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AGREEMENT
BY AND BETWEEN
XXXXX XXXXXX, SELLER
AND
SOUTHERN MINERAL CORPORATION, PURCHASER
FOR SALE AND PURCHASE
OF STOCK OF
BEC ENERGY, INC.
MAY 20, 1997
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TABLE OF CONTENTS TO AGREEMENT FOR SALE AND PURCHASE OF STOCK
ARTICLE I. DEFINITIONS...................................................... 2
ARTICLE II. AGREEMENT TO SELL AND PURCHASE; DEPOSIT; PURCHASE PRICE......... 6
2.1. Agreement to Sell and Purchase...................................... 6
2.2. Purchase Price...................................................... 6
ARTICLE III. PAYMENT FOR AND TRANSFER OF STOCK.............................. 6
3.1. Payment of Money; Delivery of Stock Certificates.................... 6
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER..................... 6
4.1. Capital Stock of BEC................................................ 6
4.2. Description and Qualification of BEC................................ 7
4.3. Interest of BEC in Other Business Enterprises....................... 7
4.4. Financial Statement................................................. 7
4.5. Changes in Condition of Properties and related assets of BEC
Since Financial Statement Date...................................... 7
4.6. Material Environmental Documents.................................... 8
4.7. Compliance with Laws and Permits.................................... 8
4.8 Suits and Claims..................................................... 9
4.9. Bank Accounts and Bank Access; Powers of Attorney................... 9
4.10. Transactions Not in Violation of Contract or Law................... 9
4.11. Transaction Authorized............................................. 10
4.12. Employee Benefits Plans............................................ 10
4.13. Material Contracts................................................. 10
4.14. Sales Contracts.................................................... 10
4.15. Condition of Equipment............................................. 11
4.16. Broker............................................................. 11
4.17. Tax Liability...................................................... 11
4.18 Title............................................................... 11
4.19 Properties.......................................................... 12
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER...................... 12
5.1. Organization and Standing of Purchaser.............................. 12
5.2. Transaction Authorized.............................................. 12
5.3. Transactions Not in Violation of Contract or Law.................... 12
5.4. Actions and Proceedings, etc........................................ 12
5.5. No Broker........................................................... 12
ARTICLE VI. CONDUCT OF BEC'S BUSINESS PRIOR TO CLOSING; OTHER COVENANTS OF
SELLER...................................................................... 13
6.1. Business Conducted in Ordinary Course............................... 13
6.2. No Change in Corporate Documents of BEC............................. 13
6.3. No Change in Stock.................................................. 13
6.4. No Dividend or Distribution......................................... 13
6.5. No Merger or Consolidation.......................................... 13
6.6. No New Indebtedness................................................. 13
6.7. No Disposal of Property............................................. 13
6.8. No Increase in Employee Compensation................................ 13
6.9. Preservation of BEC's Organization.................................. 14
6.10. Maintenance of Facilities and Equipment............................ 14
6.11. Maintenance of Insurance Coverage.................................. 14
6.12. Access by Purchaser to BEC's Property and Records.................. 14
ARTICLE VII. CONDITIONS PRECEDENT TO CLOSING................................ 14
7.1. Conditions Precedent to the Obligations of Purchaser................ 14
7.2. Conditions Precedent to Obligations of Seller....................... 16
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ARTICLE VIII. CLOSING....................................................... 16
8.1. Place of Closing.................................................... 16
8.2. Items to Be Delivered or Made Available to Purchaser at Closing..... 17
8.3. Items to be Delivered to Seller at Closing.......................... 17
ARTICLE IX. INDEMNIFICATION................................................. 18
9.1 Survival............................................................. 18
9.2. Indemnification of Purchasers....................................... 18
9.3. Indemnification of Seller........................................... 18
9.4. Rights of Parties with Respect to Indemnification Claims............ 19
9.5. Specific Performance................................................ 20
ARTICLE X. OBLIGATIONS AND UNDERTAKINGS OF SELLER AND PURCHASER WITH
RESPECT TO TAXES............................................................ 20
10.1. Scope of Article................................................... 20
10.2. Section 338(h)(10) Election........................................ 21
10.3. Representation and Warranties of Seller as to Certain Taxes........ 21
ARTICLE XI. TERMINATION OF AGREEMENT........................................ 22
11.1. Termination........................................................ 22
11.2. Agreement Void..................................................... 22
ARTICLE XII. PUBLICITY...................................................... 22
12.1. Publicity or Release of Information................................ 22
ARTICLE XIII. GENERAL PROVISIONS............................................ 22
13.1. Governing Law...................................................... 22
13.2. Entire Agreement................................................... 22
13.3. Assignment......................................................... 23
13.4. Amendment and Waiver............................................... 23
13.5. Execution in Counterparts.......................................... 23
13.6. Notices............................................................ 23
13.7. Schedules.......................................................... 24
13.8. Severability....................................................... 24
13.9. Headings........................................................... 24
13.10. No Rights of Third Parties........................................ 24
13.11. Further Assurances................................................ 24
13.12. Agreement Takes Precedent......................................... 24
13.13. Jurisdiction...................................................... 24
13.14. Transaction Costs................................................. 25
13.15. Method of Payments................................................ 25
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AGREEMENT FOR SALE AND PURCHASE OF STOCK
THIS AGREEMENT, dated May 20, 1997, is made and entered into by and between
XXXXX XXXXXX ("Seller"), and SOUTHERN MINERAL CORPORATION, a
Nevada corporation ("Purchaser"), for the purchase and sale of the issued and
outstanding common stock of BEC Energy, Inc., a Texas corporation ("BEC").
W I T N E S S E T H :
WHEREAS, Seller owns, holds and has the right to sell and transfer all
of the issued and outstanding shares of common stock of BEC consisting of one
million (1,000,000) authorized of common stock, par value one dollar ($1) per
share, of which one thousand (1,000) shares are outstanding ("Stock"); and
WHEREAS, Seller desires to sell all of the Stock of BEC; and
WHEREAS, Purchaser desires to purchase and acquire and receive the Stock from
Seller; and
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to consummate the transactions set forth herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
For purposes of this Agreement, the following defined terms shall have
the meanings set forth in this Article I.
1.1. "Accumulated Funding Deficiency" shall have the meaning set forth in
Section 412(a) of the Code.
1.2. "Affiliate" means any person that directly or indirectly controls, or
is controlled by, or is under common control with, a party hereto. For purposes
of this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under control with") of a person means the possession,
direct or indirect, of the power to vote ten percent (10%) or more of the voting
stock of such person or the power to direct or cause the direction of the
management and policies of such person by contract or other agreement.
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1.3. "Agreement" means this agreement for Purchase and Sale of Stock.
1.4. "Business Day" shall mean any day which is not a day on which national
banking institutions in Houston, Texas, are closed as authorized or required by
law.
1.5. "Seller" means Xxxxx Xxxxxx.
1.6. "BEC" means BEC Energy, Inc., a Texas corporation
1.7. "Closing" means the consummation on the Closing Date of the transaction
contemplated by this Agreement conducted pursuant to Article VIII.
1.8. "Closing Date" means May 20, 1997.
1.9. "Code" means the Internal Revenue Code of 1986, as amended.
1.10. "Debt" means the aggregate amount of all outstanding debt encumbering
BEC, its assets or the Properties as of the date hereof, including without
limitation the debt more fully described on Exhibit B attached hereto.
1.11. "Effective Date" shall mean March 1, 1997.
1.12. "Election" shall have the meaning set forth in Section 10.2(a).
1.13. "Employee Pension Benefit Plans" shall have the meaning set forth in
Section 3(2) of ERISA.
1.14. "Employee Welfare Benefit Plans" shall have the meaning set forth in
Section 3(1) of ERISA.
1.15. "Environmental Laws" shall have the meaning ascribed to it in
Section 4.8(c).
1.16. "Equipment" shall mean all surface or subsurface machinery, equipment,
platforms, facilities, supplies or other property, which is either leased or
owned by BEC, of whatsoever kind or nature now or hereafter located on or under
any of the Properties and which relate to or are useful for the production,
treatment, storage or transportation of Hydrocarbons, including, without
limitation, all oil xxxxx, gas xxxxx, water xxxxx, salt water disposal xxxxx,
injection xxxxx, wellhead equipment, casing, tubing, rods, pumping units and
engines, Christmas trees, derricks, separators, compressors, dehydration units,
heater- treaters, boilers, valves, gauges, meters, pumps, generators, motors,
gun barrels, flow lines, tanks and tank batteries, water lines, gas lines, gas
processing plants and other plants, gathering lines, laterals and trunklines,
gas systems (for gathering, treating and compression), chemicals, solutions,
water systems (for treating, disposal and/or injection), power plants, poles,
lines, transformers, starters, controllers, machine shops, tools, storage yards
and equipment stored therein, buildings and camps, telegraph, telephone and
other communications systems, computers and related software, loading docks,
loading racks and shipping facilities, offshore platforms, equipment and
facilities, and any and all additions, accessions to, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts equipment and accessories installed thereon or
affixed thereto (and any and all contracts, leases or agreements pertaining to
the same).
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1.17. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.18. "Financial Statement" shall have the meaning set forth in Section
4.4(a).
1.19. "Financial Statement Date" means March 31, 1997.
1.20. "General Increase" means, with respect to employee compensation, any
increase generally applicable to a class or group of employees and not including
increases granted to individual employees for merit, change in position or
responsibility or other reasons applicable to specific employees and not
generally to a class or a group thereof.
1.21. "Hydrocarbons" shall mean oil and gas and other hydrocarbons produced
or processed in association therewith.
1.22. "Indemnified Party" shall mean the party to this Agreement, and its
respective stockholders, directors, officers, employees, agents, consultants,
attorneys and affiliates, entitled to indemnification from the Indemnifying
Party pursuant to Article IX.
1.23. "Indemnifying Party" shall mean the party to this Agreement who is
obligated to indemnify the Indemnified Party pursuant to Article IX.
1.24. "Interest Rate" shall mean that certain rate of interest published in
the Prime Rate Column of the Wall Street Journal, Southwest Edition (or the
average of the end points if such rate is quoted as a range).
1.25. "Interim Period" shall mean that period commencing on and including
the Effective Date and ending on the Closing Date.
1.26. "Medical Plans" means all hospitalization, medical, dental, and
disability insurance or other Employee Welfare Benefit Plans provided through
BEC.
1.27. "Other Employee Plans" means all vacation, severance, stock option,
stock appreciation rights and other employee benefit plans or policies provided
through BEC.
1.28. "Pension Plans" means all pension, profit-sharing, stock bonus,
deferred compensation, retirement or other Employee Pension Benefit Plans
provided through BEC.
1.29."Personal Property" shall mean all of BEC's Existing Contracts and
Equipment.
1.30. "Property" shall mean all oil, gas and mineral leases, leasehold,
royalty or overriding royalty interests, net profits interests and production
payments, operating
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rights, executive rights and other interests owned by BEC, of whatever kind or
character, whether legal or equitable, vested or contingent or attributable in
and to said leases and interests, including without limitation, those leases and
interests described in Exhibit A attached to this Agreement, the land covered by
said leases and interests and the lands included in any pooled or communitized
units and governmental unit orders covering any of such leases and interests
described in Exhibit A attached to this Agreement, whether such interests are
described in Exhibit A or are described by reference to another instrument set
forth in Exhibit A, even though BEC's interest may be incorrectly described in
or omitted from Exhibit A.
1.31. "Purchase Price" means the sum provided for in Section 2.2.
1.32. "Purchaser" means Southern Mineral Corporation, a Nevada corporation.
1.33. "Records" shall mean all the applicable files, records and data
directly relating to the Properties and any related assets used in connection
with the ownership or operation thereof, including, without limitation, joint
interest xxxxxxxx, check receipts and third party disbursement records relating
to ad valorem, excise and other production related taxes, legal files, land and
lease files, title records, contracts, geological, geophysical and seismic data
and records except where the transfer or disclosure of such data and records is
restricted by agreement with third parties, production records, electric logs,
core data, pressure data and decline curves and graphical production curves and
all related matters in the possession of BEC.
1.34. "RIMCO" shall mean RIMCO Partners, L.P. a Delaware limited
partnership, RIMCO Partners, X.X. XX, a Delaware limited partnership, and
RIMCO Partners, L.P., IV, a Delaware limited partnership.
1.35. "Reportable Event" shall have the meaning set forth in Section 4043 of
ERISA.
1.36. "Stock" shall have the meaning set forth in the first recital of this
Agreement.
1.37. "Tax" or "Taxes" means any tax which is imposed by the United States
or a State of the United States, or by any officer, agency, instrumentality, or
political subdivision of either, upon Seller with respect to BEC or upon BEC or
its receipts, income, properties, or business transactions. Such term includes
any interest or penalty imposed on or with respect to a tax.
1.38. "Taxable Period" means the calendar or fiscal period of time with
respect to which a Tax is assessed or imposed. Where a Tax is imposed on the
happening of a transaction, such term shall mean the calendar date of the
transaction.
1.39. "Third Party Claim" shall have the meaning set forth in Section 9.4.
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1.40. "Title IV Plan" means any Pension Plan that is subject to Title IV of
ERISA.
1.41. "Transaction" means the sale of the Stock by BEC to Purchaser and all
incidental matters pertaining thereto, such transaction to be completed in
accordance with and subject to the terms and conditions of this Agreement.
ARTICLE II.
AGREEMENT TO SELL AND PURCHASE; DEPOSIT; PURCHASE PRICE
2.1. Agreement to Sell and Purchase On the terms and subject to the
conditions contained in this Agreement, Seller hereby agrees to sell, transfer
and convey the Stock to Purchaser, and Purchaser hereby agrees to purchase,
acquire and receive the Stock from Seller.
2.2. Purchase Price. The Purchase Price to be paid by Purchaser to Seller
for the Stock shall be Ten Million Six Hundred Forty Thousand Dollars
($10,640,000).
2.3. Seller shall, contemporaneously with receipt of the purchase price,
pay Eight Million Six Hundred Thirty-Eight Thousand Six Hundred Dollars
($8,638,600) to RIMCO.
ARTICLE III.
PAYMENT FOR AND TRANSFER OF STOCK
3.1. Payment of Money; Delivery of Stock Certificates conditions set forth
in this Agreement, at Closing, Purchaser will cause to be paid to Seller, by
wire transfer to a bank account designated in writing by Seller prior to the
Closing Date, immediately available funds ($U.S.) in an amount equal to the
Purchase Price. Subject to the terms and conditions set forth in this Agreement,
Seller concurrently at Closing will transfer, convey, assign and deliver to
Purchaser all of the Stock.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller does hereby represent and warrant as follows:
4.1. Capital Stock of BEC. BEC's authorized capital stock consists of a
total of one million (1,000,000) shares of common stock of the par value of one
dollar ($1) per share, of which one thousand (1,000) shares are issued and
outstanding. All of such Stock is fully paid and non-assessable and no Stock is
held as treasury shares. Seller owns all of the Stock of record and no dividends
or distributions attributable to the Stock have been paid by BEC after the
Effective Date, except for the sum of not more than $35,000 to be withdrawn by
Seller from the NationsBank corporate account of BEC, Inc. prior to Closing.
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4.2. Description and Qualification of BEC. BEC is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Texas.
4.3. Interest of BEC in Other Business Enterprises. Interest of BEC in
Other Business Enterprises" . Except as listed in Schedule 4.3, BEC does not own
or control (directly or indirectly) any capital stock, bonds or other securities
of, and has no ownership interest in, any corporation, partnership, firm,
association or business organization, entity or enterprise.
4.4. Financial Statement. (a) Seller has heretofore delivered to Purchaser
an independently audited financial statement consisting of BEC's balance sheet
as of December 31, 1996 and an unaudited balance sheet as of May 15, 1997
(collectively, "the Financial Statement"). Such Financial Statement, including
the notes thereto, is in accordance with the books and records of BEC and fairly
presents the financial position of BEC consistent with financial statements
prepared on a modified cash basis.
(b) As of May 15, 1997, except for debt to Xxxxx, Pipes and Xxxx in an
amount not to exceed an amount of $3,500, BEC does not have any indebtedness or
liability (whether accrued, absolute, contingent or otherwise, and whether due
or to become due) required to be shown on a balance sheet (or the notes thereto)
consistent with financial statements prepared on a modified cash basis which is
not shown on the Financial Statement or any notes thereto or expressly disclosed
herein or in a schedule hereto (whether or not such Financial Statement is
accompanied by notes). BEC has not incurred since May 15, 1997 (i) any funded
indebtedness whatsoever or (ii) any indebtedness or liability which is
outstanding on the date hereof and is required to be shown on a balance sheet
consistent with financial statements prepared on a modified cash basis, other
than those relating to operating or capital expenses incurred in the ordinary
course of business or expressly disclosed herein or in a schedule hereto.
4.5. Changes in Condition of Properties and related assets of BEC
Since Financial Statement Date . Except as set forth in Schedule 4.5, since the
Financial Statement Date, to the best knowledge of Seller:
(a) The business of BEC has been conducted in the ordinary course and
there has not been any material adverse change in the Properties or
financial condition of BEC other than changes relating to the economy
in general or BEC's industry in general and not specifically relating
to BEC.
(b) There has not been any material change in the accounting methods or
practices followed by, or in depreciation, amortization or inventory
valuation policies or methods used or adopted by, BEC.
(c) Other than in the ordinary course of business, there has not been
(i) any sale, lease, abandonment or other disposition by BEC of any of
its Properties or material assets used in connection therewith or (ii)
any sale, transfer, license or other disposition by BEC of any of its
material intangible assets, except as provided on Schedule 4.5 attached
hereto.
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(d) There has not been any declaration, setting aside or payment of any
dividend or other distribution in respect of shares of the Stock of
BEC, or any direct or indirect redemption, retirement, purchase or
other acquisition by BEC of any such shares.
4.6. Material Environmental Documents. To the best knowledge of
Seller, all material reports, studies, written notices from government
environmental agencies, tests, analyses, and other documents specifically
addressing environmental matters related to BEC's Properties during the
period after 1985, and which are in BEC's possession, have been made
available to Purchaser for inspection in BEC's offices during normal
business hours.
4.7. Compliance with Laws and Permits.
(a) To the best knowledge of Seller, except as set forth on Exhibit 4.7,
(i) the Properties have been owned and operated, and
BEC is in compliance in all material respects with
all laws, rules, regulations, ordinances, codes,
orders, licenses and permits relating to the
Properties.
(ii) BEC has all material governmental
licenses, permits and other authorizations
(hereinafter "Permits") and has properly made all
filings necessary or appropriate to obtain and
maintain such Permits and to own and operate the
Properties as presently being owned and operated.
(iii) no violations exist in respect of
such Permits.
(b) To the best knowledge of Seller, except as set forth on Exhibit 4.7,
(i) without in any way limiting the foregoing
representations, neither BEC (with respect to the
operations of the Properties) nor the Properties are
in material violation of, or with the lapse of time
or the giving of notice, or both, would be in
material violation of, any Environmental Law (as
hereinafter defined);
(ii) neither BEC (with respect to the
operations of the Properties) nor the Properties are
subject to, or with the lapse of time or the giving
of notice, or both, would be subject to, any
existing, pending or threatened investigation or
inquiry by any governmental authority;
(iii) neither BEC (with respect to the
operations of the Properties) nor the Properties are
subject to, or with the lapse of time or the giving
of notice, or both, would be subject to, any remedial
obligations under any Environmental Law (as
hereinafter defined); and
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(iv) there is no physical condition or
circumstance which, with the giving of notice to, or
the receiving of notice or orders from, any
governmental authority, would reasonably be expected
to result in material liability under any
Environmental Law (as hereinafter defined).
(c) "Environmental Law" shall mean (i) federal laws
in effect as of the Effective Date, including but not limited
to, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and
Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, the Hazardous Materials Transportation
Act, the Toxic Substances Control Act, the Clean Air Act, the
Clean Water Act, the Occupational Safety and Health Act, and
all regulations, rules, orders or ordinances in effect as of
or prior to the Effective Date or current judicial or
administrative interpretations of general application issued
incident thereto, and (ii) state or local laws, regulations,
rules, orders or ordinances in effect as of or prior to the
Effective Date, or current judicial or administrative
interpretations of general application or incident thereto;
any of which govern or purport to govern protection of the
environment, air emissions, water discharges, hazardous or
toxic substances, solid or hazardous wastes and occupational
health and safety as any of these terms are defined in such
laws, regulations, rules, orders or ordinances, or judicial or
administrative interpretations of general application incident
thereto.
4.8 Suits and Claims. To the best knowledge of Seller, except as specified
in Schedule 4.8, there are (a) no suits, actions or claims, (b) no
investigations or inquiries by any administrative agency or governmental body,
and (c) no legal, administrative or arbitration proceedings in process, pending
or to the best knowledge of Seller or BEC, threatened against BEC or any of the
Properties, and, except as specified in Schedule 4.8, there is no outstanding
order, writ, injunction or decree of any court, administrative agency or
governmental body or arbitration tribunal against or affecting BEC or any of the
Properties or the Stock that is reasonably expected to have a material adverse
effect on such Properties or Stock.
4.9. Bank Accounts and Bank Access; Powers of Attorney. To the best
knowledge of Seller, Schedule 4.9 sets forth the name of each bank in which BEC
has an account, lock box or safe deposit box, the identifying numbers of each
account, lock box or safe deposit box and the names of all persons authorized to
draw thereon or have access thereto, and the name of each person or entity
holding a general or special power of attorney from BEC with respect thereto.
4.10. Transactions Not in Violation of Contract or Law. To the best
knowledge of Seller, the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not result in
the breach of any material provision of, or constitute a material default under,
the articles of
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incorporation or the by-laws of BEC, or any material contract, agreement,
commitment, indenture, mortgage, pledge, note, bond, license or other instrument
or obligation to which Seller or BEC is now a party. To the best knowledge of
Seller, all regulatory approvals necessary for the performance by Seller under
this Agreement have been received, other than approvals that are customarily
received after the consummation of a transaction, and the implementation of this
Agreement in accordance with its terms will not violate any applicable law,
governmental regulation or court or other governmental order, writ, injunction
or decree where the noncompliance therewith is reasonably expected to result in
a material adverse effect on the Properties, or financial condition of BEC.
4.11. Transaction Authorized. The execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action of BEC. This
Agreement has been duly executed and delivered by Seller and is legally binding
on Seller.
4.12. Employee Benefits Plans. BEC is not a participant in or with any
Pension Plans, Medical Plans or Other Employee Plans.
4.13. Material Contracts . Except as listed in Schedule 4.13 hereto or any
other schedule hereto, BEC is not by name, or by succession in interest bound
by, or, to the best knowledge of Sellers otherwise bound by or subject to
prospective obligations under any Material Contract, which, for purposes of this
paragraph shall mean any contract which by its terms is not terminable by BEC on
60 days notice and which is a: (a) contract or agreement relating to the
exploration for, production, transportation, treatment or processing of
hydrocarbons or the creation of any such joint venture for such purpose relating
to the Properties; (b) contract for the employment of any officer or employee or
any consulting agreement; (c) agreement for the sale or lease of any of the
Properties outside of the ordinary course of business; (d) contract or
commitment for capital expenditures pertaining to the Properties in excess of
$10,000, except for AFE No. 5111 from JN Exploration & Production; (e) lease of
machinery or equipment or other agreement pertaining to the Properties involving
annual payments in excess of $10,000; (f) agreement with a labor union or labor
association; (g) after the consummation of this Agreement, loan agreement,
promissory note issued by it, guarantee, subordination or similar type of
agreement; (h) agreement, contract or commitment relating to the acquisition of
the assets, liabilities or any interest in any business enterprise; or (i)
farmout agreement, exploration agreement or other agreement permitting any
person or entity to acquire any interest in the Properties.
4.14. Sales Contracts. All currently existing contracts to which BEC is a
party applicable to the production and sale of oil or gas or other hydrocarbons
(other than any such contracts that may be terminated on notice of sixty (60)
days or less or terminate within six (6) months from the date hereof by the
terms of such contracts) are identified in Schedule 4.14 and to the best
knowledge of Seller, such contracts are in full force and effect in accordance
with their respective terms and BEC is not in default thereunder. To the best
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knowledge of Seller, BEC has not assigned to any other person all or any portion
of its share of the revenues attributable to the sale of oil or gas pursuant to
such contracts.
4.15. Condition of Equipment. To the best knowledge of Seller, the
Equipment owned by BEC is, when taken as a whole, in sufficient repair and
condition to permit the continued operation of the businesses of BEC in the
normal course consistent with current practices, subject to routine maintenance,
repair and replacement requirements.
4.16. Broker. Seller has engaged and utilized the services of a broker or
finder, and paid or agreed to pay any fee or commission to a broker or finder.
4.17. Tax Liability.
a. BEC has filed when due all federal, state, local and
other tax returns or reports that are required to be filed
by it, which returns and reports are in all material
respects complete and accurate. All federal, state, local
and other taxes, including any interest and penalties
thereon for which BEC may be liable have in all respects
been paid when due and payable. True and complete copies
of all tax returns of BEC have been delivered or made
available to Purchaser, and the taxes as shown due on such
returns have been paid and there are no tax assessments or
deficiencies claimed to be due in respect of such tax
returns or claimed in writing to be due by any taxing
authority.
b. All ad valorem, property, production,
severance and similar taxes based upon or measured by the
ownership of property or the production of hydrocarbons or
other minerals relating to the Properties that have become
due and payable have been or will be paid or deposited
4.18 Title. BEC holds record title, as more particularly described on
Exhibit A, to the Property, and shall warrant and defend Purchaser, its
successors and assigns, against the lawful claims and demands of every person
whomsoever claiming or to claim the same or any part thereof by, through or
under BEC or its predecessors in interest, but not otherwise. Notwithstanding
the foregoing, Purchaser shall have full substitution and subrogation in and to
all representations, warranties and covenants made to BEC by third parties
unaffiliated with BEC heretofore or hereafter given or made that in any manner
relate to the Properties or any part thereof; and Purchaser shall have the
non-exclusive right to enforce and/or recover damages from such unaffiliated
third parties for the breach or inaccuracy of all such representations,
warranties and covenants, and Purchaser shall have the right to institute any
such action to enforce or seek damages with respect to any such representation,
warranty or covenant without the joinder or consent of BEC.
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4.19 Properties. Exhibit A hereto is a complete list of all Properties
owned by BEC.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser does hereby represent, warrant and covenant as follows:
5.1. Organization and Standing of Purchaser. Purchaser is a corporation
duly formed, validly existing and in good standing under the laws of the State
of Nevada.
5.2. Transaction Authorized. The execution, delivery and performance by
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action of Purchaser. This Agreement has been duly executed and
delivered by Purchaser and is legally binding on Purchaser.
5.3. Transactions Not in Violation of Contract or Law. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the breach of any of the
terms and conditions of, or constitute a default under, the certificate of
incorporation or the by-laws of Purchaser or any material contract, agreement,
commitment, indenture, mortgage, pledge, note, bond, license or other instrument
or obligation to which Purchaser is now a party. No other approval is required
for the purchase and acquisition by Purchaser of the Stock pursuant to this
Agreement, and such purchase and acquisition will not violate any law or any
rule or regulation of any administrative agency or governmental body or any
order, writ, injunction or decree of any court, administrative agency or
governmental body.
5.4. Actions and Proceedings, etc. There are no (a) outstanding judgments,
orders, writs, injunctions or decrees of any court, governmental agency or
arbitration tribunal against Purchaser which individually or in the aggregate
could have a material adverse effect on the ability of Purchaser to enter or
perform this Agreement or to consummate the transactions contemplated hereby or
(b) actions, suits, claims or legal, administrative or arbitration proceedings
or investigations pending or, to the best knowledge of Purchaser, threatened
against Purchaser, which individually or in the aggregate could have a material
adverse effect on the ability of Purchaser to enter or perform this Agreement or
to consummate the transactions contemplated hereby.
5.5. No Broker. Neither Purchaser, its Affiliates nor any of their
respective employees, officers, agents, directors, advisors or representatives
has engaged or utilized the services of any broker or finder, or has paid or
agreed to pay any fee or commission to any broker or finder, in any way related
to this Agreement or any subject matter contained or contemplated herein.
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ARTICLE VI.
CONDUCT OF BEC'S BUSINESS PRIOR
TO CLOSING; OTHER COVENANTS OF SELLER
Seller covenants that, except as otherwise consented to in writing by
Purchaser, after the date hereof and prior to Closing Seller will cause BEC to
do or refrain from doing, as the case may be, the following:
6.1. Business Conducted in Ordinary Course. The business of BEC will be
conducted in the ordinary course.
6.2. No Change in Corporate Documents of BEC. No change will be made in the
certificate of incorporation or by-laws of BEC.
6.3. No Change in Stock. No change will be made in the authorized, issued
or outstanding common stock of BEC. No additional shares of such stock and no
subscription, option, right, warrant or agreement relating to and no security
interest, pledge or lien on such stock will be issued, granted, created, entered
into or suffered to exist, except this Agreement and the transactions
contemplated hereby.
6.4. No Dividend or Distribution. No dividend or other distribution will be
declared, set aside, paid or made on the Stock, nor will BEC directly or
indirectly redeem, retire, purchase or otherwise acquire any such Stock.
6.5. No Merger or Consolidation. BEC will not, and will not enter an
agreement to, merge or consolidate with or into any other corporation or entity
or acquire all or a material part of the business or assets of any other
corporation or entity.
6.6. No New Indebtedness. BEC will not (a) enter into, create or assume any
obligation for borrowed money except to the extent that such funding is provided
by Seller in the ordinary course of business, or (b) assume, guarantee or
otherwise become contractually liable for any financial obligation of any
corporation or other entity other than BEC.
6.7. No Disposal of Property. BEC will not sell, lease, abandon, assign,
transfer or otherwise dispose of (a) any real property except as provided in
existing agreements entered into by BEC prior to the date hereof; or (b) other
than in the ordinary course of business, any machinery, equipment, operating
property or other tangible or intangible personal property. BEC will not forego,
cancel or waive any right, claim or cause of action with respect to itself or
its property which is reasonably expected to likely result in a material adverse
effect on the Property, business, assets or financial condition of BEC.
6.8. No Increase in Employee Compensation. No increase will be made in the
total compensation (including but not limited to, normal bonus, profit sharing
and other extra compensation) or the rate of total compensation, payable or
to become payable by BEC to any employee, officer or director. Except as shown
on Schedule 6.8, no General
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Increase will be made in the total compensation or rate of total compensation
payable or to become payable by BEC to any other salaried employees or to hourly
employees of BEC. No employee will be hired by BEC. No extraordinary or special
extra compensation or bonus will be paid by BEC and no employee benefit
arrangement of any kind, including without limitation, an employee benefit plan
or employee pension plan, will be adopted or entered into or be amended,
modified or changed in any respect or be funded by BEC with any contribution
which is materially in excess of any comparable contribution heretofore made in
respect thereof.
6.9. Preservation of BEC's Organization. Subject to the other provisions of
this Agreement, BEC will use its best efforts to preserve its business
organization in substantially its current form and to preserve the goodwill of
key customers, suppliers and others currently having material business relations
with BEC.
6.10. Maintenance of Facilities and Equipment. To the best knowledge of
Seller, all Properties and related plant and equipment owned, leased or used by
BEC and under its control which are necessary for the continued operation of
such Properties by BEC in the manner heretofore operated, will be maintained in
good operating condition and repair, reasonable wear and tear excepted.
6.11. Maintenance of Insurance Coverage. Seller and BEC will continue to
maintain in full force and effect all property, casualty, liability, and
workers' compensation insurance policies and coverage now in effect covering BEC
and its properties and all renewals thereof or substitutions thereof, if any,
through and including the Closing Date.
6.12. Access by Purchaser to BEC's Property and Records. BEC, after
Purchaser's request, has given to Purchaser and to Purchaser's counsel,
accountants, engineers, actuaries and other representatives reasonable access,
during normal business hours prior to Closing, to BEC's offices, properties,
books, contracts, commitments, records and affairs, and BEC will furnish to
Purchaser copies of documents and information concerning the properties and
business of BEC as Purchaser may reasonably request, in order to facilitate
Purchaser's due diligence review of the Properties and the safe, efficient and
orderly transition of BEC's business from Seller to Purchaser.
ARTICLE VII.
CONDITIONS PRECEDENT TO CLOSING
7.1. Conditions Precedent to the Obligations of Purchaser. All obligations
of Purchaser under this Agreement are subject to the satisfaction, prior to or
at Closing, of each of the following conditions (any or all of which may be
waived by Purchaser):
(a) Continuation of Representations and Warranties. Each
representation and warranty of Seller set forth in Article IV of this
Agreement shall be true and accurate in all material respects as of the
date of this Agreement and on and as of the Closing Date.
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(b) Compliance with Covenants, Agreements and Conditions. Seller shall
have performed and complied with each and every covenant, agreement and
condition required by this Agreement to be performed or complied with
by Seller in all material respects prior to or at Closing. The items
required to be delivered or made available to Purchaser pursuant to
Section 8.2 shall have been so delivered or otherwise made available.
(c) Officer's Certificates. Seller and BEC shall have delivered to
Purchaser certificates substantially in the form of Schedule 7.1(c)
hereto executed by an officer of Seller and BEC respectively, dated the
Closing Date, certifying the fulfillment of the conditions set forth in
Sections 7.1(a) and 7.1(b).
(d) Opinion of Counsel. Seller shall have delivered to Purchaser
opinions of counsel for Seller, dated the Closing Date, substantially
in the forms of Schedule 7.1(d) hereto.
(e) Absence of Legal Action to Prevent Execution or Performance of
Agreement. No injunction or order of any court or administrative agency
of competent jurisdiction shall be in effect as of the Closing Date
which restrains or prohibits the consummation of Closing, and no suit
or action or other proceeding shall be pending before any court or
administrative agency of competent jurisdiction which questions the
validity or legality of this Agreement, or of the right to proceed with
the transactions contemplated hereby, and which, in the written opinion
of independent counsel reasonably acceptable to Seller and Purchaser,
has a reasonable likelihood of success.
(f) Resignations. Written resignations, duly executed, of all BEC
directors and such of the officers as designated by Purchaser.
(g) Releases. Seller shall have obtained and delivered to Purchaser
duly executed releases of all liens and encumbrances, Debts, guarantees
and indemnities of BEC described in the balance sheet of BEC or in
Exhibit B.
(h) Resolutions. Purchaser shall have received a certificate of a duly
authorized officer of BEC, dated the Closing Date, setting forth the
resolutions of the Board of Directors of BEC authorizing the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and certifying that such resolutions were duly
adopted and have not been rescinded or amended as of the Closing Date.
(i) Bank Accounts. Seller shall have, as of the Closing Date, withdrawn
the sum of not more than thirty-five thousand dollars ($35,000) from
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the the NationsBank corporate account of BEC, Inc., and shall have
caused BEC to terminate the authority of the parties having signature
authority for all bank accounts maintained by BEC.
(j) Debts to Seller. If any debt is owed to Seller, Seller shall have
made such legal and accounting adjustments as are necessary to convert
the debt to equity, and shall have obtained and delivered to Purchaser
duly executed releases of such debts.
7.2. Conditions Precedent to Obligations of Seller. All obligations of
Seller under this Agreement are subject to the satisfaction, prior to or at
Closing, of each of the following conditions (any or all of which may be waived
by Seller):
(a) Continuation of Representations and Warranties. Each and every
representation and warranty of Purchaser set forth in Article V of this
Agreement, shall be true and accurate in all material respects as of
the date of this Agreement on and as of the time of the Closing Date.
(b) Compliance with Covenants, Agreements and Conditions. Purchaser
shall have performed and complied with each and every covenant,
agreement and condition required by this Agreement to be performed or
complied with by it in all material respects prior to or at Closing.
The items required to be delivered to Seller pursuant to Section 8.3
shall have been so delivered.
(c) Officer's Certificate. Purchaser shall have delivered to Seller a
certificate substantially in the form of Schedule 7.2.(c) hereto
executed by an officer of Purchaser dated the Closing Date, certifying
on behalf of Purchaser the fulfillment of the conditions set forth in
Sections 7.2.(a) and 7.2.(b).
(d) Absence of Legal Action to Prevent Execution or Performance of
Agreement. No injunction or order of any court or administrative agency
of competent jurisdiction shall be in effect as of the Closing Date
which restrains or prohibits the consummation of Closing, and no suit
or action or other proceeding shall be pending before any court or
administrative agency of competent jurisdiction, which questions the
validity or legality of this Agreement, or of the right to proceed with
the transactions contemplated hereby and which, in the written opinion
of independent counsel reasonable acceptable to Seller and Purchaser,
has a reasonable likelihood of success.
ARTICLE VIII.
CLOSING
8.1. Place of Closing. Closing shall take place on the Closing Date at the
offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. whose address is 000
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, 00000.
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8.2. Items to Be Delivered or Made Available to Purchaser at Closing. At
Closing, Seller shall deliver or cause to be delivered to Purchaser, or
otherwise make available or cause to be made available to Purchaser as Purchaser
may reasonably request, the following:
(a) All the Stock fully endorsed for transfer, together with such stock
powers, documents of transfer, validation of signatures and other items
or documents as may be necessary to perfect the transfer of the Stock
from Seller to Purchaser.
(b) Duly executed releases of all liens and encumbrances, Debts,
guarantees and indemnities of BEC described in the balance sheet of BEC
or in Exhibit B, as provided for in Section 7.1(g).
(c) The stock books, books of account, ledgers, minute books, corporate
seals, original contracts, agreements, leases, deeds and all other
corporate documents, books and records of BEC.
(d) The opinion of counsel, dated as of the Closing Date, as provided
for in Section 7.1.(d).
(e) A certificate of the Secretary or Assistant Secretary of BEC
certifying the certificate of incorporation and by-laws of BEC and the
incumbency of the officers of BEC.
(f) Written resignations as provided in Section 7.1(f).
(g) Certificates of officers of Seller and BEC as to the
representations and warranties of Seller and BEC, in accordance with
the provisions of Section 7.1(c).
(h) A copy of the BEC certificate of incorporation, duly certified by
the Secretary of State of Texas, and certificate of good standing.
(i) Evidence that Seller has, as of the Closing Date, caused BEC to
terminate the authority of the parties having signature authority for
all bank accounts maintained by BEC as provided in Section 7.1(i).
(j) Duly executed releases of any and all debts owed to Seller as
provided for in Section 7.1(j).
8.3. Items to be Delivered to Seller at Closing. At Closing, Purchaser
shall deliver to Seller:
(a) An amount equal to the Purchase Price which shall be delivered to
Seller by wire transfer pursuant to instructions to be given to
Purchaser.
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(b) A certificate of the secretary or assistant secretary of Purchaser
certifying the certificate of incorporation and by-laws of Purchaser,
the incumbency of the officers of Purchaser executing documents
relating to this Agreement and the action by the board of directors of
Purchaser approving the execution, delivery and performance of this
Agreement.
(c) A certificate of an officer of Purchaser as to representations and
warranties by Purchaser as required by Section 7.2(c).
ARTICLE IX.
INDEMNIFICATION
9.1 Survival. The liability of Purchaser and Seller under each of their
respective representations, warranties and covenants contained in this Agreement
shall survive the Closing and execution and delivery of the assignments
contemplated hereby.
9.2. Indemnification of Purchasers. Seller shall, to the fullest extent
permitted by law, protect, defend, indemnify and hold Purchaser and its direct
or indirect partners, affiliates, directors, officers, employees, agents and the
respective representatives of each of them (collectively, the "Purchaser
Group"), harmless from and against any and all claims, losses, damages, costs,
expenses, diminutions in value, suits, causes of action or judgments of any kind
or character with respect to any and all liabilities and obligations or alleged
or threatened liabilities and obligations, including, but not limited to, any
interest, penalty, and any attorneys' fees and other costs and expenses incurred
in connection with investigating or defending any claims or actions, whether or
not resulting in any liability (collectively such claims shall be referred to as
"Losses"), attributable to or arising out of:
(a) Any material inaccuracy or breach of any representation or warranty
of Seller set forth in this Agreement.
(b) Any failure of Seller or BEC duly to perform or comply with any
material agreement or condition set forth in this Agreement to be
performed or complied with by Seller or BEC.
(c) Any fees or commissions of brokers or finders retained or engaged
by BEC relating to the transactions contemplated in this Agreement.
(d) Any claims arising in connection with or attributable to the
ownership or operation of BEC, its assets or the Properties arising on
or before the Closing Date, provided, however, this indemnification
does not extend to or cover claims arising from Environmental Law
violations or alleged violations, including, but not limited to future
remediation of freshwater contamination.
9.3. Indemnification of Seller. Purchaser shall be responsible for, shall
pay on a current basis, indemnify and hold harmless Seller from and against any
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and all damage, liability, claim, loss or expense (including, but not limited
to, reasonable attorneys fees incident thereto) arising out of:
(a) Any material inaccuracy or breach of any representation, warranty
or agreement of Purchaser under this Agreement.
(b) Any act or omission of BEC or Purchaser after the Closing Date.
(c) Any act or omission of Purchaser or any of its Affiliates relating
to this Agreement, the transactions contemplated hereby or the sale or
other disposition of the Properties, including, but not limited to, any
and all claims, costs, damages and liabilities arising under applicable
state, federal or foreign securities laws in connection with such acts
or omissions.
9.4. Rights of Parties with Respect to Indemnification Claims. In order for
the Indemnified Party to be entitled to any indemnification provided for under
this Article IX in respect of, arising out of or involving a claim or demand
made by any person, firm, governmental authority, corporation or other entity
against the Indemnified Party (a "Third Party Claim"), such Indemnified Party
must notify the Indemnifying Party in writing of the Third Party Claim within
thirty (30) days after receipt by such Indemnified Party of notice of the Third
Party Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure (except that the Indemnifying Party shall not be liable for any expenses
incurred during the period in which the Indemnified Party failed to give such
notice). The Indemnified Party shall deliver to the Indemnifying Party, within
five (5) business days after the Indemnified Party's receipt thereof, copies of
all notices and documents (including court papers) received by the Indemnified
Party relating to the Third Party Claim.
If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party. Should
the Indemnifying Party so elect to assume the defense of a Third Party Claim,
the Indemnifying Party will not be liable to the Indemnified Party for legal
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof except to the extent provided in the last sentence of this
Section 9.4. If the Indemnifying Party assumes such defense, the Indemnified
Party shall have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party, it being understood that the Indemnifying Party shall
control any such defense. The Indemnifying Party shall be liable for the fees
and expenses of counsel employed by the Indemnified Party for any period during
which the Indemnifying Party has not assumed the defense thereof (other than
during any period in which the Indemnified Party shall have failed to give
notice of the Third Party Claim as provided above). If the Indemnifying Party
chooses to defend or prosecute any Third Party Claim for which the Indemnified
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Party properly has made a claim of indemnification pursuant to the foregoing
provisions of this Section 9.4, all of the parties hereto shall cooperate in the
defense or prosecution thereof. Such cooperation shall include the retention and
(upon the Indemnifying Party's request) the provision to the Indemnifying Party
of records and information which are reasonably relevant to such Third Party
Claim. Whether or not the Indemnifying Party shall have assumed the defense of a
Third Party Claim, the Indemnified Party shall not admit any liability with
respect to, or settle, compromise or discharge, such Third Party Claim without
the Indemnifying Party's prior written consent. All amounts that may be due to
the Indemnified Party hereunder, to the extent not directly paid by the
Indemnifying Party, shall be payable to the Indemnified Party promptly on
written demand therefor, with interest at the Interest Rate as of and from the
date the Indemnified Party suffered the loss or incurred the expense.
Notwithstanding anything to the contrary in this Section 9.4, if the defendants
of any such action based on a Third Party Claim include both the Indemnified
Party and the Indemnifying Party, and the Indemnified Party shall have
reasonably concluded that there be any legal defense available to it which is
different from or additional to those available to the Indemnifying Party, the
Indemnified Party shall have the right to select separate counsel at its own
expense to assume such legal defense to otherwise participate in the defense
of such action on behalf of such Indemnified Party.
9.5. Specific Performance. The obligations of Seller to sell and transfer
the stock and Purchaser's obligations to purchase, acquire and make payment to
Seller for the Stock under this Agreement are unique. If either party should
default in such obligations, the parties each acknowledge that it would be
extremely impracticable to measure the resulting damages; accordingly, in the
event of such default, the nondefaulting party, in addition to any other
available rights or remedies, may seek specific performance of the defaulting
party's obligations, and the parties each expressly waive the defense that a
remedy in damages would be adequate. If the purchase and sale transactions
contemplated by this Agreement shall be consummated at Closing, each of the
parties waives any rights that it may have to rescind this Agreement or such
transactions; provided, however, this waiver shall not affect any other rights
or remedies available to the parties under this Agreement or otherwise.
ARTICLE X.
OBLIGATIONS AND UNDERTAKI GS OF SELLER AND PURCHASER
WITH RESPECT TO TAXES
10.1. Scope of Article. Seller and Purchaser acknowledge and agree, jointly
and severally, that the provisions of this Article X constitute the full and
exclusive agreement of each of them with respect to Taxes, and that such
provisions override and supersede any other provision of this Agreement which
relates, or may be construed to relate to Taxes, except for Seller's obligations
under Section 4.17.
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10.2. Section 338(h)(10) Election.
(a) at Purchaser's election, within the period allowed by law, Seller
and Purchaser shall cause an election under Section 338(h)(10) and
Section 338(g) of the Code (the "Election") to be executed with respect
to BEC pursuant to the procedures specified in Treasury Regulation
Section 1.338(h)(10)-1T;
(b) following the date hereof, Purchaser shall undertake to determine
the fair market value of the assets of BEC subject to Seller's comment
on and concurrence with such value, which value shall be the basis of
the allocation of the purchase price among assets in accordance with
Treasury Regulation Section 1.338(h)(10)-1T(f) (the "Price
Allocation"). Seller and BEC shall cooperate to the extent reasonably
requested with Purchaser in this effort. Purchaser may, at its expense,
engage an outside appraiser for this purpose, in which case Seller and
BEC agree to cooperate with such appraiser to the extent reasonably
requested. Purchaser shall provide Seller with a copy of a schedule,
together with any supporting documentation, setting forth the Price
Allocation;
(c) Purchaser and Seller agree to follow the value and Price Allocation
determined under Section 10.2(b) above, for purposes of all federal,
and where applicable, state and local income Tax returns to the extent
said values are relevant for such purpose; and
(d) after Closing, neither Purchaser, Seller, BEC nor any of their
respective Affiliates shall take any action or fail to take any action
where such act or failure to act would result in or have the effect of
defeating the Election.
10.3. Representation and Warranties of Seller as to Certain Taxes. With
respect to any Taxable Period ending on or before the Closing Date, Seller
represent and warrant to Purchaser that either Seller or BEC has either filed on
or before the Effective Date or will timely file any return or report required
by law to be filed in regard to such Tax, and has paid or will timely pay the
amount of any Tax liability shown thereon, and that Seller or BEC has paid or
will timely pay any additional amount of Tax which has been or will have been
assessed or imposed upon any such Tax by the applicable taxing jurisdiction.
Seller shall prepare for BEC the stub period tax return for 1997 (as of the
Closing) (the "Return") for all federal and state income taxes due as a result
of the Closing hereunder and Seller shall be responsible for the payment of all
such taxes. Such Return shall, in the reasonable estimation of KPMG Peat
Marwick, not affect the Section 338(h)(10) election or the step-up in basis to
the Purchase Price amount contemplated by Section 10.2 of this Agreement. Seller
shall submit the Return to Purchaser seven (7) days after the Closing Date.
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ARTICLE XI.
TERMINATION OF AGREEMENT
11.1. Termination. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the Transaction and
Closing abandoned at any time prior to Closing:
(a) By mutual written consent of Seller and Purchaser; or
(b) By Seller, by giving written notice to Purchaser, if any of the
conditions set forth in Section 8.2 hereof have not been completely
fulfilled in accordance with their terms, and shall not have been
waived by Seller; or
(c) By Purchaser, by giving written notice to Seller, if any of the
conditions set forth in Section 8.1 hereof shall not have been
completely fulfilled in accordance with their terms, and shall not have
been waived by Purchaser.
11.2. Agreement Void. If this Agreement is terminated and the Transaction
and Closing are abandoned pursuant to this Article XI, this Agreement shall
become void and have no effect, except for the provisions which shall survive in
accordance with Section 9.1. Nothing in this Article XI shall be deemed to
release either party from any liability for any breach by such party of the
terms and provisions of this Agreement or preclude either party from asserting
any and all rights and remedies available to it at law or in equity, including,
without limitation, specific performance.
ARTICLE XII.
PUBLICITY
12.1. Publicity or Release of Information. Whether or not this Agreement is
terminated without Closing or a Closing orrurs, no party to this Agreement shall
publicize, make a press release or otherwise make available to the public or any
information medium any statement or announcement concerning the transactions
contemplated by this Agreement without the prior written consent of the other
party, except as such release or announcement may be required by law, in which
case the party required to make the release or announcement shall allow the
other party reasonable time to comment on such release or announcement in
advance of such issuance.
ARTICLE XIII.
GENERAL PROVISIONS
13.1. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas without giving effect
to any conflicts-of-law rule or procedure which would refer the matter to
another jurisdiction.
13.2. Entire Agreement. This Agreement and the schedules hereto and the
agreements referred to herein set forth the entire agreement and understanding
of the parties with respect to the subject matter hereof, and supersede all
prior agreements, arrangements and understandings relating thereto. No
representation, promise, inducement or statement of intention has been made by
Seller or Purchaser which is not embodied in this Agreement or in the documents
referred to herein, nor shall any of the parties hereto be bound by or liable
for any alleged representation, promise, inducement or statement of intention
not so set forth.
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13.3. Assignment. This Agreement without limitation, shall not be
assignable or transferable, in whole or in part, by Purchaser or Seller
(including, without limitation, by operation of law in connection with a merger,
or sale of substantially all the assets, of Purchaser or Seller) without the
prior written consent of the other party hereto.
13.4. Amendment and Waiver. This Agreement may be amended, modified or
superseded only by written agreement executed by Seller and Purchaser. No
failure on the part of Seller or Purchaser to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right.
13.5. Execution in Counterparts. This Agreement may be executed
simultaneously in any number of counterparts (including copies hereof), each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
13.6. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be deemed to have been duly
given if in writing and delivered personally or mailed first class, postage
prepaid, registered or certified United States mail, addressed as follows:
If to Seller:
Xxxxx Xxxxxx
0000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
phone: (000) 000-0000
fax: (000) 000-0000
If to Purchaser:
Southern Mineral Corporation
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
phone: (000) 000-0000
fax: (000) 000-0000
Attention: Xxxxxx Xxxxx
With a copy to:
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Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
phone: (000) 000-0000
fax: (000) 000-0000
Attention: L. Xxxx Xxxxxxxxxx
Any party may change the address to which such communications are to be
directed to such party by giving written notice, in accordance with the
foregoing provision of this Section 13.6, to the other party hereto of such
change of address.
13.7. Schedules. The schedules and exhibits which are referred to and
described in various Sections of this Agreement are hereby incorporated into and
made part of this Agreement by reference. With the exception of Schedule 7.2(c),
all schedules and exhibits were prepared by or at the direction of Seller and
Seller is solely accountable for the contents thereof.
13.8. Severability. The invalidity or unenforceability of any portion or
provision of this Agreement shall in no way affect the validity or
enforceability of any other portion or provision hereof. Any invalid or
unenforceable portion or provision shall be deemed severed from this Agreement
and the balance of this Agreement shall be construed and enforced as if this
Agreement did not contain such invalid or unenforceable portion or provision. In
the event any such provision of this Agreement is so declared invalid, the
parties shall promptly negotiate in good faith new provisions to eliminate such
invalidity and to restore this Agreement as near as possible to its original
intent and effect.
13.9. Headings. The headings contained herein are included for convenience
of reference only and are in no way intended to describe, interpret, define or
limit the scope intent or substance of this Agreement or any provision hereof.
13.10. No Rights of Third Parties. The provisions of this Agreement shall
be binding on and shall inure to the benefit of Seller and Purchaser and their
permitted assigns.
13.11. Further Assurances. Seller and Purchaser agree to execute and
deliver all such other and additional instruments and documents and to do such
other acts and things as may be reasonably required to effectuate this
Agreement.
13.12. Agreement Takes Precedent. In the event of any conflict or
inconsistency between this Agreement (without giving effect to Section 13.8
hereof) and any schedules or exhibits hereto, this Agreement (without giving
effect to Section 13.8 hereof) shall control and govern.
13.13. Jurisdiction; Costs of Legal Proceedings.
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(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction
of any State of Texas court or federal court of the United States of
America sitting in the State of Texas, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in any such
Texas court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this
Agreement or the transactions contemplated hereunder in the courts of
any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the
transactions contemplated hereunder in any State
of Texas or federal court. Each of the parties hereto irrevocably
waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in
any such court.
(c) If either party to this Agreement initiates a legal proceeding to
enforce any provision of this Agreement, and fails to obtain a final
judgment in its favor, such party shall pay all court costs and legal
fees incurred by the defending party pertaining to such legal
proceeding.
13.14. Transaction Costs. Seller and Purchaser shall each be liable for and
pay for its respective costs related to the consummation of the transaction
contemplated by this Agreement, including, but not limited to, all costs
incurred in connection with its agents, consultants, brokers, contractors or
counsel.
13.15. Method of Payments. Each party hereto shall make any payment
required pursuant to this Agreement by wire transfer to an account and pursuant
to instructions designated by the other party. The party making any such payment
shall request the account information on or before two Business Days prior to
the date such payment is to be made.
IN WITNESS WHEREOF the parties have duly executed this Agreement on the
date first above written.
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
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SOUTHERN MINERAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Printed Name: XXXXXX X. XXXXX
--------------------------
Title: President
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