PURCHASE AGREEMENT
Exhibit 2.1
This Purchase Agreement is made and entered into on this the 7 day of August, 2013, by and between Xxxxxxx Energy Corporation, a Delaware corporation (“SN”), and Altpoint Xxxxxxx Holdings LLC, a Delaware limited liability company (“Altpoint”).
1. TRANSFER OF THE PROPERTIES. Subject to the terms and conditions herein set forth, in consideration of the Stock Consideration and the Cash Consideration Altpoint agrees to sell, assign, convey and deliver to SN (or Xxxxxxx Entity as SN’s designee), and SN agrees to acquire (or to cause Xxxxxxx Entity as its designee to acquire) from Altpoint, effective as of 7:00 a.m. at the location of each of the Oil and Gas Properties on the date of the Closing (as defined in Section 5.1.1) all of the interest of Altpoint acquired from Resources and Acquisition pursuant to the Redemption Agreement in and to the Properties as they exist on such date, as such Properties are more specifically described on Exhibit 1.
2. DELIVERY OF CASH CONSIDERATION AND STOCK CONSIDERATION. In consideration for the transfer of the Properties to SN (or Xxxxxxx Entity as SN’s designee), SN shall deliver to Altpoint the Stock Consideration, free and clear of all Encumbrances (other than any Encumbrances arising under applicable securities Laws), and the Cash Consideration.
3. REPRESENTATIONS AND WARRANTIES OF ALTPOINT. Altpoint represents and warrants to SN as follows:
agreements contemplated hereby and the transactions contemplated hereby and thereby shall be at the time required to be performed hereunder, duly and validly authorized by all requisite limited liability company action on the part of Altpoint.
“The securities evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction. The securities may not be offered, sold, pledged or otherwise transferred except (1) pursuant to an exemption from registration under
the Securities Act or (2) pursuant to an effective registration statement under the Securities Act, in each case in accordance with all applicable securities laws of the states and other jurisdictions, and in the case of a transaction exempt from registration, unless the issuer has received an opinion of counsel reasonably satisfactory to it that such transaction does not require registration under the Securities Act and such other applicable laws.”
4. REPRESENTATIONS AND WARRANTIES OF SN. SN represents and warrants to Altpoint that:
relying on any representations or warranties, express or implied, not expressly set forth in this Agreement.
5. CLOSING.
5.1 THE CLOSING.
5.1.1 The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000 on the date of the Redemption Closing (such date, the “Closing Date”) immediately after the Redemption Closing. Time shall be of the essence in this Agreement.
5.1.2 The obligation of each of the parties hereto to effect the transactions contemplated hereby is subject to the satisfaction or waiver of the following conditions: (i) (x) the representations and warranties made by the other party in this Agreement shall be true and correct in all material respects on and as of the date hereof and at the Closing (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), (y) the other party shall have performed in all material respects its covenants and agreements herein (except for the covenants and agreements in Section 1 and Section 2 which shall have been performed in all respects) to be performed prior to the Redemption Closing, and (z) an executive officer of the other party shall have provided a certificate certifying that the conditions applicable to such other party set forth in clauses (x) and (y) above have been satisfied; (ii) all consents, filings and releases required in connection with the transactions contemplated hereby and the Redemption Agreement (as identified on Exhibit 3 with an asterisk (*) beside the related agreement) shall have been obtained or made; and (iii) the Redemption Closing shall have occurred immediately prior to the Closing.
5.2.1 Counterparts of the State Assignments.
5.2.2 An executed affidavit of non-foreign status under Section 1445 of the Internal Revenue Code.
5.2.3 Such other instruments as are necessary to effectuate the conveyance of the Properties to SN (or Xxxxxxx Entity as SN’s designee).
5.4.1 Via wire transfer to an account specified by Altpoint, in immediately available funds, the Cash Consideration.
5.4.2 A certificate evidencing the Stock Consideration, legended as prescribed by Section 3.5 or, at SN’s election, the number of non-certificated shares of Common Stock equal to the Stock Consideration in book entry form for the account of Altpoint, with the restrictions prescribed by Section 3.5.
5.5 STOCK CONSIDERATION LEGEND. The restrictive legend prescribed by Section 3.5 on the certificates evidencing the Stock Consideration shall be removed, at SN’s expense, if and when the Stock Consideration represented by such certificate is disposed of pursuant to an effective registration statement under the Securities Act or, in the opinion of counsel to SN, the same are no longer required under the applicable requirements of securities Laws.
6. ASSUMPTION BY SN. At the Closing, except as provided in Section 7, SN shall assume all of the costs, obligations and liabilities of Altpoint or its immediate predecessor relating to the Properties from and after the Effective Date with such assumption commencing as of the Effective Date.
7. PRODUCTION, PROCEEDS, EXPENSES AND TAXES.
(a) sell, transfer, assign, convey or otherwise dispose of any Properties other than (i) oil, gas and other hydrocarbons produced, saved and sold in the ordinary course of business, (ii) personal property and equipment which is replaced with property and equipment of comparable or better value and utility in the ordinary and routine maintenance and operation of the Properties and (iii) sales, transfers, assignments, conveyances or other dispositions by and between Resources and Acquisition;
(b) create or permit the creation of any Encumbrance on the Properties, other than Permitted Encumbrances;
(c) grant any preferential right to purchase or similar right or agree to require the consent of any party to the transfer and assignment of the Properties to SN;
(d) designate any Person, other than Xxxxxxx Oil & Gas Corporation, as an operator of the Properties;
(e) incur or agree to incur any contractual obligation or liability, whether absolute, contingent, matured or unmatured, which would constitute an assumed liability by SN as provided in Section 6 above; provided, that Altpoint may incur such obligations or liabilities in the ordinary course of business or in the ordinary and routine maintenance and operation of the Properties with the consent of SN, which consent shall not be unreasonably withheld or delayed; provided, that any such obligation or liability incurred with SN’s consent would not, either individually or in the aggregate, have a material adverse effect on any of the Properties;
(f) enter into any transaction the effect of which, considered as a whole, would be to cause Altpoint’s ownership interest in any of the Properties to be altered from its ownership interest as of the date hereof; or
(g) agree or commit to do any of the foregoing or to grant a waiver of any covenant for the benefit of Altpoint under Section 8.1 of the Redemption Agreement.
9.1 After the Closing, SN and Altpoint shall execute, acknowledge and deliver or cause to be executed, acknowledged and delivered such instruments and take such other action as may be necessary or advisable to carry out their obligations under this Agreement and under any exhibit, annex, document, certificate or other instrument delivered pursuant hereto. SN and Altpoint, as applicable, shall cooperate and use their commercially reasonable efforts to obtain all approvals and consents required by or necessary for the transactions contemplated by this Agreement that are customarily obtained after Closing.
9.2 Until the Closing or the termination of this Agreement, Altpoint shall not, and to the extent within its control, shall cause its affiliates (including Resources) to not, take any action (or cause or induce any Person to take any action) (i) to amend, terminate, waive any provision of or otherwise modify the Redemption Agreement or any agreement related thereto or contemplated thereby or (ii) that would impede any of the transactions contemplated thereby, without the prior written consent of SN.
10. WAIVER AND RELEASE.
10.1 Except (i) as provided in Section 10.2 or (ii) as may be otherwise provided in this Agreement, effective as of the Closing, each of SN and Altpoint (as applicable, the “Releasing Party”) does hereby, for itself and its affiliates, predecessors, successors and assigns and, to the extent the Releasing Party legally may, all Persons that at any time prior or subsequent to the Closing have been partners, directors, officers, members, agents or employees of the Releasing
Party (in each case, in their respective capacities as such), remise, release and forever discharge (x) with respect to SN as the Releasing Party, Altpoint or (y) with respect to Altpoint as the Releasing Party, SN, as applicable (the “Released Party”), and, in each case, the Released Party’s respective affiliates, successors and assigns, and all Persons that at any time prior to the Closing have been equityholders, directors, officers, members, agents or employees of the Released Party (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all damage, loss, cost, expense, obligation, claim or liability, including counsel fees and expenses of investigating, defending and prosecuting litigation (collectively, “Damages”), whatsoever, whether at law or in equity, whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from or relating to any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Closing, whether or not known as of the Closing, in each case, relating to the Properties or other properties or assets of Resources or Acquisition, including (with respect to the release by Altpoint) any transaction or potential transaction by and between or among SN, on the one hand, and Resources and/or Acquisition, on the other hand, or with any of their respective affiliates, relating to the disposition and/or development of the Properties or other properties or assets owned by Resources or Acquisition.
10.2 Nothing contained in Section 10.1 shall impair any right of any Person before or after Closing to enforce this Agreement or the Redemption Agreement or to bring a claim hereunder or thereunder, including the applicable exhibits, annexes and schedules hereto and thereto.
10.3 Neither Altpoint nor SN shall make any claim or demand, or commence any action asserting any claim or demand, including any claim for indemnification, against SN or Altpoint, as applicable, or any other Person released pursuant to Section 10.1, with respect to any Damages released pursuant to Section 10.1.
10.4 At any time, at the request of any other party, each party shall take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable to execute and deliver releases in forms reasonably satisfactory to the other party reflecting the provisions of this Section 10.
10.5 Altpoint is aware that SN may be in possession of material, non-public information that may affect the value of the Common Stock and acknowledge that it may not be privy to any such information, if there is any. Altpoint hereby irrevocably and unconditionally waives and releases SN and its affiliates and their respective officers, directors, members, managers, equityholders, agents, attorneys and employees from all claims that Altpoint might have (whether for damages, rescission or any other relief) based on SN’s possession or non-disclosure of material, non-public information. Altpoint represents and warrants that it has not and will not solicit or encourage, directly or indirectly, any other person to assert such a claim, and Altpoint confirms that it understands the significance of the foregoing waiver.
11. NOTICE. All notices required or permitted under this Agreement shall be in writing and, (a) if by air courier, shall be deemed to have been given one Business Day after the date deposited with a recognized carrier of overnight mail, with all freight or other charges prepaid, (b) if by facsimile, provided a confirmation is received, shall be deemed to have been given when such facsimile is sent, (c) if mailed, shall be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid, addressed as follows:
SN: |
Xxxxxxx Energy Corporation |
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0000 Xxxxx, Xxxxx 0000 |
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Xxxxxxx, Xxxxx 00000 |
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Attention: Xxxxxxx X. Xxxxxxx, III |
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Facsimile: (000) 000-0000 |
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with a copy to: |
Xxxxx X. Xxxxx |
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Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. |
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0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx |
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Xxxxxxx, Xxxxx 00000 |
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Facsimile: (000) 000-0000 |
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Altpoint: |
Altpoint Xxxxxxx Holdings LLC |
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000 Xxxxx Xxxxxx |
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Xxx Xxxx, Xxx Xxxx 00000 |
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Facsimile: (000) 000-0000 |
or to such other address as either party hereto may from time to time designate by notice in writing to the other party.
12. ASSIGNMENT. This Agreement and any of the rights, interests or obligations hereunder may not be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party, provided that the rights, interests or obligations under this Agreement may be assigned to Xxxxxxx Entity (except for the obligation to deliver the Stock Consideration, and except no such assignment shall relieve SN of any liabilities or obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon and inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns.
13. GOVERNING LAW. This Agreement shall be governed and construed in accordance with the laws of the State of Texas without giving effect to any principles of conflicts of laws. The validity of the various conveyances affecting the title to real property shall be governed by and construed in accordance with the laws of the jurisdiction in which such property is situated. The representations and warranties contained in such conveyances and the remedies available because of a breach of such representations and warranties shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to the principles of conflict of laws.
14. EXPENSES AND FEES. (i) Each of the parties hereto shall pay the fees and expenses of their respective counsel, accountants and other experts incident to the negotiation and preparation of this Agreement and consummation of the transactions contemplated hereby, (ii) SN shall be responsible for any out-of-pocket costs or expenses incurred by SN or by Altpoint with SN’s consent in connection with obtaining any consents or approvals identified on Exhibit 3 and required to be obtained under clause (ii) of Section 5.1.2 and (iii) all other costs shall be borne by the party incurring such costs.
15. INTEGRATION. This Agreement, the exhibits and annexes hereto and the other agreements to be entered into by the parties under the provisions of this Agreement set forth the entire agreement and understanding of the parties in respect of the transactions contemplated hereby and supersede all prior agreements, prior arrangements and prior understandings relating to the subject matter hereof.
16. WAIVER OR MODIFICATION. This Agreement may be amended, modified, superseded or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by a duly authorized officer of Altpoint and SN, or, in the case of a waiver or consent, by or on behalf of the party or parties waiving compliance or giving such consent. No waiver by any party of any condition, or of any breach of any covenant, agreement, representation or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or waiver of any other condition or of any breach of any other covenant, agreement, representation or warranty.
17. HEADINGS. The section headings contained in this Agreement are for convenient reference only and shall not in any way affect the meaning or interpretation of this Agreement.
18. INVALID PROVISIONS. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.
19. MULTIPLE COUNTERPARTS. This Agreement may be executed in a number of identical counterparts, each of which for all purposes is to be deemed as original, and all of which constitute, collectively, one agreement; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.
20. TERMINATION. This Agreement may be terminated by mutual written consent of the parties hereto or by either party hereto if the Closing does not occur by September 30, 2013.
21. SPECIFIC PERFORMANCE.
21.1 SN acknowledges and agrees that Altpoint (a) would suffer irreparable damage in the event that SN fails to perform or comply with its obligations set forth in Section 2 and Section 5.4 and (b) shall be entitled to injunction and specific performance of the terms and conditions of Section 2 and Section 5.4, in each case, in accordance with the terms and
conditions thereof, in addition to any other remedy at law or equity. SN hereby waives the need to post any bond that may be required in connection with the granting of such an injunction or other equitable relief.
21.2 Altpoint acknowledges and agrees that SN (a) would suffer irreparable damage in the event that Altpoint fails to perform or comply with its obligations set forth in Section 1, Section 5.2 and Section 5.3 and (b) shall be entitled to injunction and specific performance of the terms and conditions of Section 1, Section 5.2 and Section 5.3, in each case, in accordance with the terms and conditions thereof, in addition to any other remedy at law or equity. Altpoint hereby waives the need to post any bond that may be required in connection with the granting of such an injunction or other equitable relief.
22. SURVIVAL. All representations, warranties, covenants and obligations in this Agreement, the exhibits, annexes and schedules hereto, the certificates delivered pursuant to this Agreement and any other certificate or document delivered pursuant to this Agreement shall survive the Closing and the consummation of the transactions contemplated hereby.
24. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings:
“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.
“Acquisition” shall mean SR Acquisition I LLC, a Delaware limited liability company.
“Agreement” shall mean this Purchase Agreement, as the same may from time to time be amended or supplemented.
“Business Day” shall mean a day other than the days that banking institutions are required or permitted to be closed under the laws of the State of Texas.
“Cash Consideration” shall mean $53,000,000.
“Closing” shall have the meaning set out in Section 5.1.1 above.
“Closing Date” shall have the meaning set out in Section 5.1.1 above.
“Common Stock” shall mean SN’s common stock, par value $0.01 per share.
“Contracts” shall mean all contracts that constitute part of the Properties or by which the Properties are bound or subject, as set forth on Exhibit 2.
“Damages” shall have the meaning set out in Section 10.1 above.
“Data” shall mean all: (i) abstracts, title opinions, title reports, title policies, lease and land files, surveys, analyses, compilations, correspondence, filings with regulatory agencies, other documents and instruments that relate to the Properties; (ii) geological, engineering, exploration, production, and other technical data, magnetic field recordings, digital processing tapes, field prints, summaries, reports and maps, whether written or in an electronically reproducible form, that are in the possession or control of Resources or Acquisition, or any affiliate thereof (excluding SN), and relate to the Oil and Gas Properties; and (iii) all other books, records, files and magnetic tapes containing financial, title or other information that are in the possession or control of Resources or Acquisition, or any affiliate thereof (excluding SN), and in any manner relate to the Properties; provided that “Data” shall not include any of the foregoing to the extent such Data is subject to a licensing agreement that does not permit access to SN.
“Effective Date” shall mean July 1, 2013.
“Encumbrances” shall refer to each and all of the following items: mortgages, claims, charges, security interests, liens, obligations, encumbrances, imperfections of title or other matters affecting title, and any rights of third parties whatsoever.
“Equipment” shall mean all equipment, fixtures, physical facilities or interests therein of every type and description to the extent that the same are used or held for use in connection with the ownership, development or operation of the Properties, whether located on or off the Properties.
“Equitable Limitations” shall mean applicable bankruptcy, reorganization or moratorium statutes, equitable principles or other similar laws affecting the rights of creditors generally.
“immediate predecessor” shall mean, with respect to Altpoint, either Resources or Acquisition, as applicable.
“Laws” shall refer to each and all of the following: domestic (federal, state or local) or foreign laws, statutes, ordinances, rules, regulations, decrees or orders.
“Oil and Gas Properties” shall mean all properties described in Exhibit 1 whether such properties are in the nature of fee interests, leasehold interests, working interests, farmout rights, royalty, overriding royalty or other non-working or carried interests, operating rights or other mineral rights of every nature and any rights that arise by operation of law or otherwise in all properties and lands pooled, unitized, communitized or consolidated with such properties.
“Payment Rights” shall mean all (i) accounts, instruments and general intangibles (as such terms are defined in the Uniform Commercial Code of Texas) attributable to the Properties with respect to any period of time on or after the Effective Date and (ii) liens and security interests in favor of Altpoint or its immediate predecessor whether xxxxxx or inchoate, under any law, rule or regulation or under the Contracts (a) arising from the ownership, operation, sale or
other disposition on or after the Effective Date of any of the Properties and (b) arising in favor of Altpoint or its immediate predecessor as the operator of certain of the Oil and Gas Properties.
“Permitted Encumbrances” shall mean (i) liens for taxes not yet delinquent, (ii) lessors’ royalties, overriding royalties, division orders, reversionary interests, and similar burdens that do not operate to reduce the net revenue interests of Altpoint or its immediate predecessor in any of the Oil and Gas Properties to less than the amount set forth therefor in Exhibit 1, (iii) the consents and rights described in Exhibit 3, (iv) the Contracts, (v) except to the extent any amounts related thereto are due and payable, any mechanic and materialmen, operator, non-operator, contractor and subcontractor or similar liens created by the Contracts or operation of law, and (vi) the liens created by the documents contemplated hereby, if any.
“Person” shall include an individual, a partnership, a limited liability company, a corporation, a trust, an unincorporated organization, a government or any department or agency thereof and any other entity.
“Properties” shall mean the Oil and Gas Properties, Xxxxx, Substances, Equipment, Data, Contracts and Payment Rights. “Properties” shall include any additional interests acquired by Altpoint in a particular operation as a result of one or more working interest owners electing to go non-consent under the applicable operating agreements.
“Redemption Agreement” shall mean the Redemption Agreement made as of the date hereof between Resources and Altpoint.
“Redemption Closing” shall have the meaning given to it in the Redemption Agreement.
“Released Party” shall have the meaning set out in Section 10.1 above.
“Releasing Party” shall have the meaning set out in Section 10.1 above.
“Resources” shall mean Xxxxxxx Resources, LLC, a Delaware limited liability company.
“Xxxxxxx Entity” shall mean any wholly owned subsidiary of SN designated by SN as the Xxxxxxx Entity hereunder before Closing.
“SEC” shall mean the Securities and Exchange Commission.
“SEC Filings” shall have the meaning set out in Section 4.7 above.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“State Assignments” shall mean the Assignments of Leases and Bills of Sale for recordation in the appropriate real property records of the appropriate parishes and/or counties in Louisiana and Mississippi where such assignments need to be recorded, in the forms of Annex I.
“Stock Consideration” shall mean 342,760 shares of Common Stock; provided, that upon the occurrence of any subdivision, combination, stock split or stock dividend of the Common Stock after the date of this Agreement, the specific number of shares of Common Stock
referenced in this definition shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of Common Stock by such subdivision, combination, stock split or stock dividend.
“Substances” shall mean all severed crude oil, natural gas, casinghead gas, drip gasoline, natural gasoline, petroleum, natural gas liquids, condensate, products, liquids and other hydrocarbons and other minerals or materials of every kind and description produced from the Oil and Gas Properties on or after the Effective Date.
“Transfer Taxes” shall have the meaning set out in Section 7.6 above.
“Xxxxx” shall mean all oil, condensate or natural gas xxxxx, water source xxxxx, and water and other types of injection xxxxx either located on the Oil and Gas Properties or held for use in connection with the Oil and Gas Properties, whether producing, operating, shut-in or temporarily abandoned.
[Signature page follows.]
This Agreement has been executed as of the date first set forth above.
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ALTPOINT XXXXXXX HOLDINGS LLC | |
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By: |
/s/ Xxxxxxx Xxxxx |
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Name: |
Xxxxxxx Xxxxx |
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Title: |
Director |
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XXXXXXX ENERGY CORPORATION | |
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By: |
/s/ Xxxxxxx X. Xxxxxxx, III |
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Name: |
Xxxxxxx X. Xxxxxxx, III |
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Title: |
President and Chief Executive Officer |
[Signature Page to Purchase Agreement]
EXHIBIT 1
PROPERTIES
EXHIBIT 2
CONTRACTS
EXHIBIT 3
CONSENTS
ANNEX I
FORMS OF STATE ASSIGNMENTS