EXHIBIT 2.2
SECURITIES PURCHASE AGREEMENT
BETWEEN
ENRON FINANCE CORP.
AND
DOMAIN ENERGY CORPORATION
November 21, 1997
TABLE OF CONTENTS
Page
ARTICLE I. PURCHASE AND SALE OF THE GULFSTAR
HOLDINGS..................................... 2
1.1 Purchase and Sale of the Gulfstar Holdings......... 2
1.2 Consideration...................................... 2
1.3 Alternate Consideration............................ 2
ARTICLE II. CLOSING...................................... 2
2.1 Closing............................................ 2
ARTICLE III. REPRESENTATIONS AND WARRANTIES............... 3
3.1 Representations and Warranties of EFC.............. 3
(a) Ownership of Gulfstar Holdings............... 3
(b) Organization and Standing.................... 4
(c) Corporate Power and Authority................ 4
(d) Conflicts; Consents and Approvals............ 4
(e) Brokers...................................... 5
(f) No Litigation................................ 5
(g) Disclosure of Agreements..................... 5
(h) Certain RIMCO Agreement Conditions........... 6
(i) Investment Intent............................ 6
(j) Disclosure of Information.................... 6
(k) Investment Experience........................ 6
(l) Restricted Securities........................ 7
(m) Legends...................................... 7
(n) Disclosure................................... 7
(o) Certain Defined Terms........................ 7
3.2 Representations and Warranties of Domain........... 7
(a) Organization and Standing.................... 7
(b) Capitalization of Domain........................
(c) Corporate Power and Authority................ 9
(d) Conflicts; Consents and Approvals............ 9
(e) Domain Shares................................ 10
(f) Investment Purpose........................... 10
(g) Brokers...................................... 10
(h) Litigation................................... 11
(i) Financial Statements......................... 11
(j) Liabilities.................................. 11
(k) No Default................................... 12
(l) Disclosure................................... 12
(m) Domain SEC Documents......................... 12
ARTICLE IV. ADDITIONAL AGREEMENTS, COVENANTS AND
REPRESENTATIONS.............................. 13
4.1 Reasonable Business Efforts........................ 13
4.2 Confidentiality.................................... 13
4.3 Certain Prohibited Actions......................... 14
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4.4 Mutual Representation.............................. 14
4.5 Further Assurances................................. 15
4.6 Registration Rights Agreement...................... 15
4.7 Voting Matters..................................... 15
4.8 Domain Shares....................................... 16
ARTICLE V. INDEMNIFICATION.............................. 17
5.1 Indemnification by Domain.......................... 17
5.2 Indemnification by EFC............................. 17
5.3 Defense of Third Party Claims...................... 17
5.4 Survival of Representations and Warranties......... 18
ARTICLE VI. CONDITIONS TO CLOSING........................ 18
6.1 Conditions to the Obligation of Domain............. 18
6.2 Conditions to the Obligation of EFC................ 20
ARTICLE VII. TERMINATION.................................. 21
7.1 Events of Termination.............................. 21
7.2 Effect of Termination.............................. 22
ARTICLE VIII. MISCELLANEOUS................................ 22
8.1 Waiver and Amendment............................... 22
8.2 Assignment......................................... 23
8.3 Notices............................................ 23
8.4 Governing Law...................................... 24
8.5 Severability....................................... 24
8.6 Counterparts....................................... 24
8.7 Headings........................................... 24
8.8 Entire Agreement; Third Party Beneficiaries........ 24
8.9 Arbitration........................................ 25
(a) Binding Arbitration.......................... 25
(b) Governing Rules.............................. 25
(c) Arbitrators.................................. 25
(d) Conduct of Arbitration....................... 26
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EFC DISCLOSURE SCHEDULES
3.1(a) Ownership of Gulfstar Holdings
3.1(g) EFC/Gulfstar Agreements
DOMAIN DISCLOSURE SCHEDULES
3.2(b) Capitalization
3.2(g) Domain Brokers
3.2(h) Litigation
EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of Assignment of Liens and Security Interests
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Letter Agreement between the Company and Fairfield Industries
Incorporated
Exhibit E Form of Letter Agreement between Domain and Cheyenne Petroleum Company
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INDEX OF DEFINED TERMS
AAA............................................................ 8.9(b)
affiliate...................................................... 3.1(a)
Agreement...................................................... Recitals
Arbitrators.................................................... 8.9(c)
Cash Consideration............................................. 1.2
Closing........................................................ 2.1
Closing Date................................................... 2.1
Commission..................................................... 3.1(i)
Common Stock................................................... Recitals
Company........................................................ Recitals
Completion Cost Notes.......................................... Recitals
controls....................................................... 3.1(a)
Dispute........................................................ 8.9(a)
Domain......................................................... Recitals
Domain Assets.................................................. 3.2(i)
Domain Audited Financials...................................... 3.2(i)
Domain Common Stock............................................ 1.2
Domain Disclosure Schedules.................................... 3.2(b)
Domain Financial Statements.................................... 3.2(i)
Domain Preferred Stock......................................... 3.2(b)
Domain SEC Documents........................................... 3.2(m)
Domain Shares.................................................. 1.3
Domain Sub..................................................... Recitals
Domain's Related Persons....................................... 5.2
ECT............................................................ 3.2(b)
EFC............................................................ Recitals
EFC Disclosure Schedules....................................... 3.1(a)
EFC's Related Persons.......................................... 5.1
Exchange Act................................................... 3.2(m)
GAAP........................................................... 3.2(i)
General Obligation Notes....................................... Recitals
Governmental Authority......................................... 3.1(d)(iv)
IPO Prospectus................................................. 3.1(j)
Liens.......................................................... 3.1(a)
Main Domain Shares............................................. 1.2
Merger......................................................... 4.7(a)
Merger Agreement............................................... Recitals
NYSE........................................................... 4.8
Other Rights................................................... Recitals
Override Notes................................................. Recitals
Plan........................................................... Recitals
Preferred Stock................................................ Recitals
Registration Rights Agreement.................................. 4.6
Registration Statement......................................... 3.2(m)
RIMCO Agreement................................................ 3.1(h)
Securities Act................................................. 3.1(i)
Special Meeting................................................ 4.7(a)
Stock Purchase Agreement....................................... 3.2(b)
iv
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement ("this Agreement") is made and
entered into as of November 21, 1997, by and between Enron Finance Corp., a
Delaware corporation ("EFC"), and Domain Energy Corporation, a Delaware
corporation ("Domain").
WHEREAS, EFC holds, in the aggregate, (i) 279,008 shares of Series A
Common Stock and 22,244 shares of Series B Common Stock (together, the "Common
Stock"), of Gulfstar Energy, Inc. (the "Company"), (ii) 55,796 shares of the
Company's 12-1/2% Cumulative Preferred Stock, Series 0 (xxx "Xxxxxxxxx Xxxxx"),
(xxx) those three certain Secured Limited Recourse Notes made by the Company and
dated November 14, 1996, in the respective face amounts of $1,520,000,
$2,470,000 and $1,010,000 (collectively, the "Completion Cost Notes"), (iv)
those three certain promissory notes made by the Company and dated May 30, 1995,
in the respective face amounts of $135,850, $83,600, and $55,550 (the "Override
Notes"), (v) those three certain notes made by the Company and dated May 30,
1995, in the respective face amounts of $1,782,960, $2,897,310 and $1,184,730
(the "General Obligation Notes"), and (vi) certain other rights and interests to
be conveyed to Domain pursuant to the Assignment and Assumption Agreement
attached hereto as Exhibit A and the Assignment of Liens and Security Interests
attached hereto as Exhibit B (collectively, the "Other Rights"); the Completion
Cost Notes, the Override Notes and the General Obligation Notes are hereinafter
referred to collectively as the "Notes", and the Notes, the Common Stock, the
Preferred Stock and the Other Rights are hereinafter referred to collectively as
the "Gulfstar Holdings";
WHEREAS, in accordance with a plan arranged by Domain, EFC and the
Company (the "Plan"), Domain will purchase, and EFC will sell, the Gulfstar
Holdings pursuant to the terms of this Agreement and, immediately thereafter, a
wholly-owned subsidiary of Domain will be merged with and into the Company
pursuant to that certain Agreement and Plan of Merger dated November 21, 1997
(the "Merger Agreement"), by and among Domain, the Company and Domain Gulf
Acquisition Corp., a Delaware corporation ("Domain Sub").
WHEREAS, the intent of Domain, EFC and the Company in adopting the
Plan was to allow Domain to acquire (directly or indirectly) all of the
outstanding equity interests in the Company in a taxable transaction;
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WHEREAS, the parties hereto desire to set forth certain
representations and warranties made by each to the other as an inducement to the
consummation of the purchase and sale of the Gulfstar Holdings.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations and warranties contained herein and for other consideration as
set forth below, the parties hereto hereby agree as follows:
ARTICLE I.
PURCHASE AND SALE OF THE GULFSTAR HOLDINGS
1.1 Purchase and Sale of the Gulfstar Holdings. Pursuant to the
terms of this Agreement, on the Closing Date (as hereinafter defined), Domain
will purchase from EFC, and EFC will sell, transfer and assign to Domain, the
Gulfstar Holdings.
1.2 Consideration. On the terms and subject to the conditions of
this Agreement, on the Closing Date, Domain will purchase the Gulfstar Holdings
for (i) $7,900,000 in cash, payable in immediately available funds to an account
or accounts designated by EFC (the "Cash Consideration") and (ii) 263,158 shares
(the "Main Domain Shares") of the common stock, $.01 par value per share, of
Domain ("Domain Common Stock").
1.3 Alternate Consideration. By written notice to Domain given not
later than three (3) business days prior to the Closing Date, EFC may elect to
alter the composition of the Cash Consideration by causing Domain to purchase
the Gulfstar Holdings for (i) $7,400,000 in cash, payable in immediately
available funds to an account or accounts designated by EFC and (ii) a number of
shares of the Domain Common Stock equal to the quotient of (x) $500,000 divided
by (y) the last sale price of Domain Common Stock as reported on the New York
Stock Exchange Composite Tape on the third business day immediately preceding
the Closing Date, rounded up or down to the nearest whole share (the "Alternate
Domain Shares" and, together with the Main Domain Shares, the "Domain Shares").
ARTICLE II.
CLOSING
2.1 Closing. Subject to the satisfaction or waiver of the conditions
to closing set forth in Article VI,
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the closing ("Closing") of the acquisition of the Gulfstar Holdings contemplated
hereby shall be held at the offices of Weil, Gotshal & Xxxxxx LLP, 000
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, on December 10, 1997, or such other
place, date and time as may be mutually agreed upon by the parties hereto (the
"Closing Date").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of EFC. EFC hereby represents and
warrants as of the date hereof and as of the Closing Date to Domain that:
(a) Ownership of Gulfstar Holdings. EFC owns beneficially the
Gulfstar Holdings. Except as set forth on Schedule 3.1(a) to the disclosure
schedules delivered by EFC to Domain pursuant to this Agreement (collectively,
the "EFC Disclosure Schedules"), neither EFC nor any affiliate of EFC, directly
or indirectly, of record or beneficially, owns or has any right or obligation to
acquire, or has any proxy or power of attorney or other right or power to vote
or otherwise control, any securities or obligations, whether debt or equity, of
the Company. Except as set forth on Schedule 3.1(a) to the EFC Disclosure
Schedules, EFC has full lawful right, power, authority and capacity to sell,
transfer, assign and convey to Domain the Gulfstar Holdings, free and clear of
all liens, claims, charges, pledges, security interests, rights, encumbrances,
rights of first refusal or other restrictions of any kind or nature (including
any restriction on the right to vote, sell or otherwise dispose of the Gulfstar
Holdings but excluding all liens being assigned or transferred to Domain
pursuant to Exhibits A and B) (collectively, "Liens"). On the Closing Date,
Domain will acquire good and marketable title to the Gulfstar Holdings, free and
clear of all Liens. For purposes of this Agreement "affiliate" means, with
respect to any person, any person that directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is in common control with
such person. For purposes of this Agreement "controls" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a person whether through the ownership of voting stock or any
equity interest, by contract or otherwise; and "person" means any individual,
partnership, joint venture, corporation, limited liability company, trust,
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unincorporated organization, government or other department or agency thereof or
other entity.
(b) Organization and Standing. EFC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full power and authority to own, lease, use and operate its
properties and to conduct its business as and where now owned, leased, used,
operated and conducted. EFC is duly qualified to do business and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the property it owns, leases or operates makes such qualification
necessary, except where the failure to be so qualified or in good standing in
such jurisdiction would not have a material adverse effect on EFC.
(c) Corporate Power and Authority. EFC has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by EFC and the consummation by EFC of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of EFC and no other
corporate proceedings on the part of EFC are necessary to approve this Agreement
and to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by EFC and constitutes a valid and
binding obligation of EFC, enforceable against EFC in accordance with its terms.
(d) Conflicts; Consents and Approvals. Neither the execution
and delivery of this Agreement by EFC, nor the consummation of the transactions
contemplated hereby will:
(i) conflict with, or violate any provision of the Certificate
of Incorporation or By-laws (or any similar organizational document) of
EFC;
(ii) conflict with, violate or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or otherwise)
to terminate, accelerate, modify or call a default under, or result in the
termination, acceleration or cancellation of, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of EFC under, any of the terms, conditions or provisions of any note,
bond, mortgage,
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indenture, deed of trust, license, contract, undertaking, agreement, lease or
other instrument or obligation to which EFC is a party or by which any of its
properties or assets may be bound;
(iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to EFC or any of its properties or assets; or
(iv) require any action or consent or approval of, or review
by, or registration or filing by EFC with any third party or any United States
federal, state or local or any foreign government, governmental, administrative
or regulatory authority, agency or commission or any court, tribunal or judicial
or arbitral body (each, a "Governmental Authority") other than any actions
required under federal and state securities laws as are contemplated by this
Agreement;
except in the case of clauses (ii), (iii) and (iv) above, for any of the
foregoing that would neither, in the aggregate, have a material adverse effect
on EFC nor prevent or delay the consummation of the transactions contemplated
hereby.
(e) Brokers. Neither EFC, nor any of its affiliates, nor any
of its or their respective directors, officers, stockholders or employees, on
behalf of EFC or its board of directors, has employed any financial advisor,
broker or finder or incurred any liability for any financial advisory, brokerage
or finders' fees or commissions in connection with the transactions contemplated
hereby. EFC is not aware of any claim against EFC for payment of any finder's
fees, brokerage or agent's commissions or other like payments in connection with
the negotiation of this Agreement or in connection with the transactions
contemplated hereby.
(f) No Litigation. There are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of EFC threatened,
that challenges the validity or legality of this Agreement or the transactions
contemplated hereby.
(g) Disclosure of Agreements. Schedule 3.1(g) to the EFC
Disclosure Schedules is a complete and accurate listing of all documents and
agreements (i) between EFC or any of its subsidiaries, directors or officers, on
the one hand, and the Company or any of its subsidiaries, directors (other than
employment agreements or indemnity
5
agreements between such directors and EFC) or officers, on the other hand, or
(ii) to which any of the Company's properties are subject and to which EFC is a
party.
(h) Certain RIMCO Agreement Conditions. In connection with the
consummation of the transactions contemplated by the Securities Purchase
Agreement dated May 15, 1997 among EFC and RIMCO Partners, L.P., et al. (the
"RIMCO Agreement"), all of the conditions precedent to the obligations of EFC
set forth in Sections and of the RIMCO Agreement and all of the conditions
precedent to the obligations of RIMCO Partners, L.P., et al. set forth in
Sections and of the RIMCO Agreement were satisfied completely and in full in
accordance with their terms, and none of such conditions was waived or
unsatisfied, in whole or in part.
(i) Investment Intent. EFC is an accredited investor as
defined under the Securities Act of 1933, as amended (the "Securities Act"), and
will acquire the Domain Shares for its own account to hold and maintain for
investment and not with a view to, or for sale or other disposition in
connection with, any distribution of all or any part of such shares, except for
a sale thereof (i) in an offering covered by a registration statement filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act, covering such shares or (ii) pursuant to an applicable exemption under the
Securities Act.
(j) Disclosure of Information. EFC has received all the
information it considers necessary or appropriate for deciding whether to accept
the Domain Shares pursuant to this Agreement. EFC hereby acknowledges that it
has been furnished with (i) Domain's Prospectus dated June 23, 1997 relating to
Domain's initial public offering of 6,000,000 shares of its Common Stock (the
"IPO Prospectus") and (ii) Domain's Form 10-Q for the quarters ended June 30,
1997 and September 30, 1997. EFC further represents that it has had an
opportunity to ask questions of and receive answers from Domain regarding Domain
and its operations and plan of business and the terms and conditions of the
issuance of the Domain Shares.
(k) Investment Experience. EFC acknowledges that it is able to
fend for itself, can bear the economic risk of its investment in the Domain
Shares and has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the investment in the
Domain Shares. EFC represents it has not been organized for the purpose of
acquiring such shares.
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(l) Restricted Securities. EFC understands that the Domain
Shares will not have been registered pursuant to the Securities Act or any
applicable state securities or Blue Sky law, that such securities will be
characterized as "restricted securities" under the federal securities laws and
that under such laws and applicable regulations such securities cannot be sold
or otherwise disposed of without registration under the Securities Act or an
exemption therefrom. In this connection, EFC represents that it is familiar with
Rule 144, as currently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Stop transfer instructions may be issued to
the transfer agent for the Domain Shares or a notation may be made in the
appropriate records of Domain in connection with the Domain Shares.
(m) Legends. It is agreed and understood that the certificate
representing the Domain Shares shall conspicuously set forth on the face or back
thereof a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS SUCH SHARES ARE FIRST REGISTERED UNDER
THAT ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
(n) Disclosure. EFC has fully provided Domain with all the
information that Domain has specifically requested from EFC in writing for
deciding whether to purchase the Gulfstar Holdings pursuant to this Agreement.
All such written information has been prepared by EFC in good faith, and to
EFC's knowledge such information does not contain any untrue statement of a
material fact or omit to state therein a material fact necessary to make the
statements made therein not misleading.
(o) Certain Defined Terms. For purposes of the representations
and warranties of EFC set out in Section , the Company and each subsidiary of
the Company shall be deemed not to be affiliates or subsidiaries of EFC.
3.2 Representations and Warranties of Domain. Domain hereby
represents and warrants as of the date hereof and as of the Closing Date to EFC
that:
(a) Organization and Standing. Domain is a corporation duly
organized, validly existing and in good
7
standing under the laws of the State of Delaware with full power and authority
to own, lease, use and operate its properties and to conduct its business as and
where now owned, leased, used, operated and conducted. Domain is duly qualified
to do business and in good standing in each jurisdiction in which the nature of
the business conducted by it or the property it owns, leases or operates makes
such qualification necessary, except where the failure to be so qualified or in
good standing in such jurisdiction would not have a material adverse effect on
Domain. The copies of the Certificate of Incorporation and By-laws of Domain
which have previously been made available to EFC are true, complete and correct
copies of such documents as in effect as of the date of this Agreement.
(b) Capitalization of Domain. Domain's authorized capital
stock consists solely of (a) 25,000,000 shares of common stock, $.01 par value
per share, and (b) 5,000,000 shares of preferred stock, $.01 par value per share
("Domain Preferred Stock"). As of November 4, 1997, (i) 14,610,121 shares of
Domain Common Stock were issued of which 14,607,729 were outstanding and 2,392
were held by Domain as treasury shares, (ii) 862,547 shares of Domain Common
Stock were issuable upon the exercise or conversion of options, warrants or
convertible securities granted or issuable by Parent and (iii) no shares of
Domain Preferred Stock were issued and outstanding. Since September 30, 1997,
with the exception of the Domain Common Stock issued to EFC pursuant hereto and
to Enron Capital & Trade Resources Corp. ("ECT") pursuant to the Stock Purchase
Agreement dated November 21, 1997 (the "Stock Purchase Agreement"), by and
between Domain and ECT, Domain has not issued any shares of its capital stock
except upon the exercise of such options, warrants or convertible securities.
Each outstanding share of capital stock of Domain is, and all shares of Domain
Common Stock to be issued pursuant hereto will be when issued in accordance with
the terms hereof, duly authorized and validly issued, fully paid and
nonassessable and free of any preemptive rights. As of the date hereof, other
than as set forth above or on Schedule 3.2(b) to the disclosure schedules
delivered by Domain to EFC pursuant to this Agreement (collectively, the "Domain
Disclosure Schedules"), there are no outstanding shares of capital stock or
subscriptions, options, warrants, puts, calls, agreements, understandings,
claims or other commitments or rights of any type relating to the issuance, sale
or transfer by Domain of any securities of Domain, nor are there outstanding any
securities which are convertible into or exchangeable for any shares of capital
stock of Domain; and Domain has no
8
obligation of any kind to issue any additional securities, other than the Domain
Common Stock to be issued to EFC pursuant hereto and to ECT pursuant to the
Stock Purchase Agreement or to pay for securities of Domain or any predecessor.
Domain has no outstanding bonds, debentures, notes or other similar obligations
the holders of which have the right to vote generally with holders of Domain
Common Stock.
(c) Corporate Power and Authority. Domain has full corporate
power and authority to execute and deliver this Agreement and the Registration
Rights Agreement and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Registration
Rights Agreement by Domain and the consummation by Domain of the transactions
contemplated hereby and thereby have been duly and validly approved by the Board
of Directors of Domain and no other corporate proceedings on the part of Domain
are necessary to approve this Agreement and the Registration Rights Agreement,
and to consummate the transactions contemplated hereby or thereby. This
Agreement has been, and upon execution and delivery the Registration Rights
Agreement will have been, duly and validly executed and delivered by Domain and
constitute (and in the case of the Registration Rights Agreement will upon such
delivery constitute) the valid and binding obligations of Domain, enforceable
against Domain in accordance with their terms.
(d) Conflicts; Consents and Approvals. Neither the execution
and delivery of this Agreement or the Registration Rights Agreement by Domain,
nor the consummation of the transactions contemplated hereby or
thereby will:
(i) conflict with, or violate any provision of the Certificate
of Incorporation or By-laws of Domain or any subsidiary of Domain;
(ii) conflict with, violate or result in a breach of any
provision of, or constitute a default (or an event which, with the giving
of notice, the passage of time or otherwise, would constitute a default)
under, or entitle any party (with the giving of notice, the passage of
time or otherwise) to terminate, accelerate, modify or call a default
under, or result in the termination, acceleration or cancellation of, or
result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Domain or any
subsidiary of Domain under, any
9
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, contract, undertaking, agreement, lease
or other instrument or obligation to which Domain or any subsidiary of
Domain is a party or by which any of their respective properties or assets
may be bound;
(iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Domain or any subsidiary of Domain or any
of their respective properties or assets; or
(iv) require any action or consent or approval of, or review
by, or registration or filing by Domain with any third party or any
Governmental Authority, other than any actions required under federal and
state securities laws as are contemplated by this Agreement;
except in the case of clauses (ii), (iii) and (iv) above, for any of the
foregoing that would neither, in the aggregate, have a material adverse effect
on Domain nor prevent or delay the consummation of the transactions contemplated
hereby.
(e) Domain Shares. The Domain Shares to be issued to EFC
pursuant to Section 1.2 and, if elected by EFC, Section have been duly
authorized for such issuance pursuant to this Agreement and, when issued and
delivered by Domain upon EFC's transfer of the Gulfstar Holdings to Domain in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable. The issuance of the Domain Shares under this Agreement is not
subject to any preemptive rights.
(f) Investment Purpose. Domain is an accredited investor as
defined under the Securities Act, and will acquire the Gulfstar Holdings for its
own account to hold and maintain for investment and not with a view to, or for
sale or other disposition in connection with, any distribution of all or any
part of the Gulfstar Holdings, except for a sale thereof (i) in an offering
covered by a registration statement filed with the Commission under the
Securities Act covering the Gulfstar Holdings or (ii) pursuant to an applicable
exemption under the Securities Act.
(g) Brokers. Except as disclosed on Schedule 3.2(g) to the
Domain Disclosure Schedules, neither Domain nor any of its directors, officers,
stockholders or
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employees, on behalf of Domain or its board of directors, has employed any
financial advisor, broker or finder or incurred any liability for any financial
advisory, brokerage or finders' fees or commissions in connection with the
transactions contemplated hereby. Domain is not aware of any claim against
Domain for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiation of this Agreement or in
connection with the transactions contemplated hereby.
(h) Litigation. Except as disclosed on Schedule 3.2(h) to the
Domain Disclosure Schedules, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Domain threatened, against Domain
before any Governmental Authority which, individually or in the aggregate, would
have a material adverse effect on Domain or a material adverse effect on the
ability of Domain to consummate the transactions contemplated by this Agreement.
Except as disclosed on Schedule 3.2(h) to the Domain Disclosure Schedules,
Domain is not subject to any outstanding order, writ, injunction or decree
which, individually or in the aggregate, would have a material adverse effect on
Domain or a material adverse effect on the ability of Domain to consummate the
transactions contemplated hereby.
(i) Financial Statements. Domain has delivered to EFC the
audited financial statements of Domain and its predecessor as of and for the
respective years ended December 31, 1996, December 31, 1995 and December 31,
1994 (the "Domain Audited Financials") and Domain's unaudited financial
statements consisting of a balance sheet as of the end of the respective interim
periods ended March 31, 1997, June 30, 1997 and September 30, 1997 and the
related statements of income, retained earnings and cash flows for the periods
then ended (the "Domain Interim Financials" and, together with the Domain
Audited Financials, the "Domain Financial Statements"). The Domain Financial
Statements fairly present in conformity with generally accepted accounting
principles consistently applied ("GAAP") the financial position and assets
(collectively, the "Domain Assets") and liabilities of Domain as of the dates
thereof and Domain's results of operations and cash flows for the periods then
ended (subject, in the case of any of the Domain Interim Financials, to the
absence of notes and to normal, recurring year-end adjustments). The balance
sheet as of September 30, 1997, included as a part of the Domain Interim
Financials is referred to herein as the "Domain Interim Balance Sheet", and the
date thereof is referred to herein as the "Domain Interim Balance Sheet Date".
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(j) Liabilities. Domain has no Liabilities, and no material
Domain Assets are subject to any Liabilities, except (a) to the extent
specifically disclosed on or provided for in the Domain Interim Balance Sheet;
(b) Liabilities incurred since the Domain Interim Balance Sheet Date in the
ordinary course of its business; (c) Liabilities that were not required under
GAAP to have been specifically disclosed or reserved for on the Domain Interim
Balance Sheet; and (d) Liabilities under or contemplated by this Agreement or
disclosed hereunder. All Liabilities required under GAAP to be specifically
disclosed or reserved for on the Domain Interim Balance Sheet are disclosed or
reserved for thereon. For purposes of this Section , "Liability" means any
direct liability, indebtedness, obligation, expense, claim, loss, damage,
deficiency, guaranty or endorsement of or by any Person, absolute or contingent,
accrued or unaccrued, due or to become due, liquidated or unliquidated.
(k) No Default. Domain is not in default, and no notice of
alleged default has been received by Domain, under any material contract or
agreement to which Domain is a party, no other party to any such contract or
agreement is in default to the knowledge of Domain, and there exists no
condition or event that, after notice or lapse of time or both, would constitute
a default by Domain under any such contract or agreement, in each case which
default would have a material adverse effect on the business, properties or
financial condition of Domain and its subsidiaries, taken as a whole.
(l) Disclosure. Domain has fully provided EFC with all the
information that EFC has specifically requested from Domain in writing for
deciding whether to accept the Domain Shares pursuant to this Agreement. All
such written information has been prepared in good faith by Domain and does not
contain any untrue statement of a material fact or omit to state therein a
material fact (other than those facts EFC recognizes to be industry risks
normally associated with the oil and gas exploration and production business)
necessary to make the statements made therein not misleading.
(m) Domain SEC Documents. Each of Domain and its material
subsidiaries has timely filed with the Commission all forms, reports, schedules,
statements, exhibits and other documents required to be filed by it since June
23, 1997 under the Securities Exchange Act of 1934, as amended (together with
the rules and regulations thereunder, the "Exchange Act") or the Securities Act
(such
12
documents, as supplemented and amended since the time of filing, together with
Domain's Registration Statement on Form S-1 under the Securities Act, No.
333-24641 (the "Registration Statement"), collectively, the "Domain SEC
Documents"). The Domain SEC Documents, including, without limitation, any
financial statements or schedules included therein, at the time filed (and, in
the case of the Registration Statement, on the date of effectiveness thereof)
(a) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be. The
financial statements (including the related notes) of Domain included in the
Domain SEC Documents were prepared in accordance with GAAP during the periods
involved (except as may be indicated in the notes thereto), and fairly present
(subject in the case of unaudited statements to the absence of notes and to
normal, recurring and year-end audit adjustments) the consolidated financial
position of Domain as of the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended.
ARTICLE IV.
ADDITIONAL AGREEMENTS, COVENANTS AND REPRESENTATIONS
4.1 Reasonable Business Efforts. EFC and Domain shall use their
reasonable business efforts to (i) obtain all approvals and consents required by
or necessary for the transactions contemplated by this Agreement and (ii) ensure
that all of the conditions to the respective obligations of EFC and Domain
contained in Article VI are satisfied timely.
4.2 Confidentiality. After the Closing Date, EFC shall not, directly
or indirectly, use or provide to, and shall not permit any affiliate, directly
or indirectly, to use or provide to any other person, other than Domain and its
affiliates any information concerning the business or operations (financial or
other) of the Company or the terms of the transactions contemplated hereby,
except as on the advice of counsel is required in governmental filings or
judicial, administrative or arbitration proceedings; provided, that EFC shall be
permitted to provide such information (i) to any of its affiliates (it being
understood and agreed that EFC will be responsible for compliance by EFC's
affiliates with the terms of this Section 4.2) and (ii) so long as such
information is not (A)
13
proprietary or technical (including without limitation geological, geophysical
or seismic data or interpretations, maps, graphs and similar data), (B)
information concerning oil and gas reserve quantities, reserve reports,
projections, economic analyses or drilling and/or acquisition opportunities or
(C) customarily confidential to customers of EFC or its affiliates, to
companies, partnerships or other business entities with whom EFC or an affiliate
(excluding Enron Oil & Gas Company) is proposing to engage in a financing
transaction in which EFC believes in good faith that disclosure of information
about the Company permitted to be disclosed hereunder is necessary to further a
legitimate business interest of EFC in connection with such proposed financing;
and provided, further, that the foregoing covenant shall not be applicable to
any information of the Company that is public (other than as a consequence of
disclosure by EFC or any affiliate of EFC in violation of the terms of this
Section 4.2).
4.3 Certain Prohibited Actions. From the execution hereof through
the Closing, unless this Agreement is earlier terminated and except as otherwise
provided herein, EFC shall not:
(a) offer to sell, sell, pledge or otherwise dispose of or
transfer any interest in or encumber with any Lien any of the Gulfstar Holdings;
(b) acquire any securities or debt obligations of the Company;
(c) deposit any of the Common Stock or the Preferred Stock
into a voting trust, enter into a voting agreement or arrangement with respect
to any of the Common Stock or the Preferred Stock (except as provided for in
this Agreement) or grant any proxy or power of attorney with respect to any of
the Gulfstar Holdings other than pursuant to this Agreement; or
(d) enter into any contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition or sale,
assignment or other disposition of or transfer of any interest in or the voting
of any securities or obligations of the Company.
4.4 Mutual Representation. Domain has had access to all books and
records of the Company which it has deemed desirable or appropriate to examine;
EFC has had access to all books and records of Domain which it has deemed
desirable or appropriate to examine; and they have each made
14
all additional inquiries and investigations of the Company and Domain,
respectively, which each has deemed desirable or appropriate for purposes of the
transactions contemplated by this Agreement. Except for the representations and
warranties of Domain set forth in Section 3.2 of this Agreement and of EFC set
forth in Section 3.1 of this Agreement and in Exhibits A and B hereto, neither
Domain nor EFC is making, in this Agreement or otherwise, any representations or
warranties to the other.
4.5 Further Assurances. From time to time after the Closing, EFC
will execute and deliver, or cause to be executed and delivered, without further
consideration, such other instruments of conveyance, assignment, transfer and
delivery and will take such other actions as Domain may reasonably request in
order to more effectively transfer, convey, assign and deliver to Domain, and to
place Domain in possession and control of, the Gulfstar Holdings and to enable
Domain to exercise and enjoy all rights and benefits of EFC with respect
thereto.
4.6 Registration Rights Agreement. Domain and EFC hereby agree to
enter into a registration rights agreement, in substantially the form set forth
as Exhibit C hereto (the "Registration Rights Agreement"), at (and subject to
the occurrence of) the Closing pursuant to which Domain will agree to register
under the Securities Act the Domain Shares upon the terms and subject to the
conditions contained in the Registration Rights Agreement.
4.7 Voting Matters.
(a) EFC hereby agrees that in connection with the solicitation
of any written consent of any holders of shares of capital stock of the Company
or at any special meeting of stockholders of the Company (the "Special Meeting")
called to consider and vote upon the Merger Agreement, any adjournment thereof
or any other meeting of the holders of shares of capital stock of the Company,
however called, EFC shall vote, and cause to be voted, all shares of Common
Stock and Preferred Stock (i) in favor of the Merger Agreement and the
transactions contemplated thereby (the "Merger"), and any actions required in
furtherance thereof or (ii) against any other action which is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
materially adversely affect the Merger Agreement and/or the Merger contemplated
thereby. In furtherance thereof, EFC hereby irrevocably appoints Domain Sub, its
officers, agents and nominees, with full power of substitution, as proxy, being
an appointment
15
coupled with an interest, to vote the Common Stock and the Preferred Stock for
and in the name, place and stead of EFC at the Special Meeting or at any
adjournment thereof or any other meeting of the holders of shares of capital
stock of the Company, however called, or pursuant to any consent in lieu of a
meeting, or otherwise, in favor of the Merger Agreement and the Merger. This
proxy shall be irrevocable, it being coupled with an interest sufficient in law
to support an irrevocable proxy. Except as expressly provided in this Agreement,
the Common Stock and the Preferred Stock shall be voted by and in the manner
determined by EFC in its sole and absolute discretion. EFC shall not enter into
any agreement or understanding with any person the effect of which would be
inconsistent or violative of the provisions and agreements contained in this
Section 4.7.
(b) The proxy granted pursuant to Section 4.7 above shall
expire upon the earliest to occur of (i) the Closing and (ii) the termination of
the Merger Agreement.
(c) EFC hereby revokes any and all previous proxies given by
it with respect to the Common Stock.
(d) EFC hereby agrees to permit Domain (i) to publish and
disclose in the Information Memorandum/Consent Solicitation to be furnished to
holders of shares of capital stock of the Company or (ii) with the consent of
EFC, which such consent shall not be unreasonably withheld, to disclose in any
press release or other public announcement related to the Merger, the identity
of, and ownership of Common Stock and Preferred Stock by, EFC and the nature of
the commitments, arrangements and understandings of EFC under this Agreement,
unless such disclosure is (A) necessary to comply with applicable laws or New
York Stock Exchange requirements, in which case Domain shall provide the text of
such disclosure to EFC before the disclosure and permit EFC to comment on such
disclosure or (B) proposed to be made in response to comments by the Commission
regarding any filing by Domain with the Commission.
Section 4.8 Domain Shares.
Domain shall take all actions required, if any, to cause the Domain
Shares to be listed on the New York Stock Exchange (the "NYSE") and shall give
such notice as may be required to the NYSE with respect to the transactions
contemplated hereby.
16
ARTICLE V.
INDEMNIFICATION
5.1 Indemnification by Domain. Domain agrees to indemnify, defend
and hold harmless, EFC and its directors, officers, employees, agents,
representatives and controlled and controlling persons (hereinafter,
collectively "EFC's Related Persons"), from and against all Claims asserted
against, relating to, imposed upon or incurred by EFC or EFC's Related Persons,
directly or indirectly, by reason of, arising out of, or resulting from (i) the
inaccuracy or breach of any covenant, representation or warranty of Domain
contained in this Agreement or (ii) the Agreement from EFC in favor of I.S.S.
Compression, Inc., which Agreement provides assurances from EFC with respect to
the Company's performance under, and was executed in connection with, the
Amendment to Lease Rental Agreements made and entered into as of September 1,
1997, between I.S.S. Compression, Inc. and the Company. As used in this Article
V, the term "Claim" shall include (x) all debts, liabilities and obligations;
(y) all losses, damages, costs and expenses (including, without limitation,
prejudgment interest in any litigated matter), penalties, court costs and
reasonable attorneys' fees and expenses; and (z) all demands, claims, actions,
costs of investigation, causes of action, proceedings, arbitrations, judgments,
settlements and assessments, whether or not ultimately determined to be valid,
with the exception of punitive or exemplary damages not sustained in an action
by a third party.
5.2 Indemnification by EFC. EFC hereby agrees to indemnify, defend
and hold harmless Domain, and its directors, officers, employees, agents,
representatives and controlled and controlling persons (hereinafter,
collectively "Domain's Related Persons"), from and against all Claims asserted
against, relating to, imposed upon or incurred by Domain or Domain's Related
Persons, directly or indirectly, by reason of, arising out of, or resulting from
the inaccuracy or breach of any covenant, representation or warranty of EFC
contained in this Agreement.
5.3 Defense of Third Party Claims. In the event any Claim is
asserted against any indemnified party by a third party, the indemnified party
shall with reasonable promptness notify the indemnifying party of such Claim.
Pursuant to its defense obligation provided in Section 5.1 or Section 5.2, the
indemnifying party shall employ counsel satisfactory to the indemnified party
and shall take such
17
other steps as are reasonably necessary or appropriate to defend the indemnified
party against such Claim.
5.4 Survival of Representations and Warranties. All representations
and warranties contained in this Agreement shall survive the Closing hereunder
and shall remain in full force and effect through the date that is one year
after the Closing Date, except as to any matters with respect to which a bona
fide written Claim shall have been made or an action at law or in equity shall
have commenced before such date, in which event survival shall continue until
the final resolution of such Claim or action, including all applicable periods
for appeal.
ARTICLE VI.
CONDITIONS TO CLOSING
6.1 Conditions to the Obligation of Domain. The obligation of Domain
to proceed with the Closing contemplated hereby is subject to the satisfaction
on or prior to the Closing Date of all of the following conditions, any one or
more of which may be waived in writing, in whole or in part, by Domain:
(a) EFC shall have complied in all respects with each of its
covenants and agreements contained herein and each of its representations and
warranties contained in this Agreement shall have been true and correct as of
the date hereof and shall be deemed to have been made again at and as of the
Closing Date and shall then be true and correct in all respects.
(b) Domain shall have received a certificate, dated as of the
Closing Date, of an executive officer of EFC certifying as to the matters
specified in Section hereof.
(c) Domain shall have received from Xxxxxxxxx & Xxxxxxxxx,
L.L.P., counsel to EFC, an opinion dated the Closing Date in form reasonably
acceptable to Domain and its counsel.
(d) EFC shall have delivered resignations, effective as of the
Closing Date, of each of its representatives on the board of directors of the
Company.
(e) As of the Closing, there shall not be any pending or
threatened litigation or proceeding to restrain or prohibit or otherwise
materially interfere with
18
the consummation of the transactions contemplated by this Agreement or the
ownership of the Gulfstar Holdings by Domain after the Closing Date or to obtain
material damages or other relief in connection with the consummation of the
transactions contemplated by this Agreement.
(f) EFC shall have delivered to Domain (a) certificates
representing the Common Stock and the Preferred Stock (together with stock
powers duly endorsed by EFC so that the Common Stock and the Preferred Stock may
be duly registered in Domain's name), and (b) the original Notes, each duly
endorsed to Domain.
(g) EFC shall have executed and delivered to Domain an
Assignment and Assumption Agreement in the form attached as Exhibit A for the
purpose of assigning to Domain all of the right, title, and interest of EFC in
and to the agreements listed in such Assignment and Assumption Agreement or on
an exhibit attached thereto.
(h) EFC shall have executed and delivered to Domain an
Assignment of Liens and Security Interests substantially in the form attached as
Exhibit B for the purpose of assigning to Domain all of the right, title, and
interest of EFC in, to and under each mortgage and each security agreement
listed in the Assignment of Liens and Security Interests or on an exhibit
attached thereto, in each case with corresponding UCC-3 financing statements
evidencing such assignment, in form and substance reasonably satisfactory to
Domain.
(i) The transactions contemplated by the Stock Purchase
Agreement shall have been consummated, or shall by consummated simultaneously
with the Closing hereunder.
(j) The Board of Directors of the Company shall have duly
called and noticed the Special Meeting, or completed the successful solicitation
of written consents in lieu thereof.
(k) The transactions contemplated by the Merger Agreement
shall not have been terminated.
(l) The condition precedent to Domain's and Domain Sub's
obligations to consummate the Merger set forth in Section 6.3(a) of the Merger
Agreement shall have been fulfilled.
19
(m) The Company and Fairfield Industries Incorporated shall
have executed and delivered the letter agreement in the form attached as Exhibit
D.
(n) Domain and Cheyenne Petroleum Company shall have executed
and delivered the letter agreement in the form attached as Exhibit E.
6.2 Conditions to the Obligation of EFC. The obligation of EFC to
proceed with the Closing contemplated hereby is subject to the satisfaction on
or prior to the Closing Date of all of the following conditions, any one or more
of which may be waived in writing, in whole or in part, by EFC:
(a) Domain shall have complied in all respects with each of
its covenants and agreements contained herein, including, without limitation,
the execution and delivery of the Registration Rights Agreement, and each of its
representations and warranties contained in this Agreement shall have been true
and correct as of the date hereof and shall be deemed to have been made again at
and as of the Closing Date and shall then be true and correct in all respects.
(b) EFC shall have received a certificate, dated the Closing
Date, of an executive officer of Domain certifying as to the matters specified
in Section hereof.
(c) EFC shall have received from Weil, Gotshal & Xxxxxx LLP,
counsel to Domain, an opinion dated the Closing Date in form reasonably
acceptable to EFC and its counsel.
(d) As of the Closing, there shall not be any pending or
threatened litigation or proceeding to restrain or prohibit or otherwise
materially interfere with the consummation of the transactions contemplated by
this Agreement or the ownership of the Gulfstar Holdings by Domain after the
Closing Date or to obtain material damages or other relief in connection with
the consummation of the transactions contemplated by this Agreement.
(e) The transactions contemplated by the Stock Purchase
Agreement shall have been consummated, or shall by consummated simultaneously
with the Closing hereunder.
20
(f) The Board of Directors of the Company shall have duly
called and noticed the Special Meeting, or completed the successful solicitation
of written consents in lieu thereof.
(g) The transactions contemplated by the Merger Agreement
shall not have been terminated.
(h) EFC shall have received a stock certificate in the name of
EFC or its designee representing all of the Domain Shares.
ARTICLE VII.
TERMINATION
7.1 Events of Termination. Notwithstanding any other provisions
hereof, this Agreement shall terminate upon the occurrence of any of the
following events:
(a) The written consent of Domain and EFC;
(b) By Domain in writing, if EFC shall materially breach any
of its representations, warranties or covenants contained herein, which failure
or breach is not cured within ten (10) days after Domain shall have notified EFC
of Domain's intent to terminate this Agreement pursuant to this subparagraph
(b);
(c) By EFC in writing, if Domain shall materially breach any
of its representations, warranties or covenants contained herein, which failure
or breach is not cured within ten (10) days after EFC has notified Domain of
EFC's intent to terminate this Agreement pursuant to this subparagraph (c);
(d) By either Domain or EFC in writing, if there shall be any
order, writ, injunction or decree of any court or governmental or regulatory
agency binding on Domain or EFC, which prohibits or restrains Domain or EFC from
consummating the transactions contemplated hereby, provided that Domain and EFC
shall have used their reasonable best efforts to have any such order, writ,
injunction or decree lifted and the same shall not have been lifted within
thirty (30) days after entry by any such court or governmental or regulatory
agency;
(e) By either Domain or EFC, in writing, if for any reason the
Closing has not occurred by December 15, 1997;
21
(f) By Domain in writing, if the unanimous approval of the
Merger Agreement and the Merger by the Company's Board of Directors and their
unanimous recommendation thereof to the holders of shares of capital stock of
the Company shall be modified or rescinded, or such Board of Directors shall
have resolved to do so, or any member thereof shall have proposed in writing
that the Company's Board of Directors do any of the foregoing; or
(g) By either Domain or EFC, in writing, if the Merger
Agreement is terminated.
7.2 Effect of Termination. The following provisions apply in the
event of a termination of this Agreement:
(a) If this Agreement is terminated by Domain or by EFC not as
the result of the negligent or willful failure of any party to perform its
obligations hereunder, such termination shall be without liability to any party
to this Agreement or any shareholder, affiliate, director, officer, partner,
employee, agent or representative of such party.
(b) EFC and Domain acknowledge that the Gulfstar Holdings are
not readily available in the open market, are unique, and are specifically
identifiable. Accordingly, EFC and Domain further agree and stipulate that if
the Closing does not occur because of the negligent or willful failure of
Domain, on the one hand, or EFC, on the other hand, to perform their respective
obligations hereunder, (i) monetary damages and any other remedy at law will not
be adequate, (ii) the non-defaulting party shall be entitled to specific
performance as the remedy for such breach, (iii) each party hereto agrees to
waive any objection to the remedy of specific performance, (iv) each party
agrees that the granting of specific performance by any court will not be deemed
to be harsh or oppressive to the party who is ordered specifically to perform
its obligations under this Agreement, and (v) in connection with any action for
specific performance, the prevailing party shall be entitled to reasonable
attorneys' fees and other costs of prosecuting or defending such action.
(c) The right to seek specific performance hereunder shall not
preclude any party from seeking any other remedy at law or in equity.
22
ARTICLE VIII.
MISCELLANEOUS
8.1 Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits thereof by
giving written notice of such waiver to the other party. This Agreement may not
be amended or supplemented at any time, except by an instrument in writing
signed on behalf of each party hereto. The waiver by any party hereto of any
condition or of a breach of another provision of this Agreement shall not
operate or be construed as a waiver of any other condition or subsequent breach.
8.2 Assignment. This Agreement shall inure to the benefit of and
will be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns.
8.3 Notices. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing, and shall be deemed to have been duly given if (i)
delivered in person or by courier, (ii) sent by telecopy or facsimile
transmission, answer back requested, or (iii) mailed, certified first class
mail, postage prepaid, return receipt requested, to the parties hereto at the
following addresses:
if to Domain Energy Corporation:
Domain Energy Corporation
00000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
President and CEO
with a copy to:
Xxxxx X. Xxxx III
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
23
if to EFC:
c/o Enron Capital & Trade Resources Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Telecopy: (000) 000-0000 or (000) 000-0000
Attention: Xxxxx X. Xxxxx
with a copy to:
Enron Capital & Trade Resources Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: W. Xxxxx Xxxxxxx
and:
Xxxx X. Xxxxxx
Bracewell & Xxxxxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 8.3. Such notices shall be
effective, (i) if delivered in person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when the
answer back is received, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
8.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the law of Texas without giving effect to the principles of
conflicts of law thereof.
8.5 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.
24
8.6 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
8.7 Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
8.8 Entire Agreement; Third Party Beneficiaries. This Agreement and
the other written agreements contemplated hereby or specifically referred to
herein constitute the entire agreement and supersede all other prior agreements
and understandings, both oral and written, among the parties or any of them,
relating to the subject matter hereof. There are no oral agreements between the
parties hereto relating to the subject matter hereof. Neither this nor any
document delivered in connection with this Agreement confers upon any person not
a party hereto any rights or remedies hereunder except as provided in Article V.
8.9 Arbitration.
(a) Binding Arbitration. On the request of any party hereto,
whether made before or after the institution of any legal proceeding, any
action, dispute, claim or controversy of any kind now existing or hereafter
arising between any of the parties hereto in any way arising out of, pertaining
to or in connection with this Agreement (a "Dispute") shall be resolved by
binding arbitration in accordance with the terms hereof. Any party hereto may,
by summary proceedings, bring an action in court to compel arbitration of any
Dispute.
(b) Governing Rules. Any arbitration shall be administered by
the American Arbitration Association (the "AAA") in accordance with the terms of
this Section , the Commercial Arbitration Rules of the AAA, and, to the maximum
extent applicable, the Federal Arbitration Act. Judgment on any award rendered
by an arbitrator may be entered in any court having jurisdiction.
(c) Arbitrators. Any arbitration shall be conducted before a
three person panel of neutral arbitrators. Such panel shall consist of one
person from each of the following categories: (i) an attorney who has practiced
in the area of commercial law for at least 10 years or a retired judge at the
Texas or United States District Court or an appellate court level; (ii) a person
with at least 10 years experience in mergers and
25
acquisitions, and (iii) a person with at least 10 years experience in the
petroleum industry (collectively, the "Arbitrators"). The AAA shall submit a
list of persons meeting the criteria outlined above for each category of
arbitrator, and the parties shall select one person from each category in the
manner established by the AAA. If the parties cannot agree on an arbitrator
within 30 days after the request for an arbitration, then any party may request
the AAA to select an arbitrator. The Arbitrators may engage engineers,
accountants or other consultants that the Arbitrators deem necessary to render a
conclusion in the arbitration proceeding.
(d) Conduct of Arbitration. To the maximum extent practicable,
an arbitration proceeding hereunder shall be concluded within 180 days of the
filing of the Dispute with the AAA. Arbitration proceedings shall be conducted
in Houston, Texas. Arbitrators shall be empowered to impose sanctions and to
take such other actions as the arbitrators deem necessary to the same extent a
judge could impose sanctions or take such other actions pursuant to the Federal
Rules of Civil Procedure and applicable law. At the conclusion of any
arbitration proceeding, the Arbitrators shall make specific written findings of
fact and conclusions of law. The Arbitrators shall have the power to award
recovery of all costs and fees to the prevailing party. The parties hereto each
agrees to keep all Disputes and arbitration proceedings strictly confidential
except for disclosure of information required by applicable law or the rules of
the NYSE. It is expressly agreed that the Arbitrators shall have no authority to
award treble, exemplary or punitive damages of any type under any circumstances
regardless of whether such damages may be available under Texas law, the parties
hereby waiving their right, if any, to recover treble, exemplary or punitive
damages in connection with any Dispute.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
26
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the date first above written.
ENRON FINANCE CORP.
By:
---------------------------
Xxxxxxx X. Xxxxxxxxx
Vice President
DOMAIN ENERGY CORPORATION
By:
---------------------------
Xxxxxxx X. Xxxxx
President & CEO
27
