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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of the 1st day
of May, 1998 ("Effective Date"), by and among EXCO Resources, Inc., a Texas
corporation ("EXCO" or "Buyer"), and Xxxxxx-Xxxxxxx Energy, Inc. a Texas
corporation (the "Company"), and Xxxx Xxxxx Xxxxxx, Xxxxxx Xxxxxx Xxxxxxx,
Xxxxxx X. Xxxxxxxxx and Xxxx Xxxxxxx, Xx., stockholders of the Company (the
"Stockholders"). Company and Stockholders collectively are herein referred to
as "Sellers".
I. RECITALS
A. Stockholders are the record and beneficial owner of an aggregate
of 10,340.6295 shares of the common capital stock (the "Shares") of the
Company, which Shares represent all of the validly issued and currently
outstanding capital stock of the Company. The Shares are owned by each of the
Stockholders as follows:
Xxxx Xxxxx Xxxxxx 3,333.3333 shares
Xxxxxx Xxxxxx Xxxxxxx 3,333.3333 shares
Xxxxxx X. Xxxxxxxxx 2,746.0370 shares
Xxxx Xxxxxxx, Xx. 925.9259 shares
X. Xxxxxxx desire to sell, and Buyer desires to purchase, all of the
issued and outstanding shares of capital stock and the business of the Company,
for the consideration and on the terms set forth in this Agreement.
C. The parties, intending to be legally bound, agree to the following
terms and conditions hereafter set forth. Each of the capitalized and/or
defined terms shall have the meaning ascribed to them as set forth in Paragraph
11, below and elsewhere in this Agreement.
II. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES. Subject to the terms and conditions of this Agreement,
and the terms and conditions of the letter agreement attached hereto as Exhibit
"B", at the Closing, Sellers will sell and transfer the Shares to Buyer, and
Buyer will purchase the Shares from Stockholders.
2.2 PURCHASE PRICE. The purchase price (the "Purchase Price") for
the Shares will be $703,035 (plus or minus the Adjustment Amount) and 85,436
shares of the common stock of EXCO ("EXCO Common Stock"). The Purchase Price
will be allocated among the Stockholders as follows:
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Xxxx Xxxxx Xxxxxx $238,868 in cash
25,500 shares of EXCO Common Stock
Xxxxxx Xxxxxx Xxxxxxx $238,868 in cash
25,500 shares of EXCO Common Stock
Xxxxxx X. Xxxxxxxxx $223,060 in cash
16,667 shares of EXCO Common Stock
Xxxx Xxxxxxx, Xx. 17,769 shares of EXCO Common Stock
In addition to the foregoing, Buyer shall also payoff the following
loans of the Company at Southside Bank of Tyler, Texas:
(a) Loan No. 61393, in the amount of $210,813.64 as evidenced by
promissory note dated January 12, 1998;
(b) Loan No. 89732, in the amount of $22,501.42, as evidenced by
promissory note dated November 25, 1997; and
(c) Loan No. 86728, in the amount of $11,624.23, as evidenced by
promissory noted dated May 12, 1997.
2.3 CLOSING. The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of EXCO at 0000 Xxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000 at 10:00 a.m. on May 4, 1998, or at such other time
and place as the parties may agree, but in no event later than May 11, 1998.
2.4 CLOSING OBLIGATIONS.
(a) At the Closing, Sellers will deliver to Buyer:
(i) certificates representing the Shares, duly endorsed (or
accompanied by duly executed stock powers), with signatures
witnessed by either Sellers' legal counsel, Buyer, or duly
notarized by a notary public, for transfer to Buyer;
(ii) a certificate executed by Sellers, representing and
warranting to Buyer that each of Sellers' representations and
warranties in this Agreement was accurate in all respects as
of the date of this Agreement and is accurate in all respects
as of the Closing Date as if made on the Closing Date;
(b) At the Closing, Buyer will deliver to Sellers:
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(i) the sum of $703,035 (subject to adjustment as authorized
at Paragraph 2.5), made payable by wire transfer to accounts
specified by Sellers ("Cash Payment");
(ii) 85,436 shares of EXCO Common Stock;
(iii) a certificate executed by Buyer to the effect that,
except as otherwise stated in such certificate, each of
Buyer's representations and warranties in this Agreement was
accurate in all respects as of the date of this Agreement and
is accurate in all respects as of the Closing Date as if made
on the Closing Date.
2.5 ADJUSTMENT AMOUNT. Within ninety (90) days after closing (the
"Post Closing Date"), the parties shall determine the "Adjustment Amount" as
follows:
(a) Attached hereto as Exhibit "C" is a schedule which sets forth
the net working capital (current assets less current
liabilities) of the Company as of January 1, 1998. If within
ninety (90) days after the closing it is determined that the
Company had additional items of net working capital as of
January 1, 1998 (either assets or liabilities) which were not
included on such schedule ("Additional Working Capital"), the
Adjustment Amount shall be increased by the total amount of
any additional current assets and reduced by the total amount
of any current liabilities.
(b) Title. The Purchase Price was determined on the basis that the
Company owns the respective interests in the properties shown on Exhibit "A" to
this Agreement (the "Subject Properties"). Buyer shall, at Buyer's cost and
with due diligence, make such examination of the Company's title to the Subject
Properties as Buyer may elect to make. The Adjustment Amount may be increased
or decreased as a result of such examination as follows:
(i) For purposes of this Agreement, a "Title Defect"
shall mean one (or more) of the following:
(A)The Company's title as to one or more of the
Subject Properties is subject to an outstanding deed
of trust, judgment lien, lis pendens notice,
litigation, other lien, or adverse claim which will
survive the Closing.
(B) Seller's interest in the Subject Properties
is subject to reduction because of a reversionary,
back-in, net profits interest, production payment, or
similar right, provision or condition which is not
disclosed in the agreements described or referred to
on Exhibit "A" to this Agreement that would reduce
Buyer's interest or obligate Buyer to make any
retroactive or future payment or expenditure to
maintain such interest or avoid damages or liability;
provided,
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however, that the existence of the operating
agreements and the farmout agreements described or
referred to on Exhibit "B" to this Agreement shall
not be considered a Title Defect.
(ii) Within sixty (60) days after the Closing (the "Notice
Date"), Buyer will notify the Company in writing (whether by
mail, personal delivery or facsimile transmission) of any
Title Defect(s) which Buyer, in good faith, believes exist(s)
in the Company's title to one or more of the Subject
Properties including with such notice any attorney's written
opinion on title expressing the objection(s) upon which such
claim of Title Defect(s) is (are) based, and specifying what
is required to cure the same. If Buyer does not notify the
Company of any Title Defect(s) in the Company's title to the
Subject Properties on or before the Notice Date, it will be
deemed that Buyer has accepted the Company's title to the
Subject Properties and that no Title Defect(s) exist.
(iii) If Buyer timely delivers to the Company notice(s) of
Title Defect(s), the Company (and/or Buyer) shall have until
the Post Closing Date (the "Cure Period") within which to cure
such Title Defect(s) and furnish Buyer evidence thereof
reasonably satisfactory to Buyer. If the Company (or Buyer)
is unable to cure the Title Defect(s) within the Cure Period,
and the parties do not agree in writing to an extension of the
Cure Period, the Adjustment Amount shall be increased in an
amount equal to the "Title Loss" attributable to each title
defect. The Title Loss attributable to each title defect shall
be determined by multiplying the value of the particular
property to which such title defect pertains by a fraction,
the numerator of which is the reduction in the net revenue
interest set forth for such property on Exhibit "A" caused by
such title defect, and the denominator of which is the total
net revenue interest set forth on Exhibit "A' for such
property.
(iv) The Company and Buyer will mutually cooperate in
attempting to cure any title Defect(s) relating to the
Company's title to the Subject Properties.
2.6 ADJUSTMENT PROCEDURE
(a) At least ten (10) days prior to the Post Closing Date,
Buyer will deliver to the Company, Buyer's proposal for the Adjustment Amount
(the "Adjustment Proposal"). If, prior to the Post Closing Date, the Company
has not given Buyer notice of its objection to the Adjustment Proposal (such
notice must contain a statement of the basis of The Company's objection), then
the Adjustment Proposal will be used in
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computing the Adjustment Amount. If the Company gives such notice of
objection, then the issues in dispute will be submitted to a mutually agreeable
firm of independent public accountants (the "Accountants") or to a mutually
agreeable oil and gas attorney (the "Attorney"), or both for resolution. If
issues in dispute are submitted to the Accountants or Attorney for resolution,
(i) each party will furnish to the Accountants or Attorney such work papers and
other documents and information relating to the disputed issues as the
Accountants or Attorney may request and are available to that party or its
Subsidiaries (or its independent public accountants), and will be afforded the
opportunity to present to the Accountants or Attorney any material relating to
the determination and to discuss the determination with the Accountants or
Attorney, (ii) the determination by the Accountants or Attorney, as set forth
in a notice delivered to both parties by the Accountants or Attorney, will be
binding and conclusive on the parties; and (iii) Buyer and the Company will
each bear 50% of the fees of the Accountants or Attorney for such
determination.
(b) On the tenth business day following the final
determination of the Adjustment Amount, the Adjustment Amount, subject to
limitations set forth at Paragraph 2.5., will either be added to the Purchase
Price (if the Additional Working Capital is a positive number) and paid to
Sellers in proportion to their ownership of the stock of the Company
immediately prior to the Closing, or shall reduce the Purchase Price (if the
Additional Working Capital is a negative number) and each of the Sellers shall
be obligated to refund to EXCO, such Seller's proportionate part of the
Adjustment Amount.
III. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to Buyer that the following are true and
correct as of the date hereof and as of the Closing Date:
3.1 ORGANIZATION AND GOOD STANDING
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to conduct its business
as it is now being conducted, to own or use the properties and assets that it
purports to own or use, and to perform all its obligations under Applicable
Contracts.
(b) Sellers have delivered to Buyer copies of the
Organizational Documents of the Company, as currently in effect.
3.2 AUTHORITY; NO CONFLICT; APPROVALS.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Sellers, enforceable against Sellers in accordance with its
terms. Sellers have the absolute and unrestricted right, power, authority,
and capacity to execute and deliver this Agreement and to perform their
obligations under this Agreement.
(b) No Seller or the Acquired Company is or will be required
to give any
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notice to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or performance of
any of the Contemplated Transactions and to the extent that such Consent is
required, it will be timely tendered on or before the Closing Date. Neither
the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organizational Documents of the Company,
or (B) any resolution adopted by the board of directors or the
Stockholders;
(ii) contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise
any remedy or obtain any relief under, any Material Legal
Requirement or any Material Order to which the Company or the
Sellers, or any of the assets owned or used by the Company,
may be subject;
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental
Body the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any Governmental Authorization that is
held by the Company or that otherwise relates to the business
of, or any of the assets owned or used by, the Company;
(iv) cause Buyer or the Company to become subject to, or to
become liable for the payment of, any Tax;
(v) cause any of the assets owned by the Company to be
reassessed or revalued by any taxing authority or other
Governmental Body;
(vi) contravene, conflict with, or result in a violation or
breach of any Material provision of, or give any Person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Material Applicable Contract; or
3.3 CAPITALIZATION. The authorized equity securities of the Company
consist of 20,000 shares of common stock, par value $0.10 per share, of which
10,340.6295 shares are issued and outstanding and constitute the Shares.
Stockholders are and will be on the Closing Date the record and beneficial
owner and holder of the Shares, free and clear of all Encumbrances. All of the
outstanding equity securities of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. There are no Contracts
relating to the issuance, sale, or transfer of any equity securities or other
securities of the Company. None of the outstanding equity securities or other
securities of the Company was issued in violation of the Securities Act or any
other Legal Requirement. The Company does not own, or has no Contract to
acquire, any equity securities or other securities of any Person or any direct
or indirect equity or ownership interest in any other business.
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3.4 TITLE TO PROPERTIES; ENCUMBRANCES. Exhibit "A" hereto contains a
complete and accurate list of substantially all of the oil and gas leases and
properties owned by the Company (the Subject Properties"). The Company owns
good and marketable title to the Leases. The Leases are free and clear of any
Title Defects.
3.5 NO UNDISCLOSED LIABILITIES. The Company has no Material
liabilities or obligations of any nature (whether known or unknown and whether
absolute, accrued, contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Balance Sheet and current
liabilities incurred in the Ordinary Course of Business since the date thereof.
3.6 TAXES.
(a) With the exception of the Company's income tax return for
1997, the Company has filed or caused to be filed (on a timely basis since
1992, all Tax Returns that are or were required to be filed pursuant to
applicable Legal Requirements. The Company has paid, or made provision for the
payment of, all Taxes that have or may have become due pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by the Company.
(b) To the best of Sellers' Knowledge, there exists no
proposed tax assessment against the Company except as disclosed in the Balance
Sheet. All Taxes that the Company is or was required by Legal Requirements to
withhold or collect have been duly withheld or collected and, to the extent
required, have been paid to the proper Governmental Body or other Person.
3.7 NO MATERIAL ADVERSE CHANGE. To the best of Sellers' Knowledge
since the dates of the Balance Sheet, there has not been any Material Adverse
change in the business, operations, properties, prospects, assets, or condition
of the Acquired Company and no event has occurred or circumstance exists that
may result in such a Material Adverse change.
3.8 EMPLOYEE BENEFITS. The Acquired Company has not established or
been party to or bound by any profit- sharing, pension, retirement incentive or
other similar plan or arrangement for any of its employees subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
consummation of the transactions contemplated by this Agreement will not (i)
entitle any person to severance pay, unemployment compensation or any other
payment; (ii) accelerate the time of payment or vesting, or increase the amount
of compensation due to any such employee; or (iii) result in any liability
under Title IV of ERISA or otherwise.
3.9 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
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(a) the Acquired Company is, and at all times since its
incorporation has been, in full compliance with each Legal
Requirement that is or was applicable to it or to the conduct
or operation of its business or the ownership or use of any of
its assets;
(b) Sellers have no Knowledge of any event or circumstance
that (with or without notice or lapse of time) (A) may
constitute or result in a violation by the Acquired Company
of, or a failure on the part of the Acquired Company to comply
with, any Legal Requirement, or (B) may give rise to any
obligation on the part of the Acquired Company to undertake,
or to bear all or any portion of the cost of, any remedial
action of any nature; and
(c) the Acquired Company has not received, at any time since
the date of its incorporation any notice or other
communication (whether oral or written) from any Governmental
Body or any other Person regarding (A) any actual, alleged,
possible, or potential violation of, or failure to comply
with, any Legal Requirement, or (B) any actual, alleged,
possible, or potential obligation on the part of the Acquired
Company to undertake, or to bear all or any portion of the
cost of, any remedial action of any nature.
3.10 LEGAL PROCEEDINGS; ORDERS.
(a) Except as previously disclosed to Buyer, there is no
pending Proceeding:
(i) that has been commenced by or against the Acquired Company
or that otherwise relates to or may affect the business of, or
any of the assets owned or used by, the Acquired Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with, any of the Contemplated Transactions.
To the Knowledge of Sellers and the Acquired Company, (1) no
such Proceeding has been Threatened, and (2) no event has occurred or
circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding.
(i) there is no Order to which the Acquired Company, or any of
the assets owned or used by the Acquired Company, is subject;
(ii) none of the Sellers is subject to any Order that relates
to the business of, or any of the assets owned or used by, the
Acquired Company; and
(iii) to the Knowledge of Sellers and the Acquired Company, no
officer, director, agent, or employee of the Acquired Company
is subject to any Order that prohibits such officer, director,
agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of the Acquired
Company.
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3.11 ABSENCE OF CERTAIN CHANGES AND EVENTS. Since the date of the
Balance Sheet, the Acquired Company has conducted its business only in the
Ordinary Course of Business and there has not been any:
(a) change in the Acquired Company's authorized or issued
capital stock; grant of any stock option or right to purchase shares of capital
stock of the Acquired Company; issuance of any security convertible into such
capital stock; grant of any registration rights; purchase, redemption,
retirement, or other acquisition by the Acquired Company of any shares of any
such capital stock; or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of the Acquired
Company;
(c) payment or increase by the Acquired Company of any
bonuses, salaries, or other compensation to any stockholder, director, officer,
or (except in the Ordinary Course of Business) employee or entry into any
employment, severance, or similar Contract with any director, officer, or
employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any employees
of the Acquired Company;
(e) damage to or destruction or loss of any asset or property
of the Acquired Company, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial condition, or
prospects of the Acquired Company, taken as a whole;
(g) sale (other than sales of inventory in the Ordinary Course
of Business), lease, or other disposition of any asset or property of the
Acquired Company or mortgage, pledge, or imposition of any lien or other
encumbrance on any material asset or property of the Acquired Company;
(h) cancellation or waiver of any claims or rights with a
value to the Acquired Company in excess of $5,000;
(j) agreement, whether oral or written, by the Acquired
Company to do any of the foregoing.
3.12 CONTRACTS; NO DEFAULTS.
(a) All parties to all Material contracts, licenses,
commitments and agreements entered into by the Acquired Company are in full
compliance with the provisions thereof, no such party is in default thereunder,
and no event has occurred which, but for the passage of time or the giving of
notice or both, would constitute a default thereunder.
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3.13 ENVIRONMENTAL MATTERS.
(a) The Acquired Company is, and at all times has been, in
substantial compliance with, and has not been and is not in violation of or
liable under any Material Environmental Law. No Seller or Acquired Company has
any basis to expect, nor has any of them or any other Person for whose conduct
they are or may be held to be responsible received, any actual or Threatened
order, notice, or other communication from (i) any Governmental Body or private
citizen acting in the public interest, or (ii) the current or prior owner or
operator of any property, of any actual or potential violation or failure to
comply with any Environmental Law, or of any actual or Threatened obligation to
undertake or bear the cost of any Environmental, Health, and Safety Liabilities
with respect to any of the Facilities or any other properties or assets
(whether real, personal, or mixed) in which Sellers or the Acquired Company has
had an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by Sellers, the Acquired Company, or any other
Person for whose conduct they are or may be held responsible, or from which
Hazardous Materials have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of Sellers and
the Acquired Company, Threatened claims, Encumbrances, or other restrictions of
any nature, resulting from any Environmental Law which has or will have, a
Material Adverse effect upon any of the Facilities or any other properties and
assets (whether real, personal, or mixed) in which Sellers or the Acquired
Company has or had an interest.
(c) No Seller or Acquired Company has Knowledge of any basis
to expect, nor has any of them or any other Person for whose conduct they are
may be held responsible, received, any citation, directive, inquiry, notice,
Order, summons, warning, or other communication that relates to Hazardous
Activity, Hazardous Materials, or any alleged, actual, or potential violation
or failure to comply with any Environmental Law, or of any alleged, actual, or
potential obligation to undertake or bear the cost of any Environmental,
Health, and Safety Liabilities with respect to any of the Facilities or any
other properties or assets (whether real, personal, or mixed) in which Sellers
or the Acquired Company had an interest, or with respect to any property or
facility to which Hazardous Materials generated, manufactured, refined,
transferred, imported, used, or processed by Sellers, the Acquired Company, or
any other Person for whose conduct they are or may be held responsible, have
been transported, treated, stored, handled, transferred, disposed, recycled, or
received.
(d) No Seller or Acquired Company, or any other Person for
whose conduct they are or may be held responsible, knows of any Environmental,
Health, and Safety Liabilities with respect to the Facilities or, to the
Knowledge of Sellers and the Acquired Company, with respect to any other
properties and assets (whether real, personal, or mixed) in which Sellers or
the Acquired Company (or any predecessor), has or had an interest, or at any
property geologically or hydrologically adjoining the Facilities or any such
other property or assets.
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(e) Except as required in the ordinary course of the Company's
business, there are no known hazardous materials present on or in the
Environment at the Facilities or at any geologically or hydrologically
adjoining property, including any Hazardous Materials contained in barrels,
above or underground storage tanks, landfills, land deposits, dumps, equipment
(whether moveable or fixed) or other containers, either temporary or permanent,
and deposited or located in land, water, sumps, or any other part of the
Facilities or such adjoining property, or incorporated into any structure
therein or thereon. No Seller, Acquired Company, or to the Knowledge of
Sellers and the Acquired Company, any other Person, has permitted or conducted,
or is aware of, any Materially Adverse Hazardous Activity conducted with
respect to the Facilities or any other properties or assets (whether real,
personal, or mixed) in which Sellers or the Acquired Company has or had an
interest except in full compliance with all applicable Environmental Laws.
(f) There has been no Materially Adverse Release or, to the
Knowledge of Sellers and the Acquired Company, Threat of Release, of any
Hazardous Materials at or from the Facilities or at any other locations where
any Hazardous Materials were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by the Facilities, or from or by
any other properties and assets (whether real, personal, or mixed) in which
Sellers or the Acquired Company has or had an interest, or any geologically or
hydrologically adjoining property, whether by Sellers, the Acquired Company, or
any other Person.
(g) Sellers have delivered to Buyer true and complete copies
and results of any reports, studies, analyses, tests, or monitoring possessed
or initiated by Sellers or the Acquired Company pertaining to Hazardous
Materials or Hazardous Activities in, on, or under the Facilities, or
concerning compliance by Sellers, any Acquired Company, or any other Person for
whose conduct they are or may be held responsible, with Environmental Laws.
3.14 EMPLOYEES.
(a) To Sellers' Knowledge, no employee or director of the
Acquired Company is a party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality, noncompetition, or proprietary
rights agreement, between such employee or director and any other Person
("Proprietary Rights Agreement") that in any way adversely affects or will
affect (i) the performance of his duties as an employee or director of the
Acquired Company, or (ii) the ability of the Acquired Company to conduct its
business, including any Proprietary Rights Agreement with Sellers or the
Acquired Company by any such employee or director.
3.15 DISCLOSURE.
(a) No representation or warranty of Sellers of this Agreement omits
to state a material fact necessary to make the statements herein, in light of
the circumstances in which they were made, not misleading.
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(b) No notice given pursuant to Paragraph 5.5 will contain any untrue
statement or omit to state a material fact necessary to make the statements
therein or in this Agreement, in light of the circumstances in which they were
made, not misleading.
(c) There is no fact known to Sellers that has specific application to
either Seller or the Acquired Company (other than general economic or industry
conditions) and that materially adversely affects or, as far as Sellers can
reasonably foresee, Materially threatens, the assets, business, prospects,
financial condition, or results of operations of the Acquired Company that has
not been set forth in this Agreement.
3.16 BROKERS OR FINDERS. None of the parties has incurred any
obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement.
IV. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Texas.
4.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Buyer has the absolute and unrestricted right, power, and authority to execute
and deliver this Agreement and to perform its obligations under this Agreement.
(b) Neither the execution and delivery of this Agreement by Buyer nor
the consummation or performance of any of the Contemplated Transactions by
Buyer will give any Person the right to prevent, delay, or otherwise interfere
with any of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
(iv) any Contract to which Buyer is a party or by which Buyer
may be bound.
Buyer is not and will not be required to obtain any Consent
from any Person in connection with the execution and delivery of this Agreement
or the consummation or performance of any of the Contemplated Transactions.
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4.3 INVESTMENT INTENT. Buyer is acquiring the Shares for its own
account and not with a view to their distribution within the meaning of Section
2(11) of the Securities Act.
4.4 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
Threatened.
4.5 BROKERS OR FINDERS. Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection
with this Agreement and will indemnify and hold Sellers harmless from any such
payment alleged to be due by or through Buyer as a result of the action of
Buyer or its officers or agents.
V. COVENANTS OF SELLERS PRIOR TO CLOSING DATE
5.1 ACCESS AND INVESTIGATION. Between the date of this Agreement and
the Closing Date, Sellers will, and will cause the Acquired Company and its
Representatives to, (a) afford Buyer and its Representatives and prospective
lenders and their Representatives (collectively, "Buyer's Advisors") full and
free access to the Acquired Company's personnel, properties, contracts, books
and records, and other documents and data, (b) furnish Buyer and Buyer's
Advisors with copies of all such contracts, books and records, and other
existing documents and data as Buyer may reasonably request, and (c) furnish
Buyer and Buyer's Advisors with such additional financial, operating, and other
data and information as Buyer may require, or as Buyer may reasonably request.
5.2 OPERATION OF THE BUSINESS OF THE ACQUIRED COMPANY. Between the
date of this Agreement and the Closing Date, Sellers will, and will cause the
Acquired Company to:
(a) conduct the business of such Acquired Company only in the
Ordinary Course of Business;
(b) use their Best Efforts to (i) preserve intact the current
business organization of such Acquired Company, (ii) keep available the
services of the current officers, employees, and agents of such Acquired
Company, and (iii) maintain the relations and good will of suppliers,
customers, landlords, creditors, employees, agents, and others having business
relationships with such Acquired Company;
(c) confer with Buyer concerning operational matters of a
material nature; and
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(d) otherwise report periodically to Buyer concerning the
status of the business, operations, and finances of such Acquired Company.
5.3 NEGATIVE COVENANT. Except as otherwise expressly permitted by
this Agreement, between the date of this Agreement and the Closing Date,
Sellers will not, and will cause the Acquired Company not to, without the prior
consent of Buyer, take any affirmative action, or fail to take any reasonable
action within their or its control, as a result of which any of the changes or
events listed in Paragraph 3.16 is likely to occur.
5.4 NOTIFICATION. Between the date of this Agreement and the Closing
Date, each Seller will promptly notify Buyer in writing if such Seller or the
Acquired Company becomes aware of any fact or condition that causes or
constitutes a Breach of the Sellers' representations and warranties as of the
date of this Agreement, or if such Seller or the Acquired Company becomes aware
of the occurrence after the date of this Agreement of any fact or condition
that would (except as expressly contemplated by this Agreement) cause or
constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. During the same period, each Seller will promptly
notify Buyer of the occurrence of any Breach of any covenant of Sellers in this
Paragraph 5 or of the occurrence of any event that may make the satisfaction of
the conditions in Paragraph 7 impossible or unlikely.
5.5 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Except as expressly
provided in this Agreement, Sellers will cause all indebtedness owed to the
Acquired Company by either Seller or any Related Person of either Seller to be
paid in full prior to Closing.
VI. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1 APPROVALS OF GOVERNMENTAL BODIES. As promptly as practicable
after the date of this Agreement, Buyer will, and will cause each of its
Related Persons to, make all filings required by Legal Requirements to be made
by them to consummate the Contemplated Transactions. Between the date of this
Agreement and the Closing Date, Buyer will, and will cause each Related Person
to, cooperate with Sellers with respect to all filings that Sellers are
required by Legal Requirements to make in connection with the Contemplated
Transactions.
6.2 BEST EFFORTS. Buyer will use its Best Efforts to cause the
conditions in Paragraphs 7 and 8 to be satisfied.
VII. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
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7.1 ACCURACY OF REPRESENTATIONS.
(a) All of Sellers' representations and warranties in this
Agreement (considered collectively), and each of these representations and
warranties (considered individually), must have been accurate in all material
respects as of the date of this Agreement and as of the Closing Date, and with
specific reference to Paragraphs 3.3, 3.4, 3.12 and 3.24, Shall have been
accurate in all respects as of the same dates.
7.2 SELLERS' PERFORMANCE.
(a) All of the covenants and obligations that Sellers are
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to
Paragraph 2.4 must have been delivered, and each of the other covenants and
obligations in Paragraphs 5.4 and 5.8 must have been performed and complied
with in all respects.
7.3 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
7.4 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. There must
not have been made or Threatened by any Person any claim asserting that such
Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any stock of, or any other
voting, equity, or ownership interest in, the Acquired Company, or (b) is
entitled to all or any portion of the Purchase Price payable for the Shares.
7.5 NO PROHIBITION. Neither the consummation nor the performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Buyer or any Person affiliated with
Buyer to suffer any material adverse consequence under, (a) any applicable
Legal Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
Governmental Body.
VIII. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and take the other actions
required to be taken by Sellers at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Sellers, in whole or in part):
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8.1 ACCURACY OF REPRESENTATIONS. All of Buyers representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
8.2 BUYER'S PERFORMANCE.
(a) All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and compiled
with in all material respects.
(b) Buyer must have delivered each of the documents required
to be delivered by Buyer pursuant to Paragraph 2.4 and must have made the cash
payments required to be made by Buyer pursuant to Paragraphs 2.4(b)(i) and
2.4(b)(ii).
8.3 NO INJUNCTION. There must not be in effect any Legal Requirement
or any injunction or other Order that (a) prohibits the sale of the Shares by
Sellers to Buyer, and (b) has been adopted or issued, or has otherwise become
effective, since the date of this Agreement.
IX. TERMINATION
9.1 TERMINATION EVENTS. This Agreement may, by notice given prior to
or at the Closing, be terminated:
(a) by either Buyer or Sellers if a material Breach of any
provision of this Agreement has been committed by the other party and such
Breach has not been waived;
(c) by mutual consent of Buyer and Sellers; or
(d) by either Buyer or Sellers if the Closing has not occurred
(other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before June 1, 1998, or such later date as the parties may agree upon.
9.2 EFFECT OF TERMINATION. Each party's right of termination under
Paragraph 9.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant to Paragraph
9.1, all further obligations of the parties under this Agreement will
terminate, except that the obligations in Paragraphs 12.1 and 12.3 will
survive; provided, however, that if this Agreement is terminated by a party
because of the Breach of the Agreement by the other party or because one or
more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to comply
with its obligations under this Agreement,
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the terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
X. INDEMNIFICATION; REMEDIES
Each of the obligations of Sellers in this Agreement in favor of
Buyer, shall upon the Closing, or upon the assignment or conveyance of the
Shares to Buyer, become the sole and several responsibility and obligation of
Stockholders, without any right of reimbursement from the Acquired Company, and
shall not at any time become a liability, shared, indirect or otherwise, of
Buyer or any entity that Buyer owns or controls, including the Acquired
Company, once it is owned legally, equitably or beneficially by Buyer.
10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE. All
representations, warranties, covenants, and obligations in this Agreement, the
certificate delivered pursuant to Paragraph 2.4(a)(v), and any other
certificate or document delivered pursuant to this Agreement will survive the
Closing. The right to indemnification, payment of Damages or other remedy
based on such representations, warranties, covenants, and obligations will not
be affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after
the execution and delivery of this Agreement or the Closing Date, with respect
to the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS. Sellers,
jointly and severally, will indemnify and hold harmless Buyer, (the
"Indemnified Persons") for, and will pay to the Indemnified Persons the amount
of, any loss, liability, claim, damage, expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, "Damages'),
arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by
Sellers in this Agreement;
(c) any Breach by either Seller of any covenant or obligation
of such Seller in this Agreement;
(e) any claim by any Person for brokerage or finders' fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Seller or any Acquired
Company (or any Person acting on their behalf) in connection with any of the
Contemplated Transactions.
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The remedies provided in this Paragraph 10.2 will not be exclusive of or limit
any other remedies that may be available to Buyer or the other Indemnified
Persons.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS-ENVIRONMENTAL
MATTERS. In addition to the provisions of Paragraph 10.2, Sellers, jointly and
severally, will indemnify and hold harmless Buyer, and will pay to Buyer the
amount of, any Damages (including costs of cleanup, containment, or other
remediation) arising, directly or indirectly, from or in connection with:
(a) any Environmental, Health, and Safety Liabilities arising
out of or relating to: (i) (A) the ownership, operation, or condition at any
time on or prior to the Closing Date of the Facilities or any other properties
and assets (whether real, personal, or mixed and whether tangible or
intangible) in which Sellers or the Acquired Company has or had an interest, or
(B) any Hazardous Materials or other contaminants that were present on the
Facilities or such other properties and assets at any time on or prior to the
Closing Date; or (ii) (A) any Hazardous Materials or other contaminants,
wherever located, that were, or were allegedly, generated, transported, stored,
treated, Released, or otherwise handled by Sellers or the Acquired Company or
by any other Person for whose conduct they are or may be held responsible at
any time on or prior to the Closing Date, or (B) any Hazardous Activities that
were, or were allegedly, conducted by Sellers or any Acquired Company or by any
other Person for whose conduct they are or may be held responsible; or
(b) any bodily injury (including illness, disability, and
death, and regardless of when any such bodily injury occurred, was incurred, or
manifested itself, personal injury, property damage (including trespass,
nuisance, wrongful eviction, and deprivation of the use of real property), or
other damage of or to any Person, including any employee or former employee of
Sellers or the Acquired Company or any other Person for whose conduct they are
or may be held responsible, in any way arising from or allegedly arising from
any Hazardous Activity conducted or allegedly conducted with respect to the
Facilities or the operation of the Acquired Company prior to the Closing Date,
or from Hazardous Material that was (i) present or suspected to be present on
or before the Closing Date on or at the Facilities (or present or suspected to
be present on any other property, if such Hazardous Material emanated or
allegedly emanated from any of the Facilities and was present or suspected to
be present on any of the Facilities on or prior to the Closing Date) or (ii)
Released or allegedly Released by Sellers or any Acquired Company or any other
Person for whose conduct they are or may be held responsible, at any time on or
prior to the Closing Date.
Buyer will be entitled to control any Cleanup, any related Proceeding, and,
except as provided in the following sentence, any other Proceeding with respect
to which indemnity may be sought under this Paragraph 10.3. The procedure
described in Paragraph 10.9 will apply to any claim solely for monetary damages
relating to a matter covered by this Paragraph 10.3.
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10.4 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Sellers, and will pay to Sellers the amount of any
Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement, (b)
any Breach by Buyer of any covenant or obligation of Buyer in this Agreement,
or (c) any claim by any Person for brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding alleged to have been
made by such Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions.
10.5 TIME LIMITATIONS. If the Closing occurs, Sellers will have no
liability (for indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and complied with prior
to the Closing Date, other than those in Paragraphs 3.3, 3.7, 3.8, and 3.13,
unless on or before May 1, 2000, Buyer notifies Sellers of a claim specifying
the factual basis of that claim in reasonable detail to the extent then known
by Buyer. A claim with respect to Paragraph 3.3, 3.7, 3.8, or 3.13, or a claim
for indemnification or reimbursement not based upon any representation or
warranty or any covenant or obligation to be performed and complied with prior
to the Closing Date, may be made at any time. If the Closing occurs, Buyer will
have no liability (for indemnification or otherwise) with respect to any
representation or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, unless on or before May 1, 2000,
Sellers notify Buyer of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known by Sellers.
10.6 LIMITATIONS ON AMOUNT-SELLERS. Sellers will have no liability
(for indemnification or otherwise) with respect to the matters described in
clause (a), clause (b) or, to the extent relating to any failure to perform or
comply prior to the Closing Date, clause (c) of Paragraph 10.2 until the total
of all Damages with respect to such matters exceeds $20,000 and then only for
the amount by which such Damages exceed $20,000. Sellers will have no
liability (for indemnification or otherwise) with respect to the matters
described in clause (d) of Paragraph 10.2 until the total of all Damages with
respect to such matters exceeds $20,000, and then only for the amount by which
such Damages exceed $20,000. In addition, the maximum liability of each of the
Seller's shall be the amount of consideration (including the fair market value
of EXCO Common Stock) paid to such Seller as provided in Paragraph 2.2 above
(including each Seller's proportionate part of the amounts paid to Southside
Bank). This Paragraph 10.6 will not apply to any Breach of any of Sellers'
representations and warranties of which either Seller had Knowledge at any time
prior to the date on which such representation and warranty is made or any
intentional Breach by either Seller of any covenant or obligation, and Sellers
will be jointly and severally liable for all Damages with respect to such
Breaches.
10.7 LIMITATIONS ON AMOUNT-BUYER. Buyer will have no liability (for
indemnification or otherwise) with respect to the matters described in clause
(a) or (b) of Paragraph 10.4 until the total of all Damages with respect to
such matters exceeds $20,000, and then only for the amount by which such
Damages exceed $20,000. However, this Paragraph 10.7 will not apply to any
Breach of any of Buyers representations and warranties of which Buyer had
Knowledge at any time prior to the date
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on which such representation and warranty is made or any intentional Breach by
Buyer of any covenant or obligation, and Buyer will be liable for all Damages
with respect to such Breaches.
10.8 EFFECT OF CLOSING ON SELLERS INDEMNIFICATIONS AND OBLIGATIONS.
Each of the indemnifications, representations and warranties hereby offered to
Buyer by Sellers, and each of the obligations hereunder by Sellers
(collectively shareholder Obligations) are offered jointly and severally and
are intended to bind and obligate both Shareholders and the Company; provided
however, that upon the Closing, or upon any event that results in the Buyer
owning the Company and the Acquired Company, whether by reason of such Closing
and/or a transfer of Shares, those Shareholder Obligations, shall terminate as
to the Company and the Acquired Company only and shall remain the sole and
several responsibility of Shareholders, without any rights of Shareholders of
indemnity and/or contribution, in equity or at law, from the Company or the
Acquired Company. Notwithstanding anything herein to the contrary, the
Shareholder Obligations shall survive the Closing for a period that expires the
later of: (i) not less than thirty (30) months from the Closing Date, or (ii)
any later date set forth in this Agreement or any of the agreements that are
part of the Contemplated Transactions, or (iii) by reason of any extension or
tolling that is authorized by law or as a matter of law.
XI. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Paragraph 11:
11.1 "ACCOUNTANTS"--as defined in Paragraph 2.6(a).
11.2 "ACQUIRED COMPANY"--the Company.
11.3 "ADDITIONAL WORKING CAPITAL"--as defined in Paragraph 2.5(a).
11.4 "ADJUSTMENT AMOUNT"--as defined in Paragraph 2.5.
11.5 "ADJUSTMENT PROPOSAL"--as defined in Paragraph 2.6(a).
11.6 "APPLICABLE CONTRACT"--any Contract (a) under which the Acquired
Company has or may acquire any rights, (b) under which the Acquired Company has
or may become subject to any obligation or liability, or (c) by which the
Acquired Company or any of the assets owned or used by it is or may become
bound.
11.7 "ATTORNEY"--as defined in Paragraph 2.6(a).
11.8 "BEST EFFORTS"--the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such
result is achieved as expeditiously as possible; provided, however, that an
obligation to use Best Efforts under this Agreement does not require the Person
subject to that obligation to take actions that
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would result in a materially adverse change in the benefits to such Person of
this Agreement and the Contemplated Transactions.
11.9 "BREACH"--a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
(b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
11.10 "BUYER"--as defined in the first Paragraph of this Agreement.
11.11 "CLOSING"--as defined in Paragraph 2.3.
11.12 "CLOSING DATE"--the date and time as of which the Closing
actually takes place.
11.13 "COMPANY"--as defined in the Recitals of this Agreement.
11.14 "CONSUMMATION DATE"--The date of successful funding and close
of the ULO.
11.15 "CONSENT"--any approval, consent, ratification, waiver, or
other authorization (including any Governmental Authorization).
11.16 "CONTEMPLATED TRANSACTIONS"--all of the transactions
contemplated by this Agreement, including:
(a) the sale of the Shares by Sellers to Buyer;
(b) the performance by Buyer and Sellers of their respective
covenants and obligations under this Agreement; and
(c) Buyer's acquisition and ownership of the Shares and
exercise of control over the Acquired Company.
11.17 "CONTRACT"--any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
11.18 "CURE PERIOD"--as defined in Paragraph 2.5(b)(iv).
11.19 "DAMAGES"--as defined in Paragraph 10.2.
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11.20 "ENCUMBRANCE"--any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right
of first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
11.21 "ENVIRONMENT"--soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.
11.22 "ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES"--any cost,
damages, expense, liability, obligation, or other responsibility arising from
or under Environmental Law or Occupational Safety and Health Law and consisting
of or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any investigation, cleanup, removal, containment, or other remediation
or response actions ("Cleanup") required by applicable Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or any other Person) and for any
natural resource damages; or
(d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law or Occupational Safety and
Health Law.
The terms "removal," "remedial," and "response action,"
include the types of activities covered by the United States Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. _9601 et
seq., as amended ("CERCLA").
11.23 "ENVIRONMENTAL LAW"--any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants or hazardous substances or
materials, violations of discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction, that
could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
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(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(g) cleaning up pollutants that have been released, preventing
the threat of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
11.24 "ERISA"--the Employee Retirement Income Security Act of 1974 or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law.
11.25 "FACILITIES"--any real property, leaseholds, or other interests
currently or formerly owned or operated by the Acquired Company and any
buildings, plants, structures, or equipment (including motor vehicles, tank
cars, and rolling stock) currently or formerly owned or operated by the
Acquired Company.
11.26 "GAAP"--generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the Balance Sheet and the
other financial statements referred to in Paragraph 3.4(b) were prepared.
11.27 "GOVERNMENTAL AUTHORIZATION"--any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise
made available by or under the authority of any Governmental Body or pursuant
to any Legal Requirement.
11.28 "GOVERNMENTAL BODY"--any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
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(d) multinational organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
11.29 "HAZARDOUS ACTIVITY"--the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Acquired
Company.
11.30 "HAZARDOUS MATERIALS"--any waste or other substance that is
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Environmental Law, including any admixture or solution thereof,
and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.
11.31 "IRC"--the Internal Revenue Code of 1986 or any successor law,
and regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
11.32 "IRS"--the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
11.33 "KNOWLEDGE"--an individual will be deemed to have "Knowledge"
of a particular fact or other matter if such individual is actually aware of
such fact or other matter.
A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.
11.34 "LEGAL REQUIREMENT"--any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
11.35 "MATERIAL" AND "MATERIAL ADVERSE" AND "ADVERSE"--the terms used
in any context herein, whether or not in capitalized context, shall refer to
the potential or actual impact, change or effect of any event, consequence or
action, as referenced, that can be significantly or materially adverse to the
business, operations, properties, assets, condition (financial or other),
results of operations or prospects of the Acquired Company.
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11.36 "MATERIAL INTEREST"--AS DEFINED IN PARAGRAPH 2.4(A)(III).
11.37 "NOTICE DATE"--as defined in Paragraph 2.5(b)(ii).
11.38 "OCCUPATIONAL SAFETY AND HEALTH LAW"--any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental
or private (including those promulgated or sponsored by industry associations
and insurance companies), designed to provide safe and healthful working
conditions.
11.39 "ORDER"--any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
11.40 "ORDINARY COURSE OF BUSINESS"--an action taken by a Person will
be deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
(b) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons exercising
similar authority) and is not required to be specifically authorized by the
parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any Person or group of Persons exercising similar authority), in the ordinary
course of the normal day-to-day operations of other Persons that are in the
same line of business as such Person.
11.41 "ORGANIZATIONAL DOCUMENTS"--(a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any
amendment to any of the foregoing.
11.42 "PERSON"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
11.43 "PERSONAL GUARANTY"--an agreement by a person to be responsible
for another's obligation.
11.44 "POST CLOSING DATE"--as defined in Paragraph 2.5.
11.45 "PROCEEDING"--any action, arbitration, audit, hearing,
investigation, litigation, or suit(whether civil, criminal, administrative,
investigative, or informal)
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commenced, brought, conducted, or heard by or before, or otherwise involving,
any Governmental Body or arbitrator.
11.46 "RELATED PERSON"--with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual includes (i)
the individual, (ii) the individual's spouse (and former spouses), (iii) any
other natural Person who is related to the individual or the individual's
spouse within the second degree, and (iv) any other natural person who resides
with such individual, and (b) "Material Interests" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of voting securities or other voting interests representing at
least 5% of the outstanding voting power of a Person or equity securities or
other equity interests representing at least 5% of the outstanding equity
securities or equity interests in a Person.
11.47 "RELEASE"--any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into the
Environment, whether intentional or unintentional.
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11.48 "REPRESENTATIVE"--with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other
representative of such Person, including legal counsel, accountants, and
financial advisors.
11.49 "SECURITIES ACT"--the Securities Act of 1933 or any successor
law, and regulations and rules issued pursuant to that Act or any successor
law.
11.50 "SECURITY AGREEMENT"--an agreement which creates or provides
for a security interest in specified collateral to ensure payment of the
Purchase Price.
11.51 "SELLERS"--as defined in the first Paragraph of this Agreement.
11.52 "SELLERS' RELEASES"--as defined in Paragraph 2.4.
11.53 "SHARES"--as defined in the Recitals of this Agreement.
11.54 "SUBJECT PROPERTIES"--as defined in Paragraph 2.5(b).
11.55 "TAX" AND "TAX RETURN"--shall mean all taxes, including,
without limitation, income, gross receipts, excise, property, sales,
employment, withholding, social security, occupation, use, service, service
use, license, payroll, franchise, transfer and recording taxes, fees and
charges, windfall profits, severance, customs, import, export, employment or
similar taxes, charges, fees, levies or other assessments imposed by the United
States or any state, local or foreign government or subdivision or agency
thereof, whether computed on a separate, consolidated, unitary, combined or any
other basis and such term shall include any interest, fines, penalties or
additional amounts and any interest in respect of any additions, fines or
penalties attributable or imposed or with respect to any such taxes, charges,
fees, levies or other assessments. The term "Tax Return" shall mean any
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Legal Requirement relating to any Tax.
11.56 "THREAT OF RELEASE"--a substantial likelihood of a Release that
may require action in order to prevent or mitigate damage to the Environment
that may result from such Release.
11.57 "THREATENED"--a claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any demand or statement has
been made (orally or in writing) or any notice has been given (orally or in
writing), or if any other event has occurred or any other circumstances exist,
that would lead a prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.
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11.58 "TITLE DEFECT"--as defined in Paragraph 2.5(b)(i).
XII. GENERAL PROVISIONS
12.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. Sellers will cause the
Acquired Company not to incur any out-of-pocket expenses in connection with
this Agreement, except that Stockholders may incur their own expenses for
professional fees. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
12.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as Buyer and Sellers
jointly determine. Unless consented to by Buyer in advance or required by
Legal Requirements, prior to the Closing Sellers shall, and shall cause the
Acquired Company to, keep the terms of this Agreement strictly confidential.
Sellers and Buyer will consult with each other concerning the means by which
the Acquired Company's employees, customers, and suppliers and others having
dealings with the Acquired Company will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any such
communication.
12.3 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer and Sellers will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Buyer and the Acquired
Company to maintain in confidence, and not use to the detriment of another
party or the Acquired Company any written, oral, or other information obtained
in confidence from written information stamped "confidential" when originally
furnished by another party or the Acquired Company in connection with this
Agreement or the Contemplated Transactions, unless (a) such information is
already known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such party,
(b) the use of such information is necessary or appropriate in making any
filing or obtaining any consent or approval required for the consummation of
the Contemplated Transactions, or (c) the furnishing or use of such information
is required by or necessary or appropriate in connection with legal
proceedings.
If the Contemplated Transactions are not consummated, each party will
return or destroy such written information upon request.
12.4 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a)
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delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
(a) If to EXCO, to:
Xxxxxxx X. Xxxxxx
EXCO Resources, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
(b) If to the Company, to:
Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxx, Xxxxx 00000
12.5 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Texas, County of Dallas, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may
be served on any party anywhere in the world.
12.6 FURTHER ASSURANCES. The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each
other such other documents, and (c) to do such other acts and things, all as
the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
12.7 WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege.
To the maximum extent permitted by applicable law, (a) no claim or right
arising out of this Agreement or the documents referred to in this Agreement
can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a
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party will be applicable except in the specific instance for which it is given;
and (c) no notice to or demand on one party will be deemed to be a waiver of
any obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
12.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement inclusive of
all Agreements herein referenced supersedes all prior agreements between the
parties with respect to its subject matter (including the Letter of Intent
between Buyer and Sellers dated March 30, 1998) and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
12.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. None of the
parties may assign any of their rights under this Agreement without the prior
consent of the other parties, which will not be unreasonably withheld, except
that Buyer may assign any of its rights under this Agreement to any Subsidiary
of Buyer. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all
of its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
12.10 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or
unenforceable.
12.11 PARAGRAPH HEADINGS, CONSTRUCTION. The headings of Paragraphs in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Paragraph" or "Paragraphs"
refer to the corresponding Paragraph or Paragraphs of this Agreement. All
words used in this Agreement will be construed to be of such gender or number
as the circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
12.12 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred-to in this Agreement, time is of the essence.
12.13 GOVERNING LAW. This Agreement will be governed by the laws of
the State of Texas.
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12.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.
EXCO Resources, Inc.
By. /s/ XXX X. XXXXXX
-----------------------------------
Xxx X. Xxxxxx
President
Xxxxxx-Xxxxxxx Energy, Inc.
By: /s/ XXXXXX XXXXXX XXXXXXX
-----------------------------------
Xxxxxx Xxxxxx Xxxxxxx
President
/s/ XXXX XXXXX XXXXXX
---------------------------------------
Xxxx Xxxxx Xxxxxx
/s/ XXXXXX XXXXXX XXXXXXX
---------------------------------------
Xxxxxx Xxxxxx Xxxxxxx
/s/ XXXXXX X. XXXXXXXXX
---------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ XXXX XXXXXXX, XX.
---------------------------------------
Xxxx Xxxxxxx, Xx.
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