EXHIBIT 2.7
MERGER AGREEMENT
AMONG
3TEC ENERGY CORPORATION,
3NEX ACQUISITION CORPORATION
AND
ENEX RESOURCES CORPORATION
OCTOBER 25, 2001
TABLE OF CONTENTS
1. Definitions.......................................................... 1
2. Basic Transaction.................................................... 3
(a) The Merger................................................... 3
(b) The Closing.................................................. 3
(c) Actions at the Closing....................................... 3
(d) Effect of Merger............................................. 4
(e) Procedure for Payment........................................ 5
(f) Closing of Transfer Records.................................. 6
3. Representations and Warranties of the Target......................... 6
(a) Organization, Qualification,
and Corporate Power......................................... 6
(b) Capitalization............................................... 6
(c) Authorization of Transaction................................. 6
(d) Noncontravention............................................. 6
(e) Filings with the SEC......................................... 7
(f) Financial Statements......................................... 7
(g) Events Subsequent to Most Recent Fiscal Quarter End.......... 7
(h) Undisclosed Liabilities...................................... 7
(i) Brokers' Fees................................................ 8
(j) Disclosure................................................... 8
4. Representations and Warranties of the Buyer and the Transitory
Subsidiary.......................................................... 8
(a) Organization................................................. 8
(b) Authorization of Transaction................................. 8
(c) Noncontravention............................................. 8
(d) Brokers' Fees................................................ 8
5. Covenants............................................................ 9
(a) General...................................................... 9
(b) Notices and Consents......................................... 9
(c) Regulatory Matters and Approvals............................. 9
(d) Fairness Opinion............................................. 9
(e) Operation of Business........................................ 10
(f) Full Access.................................................. 10
(g) Notice of Developments....................................... 10
(h) Exclusivity.................................................. 11
(i) Insurance and Indemnification................................ 11
6. Conditions to Obligation to Close.................................... 11
(a) Conditions to Obligation of the Buyer and the Transitory
Subsidiary.................................................. 11
(b) Conditions to Obligation of the Target....................... 12
7. Termination.......................................................... 13
(a) Termination of Agreement..................................... 13
(b) Effect of Termination........................................ 14
8. Miscellaneous........................................................ 14
(a) Survival..................................................... 14
(b) Press Releases and Public Announcements...................... 14
(c) No Third-Party Beneficiaries................................. 14
(d) Entire Agreement............................................. 14
(e) Succession and Assignment.................................... 14
(f) Counterparts................................................. 15
(g) Headings..................................................... 15
(h) Notices...................................................... 15
(i) Governing Law................................................ 16
(j) Amendments and Waivers....................................... 16
(k) Severability................................................. 16
(l) Expenses..................................................... 16
(m) Construction................................................. 16
(n) Incorporation of Exhibits and Schedules...................... 16
Exhibit A--Certificate of Merger
Disclosure Schedule--Exceptions to Representations and Warranties
MERGER AGREEMENT
This Merger Agreement (the "Agreement") is made and entered into as of
October 25, 2001, by and among 3TEC Energy Corporation, a Delaware corporation
(the "Buyer"), 3NEX Acquisition Corporation, a Delaware corporation and a
wholly-owned Subsidiary of the Buyer (the "Transitory Subsidiary"), and Enex
Resources Corporation, a Delaware corporation (the "Target"). The Buyer, the
Transitory Subsidiary, and the Target are referred to collectively herein as the
"Parties."
This Agreement contemplates a transaction in which the Buyer will
acquire all of the outstanding capital stock of the Target for cash through a
reverse subsidiary merger of the Transitory Subsidiary with and into the Target.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Buyer" has the meaning set forth in the preface above.
"Buyer-owned Share" means any Target Share that the Buyer or the
Transitory Subsidiary owns beneficially.
"Certificate of Merger" has the meaning set forth in Section 2(c)
below.
"Closing" has the meaning set forth in Section 2(b) below.
"Closing Date" has the meaning set forth in Section2(b) below.
"Common Stock" means the issued and outstanding shares of Target
common stock, $.05 par value.
"Confidential Information" means any information concerning the
business and affairs of the Target that is not already generally available to
the public.
"Definitive Information Statement" means the definitive
information statement relating to the Special Meeting.
"Definitive Information Statement Materials" means the definitive
information statement materials relating to the Special Meeting.
"Delaware General Corporation Law" means the General Corporation
Law of the State of Delaware, as amended.
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"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Dissenting Share" means any Target Share which any stockholder who
or which has exercised his or its appraisal rights under the Delaware General
Corporation Law holds of record.
"Effective Time" has the meaning set forth in Section 2(d)(i)
below.
"Fairness Opinion" has the meaning set forth in Section 5(d) below.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"Knowledge" means actual knowledge after reasonable investigation.
"Merger" has the meaning set forth in Section 2(a) below.
"Merger Consideration" has the meaning set forth in Section 2(d)(v)
below.
"Most Recent Fiscal Quarter End" has the meaning set forth in
Section 3(f) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Parties" has the meaning set forth in the preface above.
"Paying Agent" has the meaning set forth in Section 2(e)(i) below.
"Payment Fund" has the meaning set forth in Section 2(e)(i) below.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Public Reports" has the meaning set forth in Section 3(e) below.
"Requisite Stockholder Approval" means the affirmative vote of two-
thirds of the holders of the Target Shares in favor of this Agreement and the
Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other
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security interest, other than (a) mechanic's, materialman's, and similar liens,
(b) liens for taxes not yet due and payable or for taxes that the taxpayer is
contesting in good faith through appropriate proceedings, (c) purchase money
liens and liens securing rental payments under capital lease arrangements, and
(d) other liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
"Special Meeting" has the meaning set forth in Section 5(c)(ii)
below.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
"Surviving Corporation" has the meaning set forth in Section 2(a)
below.
"Target" has the meaning set forth in the preface above.
"Target Share" means any share of the Common Stock.
"Target Stockholder" means any Person who or which holds any Target
Shares.
"Transitory Subsidiary" has the meaning set forth in the preface
above.
2. Basic Transaction.
(a) The Merger. On and subject to the terms and conditions of this
Agreement, the Transitory Subsidiary will merge with and into the Target (the
"Merger") at the Effective Time. The Target shall be the corporation surviving
the Merger (the "Surviving Corporation").
(b) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of the Buyer in
Houston, Texas, commencing at 10:00 a.m. local time on October 25, 2001 or such
other date as the Parties may mutually determine (the "Closing Date").
(c) Actions at the Closing. At the Closing, (i) the Target will
deliver to the Buyer and the Transitory Subsidiary the various certificates,
instruments, and documents referred to in Section 6(a) below, (ii) the Buyer and
the Transitory Subsidiary will deliver to the Target the various certificates,
instruments, and documents referred to in Section 6(b) below, (iii) the Target
and the Transitory Subsidiary will file with the Secretary of State of the State
of Delaware a Certificate of Merger in the form attached hereto as Exhibit A
(the "Certificate of Merger"), and (iv) the Buyer will cause the Surviving
Corporation to deliver the Payment Fund to the Paying Agent in the manner
provided below in this Section 2.
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(d) Effect of Merger.
(i) General. The Merger shall become effective at the time (the
"Effective Time") the Target and the Transitory Subsidiary file the
Certificate of Merger with the Secretary of State of the State of Delaware.
The Merger shall have the effect set forth in the Delaware General
Corporation Law. The Surviving Corporation may, at any time after the
Effective Time, take any action (including executing and delivering any
document) in the name and on behalf of either the Target or the Transitory
Subsidiary in order to carry out and effectuate the transactions
contemplated by this Agreement.
(ii) Certificate of Incorporation. The Certificate of
Incorporation of the Surviving Corporation shall be the Certificate of
Incorporation of the Target immediately prior to the Effective Time.
(iii) Bylaws. The Bylaws of the Surviving Corporation shall be
the Bylaws of the Target immediately prior to the Effective Time.
(iv) Directors and Officers. The directors and officers of the
Surviving Corporation shall be the directors and officers of the Target at
and as of the Effective Time (retaining their respective positions and
terms of office).
(v) Conversion of Target Shares. At and as of the Effective Time,
(A) each Target Share (other than any Dissenting Share or Buyer-owned
Share) shall be converted into the right to receive an amount (the "Merger
Consideration") equal to $14.00 in cash (without interest), (B) each
Dissenting Share shall be converted into the right to receive payment from
the Surviving Corporation with respect thereto in accordance with the
provisions of the Delaware General Corporation Law, and (C) each Buyer-
owned Share shall be cancelled; provided, however, that the Merger
Consideration shall be subject to equitable adjustment in the event of any
stock split, stock dividend, reverse stock split, or other change in the
number of Target Shares outstanding. No Target Share shall be deemed to be
outstanding or to have any rights other than those set forth above in this
Section2(d)(v) after the Effective Time.
(vi) Conversion of Capital Stock of the Transitory Subsidiary. At
and as of the Effective Time, each share of common stock, $.05 par value
per share, of the Transitory Subsidiary shall be converted into one share
of common stock, $.05 par value per share, of the Surviving Corporation.
(e) Procedure for Payment.
(i) Immediately after the Effective Time, (A) the Buyer will
cause the Surviving Corporation to furnish to Bank One, N.A. (the "Paying
Agent") a corpus (the "Payment Fund") consisting of cash sufficient in the
aggregate for the Paying Agent to make full payment of the Merger
Consideration to the holders of all of the outstanding Target Shares (other
than any Dissenting Shares and Buyer-owned Shares) and (B) the Buyer
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will cause the Paying Agent to mail to each record holder of outstanding
Target Shares (other than any Dissenting Shares or Buyer-owned Shares) a
letter of transmittal along with instructions for using such letter of
transmittal to surrender the stock certificates representing such Target
Shares. The letter of transmittal (or the instructions thereto) shall
specify that delivery will be effected and risk of loss and title to such
Target Shares will pass to the Paying Agent only upon proper delivery of
such Target Shares' stock certificates to the Paying Agent. The letter of
transmittal shall be in such form and have such other provisions as the
Buyer may reasonably specify. No interest will accrue or be paid to the
holder of any outstanding Target Shares.
(ii) Pending payment of the Payment Fund to holders of the Target
Shares (other than any Dissenting Shares or Buyer-owned Shares), such funds
shall be held and invested by the Paying Agent as the Buyer directs. Any
net profit resulting from, or interest or income produced by, such
investments will be payable to the Surviving Corporation or the Buyer, as
the Buyer directs. Such investments shall be in obligations of or
guaranteed by the United States of America or any agency thereof and backed
by the full faith and credit of the United States of America, in commercial
paper obligations rated A-1 or P-1 or better by Xxxxx'x Investors Services,
Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposits or banker's acceptances of, repurchase
or reverse repurchase agreements with, or Eurodollar time deposits
purchased from, commercial banks with capital, surplus and undivided
profits aggregating in excess of $100 million (based on the most recent
financial statements of such bank which are then publicly available at the
SEC or otherwise); provided, however, that no loss on any investment made
pursuant to this Section 2(e)(ii) shall relieve the Buyer or the Surviving
Corporation of its obligation to pay the Merger Consideration. The Buyer
will promptly replace an monies lost through any investment made pursuant
to this Section 2(e)(ii).
(iii) The Buyer may cause the Paying Agent to pay over to the
Surviving Corporation any portion of the Payment Fund (including any
earnings thereon) remaining ninety (90) days after the Effective Time, and
thereafter all former stockholders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat, and other
similar laws) as general creditors thereof with respect to the cash payable
upon surrender of their certificates.
(iv) The Buyer shall pay or shall cause the Surviving Corporation
to pay all charges and expenses of the Paying Agent.
(f) Closing of Transfer Records. After the close of business on the
Closing Date, transfers of Target Shares outstanding prior to the Effective Time
shall not be made on the stock transfer books of the Surviving Corporation.
3. Representations and Warranties of the Target. The Target represents
and warrants to the Buyer and the Transitory Subsidiary that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the
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Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 3), except as
set forth in the disclosure schedule accompanying this Agreement and initialed
by the Parties (the "Disclosure Schedule"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 3.
(a) Organization, Qualification, and Corporate Power. The Target is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware. The Target is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification would not have a material
adverse effect on the financial condition of the Target taken as a whole or on
the ability of the Parties to consummate the transactions contemplated by this
Agreement. The Target has full corporate power and authority to carry on the
business in which it is engaged and to own and use the properties owned and used
by it.
(b) Capitalization. The authorized capital stock of the Target
consists of (i) 10,000,000 shares of Common Stock and (ii) 5,000,000 shares of
preferred stock with $.01 par value ("Preferred Stock"). As of the date hereof,
1,342,672 shares of Common Stock are issued and outstanding, 462,240 shares of
Common Stock are held in treasury, and there are no shares of Preferred Stock
issued and outstanding. All of the issued and outstanding Target Shares have
been duly authorized and are validly issued, fully paid, and nonassessable.
There are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require the Target to issue, sell, or otherwise cause to
become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Target.
(c) Authorization of Transaction. The Target has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder; provided, however, that
the Target cannot consummate the Merger unless and until it receives the
Requisite Stockholder Approval. This Agreement constitutes the valid and legally
binding obligation of the Target, enforceable in accordance with its terms and
conditions.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of the Target is subject or any
provision of the certificate of incorporation or bylaws of the Target or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Target is a party or by which it
is bound or to which any of its assets is subject (or result in the imposition
of any Security Interest upon any of its assets). To the Knowledge of any
director or officer of the Target, and other than in connection with the
provisions of the Delaware General Corporation Law, the Securities Exchange Act,
the Securities Act, and the state securities laws, the Target does not need to
give
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any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
(e) Filings with the SEC. The Target has made all filings with the SEC
that it has been required to make within the past three (3) years under the
Securities Act and the Securities Exchange Act (collectively the "Public
Reports"). Each of the Public Reports has complied with the Securities Act and
the Securities Exchange Act in all material respects. None of the Public
Reports, as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Target has delivered to the Buyer a correct and
complete copy of each Public Report (together with all exhibits and schedules
thereto and as amended to date).
(f) Financial Statements. The Target has filed Quarterly Reports on
Form 10-QSB for the fiscal quarters ended June 30, 2001 (the "Most Recent Fiscal
Quarter End") and March 31, 2001, and an Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2000. The financial statements included in or
incorporated by reference into these Public Reports (including the related notes
and schedules) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly the
financial condition of the Target as of the indicated dates and the results of
operations of the Target for the indicated periods; provided, however, that the
interim statements are subject to normal year-end adjustments.
(g) Events Subsequent to Most Recent Fiscal Quarter End. Since the
Most Recent Fiscal Quarter End, there has not been any material adverse change
in the financial condition of the Target taken as a whole.
(h) Undisclosed Liabilities. The Target does not have any liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for taxes, except for
(i) liabilities set forth on the face of the balance sheet dated as of the Most
Recent Fiscal Quarter End (rather than in any notes thereto) and (ii)
liabilities which have arisen after the Most Recent Fiscal Quarter End in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
(i) Brokers' Fees. The Target does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
(j) Disclosure. The Definitive Information Statement Materials will
comply with the Securities Exchange Act in all material respects. The Definitive
Information Statement Materials will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they will
be made, not misleading; provided, however, that the Target makes no
representation or
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warranty with respect to any information that the Buyer and the Transitory
Subsidiary will supply specifically for use in the Definitive Information
Statement Materials.
4. Representations and Warranties of the Buyer and the Transitory
Subsidiary. Each of the Buyer and the Transitory Subsidiary represents and
warrants to the Target that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4).
(a) Organization. Each of the Buyer and the Transitory Subsidiary is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware.
(b) Authorization of Transaction. Each of the Buyer and the Transitory
Subsidiary has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of each of the Buyer and the Transitory Subsidiary, enforceable in accordance
with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which either the Buyer or the Transitory
Subsidiary is subject or any provision of the certificate of incorporation or
bylaws of either the Buyer or the Transitory Subsidiary or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license, instrument,
or other arrangement to which either the Buyer or the Transitory Subsidiary is a
party or by which it is bound or to which any of its assets is subject. Other
than in connection with the provisions of the Delaware General Corporation Law,
the Securities Exchange Act, the Securities Act, Nasdaq, and the state
securities laws, neither the Buyer nor the Transitory Subsidiary needs to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
(d) Brokers' Fees. Neither the Buyer nor the Transitory Subsidiary has
any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which the Target could become liable or obligated.
5. Covenants. The Parties agree as follows with respect to the period
from and after the execution of this Agreement.
(a) General. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 6 below).
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(b) Notices and Consents. The Target will give any notices to third
parties, and will use its reasonable best efforts to obtain any third party
consents, that the Buyer reasonably may request in connection with the matters
referred to in Section 3(d) above.
(c) Regulatory Matters and Approvals. Each of the Parties will give
any notices to, make any filings with, and use its reasonable best efforts to
obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in Section 3(d)
and Section 4(d) above. Without limiting the generality of the foregoing:
(i) Securities Act, Securities Exchange Act, and State Securities
Laws. The Target will prepare and file with the SEC preliminary information
statement materials under the Securities Exchange Act relating to the
Special Meeting. The Target will use its reasonable best efforts to respond
to the comments of the SEC thereon and will make any further filings
(including amendments and supplements) in connection therewith that may be
necessary, proper, or advisable. The Buyer will provide the Target with
whatever information and assistance in connection with the foregoing
filings that the Target reasonably may request.
(ii) Delaware General Corporation Law. The Target will call a
special meeting of its stockholders (the "Special Meeting"), as soon as
reasonably practicable in order that the stockholders may consider and vote
upon the adoption of this Agreement and the approval of the Merger in
accordance with the Delaware General Corporation Law. The Target will mail
the Definitive Information Statement to its stockholders as soon as
reasonably practicable. The Definitive Information Statement will contain
the affirmative recommendation of the board of directors of the Target in
favor of the adoption of this Agreement and the approval of the Merger;
provided, however, that no director or officer of the Target shall be
required to violate any fiduciary duty or other requirement imposed by law
in connection therewith.
(d) Fairness Opinion. The Target will deliver to the Buyer and the
Transitory Subsidiary on or before the date the Definitive Information Statement
is mailed to the Target Stockholders an opinion of Xxxxxxx Xxxxxx Xxxxxx as to
the fairness of the Merger to the Target Stockholders from a financial point of
view (the "Fairness Opinion"). The Fairness Opinion shall be reasonably
satisfactory to the Buyer and the Transitory Subsidiary in form and substance.
(e) Operation of Business. The Target will not engage in any practice,
take any action, or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing:
(i) the Target will not authorize or effect any change in its
certificate of incorporation or bylaws;
(ii) the Target will not grant any options, warrants, or other
rights to purchase or obtain any of its capital stock or issue, sell, or
otherwise dispose of any of its capital stock (except upon the conversion
or exercise of options, warrants, and other rights
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currently outstanding);
(iii) the Target will not declare, set aside, or pay any dividend
or distribution with respect to its capital stock (whether in cash or in
kind), or redeem, repurchase, or otherwise acquire any of its capital
stock;
(iv) the Target will not issue any note, bond, or other debt
security or create, incur, assume, or guarantee any indebtedness for
borrowed money or capitalized lease obligation outside the Ordinary Course
of Business;
(v) the Target will not impose any Security Interest upon any of
its assets outside the Ordinary Course of Business;
(vi) the Target will not make any capital investment in, make any
loan to, or acquire the securities or assets of any other Person outside
the Ordinary Course of Business;
(vii) the Target will not make any change in employment terms for
any of its directors, officers, or employees outside the Ordinary Course of
Business; and
(viii) the Target will not commit to any of the foregoing.
(f) Full Access. The Target will permit representatives of the Buyer
to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Target, to all premises,
properties, personnel, books, records (including tax records), contracts, and
documents of or pertaining to the Target. Each of the Buyer and the Transitory
Subsidiary will treat and hold as such any Confidential Information it receives
from the Target in the course of the reviews contemplated by this Section 5(f),
and will not use any of the Confidential Information except in connection with
this Agreement.
(g) Notice of Developments. Each Party will give prompt written notice
to the others of any material adverse development causing a breach of any of its
own representations and warranties in Section 3 and Section 4 above. No
disclosure by any Party pursuant to this Section 5(g), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(h) Exclusivity. The Target will not solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition of all or substantially all of the capital stock or assets of the
Target (including any acquisition structured as a merger, consolidation, or
share exchange); provided, however, that the Target and its directors and
officers will remain free to participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing to the extent their fiduciary duties may require.
(i) Insurance and Indemnification.
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(i) The Buyer will provide each individual who served as a
director or officer of the Target at any time prior to the Effective Time
with liability insurance for a period of five (5) years after the Effective
Time no less favorable in coverage and amount than any applicable insurance
in effect immediately prior to the Effective Time.
(ii) The Buyer will not take any action to alter or impair any
exculpatory or indemnification provisions now existing in the certificate
of incorporation or bylaws of the Target for the benefit of any individual
who served as a director or officer of the Target at any time prior to the
Effective Time.
(iii) The Buyer will indemnify each individual who served as a
director or officer of the Target at any time prior to the Effective Time
from and against any and all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines,
costs, amounts paid in settlement, liabilities, obligations, taxes, liens,
losses, expenses, and fees, including all court costs and reasonable
attorneys' fees and expenses, resulting from, arising out of, relating to,
in the nature of, or caused by this Agreement or any of the transactions
contemplated herein.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer and the Transitory
Subsidiary. The obligation of each of the Buyer and the Transitory Subsidiary to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) this Agreement and the Merger shall have received the
Requisite Stockholder Approval;
(ii) the Target shall have procured all of the third party
consents specified in Section 5(b) above;
(iii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;
(iv) the Target shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(v) there shall not be any judgment, order, decree, stipulation,
injunction, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(vi) the Target shall have delivered to the Buyer and the
Transitory Subsidiary a certificate to the effect that each of the
conditions specified above in Section 6(a)(i)-(v) is satisfied in all
respects;
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(vii) the Parties shall have received all other authorizations,
consents, and approvals of governments and governmental agencies referred
to in Section 3(d) and Section 4(d) above; and
(viii) all actions to be taken by the Target in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Buyer and the Transitory Subsidiary.
The Buyer and the Transitory Subsidiary may waive any condition specified in
this Section 6(a) if they execute a writing so stating at or prior to the
Closing.
(b) Conditions to Obligation of the Target. The obligation of the
Target to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) each of the Buyer and the Transitory Subsidiary shall have
performed and complied with all of its covenants hereunder in all material
respects through the Closing;
(iii) there shall not be any judgment, order, decree,
stipulation, injunction, or charge in effect preventing consummation of any
of the transactions contemplated by this Agreement;
(iv) each of the Buyer and the Transitory Subsidiary shall have
delivered to the Target a certificate to the effect that each of the
conditions specified above in Section 6(b)(i)-(iii) is satisfied in all
respects;
(v) this Agreement and the Merger shall have received the
Requisite Stockholder Approval; and
(vi) all actions to be taken by the Buyer and the Transitory
Subsidiary in connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Target.
The Target may waive any condition specified in this Section 6(b) if it executes
a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Any of the Parties may terminate this
Agreement with the prior authorization of its board of directors (whether before
or after stockholder approval) as
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provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
(ii) the Buyer and the Transitory Subsidiary may terminate this
Agreement by giving written notice to the Target at any time prior to the
Effective Time (A) in the event the Target has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect, the Buyer or the Transitory Subsidiary has notified the
Target of the breach, and the breach has continued without cure for a
period of thirty (30) days after the notice of breach or (B) if the Closing
shall not have occurred on or before December 31, 2001, by reason of the
failure of any condition precedent under Section 6(a) hereof (unless the
failure results primarily from the Buyer or the Transitory Subsidiary
breaching any representation, warranty, or covenant contained in this
Agreement);
(iii) the Target may terminate this Agreement by giving written
notice to the Buyer and the Transitory Subsidiary at any time prior to the
Effective Time (A) in the event the Buyer or the Transitory Subsidiary has
breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Target has notified the Buyer
and the Transitory Subsidiary of the breach, and the breach has continued
without cure for a period of thirty (30) days after the notice of breach or
(B) if the Closing shall not have occurred on or before December 31, 2001,
by reason of the failure of any condition precedent under Section6(b)
hereof (unless the failure results primarily from the Target breaching any
representation, warranty, or covenant contained in this Agreement);
(iv) the Target may terminate this Agreement by giving written
notice to the Buyer and the Transitory Subsidiary at any time prior to the
Effective Time in the event the Target's board of directors concludes that
termination would be in the best interests of the Target and its
stockholders;
(v) any Party may terminate this Agreement by giving written
notice to the other Parties at any time prior to the Effective Time in the
event the Fairness Opinion is withdrawn; or
(vi) any Party may terminate this Agreement by giving written
notice to the other Parties at any time after the Special Meeting in the
event this Agreement and the Merger fail to receive the Requisite
Stockholder Approval.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 7(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Section 5(f) above shall survive any
such termination.
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8. Miscellaneous.
(a) Survival. None of the representations, warranties, and covenants
of the Parties (other than the provisions in Section 2 above concerning payment
of the Merger Consideration and the provisions in Section 5(i) above concerning
insurance and indemnification) will survive the Effective Time.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Parties;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its reasonable best efforts to advise the other Party prior to making
the disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns; provided, however, that (i) the provisions in
Section 2 above concerning payment of the Merger Consideration are intended for
the benefit of the Target Stockholders and (ii) the provisions in Section 5(i)
above concerning insurance and indemnification are intended for the benefit of
the individuals specified therein and their respective heirs and legal
representatives.
(d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given two business days
after it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
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If to the Target:
Enex Resources Corporation
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
If to the Buyer:
3TEC Energy Corporation
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
If to the Transitory Subsidiary:
3NEX Acquisition Corporation
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
(j) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors; provided, however,
that any amendment effected subsequent to stockholder approval will be subject
to the restrictions contained in the Delaware General Corporation Law. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by all of the Parties. No waiver by any Party of
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
"Buyer"
3TEC ENERGY CORPORATION
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: _________________________
"Target"
ENEX RESOURCES CORPORATION
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: _________________________
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"Transitory Subsidiary"
3NEX ACQUISITION CORPORATION
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: _________________________
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EXHIBITS
Exhibit A-Certificate of Merger
Disclosure Schedule-Exceptions to Representations and Warranties
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