii)           During the Term, Employee shall devote his full time, skill, and attention during normal business hours to the business and affairs of the Company and use his reasonable efforts to discharge faithfully and efficiently the duties and responsibilities delegated and assigned to Employee herein or pursuant hereto; provided, however, that Employee may (i) serve on corporate, civic, or charitable boards or committees, (ii) deliver lectures or fulfill speaking engagements, and (iii) manage Employee’s personal investments, so long as such activities, either individually or in the aggregate, do not significantly interfere with the performance and fulfillment of Employee’s duties and responsibilities as an employee of the Company in accordance with this Agreement, and comply with the following. In the case of the activities described in clause (i) of the proviso in the immediately preceding sentence, Employee shall notify the Board of any of the positions described in such clause. In the case of the activities described in clause (iii) of the proviso in the immediately preceding sentence, Employee shall comply with the Company’s conflicts policy in effect from time, to time and shall inform the Board of any conflicts of interest (whether actual or apparent) with the business of the Company and its Subsidiaries, including any event reasonably likely to raise the appearance of a conflict.
 
(b)           Compensation.
 
(i)           Annual Base Salary. During the Term, Employee shall receive an annual base salary (“Annual Base Salary”), which shall be paid biweekly in accordance with the customary payroll practices for executive officers of the Company, in the initial amount of $360,000 per year. At least annually (by no later than January 31 of each year) during the Term, the Compensation Committee shall review the Annual Base Salary of Employee and may increase (but not decrease) the Annual Base Salary by such amount as the Compensation Committee shall deem appropriate. The term “Annual Base Salary” as used in this Agreement shall refer to the Annual Base Salary as it may be so increased.
 
 
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(ii)          Annual Bonus. During the Term, Employee shall be eligible to receive, in addition to the Annual Base Salary, an annual bonus (each, an “Annual Bonus”), subject to achieving the performance goals established by the Compensation Committee as described below. Annually (by no later than March 15 of each calendar year during the Term), the Compensation Committee shall determine the amount (or amount range) of the Annual Bonus that Employee shall be eligible to receive for the calendar year and the performance goals that must be achieved for Employee to become entitled to receive the Annual Bonus for such calendar year. For each calendar year (or partial calendar year) during the Term, the Compensation Committee shall determine in its reasonable discretion whether the performance goals established for Employee for such calendar year have been achieved, such determination to be made no later than 10 business days after the date on which the Company has available to it the information reasonably required to make the determination. Any Annual Bonus that Employee is entitled to receive shall be paid to Employee within 10 business days after the determination of the Compensation Committee that the Employee is entitled to it.
 
(iii)         Option. The Employee shall be entitled to exercise the option to purchase shares of common stock, par value $0.01 per share of the Company issued to Employee pursuant to Section 6(i) of the Company’s 2008 Long Term Incentive Plan (the “Option”). The Option may be exercised only in the time and manner described in the Option.
 
(iv)         Incentive, Savings, Stock Option and Retirement Plans. During the Term, Employee shall be entitled to participate in all incentive, savings, stock option, equity-based, profit sharing and retirement plans, practices, policies and programs applicable generally to other executive officers of the Company (“Investment Plans”), subject to all of the terms and conditions of such Investment Plans.
 
(v)          Welfare Benefit Plans. During the Term, Employee and Employee’s family shall be eligible for participation in and shall receive all benefits under the welfare benefit plans, practices, policies and programs (“Welfare Plans”) provided by the Company (including, without limitation, medical, prescription, dental, short-term and long-term disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other executives of the Company, subject to all of the terms and conditions of such Welfare Plans.
 
(vi)         Perquisites. During the Term, (A) the Company shall provide a new Yukon automobile or a comparable automobile to Employee for his business and personal use and shall pay all costs related to the operation of such automobile, including maintenance, repair, gasoline, insurance and taxes, (B) the Company shall bear all the fees and costs related to Employee’s country club
 
 
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membership at Gaillardia Country Club in Oklahoma City and at any alternative country club selected by Employee so long as the costs are comparable and (C) the Employee shall be entitled to receive (in addition to the benefits described above) such other perquisites and fringe benefits appertaining to Employee’s position in accordance with any policies, practices, and procedures established by the Board.
 
(vii)        Expenses. During the Term, Employee shall be entitled to receive prompt reimbursement for all reasonable business-related expenses incurred by Employee in the performance of Employee’s duties in accordance with the Company’s policies, practices and procedures.
 
(viii)       Vacation and Holidays. During the Term, Employee shall be entitled to not less than four weeks of annual paid vacation in accordance with the plans, policies, programs and practices of the Company for its executive officers. In addition, Employee shall be entitled to sick leave and paid holidays, in accordance with the plans, policies, programs and practices of the Company for its executive officers.
 
(ix)         Pro-ration. Any payments or benefits payable to Employee hereunder in respect of any calendar year during which Employee is employed by the Company for less than the entire year, unless otherwise provided in the applicable plan or arrangement, shall be pro-rated in accordance with the number of days in such calendar year during which Employee is so employed.
 
4.           Termination of Employment.
 
(a)           Death. Employee’s employment hereunder shall terminate automatically upon Employee’s death during the Term.
 
(b)           Disability. If the Disability of Employee has occurred during the Term, the Company may give to Employee a written Notice of Termination (as defined in Section 6(a)) in accordance with Section 6(a) of its intention to terminate Employee’s employment hereunder. In such event, Employee’ s employment shall terminate effective on the 30th day after receipt of such notice by Employee (the “Disability Effective Date”) provided that, within 30 days after receipt of the Notice of Termination, Employee shall not have returned to perform, with or without reasonable accommodations, the essential functions of Employee’s position on a full-time basis. During any period of Employee’s Disability, the Company may assign Employee’s duties to any other Employee of the Company or may engage or hire a third party to perform such duties and any such action shall not be deemed “Good Reason” for Employee to terminate this Agreement pursuant to Section 4(d)(i) so long as Employee continues to receive the compensation and benefits under Section 3 during such period.
 
 
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(c)           Termination by Company. Subject to Section 6(d), the Company may terminate Employee’s employment at any time during the Term for Cause or without Cause.
 
(d)           Resignation by Employee. At Employee’s option, Employee may terminate Employee’s employment hereunder (i) subject to Section 6(c), for Good Reason or (ii) without Good Reason.
 
(e)           Agreement Not to Terminate. Notwithstanding any provision to the contrary contained in this Agreement, the Company agrees that it shall not have the right to terminate Employee’s employment, other than for Cause, for a period of time commencing on the Effective Date and ending at 5:00 p.m., Oklahoma City, Oklahoma time, on the 180th day following the Effective Date.
 
5.           Compensation Upon Termination of Employment. Employee shall be entitled to the following compensation from the Company upon the termination of Employee’s employment during the Term. The compensation provided for in this Section 5 shall be in lieu of any other severance pay to which Employee might otherwise be entitled (whether contractual or under a severance plan, the WARN Act, any other applicable law, or otherwise) and shall be conditioned on the execution and delivery of a Release (as defined in Section 6(f)) signed by Employee or Employee’s legal representative pursuant to Section 6(f). The timing of payments pursuant to this Section 5 shall also be subject to the requirements of Section 6(g) and Section 409A of the Code:
 
(a)           Death or Disability. If Employee’s employment is terminated by reason of Employee’s death or Disability, the Company shall pay to Employee or Employee’s legal representatives:
 
(i)           within 30 days after the Employee’s Date of Termination as defined in Section 6(b), a lump sum in cash equal to the sum of Employee’s Annual Base Salary through the Date of Termination to the extent not previously paid and any compensation previously deferred by Employee (together with any accrued interest or earnings thereon) (the “Accrued Obligations”);
 
(ii)          the amount of any Annual Bonus to which Employee was entitled for the calendar year ending prior to the Date of Termination to the extent not previously paid and the amount of any Pro Rata Bonus, each of which amounts shall be paid no later than the later of 30 days after the Date of Termination or 10 business days after the date on which the Company has available to it the information reasonably required to determine the amount to be paid;
 
(iii)         any amounts arising from Employee’s participation in, or benefits under, any Investment Plan (the “Accrued Investments”), which amounts
 
 
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shall be paid in accordance with the terms and conditions of such Investment Plan; and
 
(iv)         any amounts to which Employee or Employee’s spouse, beneficiaries or estate are entitled from Employee’s participation in, or benefits under, any Welfare Plan (“Accrued Welfare Benefits”), which amounts shall be paid in accordance with the terms and conditions of such Welfare Plan.
 
Except as described in this Section 5(a), in the event of Employee’s termination by reason of Employee’s death or Disability, Employee and Employee’s legal representatives, as applicable, shall forfeit all rights to any other compensation.
 
(b)           For Cause; Resignation by Employee Without Good Reason; Non-Renewal Election by Employee. If the Company shall terminate Employee’s employment for Cause, or if Employee resigns without Good Reason, or if Employee’s employment is terminated due to a Non-Renewal election by Employee, the Company shall have no further obligations to Employee other than the obligation for payment of:
 
(i)           the Accrued Obligations, which shall be payable within 30 days after the Employee’s Date of Termination;
 
(ii)          the amount of any Annual Bonus to which Employee was entitled for the calendar year ending prior to the Date of Termination to the extent not previously paid, which amount shall be paid no later than the later of 30 days after the Date of Termination;
 
(iii)         the Accrued Investments, which amounts shall be paid in accordance with the terms and conditions of the Investment Plans; and
 
(iv)         the Accrued Welfare Benefits, which amounts shall be paid in accordance with the terms and conditions of the Welfare Plans.
 
Except as described in this Section 5(b), in the event of Employee’s termination by the Company for Cause or by Employee without Good Reason or due to a Non-Renewal election by Employee, Employee shall forfeit all rights to any other compensation.
 
(c)           Without Cause; Resignation by Employee for Good Reason: Non-Renewal Election by the Company. If the Company terminates Employee’s employment without Cause (other than by reason of Employee’s death or Disability or a Non-Renewal by Employee) or Employee resigns for Good Reason or Employee’s employment is terminated due to a Non-Renewal election by the Company, then the Company shall pay or provide Employee:
 
 
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(i)           within 30 days after the Employee’s Date of Termination, a lump sum in cash equal to the aggregate of the Accrued Obligations;
 
(ii)          the amount of any Annual Bonus to which Employee was entitled for the calendar year ending prior to the Date of Termination to the extent not previously paid and any Pro Rata Bonus, each of which amounts shall be paid no later than the later of 30 days after the Date of Termination or 10 business days after the date on which the Company has available to it the information reasonably required to determine the amount to be paid;
 
(iii)         the Accrued Investments, which amounts shall be paid in accordance with the terms and conditions of the Investment Plans;
 
(iv)         the Accrued Welfare Benefits, which amounts shall be paid in accordance with the terms and conditions of the Welfare Plans;
 
(v)          a lump-sum payment within 30 days of the Date of Termination equal to the greater of (A) the undiscounted amount of Annual Base Salary the Employee would have received for the rest of the Term based upon the highest Annual Base Salary to which Employee was entitled during the 24-month period ending on the Date of Termination or (B) two years of the highest Annual Base Salary to which Employee was entitled during the 24-month period ending on the Date of Termination; and
 
(vi)         if Employee is entitled on the Date of Termination to coverage under the medical, prescription, and dental portions of the Welfare Plans, continuation at the Company’s sole cost and expense of such coverage for Employee and Employee’s dependents for a period ending on the later to occur of (A) the second anniversary of the Date of Termination or (B) the end of the full Term. Notwithstanding any provision of the foregoing to the contrary, the continued coverage provided pursuant to this Section 5(c)(vi) will count towards the depletion of any continued health care coverage rights that Employee and Employee’s dependents may have pursuant to COBRA, and Employee’s or Employee’s dependents’ rights to continued health care coverage pursuant to this Section 5(c)(vi) shall terminate at the time Employee or Employee’s dependents become covered, as described in COBRA, under another group health plan that does not limit coverage with respect to any preexisting conditions of Employee or Employee’s dependents, and shall also terminate as of the date the Company ceases to provide coverage to its senior executives generally under any such Welfare Plan.
 
The parties hereto acknowledge that in the event Employee’s employment is terminated in connection with a Change in Control, the consideration payable to Employee under Section 5(c)(v) hereof is related to the additional efforts and services that will have been required of the Employee in connection with such
 
 
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Change in Control transaction and to Employee’s obligations under Sections 7, 8 and 9 of this Agreement.
 
Except as described in this Section 5(c), in the event of Employee’s termination by the Company without Cause or by Employee for Good Reason or due to a Non-Renewal election by the Company, Employee shall forfeit all rights to any other compensation.
 
6.           Other Provisions Relating to Termination.
 
(a)           Notice of Termination. Any termination by the Company for Cause or without Cause or by reason of Employee’s Disability, or by Employee’s resignation for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(b). For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon and (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated. The failure by the Company or Employee to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Company or Employee hereunder or preclude the Company or Employee from asserting such fact or circumstance in enforcing the Company’s or Employee’s rights hereunder.
 
(b)           Date of Termination. “Date of Termination” means (i) if Employee’s employment is terminated by reason of Employee’s death, the date of Employee’s death; (ii) if Employee’s employment is terminated by reason of Employee’s Disability, the Disability Effective Date (provided that Employee shall not have returned to perform, with or without reasonable accommodation, the essential functions of Employee’s position on a full-time basis during the 30-day period provided for in Section 4(b)); (iii) if Employee’s employment is terminated by the Company without Cause or by Employee for Good Reason or without Good Reason, then, subject to Section 6(c), the date specified in the Notice of Termination (which date shall be a date between the date that the Notice of Termination is given and 30 days thereafter (inclusive)); (iv) if Employee’s employment is terminated by the Company for Cause then, subject to Section 6(d), the date on which the Notice of Termination is given; and (v) if Employee’s employment is terminated due to a Non-Renewal election by Employee or the Company, the date on which the Term expires.
 
(c)           Good Reason. Upon Employee’s learning of the occurrence of any event described in the definition of Good Reason in Section 1(j), Employee may terminate Employee’s employment hereunder for Good Reason within 60 days thereafter by giving a Notice of Termination to the Company to that effect and
 
 
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describing in reasonable detail the facts or circumstances giving rise to Employee’s right to terminate Employee’s employment for Good Reason. Notwithstanding the foregoing, the right of Employee to terminate Employee’s employment for Good Reason under Section 4(d)(i) shall not limit the Company’s right to terminate Employee’s employment for Cause under Section 4(c) if Cause is determined to exist prior to the time Good Reason is determined to exist.
 
(d)           Cause. Upon the Company learning of the occurrence of any event described in Section 1(c), the Company may terminate Employee’s employment hereunder for Cause within 60 days thereafter by giving Employee a Notice of Termination to that effect and describing in reasonable detail the facts or circumstances giving rise to the Company’s right to terminate Employee’s employment for Cause. Notwithstanding the foregoing, the right of the Company to terminate Employee’s employment for Cause under Section 4(c) shall not limit Employee’s right to resign for Good Reason under Section 4(d)(i) if Good Reason is determined to exist prior to the time Cause is determined to exist.
 
(e)           Full Settlement; Mitigation. In no event shall Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Employee under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Employee obtains other employment. The Company shall not be liable to Employee for any damages for breach of this Agreement in addition to the amounts payable under Section 5 arising out of the termination of Employee’s employment prior to the end of the Term. The Company shall be entitled to seek damages from Employee for any breach of Section 8 by Employee.
 
(f)           Release and Other Agreements. Notwithstanding any other provision in this Agreement to the contrary, in consideration for receiving the severance benefits described in Sections 5(c)(v) and 5(c)(vi), Employee hereby agrees to execute (and not revoke) a release within 60 days of the Date of Termination in substantially the form attached hereto as Exhibit A (the “Release”). If Employee fails to properly execute and deliver the Release (or revokes the Release), Employee agrees that Employee shall not be entitled to receive such severance benefits.
 
(g)           409A Compliance. To the extent required by section 409A of the Code, if on Employee’s Date of Termination he is a “specified employee” within the meaning of section 409A of the Code, any amounts that are payable to Employee by reason of his termination of employment pursuant to Section 5 and that are not excluded from application of Section 409A of the Code by reason of the “short term deferral” exception to Section 409A of the Code will be delayed for a period of six months following the Date of Termination. Any payments that would have been paid to Employee pursuant during such six-month period and
 
 
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that are delayed pursuant to this Section 6(g) shall be paid to him in the form of a lump sum payment at the end of the six-month period.
 
7.           Disclosure of, Access to and Entrustment of Confidential Information, Business Opportunities and Business Goodwill. During the course of Employee’s employment with the Company, the Company shall disclose to Employee, or place Employee in a position to have access to or develop, Confidential Information (as defined in Section 8(a)(i)), and/or shall entrust Employee with business opportunities of the Company, and/or shall place Employee in a position to develop business goodwill on behalf of the Company. There is a need and desire on the part of the Company and Employee to specify the parties’ rights and obligations with respect to the ownership and protection of such Confidential Information, business opportunities and goodwill. Accordingly, as a material inducement to the Company to enter into this Agreement, in consideration for the compensation and other benefits payable hereunder to Employee, to protect the Company’s Confidential Information that has been and will be in the future disclosed or entrusted to Employee (the disclosure of which by Employee in violation of this Agreement would adversely affect the business goodwill of the Company), the business goodwill of the Company that has been and will in the future be developed in Employee and the business opportunities that have been and will in the future be disclosed or entrusted to Employee by the Company; and for other good and valuable consideration, Employee agrees to comply with, and be bound by, Section 8 and Section 9. As used in this Section 7 and in Section 8 and Section 9 “Company” shall include the Company and any of its Subsidiaries.
 
8.           Confidential Information; Ownership of Property.
 
(a)           Obligations to Maintain Confidentiality.
 
(i)           Employee acknowledges that the Company has trade, business and financial secrets and other confidential and proprietary information regarding the Company and its business, in whatever form, tangible or intangible (collectively, the “Confidential Information”), and that, during the course of Employee’s employment with the Company, Employee has received, shall receive or be placed in a position to have access to or develop Confidential Information. Employee further acknowledges and agrees that Employee’s use of Confidential Information in the conduct of business on behalf of a competitor of the Company would constitute unfair competition with the Company and would adversely affect the business goodwill of the Company. Confidential Information includes sales materials, technical information, processes and compilations of information, records, specifications and information concerning customers, prospective customers, customer and prospective customer lists, and information regarding methods of doing business, As defined herein, Confidential Information shall not include information that is or was (i) obtained by Employee from a source other
 
 
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than the Company or its Affiliates, which source is not under a duty of non-disclosure in regard to such information or (ii) becomes generally available to the public other than through disclosure by Employee in violation of the provisions of this Agreement.
 
(ii)          Employee is aware of those policies implemented by the Company to keep its Confidential Information secret, including those policies limiting the disclosure of information on a need-to-know basis and requiring the keeping of information in secure areas. Employee acknowledges that the Confidential Information has been or will be developed or acquired by the Company through the expenditure of substantial time, effort and money and provides or will provide the Company with an advantage over competitors who do not know or use such Confidential Information.
 
(iii)         During and following Employee’s employment by the Company, Employee shall hold in confidence and not directly or indirectly disclose, use (for Employee’s commercial advantage or otherwise), copy, make lists of, or make available to others any Confidential Information except in Employee’s good faith performance of Employee’s duties to the Company as an executive of the Company or to the extent authorized in writing by the Board or required by law or compelled by legal process. Employee agrees to use reasonable efforts to give the Company notice of any and all attempts to compel disclosure of any Confidential Information. Employee further agrees not to use any Confidential Information for the benefit of any person or entity other than the Company.
 
(iv)         Employee agrees that all Confidential Information and other files, documents, materials, records, notebooks, customer lists, business proposals, contracts, agreements and other repositories containing information concerning the Company or the business of the Company, in whatever form, tangible or intangible (including all copies thereof), that Employee shall prepare, or use, or be provided with as a result of Employee’s employment with the Company, shall be and remain the sole property of the Company. Upon termination of Employee’s employment hereunder, Employee agrees that all Confidential Information and other files, documents, materials, records, notebooks, customer lists, business proposals, contracts, agreements and other repositories containing information concerning the Company or the business of the Company (including all copies thereof) in Employee’s possession, custody or control, whether prepared by Employee or others, shall remain with or be returned to the Company promptly after the Date of Termination. The materials required to be returned pursuant to this Section 8(a)(iv) shall not include personal correspondence or other personal property of Employee that does not relate to the Company or the business of the Company.
 
 
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(b)           Ownership of Work Product. Employee acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, patent applications, copyrightable work and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) that relate to the Company’s or its Affiliates’ actual or anticipated business, research and development, or existing or future products or services and that are conceived, developed, contributed to, made, or reduced to practice by Employee (either solely or jointly with others) while employed by the Company (including any of the foregoing that constitutes any proprietary information or records) (“Work Product”) belong to the Company or its Affiliates, as applicable, and Employee hereby assigns, and agrees to assign, all of the above Work Product to the Company or its Affiliates, as applicable.
 
9.           Non-Competition and Related Matters.
 
(a)           Employee agrees that, during the Term and for a period commencing upon the termination of the Employee’s employment hereunder and ending upon the first anniversary thereof, unless otherwise extended pursuant to the terms of this section 9, Employee will not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, shareholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any business or activity in North America that is substantially similar to the business of the Company. Notwithstanding the foregoing provisions of this Section 9(a), however, Employee shall have no further obligations under this Section 9(a) in the event of a termination of Employee’s employment by the Company without Cause or in the event of Employee’s resignation for Good Reason or if the Employee’s employment is terminated as a result of the Company’s Non-Renewal election.
 
(b)           Employee agrees that a breach or violation of this covenant not to compete by Employee shall entitle the Company, as a matter of right, to an injunction issued by any court of competent jurisdiction, restraining any further or continued breach or violation of this covenant. Such right to an injunction shall be cumulative and in addition to, and not in lieu of, any other remedies to which the Company may show itself justly entitled. Further, during any period in which Employee is in breach of this covenant not to compete, the time period of this covenant shall be extended for an amount of time that Employee is in breach hereof.
 
(c)           Employee agrees that during the Term and for a period commencing upon the termination of the Employee’s employment for Cause or due to a Non-Renewal election by the Employee or following the Employee’s resignation without Good Reason and ending upon the first anniversary thereof, unless otherwise extended pursuant to the terms of this Section 9, Employee will
 
 
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not solicit, directly or indirectly, in the capacity of employee, consultant, or in any other capacity whatsoever, one or more of the employees, directors, officer or other persons who, at the time of solicitation, or in the 180-day period prior thereto, are working full-time or part time for the Company and will not endeavor, directly or indirectly in any manner whatsoever, to encourage any such person to leave his or her job with the Company and will not endeavor, directly or indirectly in any manner whatsoever, to incite or induce any client or customer of the Company to terminate, in whole or in part, its business relations with the Company except to the extent the solicitation is made through a public advertisement in a newspaper, trade journal or similar public medium. Notwithstanding the foregoing provisions of this Section 9(c), Employee shall have no obligations under this Section 9(c) after the termination of his employment unless under the circumstances of his termination he also has obligations after the termination of his employment under Section 9(a).
 
(d)           The representations and covenants contained in this Section 9 on the part of Employee will be construed as ancillary to and independent of any other provision of this Agreement, and the existence of any claim or cause of action of Employee against the Company or any officer, director, or shareholder of the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants of Employee contained in this Section 9. In addition, the provisions of this Section 9 shall continue to be binding upon Employee in accordance with their terms, notwithstanding the termination of Employee’s employment hereunder for any reason.
 
(e)           If Employee violates any covenant contained in this Section 9 and the Company brings legal action for injunctive or other relief, the Company shall not, as a result of the time involved in obtaining the relief, be deprived of the benefit of the full period of any such covenant. Accordingly, the covenants of Employee contained in the Section 9 shall be deemed to have durations as specified above, which periods shall commence upon the later of (i) the termination of Employee’s employment hereunder and (ii) the date of entry by a court of competent jurisdiction of a final judgment enforcing the covenants of Employee in this Section 9.
 
(f)           The parties to this Agreement agree that the limitations contained in this Section 9 with respect to time, geographical area, and scope of activity are reasonable. However, if any court shall determine that the time, geographical area, or scope of activity of any restriction contained in this Section 9 is unenforceable, it is the intention of the parties that such restrictive covenant set forth herein shall not thereby be terminated but shall be deemed amended to the extent required to render it valid, and enforceable.
 
 
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(g)           Nothing contained in this Section 9 shall be construed to prohibit Employee from investing in stock or other securities listed on a national securities exchange or actively traded in the over-the-counter market of any corporation or other entity engaged in a business or activity competitive with the business of the Company, provided that Employee and the members of his immediate family shall not, directly or indirectly, hold more than a total of five percent of all such shares of stock or other securities issued and outstanding, and provided further that Employee shall not perform any services on behalf of, or in the operation of the affairs of, such corporation or other entity.
 
(h)           The provisions restricting the Employee’s ability to compete or solicit Company employees shall not apply if a Change in Control occurs after the Effective Date of this Agreement.
 
10.           Successors; Binding Agreement.
 
(a)           This Agreement is personal to Employee and shall not be assignable by Employee otherwise than by will or the by laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Employee’s personal and legal representatives, executors, administrators, heirs, distributes, devisees and legatees.
 
(b)           This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
 
11.           Miscellaneous.
 
(a)           Construction. This Agreement shall be deemed drafted equally by both the parties. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections, subsections or clauses are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary, (i) the plural includes the singular and the singular includes the plural; (ii) “and” and “of’ are each used both conjunctively and disjunctively; (iii) “any,” “all,” “each,” or “every” means “any and all”, and “each and every”; (iv) “includes” and “including” are each “without limitation”; (v) “herein,” “hereof” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (vi) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require.
 
 
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(b)           Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
 
If to Employee
 
If to the Company
     

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
 
(c)           Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
 
(d)           Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
 
(e)           No Waiver. Except as expressly set forth in this Agreement, no waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at any time.
 
(f)           Equitable and Other Relief. Employee acknowledges that money damages would be both incalculable and an insufficient remedy for a breach of Section 8 or Section 9 by Employee and that any such breach would cause the Company irreparable harm. Accordingly, the Company, in addition to any other remedies at law or in equity it may have, shall be entitled, without the requirement of posting of bond or other security, to equitable relief, including injunctive relief and specific performance, in connection with a breach of Section 8 or Section 9 by Employee. If the Company files a pleading with a court seeking immediate injunctive relief and this pleading is challenged by Employee and injunctive relief sought is not awarded, the Company shall pay all of Employee’s costs and attorneys’ fees. The parties consent to the exclusive jurisdiction of competent state courts or federal courts in the State of Nevada for all litigation which may be
 
 
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brought with respect to the terms of; and the transactions and relationships contemplated by, this Agreement. The parties further consent to the non-exclusive jurisdiction of any state court located within a district which encompasses assets of a party against which a judgment has been rendered for the enforcement of such judgment or award against the assets of such party.
 
(g)           Entire Agreement. The provisions of this Agreement constitute the entire and complete understanding and agreement between the parties with respect to the subject matter hereof, and supersede all prior and contemporaneous oral and written agreements, representations and understandings of the parties, which are hereby terminated. Employee and the Company acknowledge and represent that there are no other promises, terms, conditions or representations (or written) regarding any matter relevant hereto,
 
(h)           Attorney Fees. The prevailing party in any dispute or controversy under or in connection with this Agreement shall be entitled to reimbursement from the non-prevailing party for all costs and reasonable legal fees incurred by such prevailing party.
 
(i)           Survival. Sections 1 and 4 through 11 of this Agreement shall survive the termination of this Agreement.
 
(j)           Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS OF NEVADA OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.
 
(k)           Amendments. This Agreement may not be amended or modified at any time except by a written instrument approved by the Board and executed by the Company and Employee.
 
(l)           Employee Acknowledgement. Employee acknowledges that Employee has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representatives or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Employee’s own judgment.
 
(m)                      Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. Any counterpart of this Agreement that has attached to it separate signature pages which together contain the signature of all parties hereto shall for all purposes be deemed a fully executed original. Facsimile signatures shall constitute original signatures.
 
 
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[SIGNATURE PAGE FOLLOWS]
 
 
 
 
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first above written.
 
 
Company:
 
     
  WESTSIDE ENERGY CORPORATION  
       
 
By:
   
       
 
EMPLOYEE:  
       
  David D. Le Norman   
       
 
SIGNATURE PAGE TO EMPLOYMENT AGREEMENT
 
 
 


 
EXHIBIT A
 

 
Form of Release
 
 
 

 
Annex II
 
Execution Copy
 
 
SERVICES AGREEMENT
 
 
by and between
 
 
Westside Energy Corporation
 
 
and
 
 
Robert J. Raymond
 
 

 

SERVICES AGREEMENT
 
THIS SERVICES AGREEMENT (this “Agreement”) is made and entered into effective as of the closing of the transaction contemplated by the Contribution Agreement (as defined below) (the “Effective Date”), by and between Westside Energy Corporation, a Nevada corporation (the “Company”), and Robert J. Raymond (“Raymond”).
 
RECITALS:
 
A.           Raymond possesses valuable skills and knowledge in the field of business of the Company and desires to be retained by the Company as non-executive Chairman of the Board on the terms and conditions set forth in this Agreement.
 
B.           The Company desires to retain Raymond on the terms and conditions set forth in this Agreement.
 
AGREEMENTS:
 
In consideration of the premises and of the mutual covenants and agreements contained herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
 
1.           Certain Definitions. As used in this Agreement, the following terms have the meanings set forth below:
 
(a)           “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with the Person in question. As used in this definition of “Affiliate,” the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Securities, by contract, or otherwise.
 
(b)           “Board” means the Board of Directors of the Company and any committee thereof.
 
(c)           “Cause” means Raymond’s:
 
(i)           commission of an act of fraud, embezzlement, mis-appropriation, willful misconduct, bad faith or dishonesty against the Company;
 
(ii)          material breach of this Agreement which is not remedied within 30 days after receipt of written notice from the Company specifically identifying the manner in which the Company believes that Raymond has materially breached this Agreement;
 
 

 
 
(iii)         conviction, plea of no contest or nolo contendere, deferred adjudication or unadjudicated probation for any felony or any crime involving moral turpitude; or
 
(iv)         violation of the Company’s substance abuse policy.
 
(d)           “Change in Control” means the occurrence of any of the following events:
 
(i)           The acquisition by any Person or group of beneficial ownership of forty percent (40%) or more of either (x) the then outstanding shares of common stock of the Company (the “Outstanding Company Stock”) or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Section 1(d), the following acquisitions (whether the acquiring Person or group acquires beneficial ownership of forty percent (40%) or more of the Outstanding Company Stock or any such acquisition results in any other Person or group (other than the acquiring Person or group) owning forty percent (40%) or more of the Outstanding Company Stock) shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (4) any acquisition by any entity pursuant to a transaction which complies with clauses (1), (2) and (3) of paragraph (iii) below; or
 
(ii)          Members of the then incumbent Board cease to constitute at least a majority of the members of the Board; or
 
(iii)         Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets of another company (a “Business Combination”), in each case, unless, following such Business Combination, (1) all or substantially all of the Persons who were the beneficial owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be,
 
 
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(2) no Person or Group (excluding any employee benefit plan (or related trust) of the Company or the entity resulting from such Business Combination) beneficially owns, directly or indirectly, forty percent (40%) or more of, respectively, the then outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership results solely from ownership of the Company that existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors or similar governing body of the entity resulting from such Business Combination were members of the incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
 
(iv)         Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
 
Notwithstanding the foregoing clause (i) of this definition: (x) the following acquisitions (whether the acquiring Person or Group acquires Beneficial Ownership of forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities or any such acquisition results in any other Person or Group (other than the acquiring Person or Group) Beneficially Owning forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities) shall not constitute a Change in Control unless, following such acquisition, any Person or Group (other than the acquiring Person or Group effecting the acquisition pursuant to the following clauses (A) through (D)) who becomes the Beneficial Owner of forty percent (40%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities as a result of one or more of such acquisitions shall thereafter acquire any additional shares of Company Securities and, following such acquisition, Beneficially Owns forty percent (40%) or more of either the Outstanding Company Stock or Outstanding Company Voting Securities, in which case such acquisition shall constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (D) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of the foregoing clause (iii) of this definition; and (y) the acquisition of Beneficial Ownership of shares of Common Stock by the Crusader Parent Entities pursuant to the Contribution Agreement, the corresponding acquisition of Beneficial Ownership of shares of Common Stock by any other Person or Group deemed to Beneficially Own the Common Stock so acquired by the Crusader Parent Entities (any such Person and/or Group, collectively with the Crusader Parent Entities and the Crusader Distributees, the “Crusader Group”) and the acquisition of Beneficial Ownership of shares of Common Stock as a result of the distribution by a Crusader Parent Entity to Crusader Distributees of
 
 
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shares of Common Stock acquired pursuant to the Contribution Agreement or directly from the Company prior to the date of the Contribution Agreement shall not constitute a Change of Control, provided that if, (1) for so long as the shares of Common Stock Beneficially Owned by any member of the Crusader Group equals or exceeds forty percent (40%) of the Outstanding Company Stock or the Outstanding Company Voting Securities, such member of the Crusader Group shall obtain Beneficial Ownership of shares of Common Stock (other than as a result of any acquisition described in the foregoing clauses (A) through (D) of this paragraph or pursuant to an award issued under any equity based compensation plan of the Company, including without limitation the 2008 LTIP) representing one percent (1%) or more of the Outstanding Company Stock or Outstanding Company Voting Securities or (2) at any time after such member of the Crusader Group shall cease to Beneficially Own forty percent (40%) or more of the Outstanding Company Stock and Outstanding Company Voting Securities, such member of the Crusader Group shall obtain Beneficial Ownership of shares of Stock (other than as a result of any acquisition described in the foregoing clauses (A) through (D) of this paragraph or pursuant to an award issued under any equity based compensation plan of the Company, including without limitation the 2008 LTIP) representing forty percent (40%) or more of either the Outstanding Company Stock or Outstanding Company Voting Securities, then in the case of either (1) or (2) a Change of Control shall be deemed to occur.
 
(e)           “Compensation Committee” means the Compensation Committee of the Board.
 
(f)           “Contribution Agreement” means the Contribution Agreement among the Company and David D. Le Norman, Knight Energy Management Holding Company, LLC, Knight Energy Group II Holding Company, LLC, Knight Energy Group I Holding Co., LLC, Crusader Energy Group Holding Co., LLC, Hawk Energy Fund I Holding Company, LLC., RCH Energy Opportunity Fund I, L.P., Knight Energy Group, LLC, Knight Energy Group II, LLC, Knight Energy Management, LLC, Hawk Energy Fund I, LLC, RCH Upland Acquisition, LLC, Crusader Management Corporation and Crusader Energy Group, LLC dated as of December ___, 2007.
 
(g)           “Disability” means Raymond’s inability to perform, with or without reasonable accommodations, the essential functions of Raymond’s position hereunder for a period of 180 consecutive days due to mental or physical incapacity, as determined by mutual agreement of a physician selected by the Company or its insurers and a physician selected by Raymond; provided, however, that if the opinion of the Company’s physician and Raymond’s physician conflict, the Company’s physician and Raymond’s physician shall together agree upon a third physician, whose opinion shall be binding. The foregoing definition of “Disability” is not intended to and shall not affect the definition of “disability” or
 
 
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any similar term in any insurance policy the Company or any of its Subsidiaries may provide.
 
(h)           “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
 
(i)           “Good Reason” means, subject to the terms and provisions of this Agreement, the occurrence of one or more of the following events:
 
(i)           any removal of Raymond from the office of Chairman of the Board of the Company except, in any such case, in connection with the termination of Raymond’s retention hereunder by the Company for Disability or for Cause or by Raymond other than for Good Reason;
 
(ii)          any termination or material reduction of a material benefit under any Investment Plan or Welfare Plan in which Raymond participates unless (A) there is substituted a comparable benefit that is economically substantially equivalent to the terminated or reduced benefit prior to such termination or reduction or (B) benefits under such Investment Plan or Welfare Plan are terminated or reduced with respect to all Raymond’s previously granted benefits thereunder;
 
(iii)         any reduction in Raymond’s Annual Base Salary;
 
(iv)         any failure by the Company to comply with any of the provisions of Section 3(b);
 
(v)          without limiting the generality of the foregoing, any material breach by the Company of this Agreement other than an isolated, insubstantial, and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Raymond; or
 
(vi)         a Change in Control,
 
(j)           “Person” means any individual, partnership, limited liability partnership, joint venture, corporation, limited liability company, trust, association, or other entity or organization.
 
(k)           “Pro Rata Bonus” means the amount equal to the product of (i) the amount of the Annual Bonus (as defined in Section 3(b)(ii)), if any, to which Raymond would have been entitled for the calendar year in which Raymond’s Date of Termination occurs if Raymond was not terminated during such calendar year, multiplied by (ii) a fraction, the numerator of which is the number of days that have elapsed since the beginning of such calendar year through (but not including) Raymond’s Date of Termination, and the denominator of which is the
 
 
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total number of days in such calendar year. The amount, if any, of the Annual Bonus to which Raymond would have been entitled for the calendar year in which the Date of Termination occurs shall be determined by the Compensation Committee in its sole reasonable discretion; provided, however, that for purposes of determining the amount of the Pro Rata Bonus in connection with a termination of Raymond’s retention upon a Change of Control, Raymond shall be deemed to have been entitled to an Annual Bonus of not less than the amount of the last Annual Bonus awarded to Raymond prior to such Change in Control, and provided further however that any determination by the Compensation Committee as to satisfaction of a performance standard shall be made in the same manner as such determination is made for the other similarly-situation executives of the Company.
 
(l)           “Subsidiary” means, with respect to any Person, any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.
 
(m)         “Voting Securities” means any securities that vote generally in the election of directors, in the admission of general partners, or in the selection of any other similar governing body.
 
(n)           “Without Cause” means a termination by the Company of Raymond’s retention hereunder during the Term at the Company’s sole discretion for any reason other than a termination based upon Cause, death or Disability; provided that, “without Cause” does not include termination of this Agreement and Raymond’s retention pursuant to Section 2.
 
2.           Term Non-Renewal of Term. Subject to the terms and provisions of this Agreement, the Company hereby agrees to retain Raymond, and Raymond hereby agrees to be retained by the Company, for the period (the “Term”) commencing on the Effective Date and, unless Raymond is sooner terminated in accordance with the terms hereof, expiring at 5:00 p.m., Oklahoma City, Oklahoma time, on December 31, 2011; provided, however, that on January 1, 2009, and on each January 1 occurring thereafter, the Term shall automatically (without any action by either party) be extended for one additional calendar year unless, at least 30 days prior to each such January 1, the Company or Raymond shall have given written notice (a “Non-Renewal Notice”) that it or Raymond, as applicable, does not wish to extend this Agreement (a “Non-Renewal”). Either party may elect not to renew this Agreement. The term “Term,” as utilized in this Agreement, shall refer to the Term as so automatically extended. The Term shall expire as a result of any Non-Renewal at 5:00 p.m., Oklahoma City, Oklahoma time, on the last day of the Term during which a Non-Renewal Notice is given, and the retention of Raymond shall terminate at that time.
 
 
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3.           Terms.
 
(a)           Position and Duties.
 
(i)           During the Term, Raymond shall serve as Chairman of the Board of the Company. In so doing, Raymond shall have such powers and duties as may be assigned from time to time by the Board, so long as such powers and duties are reasonable and customary for a non-executive chairman of the board of an enterprise comparable to the Company.
 
(ii)          During the Term, and excluding any periods of vacation and sick leave to which Raymond is entitled, Raymond agrees to (a) use Raymond’s reasonable efforts to perform diligently, faithfully, effectively and efficiently his responsibilities, and (b) use Raymond’s reasonable efforts to promote the interests of the Company.
 
(iii)         Raymond shall not be an employee of the Company, and may engage in any other business endeavors during the Term, including those which compete with the Company; provided, however, that the foregoing shall not be deemed to modify or limit Raymond’s covenants, agreements and obligations under Section 3(a)(ii), Section 8 or Section 9. Raymond is an independent contractor with respect to the services he provides to the Company.
 
(b)           Compensation.
 
(i)           Annual Base Salary. During the Term, Raymond shall receive an annual base salary (“Annual Base Salary”), which shall be paid bi-weekly in accordance with the customary payroll practices for executives of the Company, in the initial amount of $100,000 per year. At least annually (by no later than January 31 of each year) during the Term, the Compensation Committee shall review the Annual Base Salary of Raymond and may increase (but not decrease) the Annual Base Salary by such amount as the Compensation Committee shall deem appropriate. The term “Annual Base Salary” as used in this Agreement shall refer to the Annual Base Salary as it may be so increased.
 
(ii)           Annual Bonus. During the Term, Raymond shall be eligible to receive an annual bonus, in addition to the Annual Base Salary, (each, an “Annual Bonus”), in such amounts and subject to such requirements as shall be determined by the Compensation Committee.
 
(iii)         Option. The Employee shall be entitled to exercise the option to purchase shares of common stock, par value $0.01 per share of the Company issued to Employee pursuant to Section 6(i) of the Company’s 2008 Long Term Incentive Plan (the “Option”). The Option may be exercised only in the time and manner described in the Option.
 
 
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(iv)         Incentive, Savings, Stock Option and Retirement Plans. During the Term, Raymond shall be entitled to participate in all incentive, savings, stock option, equity-based, profit sharing and retirement plans, practices, policies and programs applicable generally to directors of the Company (“Investment Plans”), subject to all of the terms and conditions of such Investment Plans.
 
(v)          Welfare Benefit Plans. During the Term, Raymond and Raymond’s family shall be eligible for participation in and shall receive all benefits under the welfare benefit plans, practices, policies and programs (“Welfare Plans”) provided by the Company (including, without limitation, medical, prescription, dental, short-term and long-term disability, salary continuance, executive life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other directors of the Company, subject to all of the terms and conditions of such Welfare Plans.
 
(vi)         Expenses. During the Term, Raymond shall be entitled to receive prompt reimbursement for all reasonable business-related expenses incurred by Raymond in the performance of Raymond’s duties in accordance with the Company’s policies, practices and procedures.
 
(vii)        Pro-ration. Any payments or benefits payable to Raymond hereunder in respect of any calendar year during which Raymond is employed by the Company for less than the entire year, unless otherwise provided in the applicable plan or arrangement, shall be pro-rated in accordance with the number of days in such calendar year during which Raymond is so employed.
 
4.           Termination.
 
(a)           Death. Raymond’s retention hereunder shall terminate automatically upon Raymond’s death during the Term.
 
(b)           Disability. If the Disability of Raymond has occurred during the Term, the Company may give to Raymond a written Notice of Termination (as defined in Section 6(a)) in accordance with Section 6(a) of its intention to terminate Raymond’s retention hereunder. In such event, Raymond’s retention by the Company shall terminate effective on the 30th day after receipt of such notice by Raymond (the “Disability Effective Date”) provided that, within 30 days after receipt of the Notice of Termination, Raymond shall not have returned to perform, with or without reasonable accommodations, the essential functions of Raymond’s position. During any period of Raymond’s Disability, the Company may assign Raymond’s duties to any other director on an interim basis and any such action shall not be deemed “Good Reason” for Raymond to terminate this Agreement pursuant to Section 4(d)(i) so long as Raymond continues to receive the compensation and benefits under Section 3 during such period.
 
 
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(c)           Termination by Company. Subject to Section 6(d), the Company may terminate Raymond’s retention at any time during the Term for Cause or without Cause.
 
(d)           Resignation by Raymond. At Raymond’s option, Raymond may terminate Raymond’s retention hereunder (i) subject to Section 6(c), for Good Reason or (ii) without Good Reason.
 
(e)           Agreement Not to Terminate. Notwithstanding any provision to the contrary contained in this Agreement, the Company agrees that it shall not have the right to terminate Raymond other than for Cause, for a period of time commencing on the Effective Date and ending at 5:00 p.m., Oklahoma City, Oklahoma time, on the 180th day following the Effective Date.
 
5.           Compensation Upon Termination. Raymond shall be entitled to the following compensation from the Company upon the termination of Raymond’s retention by the Company during the Term. The compensation provided for in this Section 5 shall be in lieu of any other severance pay to which Raymond might otherwise be entitled (whether contractual or under a severance plan, the WARN Act, any other applicable law, or otherwise) and shall be conditioned on the execution and delivery of a Release (as defined in Section 6(f).) signed by Raymond or Raymond’s legal representative pursuant to Section 6(f). The timing of payments pursuant to this Section 5 shall also be subject to the requirements of Section 6(g) and Section 409A of the Code:
 
(a)           Death or Disability. If Raymond’s retention by the Company is terminated by reason of Raymond’s death or Disability, the Company shall pay to Raymond or Raymond’s legal representatives:
 
(i)           within 30 days after Raymond’s Date of Termination as defined in Section 6(b), a lump sum in cash equal to the sum of Raymond’s Annual Base Salary through the Date of Termination to the extent not previously paid and any compensation previously deferred by Raymond (together with any accrued interest or earnings thereon) (the “Accrued Obligations”);
 
(ii)          the amount of any Annual Bonus to which Raymond was entitled for the calendar year ending prior to the Date of Termination to the extent not previously paid and the amount of any Pro Rata Bonus, each of which amounts shall be paid no later than the later of 30 days after the Date of Termination or 10 business days after the date on which the Company has available to it the information reasonably required to determine the amount to be paid;
 
(iii)         any amounts arising from Raymond’s participation in, or benefits under, any Investment Plan (the “Accrued Investments”), which amounts
 
 
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shall be paid in accordance with the terms and conditions of such Investment Plan; and
 
(iv)         any amounts to which Raymond or Raymond’s spouse, beneficiaries or estate are entitled from Raymond’s participation in, or benefits under, any Welfare Plan (“Accrued Welfare Benefits”), which amounts shall be paid in accordance with the terms and conditions of such Welfare Plan.
 
Except as described in this Section 5(a), in the event of Raymond’s termination by reason of Raymond’s death or Disability, Raymond and Raymond’s legal representatives, as applicable, shall forfeit all rights to any other compensation.
 
(b)           For Cause; Resignation by Raymond Without Good Reason; Non-Renewal Election by Raymond. If the Company shall terminate the retention of Raymond hereunder for Cause, or if Raymond resigns without Good Reason, or if Raymond’s retention by the Company is terminated due to a Non-Renewal election by Raymond, the Company shall have no further obligations to Raymond other than the obligation for payment of:
 
(i)           the Accrued Obligations, which shall be payable within 30 days after Raymond’s Date of Termination;
 
(ii)          the amount of any Annual Bonus to which Raymond was entitled for the calendar year ending prior to the Date of Termination to the extent not previously paid, which amount shall be paid no later than the later of 30 days after the Date of Termination;
 
(iii)         the Accrued Investments, which amounts shall be paid in accordance with the terms and conditions of the Investment Plans; and
 
(iv)         the Accrued Welfare Benefits, which amounts shall be paid in accordance with the terms and conditions of the Welfare Plans.
 
Except as described in this Section 5(b), in the event of Raymond’s termination by the Company for Cause or by Raymond without Good Reason or due to a Non-Renewal election by Raymond, Raymond shall forfeit all rights to any other compensation.
 
(c)           Without Cause; Resignation by Raymond for Good Reason; Non-Renewal Election by the Company. If the Company terminates the retention of Raymond hereunder without Cause (other than by reason of Raymond’s death or Disability or a Non-Renewal by Raymond) or Raymond resigns for Good Reason or the retention of Raymond hereunder is terminated due to a Non-Renewal election by the Company, then the Company shall pay or provide Raymond:
 
 
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(i)           within 30 days after Raymond’s Date of Termination, a lump sum in cash equal to the aggregate of the Accrued Obligations;
 
(ii)          the amount of any Annual Bonus to which Raymond was entitled for the calendar year ending prior to the Date of Termination to the extent not previously paid and any Pro Rata Bonus, each of which amounts shall be paid no later than the later of 30 days after the Date of Termination or 10 business days after the date on which the Company has available to it the information reasonably required to determine the amount to be paid;
 
(iii)         the Accrued Investments, which amounts shall be paid in accordance with the terms and conditions of the Investment Plans;
 
(iv)         the Accrued Welfare Benefits, which amounts shall be paid in accordance with the terms and conditions of the Welfare Plans;
 
(v)          a lump-sum payment within 30 days of the Date of Termination equal to the greater of (A) the undiscounted amount of Annual Base Salary Raymond would have received for the rest of the Term based upon the highest Annual Base Salary to which Raymond was entitled during the 24-month period ending on the Date of Termination or (B) two years of the highest Annual Base Salary to which Raymond was entitled during the 24-month period ending on the Date of Termination; and
 
(vi)         if Raymond is entitled on the Date of Termination to coverage under the medical, prescription, and dental portions of the Welfare Plans, continuation at the Company’s sole cost and expense of such coverage for Raymond and Raymond’s dependents for a period ending on the later to occur of (A) the second anniversary of the Date of Termination or (B) the end of the full Term. Notwithstanding any provision of the foregoing to the contrary, the continued coverage provided pursuant to this Section 5(c)(vi) will count towards the depletion of any continued health care coverage rights that Raymond and Raymond’s dependents may have pursuant to COBRA, and Raymond’s or Raymond’s dependents’ rights to continued health care coverage pursuant to this Section 5(c)(vi) shall terminate at the time Raymond or Raymond’s dependents become covered, as described in COBRA, under another group health plan that does not limit coverage with respect to any preexisting conditions of Raymond or Raymond’s dependents, and shall also terminate as of the date the Company ceases to provide coverage to its senior executives generally under any such Welfare Plan.
 
The parties hereto acknowledge that in the event Raymond’s retention is terminated in connection with a Change in Control, the consideration payable to Raymond under Section 5(c)(v) hereof is related to the additional efforts and services that will have been required of the Raymond in connection with such
 
 
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Change in Control transaction and to Raymond’s obligations under Sections 7, 8 and 9 of this Agreement.
 
Except as described in this Section 5(c), in the event of Raymond’s termination by the Company without Cause or by Raymond for Good Reason or due to a Non-Renewal election by the Company, Raymond shall forfeit all rights to any other compensation.
 
6.           Other Provisions Relating to Termination.
 
(a)           Notice of Termination. Any termination by the Company for Cause or without Cause or by reason of Raymond’s Disability, or by Raymond’s resignation for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(b). For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon and (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Raymond under the provision so indicated. The failure by the Company or Raymond to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Company or Raymond hereunder or preclude the Company or Raymond from asserting such fact or circumstance in enforcing the Company’s or Raymond’s rights hereunder.
 
(b)           Date of Termination. “Date of Termination” means (i) if Raymond is terminated by reason of Raymond’s death, the date of Raymond’s death; (ii) if Raymond is terminated by reason of Raymond’s Disability, the Disability Effective Date (provided that Raymond shall not have returned to perform, with or without reasonable accommodation, the essential functions of Raymond’s position during the 30-day period provided for in Section 4(b)); (iii) if Raymond is terminated by the Company without Cause or by Raymond for Good Reason or without Good Reason; then, subject to Section 6(c), the date specified in the Notice of Termination (which date shall be a date between the date that the Notice of Termination is given and 30 days thereafter (inclusive)); (iv) if Raymond is terminated by the Company for Cause then, subject to Section 6(d), the date on which the Notice of Termination is given; and (v) if Raymond is terminated due to a Non-Renewal election by Raymond or the Company, the date on which the Term expires.
 
(c)           Good Reason. Upon Raymond’s learning of the occurrence of any event described in the definition of Good Reason in Section 1(j), Raymond may resign his responsibilities hereunder for Good Reason within 60 days thereafter by giving a Notice of Termination to the Company to that effect and describing in reasonable detail the facts or circumstances giving rise to Raymond’s right to terminate his responsibilities for Good Reason. Notwithstanding the foregoing,
 
 
12

 
 
the right of Raymond to terminate for Good Reason under Section 4(d)(i) shall not limit the Company’s right to terminate Raymond for Cause under Section 4(c) if Cause is determined to exist prior to the time Good Reason is determined to exist.
 
(d)           Cause. Upon the Company learning of the occurrence of any event described in Section 1(c), the Company may terminate Raymond’s retention hereunder for Cause within 60 days thereafter by giving Raymond a Notice of Termination to that effect and describing in reasonable detail the facts or circumstances giving rise to the Company’s right to terminate for Cause. Notwithstanding the foregoing, the right of the Company to terminate Raymond’s retention for Cause under Section 4(c) shall not limit Raymond’s right to resign for Good Reason under Section 4(d)(i) if Good Reason is determined to exist prior to the time Cause is determined to exist.
 
(e)           Full Settlement; Mitigation. In no event shall Raymond be obligated to seek other similar positions or take any other action by way of mitigation of the amounts payable to Raymond under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Raymond obtains another similar position. The Company shall not be liable to Raymond for any damages for breach of this Agreement in addition to the amounts payable under Section 5 arising out of the termination of Raymond hereunder prior to the end of the Term. The Company shall be entitled to seek damages from Raymond for any breach of Section 8 by Raymond.
 
(f)           Release and Other Agreements. Notwithstanding any other provision in this Agreement to the contrary, in consideration for receiving the severance benefits described in Sections 5(c)(v) and 5(c)(vi), Raymond hereby agrees to execute (and not revoke) a release within 60 days of the Date of Termination in substantially the form attached hereto as Exhibit A (the “Release”). If Raymond fails to properly execute and deliver the Release (or revokes the Release), Raymond agrees that Raymond shall not be entitled to receive such severance benefits.
 
(g)           409A Compliance. To the extent required by section 409A of the Code, if on Raymond’s Date of Termination he is a “specified executive” within the meaning of section 409A of the Code, any amounts that are payable to Raymond by reason of his termination pursuant to Section 5 and that are not excluded from application of Section 409A of the Code by reason of the “short term deferral” exception to Section 409A of the Code will be delayed for a period of six months following the Date of Termination. Any payments that would have been paid to Raymond pursuant during such six-month period and that are delayed pursuant to this Section 6(g) shall be paid to him in the form of a lump sum payment at the end of the six-month period.
 
 
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7.           Disclosure of, Access to and Entrustment of Confidential Information, Business Opportunities and Business Goodwill. During the Term, the Company shall disclose to Raymond, or place Raymond in a position to have access to or develop, Confidential Information (as defined in Section 8(a)(i)), and/or shall entrust Raymond with business opportunities of the Company, and/or shall place Raymond in a position to develop business goodwill on behalf of the Company. There is a need and desire on the part of the Company and Raymond to specify the parties’ rights and obligations with respect to the ownership and protection of such Confidential Information, business opportunities and goodwill. Accordingly, as a material inducement to the Company to enter into this Agreement, in consideration for the compensation and other benefits payable hereunder to Raymond, to protect the Company’s Confidential Information that has been and will be in the future disclosed or entrusted to Raymond (the disclosure of which by Raymond in violation of this Agreement would adversely affect the business goodwill of the Company), the business goodwill of the Company that has been and will in the future be developed in Raymond and the business opportunities that have been and will in the future be disclosed or entrusted to Raymond by the Company; and for other good and valuable consideration, Raymond agrees to comply with, and be bound by, Section 8 and Section 9. As used in this Section 7 and in Sections 8 and 9, “Company” shall include the Company and any of its Subsidiaries.
 
8.           Confidential Information; Ownership of Property.
 
(a)           Obligations to Maintain Confidentiality.
 
(i)           Raymond acknowledges that the Company has trade, business and financial secrets and other confidential and proprietary information regarding the Company and its business, in whatever form, tangible or intangible (collectively, the “Confidential Information”), and that, during the course of Raymond’s retention by the Company, Raymond has received, shall receive or be placed in a position to have access to or develop Confidential Information. Raymond further acknowledges and agrees that Raymond’s use of Confidential Information in the conduct of business on behalf of a competitor of the Company would constitute unfair competition with the Company and would adversely affect the business goodwill of the Company. Confidential Information includes sales materials, technical information, processes and compilations of information, records, specifications and information concerning customers, prospective customers, customer and prospective customer lists, and information regarding methods of doing business, As defined herein, Confidential Information shall not include information that is or was (i) obtained by Raymond from a source other than the Company or its Affiliates, which source is not under a duty of nondisclosure in regard to such information or (ii) becomes generally available to the public other than through disclosure by Raymond in violation of the provisions of this Agreement.
 
 
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(ii)          Raymond is aware of those policies implemented by the Company to keep its Confidential Information secret, including those policies limiting the disclosure of information on a need-to-know basis and requiring the keeping of information in secure areas. Raymond acknowledges that the Confidential Information has been or will be developed or acquired by the Company through the expenditure of substantial time, effort and money and provides or will provide the Company with an advantage over competitors who do not know or use such Confidential Information.
 
(iii)         During and following Raymond’s retention by the Company, Raymond shall hold in confidence and not directly or indirectly disclose, use (for Raymond’s commercial advantage or otherwise), copy, make lists of, or make available to others any Confidential Information except in Raymond’s good faith performance of Raymond’s duties to the Company or to the extent authorized in writing by the Board or required by law or compelled by legal process. Raymond agrees to use reasonable efforts to give the Company notice of any and all attempts to compel disclosure of any Confidential Information. Raymond further agrees not to use any Confidential Information for the benefit of any person or entity other than the Company.
 
(iv)         Raymond agrees that all Confidential Information and other files, documents, materials, records, notebooks, customer lists, business proposals, contracts, agreements and other repositories containing information concerning the Company or the business of the Company, in whatever form, tangible or intangible (including all copies thereof), that Raymond shall prepare, or use, or be provided with as a result of Raymond’s retention by the Company, shall be and remain the sole property of the Company. Upon termination of Raymond’s retention hereunder, Raymond agrees that all Confidential Information and other files, documents, materials, records, notebooks, customer lists, business proposals, contracts, agreements and other repositories containing information concerning the Company or the business of the Company (including all copies thereof) in Raymond’s possession, custody or control, whether prepared by Raymond or others, shall remain with or be returned to the Company promptly after the Date of Termination. The materials required to be returned pursuant to this Section 8(a)(iv) shall not include personal correspondence or other personal property of Raymond that does not relate to the Company or the business of the Company.
 
(b)           Ownership of Work Product. Raymond acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, patent applications, copyrightable work and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) that relate to the Company’s or its Affiliates’ actual or anticipated business, research and development, or existing or future products or services and that are conceived, developed, contributed to,
 
 
15

 
 
made, or reduced to practice by Raymond (either solely or jointly with others) while retained by the Company (including any of the foregoing that constitutes any proprietary information or records) (“Work Product”) belong to the Company or its Affiliates, as applicable, and Raymond hereby assigns, and agrees to assign, all of the above Work Product to the Company or its Affiliates, as applicable.
 
9.           Non-Solicitation and Related Matters.
 
(a)           Raymond agrees that during the Term and for a period commencing upon the termination of Raymond’s retention hereunder and ending upon the first anniversary thereof, unless otherwise extended pursuant to the terms of this Section 9, Raymond will not solicit, directly or indirectly, in the capacity of employee, consultant, or in any other capacity whatsoever, one or more of the employees, directors, officer or other persons who, at the time of solicitation, or in the 180-day period prior thereto, are working full-time or part time for the Company and will not endeavor, directly or indirectly in any manner whatsoever, to encourage any of such person to leave his or her job with the Company and will not endeavor, directly or indirectly in any manner whatsoever, to incite or induce any client or customer of the Company to terminate, in whole or in part, its business relations with the Company except to the extent the solicitation is made through a public advertisement in a newspaper, trade journal or similar public medium. Notwithstanding the foregoing provisions of this Section 9(a), however, Employee shall have no further obligations under this Section 9(a) in the event of a termination of Employee’s employment by the Company without Cause or in the event of Employee’s resignation for Good Reason or if the Employee’s employment is terminated as a result of the Company’s Non-Renewal election or if there is Change in Control.
 
(b)           The representations and covenants contained in this Section 9 on the part of Raymond will be construed as ancillary to and independent of any other provision of this Agreement, and the existence of any claim or cause of action of Raymond against the Company or any officer, director, or shareholder of the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants of Raymond contained in this Section 9. In addition, the provisions of this Section 9 shall continue to be binding upon Raymond in accordance with their terms, notwithstanding the termination of Raymond’s employment hereunder for any reason.
 
(c)           If Raymond violates any covenant contained in this Section 9 and the Company brings legal action for injunctive or other relief, the Company shall not, as a result of the time involved in obtaining the relief, be deprived of the benefit of the full period of any such covenant. Accordingly, the covenant of Raymond contained in the Section 9 shall be deemed to have the duration as specified above, which period shall commence upon the later of (i) the
 
 
16

 
 
termination of Raymond’s employment hereunder and (ii) the date of entry by a court of competent jurisdiction of a final judgment enforcing the covenant of Raymond in this Section 9.
 
10.           Successors; Binding Agreement.
 
(a)           This Agreement is personal to Raymond and shall not be assignable by Raymond otherwise than by will or the by laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Raymond’s personal and legal representatives, executors, administrators, heirs, distributes, devisees and legatees.
 
(b)           This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
 
(c)           The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, sale of assets or otherwise) to all or substantially all of the business and/or assets of the Company, by a written agreement in form and substance reasonably satisfactory to Raymond, to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Raymond to compensation from the Company in the same amount and on the same terms as Raymond would be entitled to pursuant to Section 5 if Raymond terminated for Good Reason after the occurrence of a Change in Control, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement and after any such succession, “Company” shall mean the Company as hereinbefore defined and any successor and/or assigns as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
 
11.           Miscellaneous.
 
(a)           Construction. This Agreement shall be deemed drafted equally by both the parties. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections, subsections or clauses are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary, (i) the plural includes the singular and the singular includes the plural; (ii) “and” and “of’ are each used both conjunctively and disjunctively; (iii) “any,” “all,” “each,” or “every” means
 
 
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“any and all”, and “each and every”; (iv) “includes” and “including” are each “without limitation”; (v) “herein,” “hereof” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (vi) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require.
 
(b)           Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
 
If to Raymond
 
If to the Company
     

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
 
(c)           Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
 
(d)           Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
 
(e)           No Waiver. Except as expressly set forth in this Agreement, no waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at any time.
 
(f)           Equitable and Other Relief. Raymond acknowledges that money damages would be both incalculable and an insufficient remedy for a breach of Section 8 by Raymond and that any such breach would cause the Company irreparable harm. Accordingly, the Company, in addition to any other remedies at
 
 
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law or in equity it may have, shall be entitled, without the requirement of posting of bond or other security, to equitable relief, including injunctive relief and specific performance, in connection with a breach of Section 8 by Raymond. If the Company files a pleading with a court seeking immediate injunctive relief and this pleading is challenged by Raymond and injunctive relief sought is not awarded, the Company shall pay all of Raymond’s costs and attorneys’ fees. The parties consent to the exclusive jurisdiction of competent state courts or federal courts in the State of Nevada for all litigation which may be brought with respect to the terms of; and the transactions and relationships contemplated by, this Agreement. The parties further consent to the non-exclusive jurisdiction of any state court located within a district which encompasses assets of a party against which a judgment has been rendered for the enforcement of such judgment or award against the assets of such party.
 
(g)           Entire Agreement. The provisions of this Agreement constitute the entire and complete understanding and agreement between the parties with respect to the subject matter hereof, and supersede all prior and contemporaneous oral and written agreements, representations and understandings of the parties, which are hereby terminated. Raymond and the Company acknowledge and represent that there are no other promises, terms, conditions or representations (or written) regarding any matter relevant hereto.
 
(h)           Attorney Fees. The prevailing party in any dispute or controversy under or in connection with this Agreement shall be entitled to reimbursement from the non-prevailing party for all costs and reasonable legal fees incurred by such prevailing party.
 
(i)           Survival. Sections 1 and 4 through 11 of this Agreement shall survive the termination of this Agreement.
 
(j)           Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS OF NEVADA OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.
 
(k)          Amendments. This Agreement may not be amended or modified at any time except by a written instrument approved by the Board and executed by the Company and Raymond.
 
(l)           Raymond Acknowledgement. Raymond acknowledges that Raymond has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representatives or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Raymond’s own judgment.
 
 
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(m)         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. Any counterpart of this Agreement that has attached to it separate signature pages which together contain the signature of all parties hereto shall for all purposes be deemed a fully executed original. Facsimile signatures shall constitute original signatures.
 
[SIGNATURE PAGE FOLLOWS]
 
 
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COMPANY:
 
     
  WESTSIDE ENERGY CORPORATION  
       
 
By:
   
       
 
EMPLOYEE:  
       
  Robert J. Raymond   
       
 
SIGNATURE PAGE TO SERVICES AGREEMENT
 
 

 
 

 
EXHIBIT A

 
Form of Release
 

 


 
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