STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as of March 24, 2002, by
and among Sub-Surface Liquid Injection Company, Inc., a Texas corporation
("Sub-Surface"), Xxxxxxx X. Xxxxxxxx, a resident of the State of Wisconsin
("Sanjenis") (Sub-Surface, and Sanjenis, each individually a "Seller" and
collectively "Sellers"), Texas Commercial Resources, Inc., a Texas corporation
("Purchaser").
W I T N E S S E T H:
WHEREAS, Sanjenis owns 12,000 shares (the "Shares") of common stock
("Common Stock"), of Crossroads Environmental Corp., a Texas corporation (the
"Company");
WHEREAS, on April 27, 1999, the Company issued a promissory note in the
original principal amount of $3,000,000 (the "Note") payable to the order of
Sub-Surface in connection with that certain Credit Agreement dated April 27,
1999 (the "Credit Agreement"), between the Company and Sub-Surface;
WHEREAS, Sanjenis desires to sell to Purchaser, and Purchaser desires to
purchase from Sanjenis, the Shares for the consideration set forth herein; and
WHEREAS, Sub-Surface desires to sell to Purchaser, and Purchaser desires to
purchase from Sub-Surface, the Note for the consideration set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows;
ARTICLE I
DEFINED TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by any Governmental Authority or other third party.
"Affiliates" of a party shall mean persons or entities that directly, or
indirectly through one or more intermediaries, control or are controlled by, or
are under common control with, such party.
"Code" means the Internal Revenue Code of 1986, as amended.
"Encumbrances" means liens, charges, pledges, options, mortgages, deeds of
trust, security interests, claims, restrictions (whether on voting, sale,
transfer, disposition or otherwise), easements and other encumbrances of every
type and description, whether imposed by law, agreement, understanding or
otherwise.
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"Environmental Laws" means any and all applicable Laws pertaining to
health, safety, or the environment in effect in any and all jurisdictions in
which the Company has conducted operations or activities or owned or leased
property, including, without limitation, the Clear Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Rivers and Harbors Act of 1899, as amended, the Federal Water
Pollution Control Act, as amended, the Occupational Safety and Health Act of
1970, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, the Texas Water
Code, the Texas Solid Waste Disposal Act, and other environmental conservation
or protection laws.
"Facilities" means those certain surface facilities for the storage or
processing of liquid wastes owned and operated by the Company.
"Governmental Authority" means any United States federal, state or local or
any foreign government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal or arbitral body.
"Governmental Order" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered into by or with any Governmental
Authority.
"IRS" means the United States Internal Revenue Service.
"Law" means any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order, requirement or rule of common law.
"Liabilities" means any and all debts, liabilities and obligations
(including, without limitation, all obligations relating to employees or former
employees of Seller), whether accrued or fixed, absolute or contingent, matured
or unmatured, or determined or determinable, including, without limitation,
those arising under any Law (including, without limitation, any environmental
law), Action or Governmental Order and those arising under any contract
agreement, arrangement, commitment or undertaking.
"Material Adverse Effect" shall mean a single event, occurrence or fact
that (together with all other events, occurrences and facts that could
reasonably be expected to result in a loss to the Company) would have, or might
reasonably be expected to have, a material adverse effect on the Company and its
business and operations.
"Materials of Environmental Concern" means any chemicals, pollutants,
contaminants, wastes (including ambient wastes, hazardous wastes, and liquid
industrial wastes), or other substances (including toxic, deleterious, or
hazardous substances), as defined, listed, or regulated pursuant to any
Environmental Laws, including asbestos-containing materials, polychlorinated
biphenyls, pesticides and oils, and petroleum (including crude oil and any
fraction thereof, natural gas, and natural gas liquids) and petroleum products
(as those exemplary terms are defined in or regulated under the United States
National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R.
xx.xx. 300.1 et. Seq. and other Environmental Laws.
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"Permitted Encumbrances" means any and all of the following encumbrances:
(a) Liens for taxes and assessments which are not yet due and payable or,
if due and payable, the validity of which is being contested in good faith by
appropriate legal proceedings;
(b) Rights existing under applicable laws or operating agreements or
similar contracts to assert liens against any properties of Seller or the
Company, but not including liens and other rights which have actually been
asserted, unless Seller or the Company disputes the validity of any such lien or
the amount claimed to be owed in connection therewith, or such lien or other
right is not enforceable against the interest of Seller or the Company;
(c) Any obligations or duties affecting any property to any municipality or
public authority with respect to any franchise, grant, license or permit and all
applicable laws, rules and orders of any Governmental Authority;
(d) Any other Encumbrance that is not substantial in character, amount or
extent and does not materially detract from the value of the property subject
thereto; and
(e) Any Encumbrance created by Purchaser or any of its Affiliates.
Section 1.02. Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections of this Agreement set forth
below:
Term Section
---- -------
Agreement Preamble
Ancillary Documents Section 4.04
Cash Payment Section 2.03
Closing Section 3.01
Common Stock Preamble
Company Preamble
Final Orders Section 2.03
Losses Section 7.02
Note Preamble
Proximate Owners Section 4.17(b)
Purchase Price Section 2.03
Purchaser Preamble
Sanjenis Preamble
Securities Act Section 4.10
Sellers Preamble
Shares Preamble
Sub-Surface Preamble
TCRI Warrants Section 2.03
TNRCC Section 4.17(a)
TNRCC Well Permits Section 4.17(a)
Warrant Agreement Section 2.03
Well Site Section 4.16
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ARTICLE II
PURCHASE AND SALE
Section 2.01. Purchase and Sale of Shares. At the Closing, and on the terms
and subject to the conditions set forth in this Agreement, Sanjenis shall sell,
assign, transfer, and deliver to Purchaser, and Purchaser shall purchase and
accept from Sanjenis, the Shares.
Section 2.02. Purchase and Sale of the Note. At the Closing, and on the
terms and subject to the conditions set forth in this Agreement, Sub-Surface
shall sell, assign, transfer, and deliver to Purchaser, and Purchaser shall
purchase and accept from Sub-Surface, all of Sub-Surface's rights, title, and
interest in and to the Note.
Section 2.03. Purchase Price and Payment. In consideration of the sale of
the Shares and the Note to Purchaser, Purchaser shall deliver to Sellers (a)
$850,000 cash ("Cash Payment") and (b) shall issue to Sellers warrants to
purchase 1,000,000 shares of common stock of Purchaser, par value $.01 per share
("TCRI Warrants"), under the vesting schedule and other terms and conditions set
forth more particularly in the warrant agreement attached hereto as Exhibits A-1
and A-2 ("Warrant Agreement"). The Cash Payment and TCRI Warrants are
collectively referred to herein as the "Purchase Price". The Purchase Price
shall be allocated between Sellers as set forth on Schedule 2.03.
ARTICLE III
CLOSING
Section 3.01. Closing. Subject to the terms of this Agreement, the sale and
purchase of the Shares contemplated by this Agreement shall take place at a
closing of the transactions contemplated hereby (the "Closing") to be held at
the offices of Xxxxxxxx & Xxxxxx, LLP, 0000 Xxxxx Xxxxxx, Xxxxx 0000 Xxxxxxx,
Xxxxx on the date which is the later of (a) May 22, 2002 or (b) the satisfaction
of all closing conditions set forth in this Article III, or at such other place
or at such other time or on such other date as Sellers and Purchaser may
mutually agree upon in writing (the day on which the Closing takes place being
the "Closing Date").
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Section 3.02. Conditions to the Closing.
(a) The obligations of Sellers to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment on or prior to the Closing
Date of each of the following conditions:
(i) All the representations and warranties of Purchaser contained in
this Agreement, and in any agreement, instrument, or document delivered
pursuant hereto or in connection herewith on or prior to the Closing Date,
shall be true and correct in all material respects as of the date made and
(having been deemed to have been made again on and as of the Closing Date)
shall be true and correct in all material respects on and as of the Closing
Date, except as affected by transactions permitted by this Agreement and
except to the extent that any such representation or warranty is made as of
a specified date, in which case such representation or warranty shall have
been true and correct as of such specified date.
(ii) Purchaser shall have performed and complied with in all material
respects all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
(b) The obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment on or prior
to the Closing Date of each of the following conditions:
(i) All the representations and warranties of Sellers contained in
this Agreement, and in any agreement, instrument, or document delivered
pursuant hereto or in connection herewith on or prior to the Closing Date,
shall be true and correct in all material respects as of the date made and
(having been deemed to have been made again on and as of the Closing Date)
shall be true and correct in all material respects on and as of the Closing
Date, except as affected by transactions permitted by this Agreement and
except to the extent that any such representation or warranty is made as of
a specified date, in which case such representation or warranty shall have
been true and correct as of such specified date.
(ii) Sellers shall have performed and complied with in all material
respects all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
Section 3.03. Closing Deliveries by Sellers. At the Closing, Sellers shall
execute, acknowledge (where appropriate) and deliver, or cause to be executed,
acknowledged (where appropriate) and delivered, to Purchaser the following:
(a) A certificate or certificates evidencing the Shares, duly endorsed in
blank or accompanied by appropriate stock powers.
(b) The Note, duly endorsed by Sub-Surface payable to the order of
Purchaser.
(c) A certificate, executed by Sellers, dated as of the Closing Date,
certifying that (i) the representations and warranties of Sellers in this
Agreement are true and correct in all material respects as of the Closing (or,
in the case of representations and warranties which address matters only as of a
particular date, as of such particular date), with the same effect as though
made as of such date, (ii) that each covenant or agreement of Sellers in this
Agreement to be complied with at or prior to Closing shall have been complied
with in all material respects and (iii) no Action (excluding any such matter
initiated by Purchaser or any of its Affiliates) is pending or, to Sellers'
knowledge, threatened before and no injunction issued by any Governmental
Authority seeking to enjoin or restrain or prohibit, delay, or restrain the
performance of or to obtain damages or other relief in connection with this
Agreement, or the consummation of the transactions contemplated hereby.
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Section 3.04. Closing Deliveries by Purchaser. At the Closing, Purchaser
shall execute, acknowledge (where appropriate) and deliver, or cause to be
executed, acknowledged (where appropriate) and delivered, to Seller the
following:
(a) The Cash Payment in immediately available funds by wire account
specified by Sellers, which Cash Payment shall be allocated among the Sellers as
set forth on Schedule 2.03. Sellers shall provide Purchaser with their
individual account number and routing information for their accounts in writing
no later than two days prior to the Closing.
(b) A certificate or certificates evidencing the TCRI Warrants duly issued
and registered in the name of Sellers, allocated among the Sellers as set forth
on Schedule 2.03.
(c) A certificate, executed by the duly authorized officer of the
Purchaser, dated as of the Closing Date, certifying that (i) the representations
and warranties of Purchaser in this Agreement are true and correct in all
material respects as of the Closing, with the same effect as though made as of
such date (or, in the case of representations and warranties which address
matters only as of a particular date, as of such particular date), (ii) that
each covenant or agreement of Purchaser in this Agreement to be complied with at
or prior to Closing shall have been complied with in all material respects and
(iii) no Action (excluding any such matter initiated by Seller or any of its
Affiliates) is pending or, to Purchaser's knowledge, threatened before any court
or governmental agency seeking to enjoin or restrain or prohibit, delay, or
restrain the performance of or to obtain damages or other relief in connection
with this Agreement, or the consummation of the transactions contemplated
hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Purchaser understands and accepts the fact that the representations and
warranties made by Sellers regarding the Company, which are made on the basis of
their best knowledge, are based on limited contacts with the Company. On the
part of Sanjenis, such contacts dealt with his execution of a judgment against
Company shareholders, Environmental Financing Partnership L.L.C., Xxxx Xxxxxx
and Xxxx Xxxxxxx, and the recovery by court order of the parties' shares of
stock. Sub-Surface's contacts and representations relate to their dealings with
the Company relative to the loans provided to the Company pursuant to the Credit
Agreement and the companion transactions related to the funding of the loan(s)
to the Company. Sellers jointly and severally represent and warrant to Purchaser
that:
Section 4.01. Organization; Good Standing. Sub-Surface is a corporation
duly formed under the laws of Texas. Sub-Surface has all requisite power and
authority to own and lease its properties and assets and to carry on its
business as currently conducted.
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Section 4.02. Charter and Bylaws. The Sellers have made available to
Purchaser accurate and complete copies of (i) the articles of incorporation
charter and bylaws of the Company as in effect at the time Sub-Surface entered
into the Credit Agreement, (ii) the stock records of the Company, and (iii) the
minutes of all meetings of the Board of Directors of the Company, any committees
of such Board, and the stockholders of the Company (and all consents in lieu of
such meetings).
Section 4.03. Capitalization of the Company. The authorized capital stock
of the Company consists of __________ shares of Common Stock, of which, as of
the date hereof, to the best of Sellers' knowledge, 100,000 shares are
outstanding and no shares are held in the Company's treasury. All outstanding
shares of capital stock of the Company have been validly issued and are fully
paid and nonassessable, and no shares of capital stock of the Company are
subject to, nor have any been issued in violation of, preemptive or similar
rights. Except as set forth above in this Section, there are (and as of the
Closing Date there will be) outstanding (i) no shares of capital stock or other
voting securities of the Company other than those shares issued to the parties
set forth on Exhibit B, (ii) no securities of the Company convertible into or
exchangeable for shares of capital stock or other voting securities of the
Company other than the Note, (iii) no options or other rights to acquire from
the Company, and no obligation of the Company to issue or sell, any shares of
capital stock or other voting securities of the Company or any securities of the
Company convertible into or exchangeable for such capital stock or voting
securities, and (iv) no equity equivalents, interests in the ownership or
earnings, or other similar rights of or with respect to the Company. There are
(and as of the Closing Date there will be) no outstanding obligations of the
Company to repurchase, redeem, or otherwise acquire any of the foregoing shares,
securities, options, equity equivalents, interests, or rights. No Seller is a
party to, or is aware of, any voting agreement, voting trust, or similar
agreement or arrangement relating to any class or series of the Company's
capital stock.
Section 4.04. Due Authorization; Execution and Delivery. Sub-Surface has
full corporate power and authority to enter into and perform this Agreement and
any documents or instruments to be entered into as contemplated or required by
this Agreement (collectively, the "Ancillary Documents") and to which each is a
party, and to carry out the transactions contemplated hereby and thereby. Prior
to the Closing, Sub-Surface will have taken all requisite action to approve the
execution and delivery of this Agreement and the Ancillary Documents to which it
is a party and the transactions contemplated hereby and thereby. This Agreement
and each of the Ancillary Documents to which the Sellers are a party constitutes
the legal, valid and binding obligation of the Sellers, enforceable against them
in accordance with its terms, except as may be limited by the availability of
equitable remedies or by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally (whether such
rights are considered at law or in equity).
Section 4.05. Noncontravention. The execution, delivery, and performance by
the Sellers of this Agreement and the Ancillary Documents to which each is a
party, and the consummation by Sellers of the transactions contemplated hereby
and thereby do not and will not (i) conflict with or result in a violation of
any provision of the charter or bylaws of Sub-Surface, (ii) conflict with or
result in a violation of any provision of, or constitute (with or without the
giving of notice or the passage of time or both) a default under, or give rise
(with or without the giving of notice or the passage of time or both) to any
right of termination, cancellation or acceleration under, or require any
consent, approval, authorization or waiver of, or notice to, any party to, any
material bond, debenture, note, mortgage, indenture, lease, contract, agreement
or other instrument or obligation to which the Sellers is a party or by which
the Sellers, or the respective assets of either of them, may be bound or any
TNRCC Permits held by the Company, or (iii) assuming compliance with the matters
referred to in Section 4.07, violate any Law binding upon the Company or Seller
or any of the Assets of the Company or Seller, except, in the case of clauses
(ii) and (iii) above, for any such conflicts, violations, defaults,
terminations, cancellations, encumbrances or accelerations which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company
or Sellers, and except, in the case of clause (ii) above, for such consents,
approvals, authorizations and waivers that have been obtained and are
unconditional and in full force and effect and such notices that have been duly
given.
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Section 4.06. Governmental Approvals. No approval, authorization, consent,
order or other action of, or filing with, any governmental authority or
administrative agency is required in connection with the execution and delivery
by the Sellers of this Agreement or the consummation of the transactions
contemplated hereby, other than (i) filings with or approvals by other
Governmental Authorities to occur in the ordinary course following the
consummation of the transaction contemplated by this Agreement and (ii) such
consents, approvals, orders or authorizations which, if not obtained, and such
declarations, filings, or registrations which, if not made, would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
Section 4.07. Subsidiaries. To the best of Sellers knowledge, the Company
does not own, directly or indirectly, any capital stock or other securities of
any corporation or have any direct or indirect equity or ownership interest in
any other Person.
Section 4.08. Shares. Sanjenis is (and at the Closing will be) the sole
record and beneficial owner of, and upon consummation of the transactions
contemplated hereby Purchaser will acquire valid title to, the Shares, free and
clear of all Encumbrances, other than (i) Permitted Encumbrances or (ii)
restrictions on transfer that may be imposed by federal or state securities
laws.
Section 4.09. Note. Sub-Surface is the owner and holder of the Note, has
full right, power, and authority to transfer the Note, free of any lawful claim
of any person by, through, or under Sub-Surface, and has not executed any
release or subordination relating to the Note or any lien, pledge, or security
agreement securing the Note. The unpaid principal balance of the Note is
$3,000,000. The Note is now in good standing and no default exists under the
Note or the Credit Agreement. The Buy-Sell, Pledge and Guaranty Agreement dated
as of April 26, 1999, between Xxx X. Xxxxxx and X.X. Xxxxxxx, Xx., the Company,
and Sub-Surface and the Security Agreement dated April 27, 1999, between the
Company and Sub-Surface have not been amended and are in full force and effect.
The Note is currently and immediately convertible into a 65% equity interest in
the capital stock of the Company.
Section 4.10. Credit Agreement. Since April 29, 1999, Sub-Surface has not,
pursuant to either Section 3.3A or 3.4 of the Credit Agreement, authorized the
Company to: (a) sell all or substantially all of its assets, (b) authorize for
issuance or sell any additional Capital Stock (as defined in the Credit
Agreement) of the Company beyond the authorized and issued Capital Stock of the
Company on April 29, 1999, (c) incur any Indebtedness (as defined in the Credit
Agreement) not contemplated and permitted by the Credit Agreement, or (d)
authorize or implement any action or omit to take any required action that would
cause a Material Adverse Effect (as defined in the Credit Agreement) upon the
Permits, the Well(s), or Facilities
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Section 4.11. Investment Intent. Each of Sanjenis and Sub-Surface is
acquiring the TCRI Warrants and the shares of common stock of Purchaser
underlying the TCRI Warrants, for its own account for investment and not with a
view to, or for sale or other disposition in connection with, any distribution
of all or any part thereof, except (i) in an offering covered by a registration
statement filed with the Securities and Exchange Commission under the Securities
Act of 1933 (the "Securities Act") covering the Purchaser Shares or (ii)
pursuant to an applicable exemption under the Securities Act.
Section 4.12. Disclosure of Information. Each of Sanjenis and Sub-Surface
acknowledges that it or its representatives have been furnished with information
regarding Purchaser and its business, assets, results of operation, and
financial condition. Sub-Surface further represents that it has had an
opportunity to ask questions of and receive answers from Purchaser regarding
Purchaser and its business, assets, results of operation and financial condition
and the terms and conditions of the issuance of the Purchaser Shares. The
foregoing, however, shall not limit or modify the representations and warranties
of Purchaser in Article V, shall not limit the rights of Seller prior to and in
anticipation of any issuance of the Purchaser Shares pursuant hereto, and shall
not limit the disclosure requirements of applicable federal and state securities
laws.
Section 4.13. Restricted Securities. Each of Sanjenis and Sub-Surface
understands that the TCRI Warrants and the shares of common stock of Purchaser
underlying the TCRI Warrants will not have been registered pursuant to the
Securities Act or any applicable state securities laws, that the TCRI Warrants
and the shares of common stock of Purchaser underlying the TCRI Warrants will be
characterized as "restricted securities" under federal securities laws, and that
under such laws and applicable regulations the TCRI Warrants and the shares of
common stock of Purchaser underlying the TCRI Warrants cannot be sold or
otherwise disposed of without registration under the Securities Act or an
exemption therefrom.
Section 4.14. Legend. It is agreed and understood by Sanjenis and
Sub-Surface that the certificates representing the TCRI Warrants shall each
conspicuously set forth on the face or back thereof, in addition to any legends
required by Law or other agreement, a legend in substantially the following
form:
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE FIRST REGISTERED PURSUANT TO THAT ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE CORPORATION RECEIVES A WRITTEN
OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE SATISFACTORY TO THE
CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
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Further, it is agreed and understood by Sanjenis and Sub-Surface that the
certificates representing the shares of common stock of Purchaser underlying the
TCRI Warrants, when and if issued, shall each conspicuously set forth on the
face or back thereof, in addition to any legends required by Law or other
agreement, a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE FIRST REGISTERED PURSUANT TO THAT ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE CORPORATION RECEIVES A WRITTEN
OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE SATISFACTORY TO THE
CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
Section 4.15. Financial Statements. The Sellers have delivered to Purchaser
copies of all financial statements of the Company in their possession. To the
best of Sellers' knowledge, all such financial statements are complete and
correct and have been prepared from the books and records of the Company in
conformity with generally accepted accounting principles applied on a basis
consistent with preceding years throughout the periods involved, except that any
unaudited financial statements are not accompanied by notes or other textual
disclosure required by generally accepted accounting principles. To the best of
Sellers' knowledge, such financial statements fairly present in all material
respects, on the basis stated therein and on the date hereof, the financial
position of the Company at the respective dates therein specified and its
results of operations and cash flows for the periods the ended and do not omit
to state any information necessary to make such financial statements not
misleading.
Section 4.16. Absence of Undisclosed Liabilities. To the best knowledge of
Sellers, the Company does not have any Liability (whether accrued, absolute,
contingent, unliquidated, or otherwise, whether or not known to the Company, and
whether due or to become due), except (i) Liabilities reflected on the financial
statements delivered to Purchaser, (ii) Liabilities that have arisen since the
date of the latest balance sheet delivered to Purchaser in the ordinary course
of business (none of which is a material liability for breach of contract),
(iii) Liabilities arising under executory contracts entered into in the ordinary
course of business (none of which is a material liability for breach of
contract), and (iv) other Liabilities that, in the aggregate, are not material
to the Company.
Section 4.17. Title to Assets. As of the Closing Date, to the best
knowledge of Sellers, the Company will have good and defensible title, or with
respect to the material assets which it then leases, valid leasehold rights, to
all of the material assets owned by it, including without limitation that
certain 21.209-acre tract of real property located in Xxxxxxxxxx County, Texas
and described more particularly in Exhibit C attached hereto (the "Well Site"),
free and clear of all Encumbrances other than Permitted Encumbrances.
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Section 4.18. TNRCC Well Permits. To the best knowledge of Sellers:
(a) The Texas Natural Resources Conservation Commission ("TNRCC") Class I
Non-Hazardous Waste Water Disposal Well Permits identified on Schedule 4.21(a)
comprise all of the TNRCC licenses, permits and other authorizations required in
order to drill, complete and test xxxxx and operate the Facilities as currently
operated (the "TNRCC Well Permits").
(b) The TNRCC Well Permits, together with other instruments governing the
Company and other surface and subsurface property owners in proximity to all
waste water disposal xxxxx (the "Proximate Owners"), preclude the Proximate
Owners in the area from validly asserting that the injection operations of the
disposal xxxxx and surface treatment Facilities by the Company are not allowed.
Moreover, if the Company complies with applicable laws and the TNRCC Well
Permits, no valid claim for damages can be made by the Proximate Owners relating
to any disposal well drilled and operated by the Company in the areas set forth
in the TNRCC Well Permits.
(c) The execution and performance of this Agreement or the possibility of a
change in control of the Company will not adversely affect the status or
validity of the TNRCC Well Permits.
(d) No action or proceeding is pending or threatened before TNRCC or other
Governmental Authority for the cancellation or material adverse modification of
the TNRCC Well Permits.
(e) The Company is current with all reports, filings and other matters
relating to the Facilities that the Company is required to file with TNRCC and
the Company is not delinquent in the payment of any material fees and charges
relating to the Facilities that are due to TNRCC.
(e) As of the Closing Date, the Company will be the authorized legal holder
of each of the TNRCC Well Permits and the TNRCC Well Permits will be in full
force and effect and no action or proceeding will be pending or threatened
before TNRCC for the cancellation of the TNRCC Well Permits.
Section 4.19. Litigation. To Sellers' knowledge, there are no Governmental
Orders and no Actions pending or threatened against or affecting the Company,
Seller, or the Facilities which, if adversely determined, could reasonably be
expected to materially and adversely affect the Company, or which challenges the
validity or propriety of any of the transactions contemplated by this Agreement.
Section 4.20. Compliance with Laws. To Sellers' knowledge, the Company has
complied in all material respects with all Laws relating to the ownership or
operation of the Facilities (including without limitation the rules, regulations
and practices of TNRCC), except for noncompliance with such Laws which,
individually or in the aggregate, does not and will not have a Material Adverse
Effect on the Company, and neither the Company nor any Seller has received any
written notice of any action, which has not been dismissed or otherwise disposed
of, that the Company and Sellers have not so complied.
11
Section 4.21. Environmental Matters. To Sellers' knowledge:
(a) The Facilities, disposal xxxxx, the Well Site and all assets located
thereon (the "Properties") do not contain, and have not contained, any Materials
of Environmental Concern in amounts or concentrations that (i) constitute or
would constitute a violation of, or (ii) could reasonably be expected to give
rise to liability under, any Environmental Law.
(b) The Properties and all operations on or at the Properties are and have
been in compliance with all applicable Environmental Laws, and there is neither
any contamination nor any violation of any Environmental Law with respect to the
Properties or the business operated by the Company that could interfere with the
continued operation of the Properties or materially impair the fair value of the
Properties.
(c) Neither the Company nor any of Sellers have received any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or business of the Company. The Company and the
Sellers do not have any knowledge or reason to believe that any such notice will
be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
that could reasonably be expected to give rise to liability under any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored, or disposed of at, on, or under any of the
Properties in violation of, or in a manner that could reasonably be expected to
give rise to liability under, any Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or threatened, under any Environmental Law to which the Company is or
will be named a party with respect to the Properties or business of the Company,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Properties or business of the Company.
(f) No release or threat of release of Materials of Environmental Concern
at or from the Properties, or arising from or related to the operations of the
Company in connection with the Properties or otherwise in connection with the
business of the Company has occurred in violation of or in amounts or in a
manner that could reasonably be expected to give rise to liability under
Environmental Laws.
Section 4.22. Brokerage Fees. Neither Sellers nor their Affiliates have
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this Agreement
or any transaction contemplated hereby. Sellers shall indemnify and hold
harmless Purchaser from and against any and all losses, claims, damages and
liabilities (including legal and other expenses reasonably incurred in
connection with investigating or defending any claims or actions) with respect
to any finder's fee, brokerage commission or similar payment in connection with
any transaction contemplated hereby asserted by any person on the basis of any
act or statement made or alleged to have been made by Sellers.
12
Section 4.23. Full Disclosure. No representation or warranty made by
Sellers in this Agreement, and no statement of any Seller contained in any
document, certificate, or other writing furnished or to be furnished by Sellers
pursuant hereto or in connection herewith, contains or will contain, at the time
of delivery, any untrue statement of a material fact or omits or will omit, at
the time of delivery, to state any material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they are
made, not misleading. Sellers know of no matter that has not been disclosed to
Purchaser pursuant to this Agreement that has or, so far as Sellers can now
reasonably foresee, will have a Material Adverse Effect. Seller have delivered
or made available to Purchaser accurate and complete copies of all agreements,
documents, and other writings referred to or listed in this Article IV or any
Schedule hereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 5.01. Organization and Good Standing. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Texas and has all requisite corporate power and authority to own and
lease its properties and carry on its business as currently conducted.
Section 5.02. Due Authorization; Execution and Delivery. Purchaser has full
power and authority to enter into this Agreement and the Ancillary Documents to
which it is a party and to carry out its obligations hereunder. The execution
and delivery by Purchaser of this Agreement and the Ancillary Documents to which
it is a party and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Purchaser. This Agreement and the Ancillary Documents to which Purchaser is a
party have been duly executed and delivered by Purchaser and constitute the
legal, valid and binding obligations of Purchaser, enforceable against it in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally or general equitable principles.
Section 5.03. TCRI Warrants and Underlying Shares. The TCRI Warrants and
shares of common stock of Purchase underlying the TCRI Warrants have been duly
authorized for issuance and, if and when delivered by Purchaser in accordance
with the provisions of this Agreement, will be validly issued fully paid and
nonassessable.
ARTICLE VI
CERTAIN COVENANTS AND OTHER AGREEMENTS
Section 6.01. Taxes; Other Charges. All sales and use taxes resulting from
the consummation of the transactions contemplated hereby shall be borne by
Sellers, and the parties shall cooperate in obtaining all exemptions from such
taxes. All other registration, transfer, recording, and deed and stamp taxes and
fees incurred in connection with the consummation of the transactions
contemplated hereby shall be borne by Seller.
13
Section 6.02. Best Efforts. The Sellers and Purchaser shall take all
reasonable action necessary to consummate the transactions contemplated by this
Agreement and will use all necessary and reasonable means at its disposal to
obtain all necessary consents and approvals of other persons and governmental
authorities required to enable it to consummate the transactions contemplated by
this Agreement, as necessary. Each party shall promptly make all filings,
applications, statements and reports to all governmental agencies or entities
which are required to be made prior to the Closing Date by or on its behalf
pursuant to any statute, rule or regulation in connection with the transactions
contemplated by this Agreement, and copies of all such filings, applications,
statements and reports shall be provided to the other.
Section 6.03. Public Announcements. Prior to the Closing Date, neither
Sellers nor Purchaser shall disclose information or make a public announcement
relating to the transactions contemplated by this Agreement, without the prior
written consent of the other parties hereto.
ARTICLE VII
INDEMNIFICATION
Section 7.01. Survival. All representations, warranties, covenants and
agreements made by any party to this Agreement or pursuant hereto shall be
deemed to be material and to have been relied upon by the parties hereto and
shall survive the Closing for two years after the Closing Date.
Section 7.02. Indemnification by Sellers. Subject to the limitations set
forth in Sections 7.01 and 7.04, Sellers shall indemnify and hold harmless
Purchaser from, against, for and in respect of:
(a) any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action and encumbrances (collectively,
"Losses") suffered, sustained, incurred or required to be paid by Purchaser and
arising from the breach of any written representation, warranty, agreement or
covenant of Sellers or the Company contained in this Agreement; and
(b) all reasonable costs and expenses (including, without limitation,
attorneys' fees, interest and penalties) incurred by Purchaser in connection
with any action, suit, proceeding, demand, assessment or judgment incident to
any of the matters indemnified against in this Section 7.02;
provided only that Purchaser shall not be entitled under this Section to receive
indemnification for that portion, if any, of any Losses, costs or expenses which
is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. As used in this Section the term
"Purchaser" refers to Purchaser and to each director, officer, agent, trustee,
manager, attorney, employee, representative and Affiliate of Purchaser.
14
Section 7.03. Indemnification by Purchaser. Subject to the limitations set
forth in Sections 7.01 and 7.04, Purchaser shall indemnify and hold Sellers and
the Company harmless from, against, for and in respect of:
(a) any and all Losses suffered, sustained, incurred or required to be paid
by Sellers and arising from the breach of any written representation, warranty,
agreement or covenant of Purchaser contained in this Agreement; and
(b) all reasonable costs and expenses (including, without limitation,
attorneys' fees, interest and penalties) incurred by Sellers or the Company in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 7.03;
provided only that Sellers shall not be entitled under this Section to receive
indemnification for that portion, if any, of any Losses, costs or expenses which
is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. As used in this Section the term
"Sellers" refers to each Seller and to each director, officer, agent, trustee,
manager, attorney, employee, representative and Affiliate of Sellers, as
applicable.
Section 7.04. Indemnification Procedures. The obligations and liabilities
of each indemnifying party hereunder with respect to claims resulting from the
assertion of liability by the other party or indemnified third parties shall be
subject to the following terms and conditions:
(a) The indemnified party shall give prompt written notice (which in no
event shall exceed 30 days from the date on which the indemnified party first
became aware of such claim or assertion) to the indemnifying party of any claim
which might give rise to a claim by the indemnified party against the
indemnifying party based on the indemnity agreements contained in Sections 7.02
or 7.03 hereof, stating the nature and basis of said claims and the amounts
thereof, to the extent known. The failure to so notify, or any delay in so
notifying, the indemnifying party will not relieve the indemnifying party of its
obligations under Sections 7.02 or 7.03, except solely to the extent that such
failure actually and materially prejudices the indemnifying party.
(b) If any action, suit or proceeding is brought against the indemnified
party with respect to which the indemnifying party may have liability under the
indemnity agreements contained in Section 7.02 or 7.03 hereof, the action, suit
or proceeding shall, upon the written acknowledgment by the indemnifying party
that it is obligated to indemnify under such indemnity agreement, be defended
(including all proceedings on appeal or for review which counsel for the
indemnified party shall deem appropriate) by the indemnifying party. The
indemnified party shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the indemnified
party's own expense unless (i) the employment of such counsel and the payment of
such fees and expenses both shall have been specifically authorized in writing
by the indemnifying party in connection with the defense of such action, suit or
proceeding, or (ii) counsel to such indemnified party shall have reasonably
concluded and specifically notified the indemnifying party that there may be
specific defenses available to it which are different from or additional to
those available to the indemnifying party or that such action, suit or
proceeding involves or could have an effect upon matters beyond the scope of the
indemnity agreements contained in Sections 7.02 or 7.03 hereof, in any of which
events the indemnifying party, to the extent made necessary by such defenses,
shall not have the right to direct the defense of such action, suit or
proceeding on behalf of the indemnified party. In the latter such case only that
portion of such fees and expenses of the indemnified party's separate counsel
reasonably related to matters covered by the indemnity agreements contained in
Section 7.02 or 7.03 hereof shall be borne by the indemnifying party. The
indemnified party shall be kept fully informed of such action, suit or
proceeding at all stages thereof whether or not it is represented by separate
counsel.
15
(c) The indemnified party shall make available to the indemnifying party
and its attorneys and accountants all books and records of the indemnified party
relating to such proceedings or litigation and the parties hereto agree to
render to each other such assistance as they may reasonably require of each
other in order to ensure the proper and adequate defense of any such action,
suit or proceeding.
(d) The indemnified party shall not make any settlement of any claims
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld or delayed.
(e) The amount of Losses required to be paid by any party to indemnify any
other party pursuant to this Article VII as a result of any Losses shall be
reduced to the extent of (i) any amounts actually received by such other party
after the Closing Date pursuant to the terms of the insurance policies (if any)
covering such Losses and (ii) any correlative net tax benefit realized or to be
realized by the party suffering such Losses.
(f) Seller shall not be required to pay any amount in satisfaction of the
indemnification obligations of Seller pursuant to Section 7.02 in excess of the
Purchase Price received by Seller.
(g) The indemnification obligations of Seller or Purchaser pursuant to this
Article VII shall be limited to actual damages and shall not include incidental,
consequential, indirect, punitive or exemplary damages.
ARTICLE VIII
TERMINATION
Section 8.01. Termination. This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing in
the following manner:
(a) by mutual written consent of Sellers and Purchaser; or
(b) by either Sellers or Purchaser, if the Closing shall not have occurred
on or before May 22, 2002, unless such failure to close shall be due to a breach
of this Agreement by the party seeking to terminate this Agreement pursuant to
this clause (b); or
(c) by either Sellers or Purchaser, if there shall be any Law that makes
consummation of the transactions contemplated hereby illegal or otherwise
prohibited or a Governmental Authority shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby, and such
order, decree, ruling or other action shall have become final and nonappealable;
or
16
(d) by Sellers, if (i) any of the representations and warranties of
Purchaser contained in this Agreement shall not be true and correct in any
material respect, when made or at any time prior to the Closing as if made at
and as of such time (except to the extent that any such representation or
warranty is made as of a specified date, in which case such representation or
warranty must have been true and correct in all material respects as of such
specified date), in any respect which is material to Purchaser or the ability of
Purchaser to consummate the transactions contemplated hereby, or (ii) Purchaser
shall have failed to fulfill in any material respect any of its material
obligations under this Agreement, which failure is material to the obligations
of Purchaser under this Agreement, and, in the case of each of clauses (i) and
(ii), such misrepresentation, breach of warranty, or failure (provided it can be
cured) has not been cured within 30 days after written notice thereof from
Seller to Purchaser; or
(e) by Purchaser, if (i) any of the representations and warranties of
Sellers or the Company contained in this Agreement shall not be true and correct
in any material respect, when made or at any time prior to the Closing as if
made at and as of such time (except to the extent that any such representation
or warranty is made as of a specified date, in which case such representation or
warranty must have been true and correct in all material respects as of such
specified date), in any respect which is material to Sellers or the Company or
the ability of Seller to consummate the transactions contemplated hereby, or
(ii) Seller or the Company shall have failed to fulfill in any material respect
any of its material obligations under this Agreement, which failure is material
to the obligations of Seller and the Company under this Agreement, and, in the
case of each of clauses (i) and (ii), such misrepresentation, breach of
warranty, or failure (provided it can be cured) has not been cured within 30
days after written notice thereof from Purchaser to Seller.
Section 8.02. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.01 by Seller or Purchaser, this Agreement
shall become void and have no effect, except that the agreements contained in
this Article VIII and in Sections 4.26, 9.01, 9.03 and 9.11 shall survive the
termination hereof.
Section 8.03. Certain Remedies Not Exclusive. Except as specifically set
forth herein, the rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law. The rights and remedies
of any party based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
contained in this Agreement shall in no way be limited by the fact that the act,
omission, occurrence or other state of facts upon which any claim of any such
inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement contained in this Agreement (or
in any other agreement between the parties) as to which there is no inaccuracy
or breach.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Expenses. Except as otherwise expressly provided herein, each
party shall pay the fees and expenses incurred by it in connection with the
transactions contemplated by this Agreement. If any action is brought for breach
of this Agreement or to enforce any provision of this Agreement, the prevailing
party shall be entitled to recover court costs, arbitration expenses and
reasonable attorneys' fees.
17
Section 9.02. Amendment. This Agreement may be amended at any time but only
by an instrument in writing signed by the parties hereto.
Section 9.03. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if (i) mailed by certified mail, return
receipt requested, or delivered by nationally recognized overnight delivery
service, to the parties at the addresses set forth below (or at such other
address for a party as shall be specified by like notice), or (ii) sent by
facsimile to the number set forth below (or such other number for a party as
shall be specified by proper notice hereunder), or (iii) sent by email to the
email address set forth below (or such other email address for a party as shall
be specified by proper notice hereunder):
If to Purchaser, to: Texas Commercial Resources, Inc.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: X. X. Xxxxxxx
Facsimile: 713-914-9193
Email: xxxx@xxxx.xxx
---
with copies (which shall not constitute notice) to:
Xxxxxxxx & Xxxxxx, LLP
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Facsimile: 000-000-0000
Email: xxxxxx@xxxxx.xxx
If to EarthCare
or Sub-Surface to: EarthCare Company
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: 000-000-0000
Email: xxxxxxxxx@xxxxx.xxx
If to Sanjenis to: Xxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxx., Xxxx X
Xxxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Email:xxxxxxxxxx@xx.xxxxxxxx.xxx
with copies (which shall not constitute notice) to:
Xxxxx X. Xxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Email: xxxxxx@xxxxxxx.xxx
18
Section 9.04. Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs and
permitted assigns. This Agreement may not be assigned by any party without the
prior written consent of the other parties hereto.
Section 9.05. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 9.06. Headings. The headings of the Sections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
Section 9.07. Entire Agreement. This Agreement and the documents referred
to herein contain the entire understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties, conveyances or undertakings other than those expressly set forth
herein. This Agreement supersedes any prior agreements and understandings
between the parties with respect to the subject matter.
Section 9.08. Waiver. No attempted waiver of compliance with any provision
or condition hereof, or consent pursuant to this Agreement, will be effective
unless evidenced by an instrument in writing by the party against whom the
enforcement of any such waiver or consent is sought.
Section 9.09. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
Section 9.10. Severability. If any term or other provision of this
Agreement is held invalid, illegal or incapable of being enforced under any rule
or law, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in a materially adverse
manner with respect to either party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
Section 9.11. Intended Beneficiaries. The rights and obligations contained
in this Agreement are hereby declared by the parties hereto to have been
provided expressly for the exclusive benefit of such entities as set forth
herein and shall not benefit, and do not benefit, any unrelated third parties.
19
Section 9.12. Consent to Jurisdiction.
(a) The parties hereto hereby irrevocably submit to the jurisdiction of the
courts of the State of Texas and the federal courts of the United States of
America located in Texas, and appropriate appellate courts therefrom, over any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or proceeding may be heard and determined in such
courts. The parties hereby irrevocably waive, to the fullest extent permitted by
Law, any objection which they may now or hereafter have to the laying of venue
of any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
This consent to jurisdiction is being given solely for purposes of this
Agreement and is not intended to, and shall not, confer consent to jurisdiction
with respect to any other dispute in which a party to this Agreement may become
involved.
(b) Each of the parties hereto hereby consents to process being served by
any party to this Agreement in any suit, action, or proceeding of the nature
specified in subsection (a) above by the mailing of a copy thereof in the manner
specified by the provisions of Section 9.03.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be duly executed as of the date first above written by their respective officers
thereunto duly authorized.
"SELLERS"
SUB-SURFACE LIQUID INJECTION
COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxxx Xxxxxxx, Xx., Vice-President and
Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------------
Xxxxxxx X. Xxxxxxxx
"PURCHASER"
TEXAS COMMERCIAL RESOURCES, INC.
By: /s/ X.X. Xxxxxxx
-------------------------------------------
X.X. Xxxxxxx, Vice President
20
EXHIBIT A-1
Warrant Vesting Schedule
1. 333,000 A Warrants - A Warrants vest on the date that the facility is
completed and the Company receives final approval from the TNRCC that
the Company may accept waste for disposal at the site (the
"Commencement Date"). Each A Warrant will entitle the holder to
purchase one share of TCRI common stock at $0.75 per share for a
period of three years from the Commencement Date.
2. 333,000 B Warrants - B Warrants will vest on the first day of the
month following the first 12-month period that occurs within 24 months
of the Commencement Date during which the gross revenues of the
Company exceed $2,000,000. Each B Warrant will entitle the holder to
purchase one share of TCRI common stock at $1.00 per share for a
period of three years from the vesting date.
3. 334,000 C Warrants - C Warrants will vest on the first day of the
month following the first 12-month period that occurs within 36 months
following the Commencement Date during which the gross revenues of the
Company exceed $4,000,000. Each C Warrant will entitle the holder to
purchase one share of TCRI common stock at $1.25 per share for a
period of three years from the vesting date.
21
EXHIBIT A-2
Form of Warrant Agreement
Omitted
22
EXHIBIT B
List of Company Shareholders
Certificate
Name Shares Number
X.X. Xxxxxxx 37,026.26 AAA-2
X.X. Xxxxxx 37,026.26 AAA-1
Xxxxxxx X. Xxxxxxxx 12,000.00 AAA-3
Xxxxxx X. Xxxxxxxxx 3,000.00
Crossroads Environmental Group (San Antonio Group) 2,916.67
Han Xxx Xxx 2,200.00
Xxxxxxx Xxxxxxxx 1,204.17
Xxxxxx Xxxxxxx 833.33
Xxxxxxxx Xxxxxxxxx 700.00
Xxxxx Xxxxxxxxx 416.67
Xxxxxx X. Xxx 400.00
Xxxxx X. Xxx 400.00
Xxx X. Xxxx 210.00
Xxxxxx Xxxxxxxxxxx 208.33
Xxxxxx Xxxxxx 208.33
Xxxxxxx Xxxxxx 208.33
Xxxxxx Xxxxxx 208.33
Xxxxxx Xxxx 208.33
Xxxxxxx X. Xxxxxxx 208.33
Xxxxxxx Xxxxxxx 208.33
Xxx Carrs 208.33
23
EXHIBIT C
Legal Description of Well Site
Omitted
24
