CONTRIBUTION AGREEMENT
Exhibit 2.3
THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made as of this day of 2007, by and among Xxxxx X. Xxxxxx (“Xxxxxx”), Xxxxxxxx X. Xxxxxxx (“X. Xxxxxxx”), Xxxxxxx X. Xxxxxxx (“Xxxxxxx”), Xxxx Xxxxxxx (“Xxxxxxx”), Xxxxxx X. Xxxxxxx (“Xxxxxxx”), Xxxxxx X. Stably (“Stably”), Xxxxxxxxxxx X. Xxxxxxx (“X. Xxxxxxx”), PennTex Energy Inc., a Delaware corporation (“PennTex Energy”), and Xxx Energy Corporation, a Delaware corporation (“Xxx”).
W I T N E S S E T H:
WHEREAS, Xxxxxx is the sole shareholder of PennTex Resources Illinois, Inc., a Delaware corporation (“PennTex Illinois”), and desires to contribute (the “PennTex Illinois Contribution”) all of the outstanding shares of common stock, $0.01 par value, of PennTex Illinois (the “PennTex Illinois Shares”) to Xxx in exchange for the number of shares of Xxx common stock, $0.001 par value (“Xxx Common Stock”), set forth next to his name under PennTex Illinois Contribution in Schedule A;
WHEREAS, Xxxxxx and X. Xxxxxxx are the shareholders of Xxx Operating Corp., a Delaware corporation (“Xxx Operating”), and each desires to contribute (collectively, the “Xxx Operating Contribution”) all of his shares of common stock, $1.00 par value, of Xxx Operating (the “Xxx Operating Shares”) to Xxx in exchange for the number of shares of Xxx Common Stock set forth next to his name under Xxx Operating Contribution in Schedule A;
WHEREAS, Xxxxxx, B. Hulburt, Carlson, Shawver, Shields, Stably, and X. Xxxxxxx are the members of Xxx Energy IV, LLC, a Delaware limited liability company (“Xxx XX”), owning fifty percent (50%), fifteen percent (15%), seven percent (7%), seven percent (7%), seven percent (7%), seven percent (7%), seven percent (7%), respectively, of the limited liability company interest in Xxx XX (the “Xxx XX LLC Interest”), and each desires to contribute (collectively, the “Xxx XX Contribution”) all of his Xxx XX LLC Interest to Xxx in exchange for the number of shares of Xxx Common Stock set forth next to his name under Xxx XX in Schedule A;
WHEREAS, Xxxxxx is the sole limited partner of PennTex Resources LP, a Texas limited partnership formerly known as S.P. Penntex Energy L.P. (“PennTex LP”), owning ninety-nine percent (99%) of the partnership interest in PennTex LP (the “PennTex LP Partnership Interest”), and Xxxxxx desires to contribute (the “PennTex LP Contribution”) all of his PennTex LP Partnership Interest to Xxx in exchange for the number of shares of Xxx Common Stock as set forth next to his name under PennTex LP Contribution in Schedule A;
WHEREAS, Xxxxxx is the sole shareholder of PennTex Energy, Inc., a Delaware corporation (“PennTex Energy”), and desires to contribute (the “PennTex Energy Contribution”) all of the outstanding shares of common stock, $1.00 par value, of PennTex Energy (the “PennTex Energy Shares”) to Xxx in exchange for the number of shares of Xxx Common Stock set forth next to his name under PennTex Energy Contribution in Schedule A;
WHEREAS, in connection with the PennTex Illinois Contribution, the Xxx Operating Contribution, the Xxx XX Contribution, the PennTex LP Contribution and the PennTex Energy Contribution (collectively, the “Contributions”) and as an overall plan, the following transactions will also occur (collectively, the “Related Transactions”): (i) Xxxxxxx Oil & Gas Limited Partnership, a Delaware limited partnership (“Xxxxxxx Oil & Gas”), Xxxxxxx Xxxxxxxxxxxx Limited Partnership, a Delaware limited partnership (“Xxxxxxx Xxxxxxxxxxxx”), Midland Exploration Limited
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Partnership, a Delaware limited partnership (“Midland”), Xxx Energy Limited Partnership, a Delaware limited partnership (“Xxx I”), Xxx Energy II Limited Partnership, a Delaware limited partnership (“Xxx XX”), Xxx Energy II Alpha Limited Partnership, a Delaware limited partnership (“Xxx XX Alpha”), and Xxx Energy Royalties Limited Partnership, a Delaware limited partnership (“Xxx Royalties”), will merge with and into Xxx Energy I, LLC, a Delaware limited liability company (“Xxx Energy I”), with the holders of the partnership interests in Xxxxxxx Oil & Gas, Xxxxxxx Xxxxxxxxxxxx, Midland, Xxx I, Xxx XX, Xxx XX Alpha and Xxx Royalties receiving shares of Xxx Common Stock (the “LP Mergers”); (ii) New Albany-Indiana, LLC, a Delaware limited liability company (“New Albany-Indiana”), and Xxx Energy III LLC, a Delaware limited liability company (“Xxx III”), will merge with and into Xxx Energy I (the “LLC Mergers”), with the holders of the limited liability company interests in New Albany-Indiana and Xxx III receiving shares of Xxx Common Stock; and (iii) Xxx Energy will consummate an initial public offering (the “IPO”) of the Xxx Common Stock; and
WHEREAS, for U.S. federal income tax purposes (and state, local and foreign tax purposes where applicable), Xxxxxx, B. Hulburt, Carlson, Shawver, Shields, Stably, X. Xxxxxxx, PennTex Energy and Xxx intend for, and will report the PennTex Illinois Contribution, the Xxx Operating Contribution, the Xxx XX Contribution, the PennTex LP Contribution, the PennTex Energy Contribution, the LP Mergers, the LLC Mergers and the IPO as being pursuant to a plan with the result that each is part of an exchange that is tax-free under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”);
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:
| 1. | Contributions. Subject to Section 2 of this Agreement, each of Xxxxxx, B. Hulburt, Carlson, Shawver, Shields, Stably and X. Xxxxxxx (each, a “Contributor”, and collectively, the “Contributors”) agrees to contribute, transfer and assign to Xxx immediately prior to the IPO all of his rights, title, and interest in and to the PennTex Illinois Shares, Xxx Operating Shares, Xxx XX LLC Interest, PennTex LP Partnership Interest and PennTex Energy Shares (collectively, the “Contributed Interests”) set forth next to his name in Schedule A in exchange for the number of shares of Xxx Common Stock set forth next to his name in Schedule A. |
| 2. | Consummation of the Related Transactions. The obligation of each Contributor to consummate the transactions contemplated by this Agreement is subject to the Related Transactions having been consummated prior to or contemporaneously with the consummation of the transactions contemplated by this Agreement. |
| 3. | Required Consent for PennTex Resources Contribution. As required under Article 10 of the partnership agreement of PennTex Resources LP dated November 12, 1997 (the “Partnership Agreement”), PennTex Energy, the sole general partner of PennTex LP, hereby consents to Xxxxxx’x contribution, transfer, and assignment to Xxx of his rights, title, and interest in the PennTex LP Partnership Interest, waives all other restrictions imposed by the Partnership Agreement on such transfer to Xxx, and admits Xxx as a limited partner of PennTex LP upon the effectiveness of the PennTex LP Contribution. |
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| 4. | Further Assurances. From time to time following the date hereof, at the request of any party hereto and without further consideration, each other party hereto shall execute and deliver to such requesting party such instruments and documents and take such other action as such requesting party may reasonably request in order to consummate more fully and effectively the transactions contemplated hereby. |
| 5. | No Third-Party Beneficiaries. Nothing express or implied in this Agreement is intended or shall be construed to confer upon or give any person other than the parties hereto and their respective heirs, successors, and permitted assigns any right, benefit, or remedy under or by reason of this Agreement. |
| 6. | Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. |
| 7. | Counterparts. For the convenience of the parties, any number of counterparts hereof may be executed, and each such counterpart shall be deemed to be an original instrument. |
| 8. | Governing Law. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of Delaware. |
| 9. | Amendment. This Agreement cannot be altered or amended except pursuant to an instrument in writing signed by or on behalf of the parties hereto. |
| 10. | Tax Matters. For U.S. federal income tax purposes (and state, local and foreign tax purposes where applicable), the Contributors intend for, and agree to report, the LP Mergers, the LLC Mergers, the Contributions and the IPO as being pursuant to a plan with the result that each is part of an exchange that is tax-free under Section 351 of the Code. |
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IN WITNESS WHEREOF, each of the parties to this Agreement has executed this Agreement as of the date first above written.
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| Xxxxx X. Xxxxxx | Xxxxxx X. Stably | |||||
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| Xxxxxxxx X. Xxxxxxx | Xxxxxxxxxxx X. Xxxxxxx | |||||
| XXX ENERGY CORPORATION | ||||||
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| Xxxxxxx X. Xxxxxxx | By: |
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| , | ||||||
| PENNTEX ENERGY, INC. | ||||||
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| Xxxx Xxxxxxx | By: |
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| Xxxxx X. Xxxxxx, as sole shareholder | ||||||
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| Xxxxxx X. Xxxxxxx | ||||||
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SCHEDULE A
PennTex Illinois Contribution
| Holder |
Number of PennTex Illinois Shares Contributed |
Number of Xxx Shares Received | ||
| Xxxxx X. Xxxxxx |
1,000 | 3,831,393 |
Xxx Operating Contribution
| Holder |
Number of Xxx Operating Shares Contributed |
Number of Xxx Shares Received | ||
| Xxxxx X. Xxxxxx |
60 | 166,891 | ||
| Xxxxxxxx X. Xxxxxxx |
40 | 111,261 |
PennTex LP Contribution
| Holder |
Percentage of Partnership Interest Contributed |
Number of Xxx Shares Received | ||
| Xxxxx X. Xxxxxx |
99% | 2,942,626 |
Xxx XX Contribution
| Holder |
Percentage of LLC Interest Contributed |
Number of Xxx Shares Received | ||
| Xxxxx X. Xxxxxx |
50% | 2,635,594 | ||
| Xxxxxxxx X. Xxxxxxx |
15% | 790,678 |
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| Xxxxxxx X. Xxxxxxx |
7% | 368,983 | ||
| Xxxx Xxxxxxx |
7% | 368,983 | ||
| Xxxxxx X. Xxxxxxx |
7% | 368,983 | ||
| Xxxxxx X. Stably |
7% | 368,983 | ||
| Xxxxxxxxxxx X. Xxxxxxx |
7% | 368,983 |
PennTex Energy Contribution
| Holder |
Number of PennTex Energy Shares Contributed |
Number of Xxx Shares Received | ||
| Xxxxx X. Xxxxxx |
100 | 29,724 |
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