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EXHIBIT 2B
AGREEMENT AND PLAN OF MERGER
among
Columbia Natural Resources, Inc.
Appalachian Acquisition Company
and
Alamco, Inc.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS............................................................. 1
ARTICLE 2 THE MERGER.............................................................. 1
2.1 Effective Time of the Merger............................................ 1
2.2 Closing................................................................. 1
2.3 Effects of the Merger................................................... 1
ARTICLE 3 CONVERSION OF SHARES; PAYMENT OF MERGER CONSIDERATION................... 2
3.1 Conversion of Shares.................................................... 2
3.2 Payment................................................................. 2
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................... 3
4.1 Organization and Good Standing.......................................... 3
4.2 Capitalization of the Company........................................... 3
4.3 Subsidiaries............................................................ 3
4.4 Authority; No Conflicts................................................. 4
4.5 SEC Filings............................................................. 4
4.6 Consents................................................................ 5
4.7 No Brokers.............................................................. 5
4.8 Proxy Statement......................................................... 5
4.9 Absence of Changes...................................................... 5
4.10 Absence of Undisclosed Liabilities...................................... 6
4.11 Tax Returns............................................................. 6
4.12 Trade Names and Rights.................................................. 6
4.13 Material Contracts...................................................... 6
4.14 Contracts and Permits................................................... 6
4.15 Labor Matters........................................................... 7
4.16 Benefit Plans........................................................... 7
4.17 Litigation.............................................................. 8
4.18 Absence of Sensitive Payments........................................... 8
4.19 Compliance with Laws.................................................... 8
4.20 Disclaimers............................................................. 8
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER AND SUB......................... 9
5.1 Organization and Good Standing.......................................... 9
5.2 Execution and Effect of Agreement....................................... 9
5.3 No Conflicts............................................................ 9
5.4 Consents................................................................ 9
5.5 Availability of Funds................................................... 10
5.6 No Brokers.............................................................. 10
5.7 Proxy Statement and Other Information................................... 10
ARTICLE 6 ADDITIONAL PROVISIONS REGARDING REPRESENTATIONS AND WARRANTIES.......... 10
6.1 Limitation; No Survival................................................. 10
6.2 Right to Update Schedules............................................... 10
6.3 Schedules and Exhibits.................................................. 10
ARTICLE 7 ADDITIONAL COVENANTS AND UNDERTAKINGS................................... 10
7.1 Stockholder Approval.................................................... 10
7.2 Further Assurances and Assistance....................................... 11
7.3 Access to Information................................................... 11
7.4 Conduct of Business Prior to Closing.................................... 12
7.5 H-S-R Act............................................................... 13
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7.6 Books and Records....................................................... 13
7.7 Inquiries and Negotiations.............................................. 13
7.8 Indemnification; Director's and Officer's Insurance..................... 13
7.9 Notice of Default....................................................... 14
7.10 Benefit Matters After Closing........................................... 14
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARTIES TO CLOSE............. 15
8.1 Conditions Precedent to the Obligation of Buyer and Sub................. 15
8.2 Conditions Precedent to the Obligation of the Company................... 15
ARTICLE 9 EXPENSES................................................................ 16
ARTICLE 10 TERMINATION............................................................. 16
10.1 Termination............................................................. 16
10.2 Deposit Escrow.......................................................... 17
10.3 Break-Up Fee............................................................ 17
ARTICLE 11 NOTICES................................................................. 17
ARTICLE 12 MISCELLANEOUS........................................................... 18
12.1 Headings................................................................ 18
12.2 Schedules and Exhibits.................................................. 18
12.3 Execution in Counterparts............................................... 18
12.4 Entire Agreement........................................................ 18
12.5 Governing Law........................................................... 18
12.6 Modification............................................................ 18
12.7 Successors and Assigns.................................................. 18
12.8 Waiver.................................................................. 18
12.9 Severability............................................................ 18
12.10 Announcements........................................................... 19
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ANNEX I DEFINITIONS
EXHIBITS
A -- Certificate of Incorporation
B -- Escrow Agreement
SCHEDULES
4.3 -- Subsidiaries
4.4 -- Conflicts
4.6 -- Company Consents
4.9 -- Absence of Changes
4.12 -- Trade Names
4.13 -- Material Contracts
4.14 -- Contracts and Permits
4.15 -- Labor Matters
4.16 -- Benefit Plans
4.17 -- Litigation
5.4 -- Buyer and Sub Consents
7.4 -- Transactions Prior to Closing
8.1 -- Indemnified Individuals
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of this 27th
day of May, 1997, is entered into by and among Columbia Natural Resources, Inc.,
a Texas corporation ("Buyer"), Appalachian Acquisition Company, a Delaware
corporation and a wholly-owned subsidiary of Buyer ("Sub"), and Alamco, Inc., a
Delaware corporation (the "Company"). The Company and Sub are the only parties
to the merger hereby contemplated and are sometimes referred to herein as the
"Constituent Corporations," and the Company is sometimes referred to herein as
the "Continuing Corporation."
WITNESSETH:
WHEREAS, the Company is an independent gas and oil producer engaged in the
acquisition, exploitation, exploration, development and production of natural
gas and oil primarily in West Virginia, Tennessee and Kentucky.
WHEREAS, the respective Boards of Directors of the Constituent Corporations
have approved this Agreement and deem it advisable and in the best interests of
their respective corporations and stockholders that Sub merge with and into the
Company on the terms and conditions herein set forth, whereby the Company will
become a wholly-owned subsidiary of Buyer (the "Merger").
NOW, THEREFORE, for the purpose of consummating the above transaction and
in consideration of the promises and mutual covenants herein contained, the
parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, capitalized terms shall have the meanings
specified in the text hereof or on Annex I hereto (which is incorporated herein
by reference), which meanings shall be applicable to both the singular and
plural forms of the terms defined.
ARTICLE 2
THE MERGER
2.1 Effective Time of the Merger. Subject to the provisions of this
Agreement, a Certificate of Merger (the "Certificate of Merger") in such form as
required by the relevant provisions of the Delaware General Corporation Law (the
"GCL") shall be duly prepared, executed and acknowledged by each of the
Constituent Corporations and thereafter delivered to the Secretary of State of
the State of Delaware for filing, as provided in the GCL, on the Closing Date.
The Merger shall become effective upon the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware or at such time thereafter
as is provided in the Certificate of Merger (the "Effective Time").
2.2 Closing. The closing of the Merger (the "Closing") will take place at
the offices of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ at 10:00 a.m., prevailing time, on (i) the earlier of
(A) October 15, 1997 and (B) the first Business Day after the last of the
conditions set forth in Article 8 is fulfilled or waived, or (ii) on such other
date as is specified by Buyer and the Company after all of the conditions to the
Merger set forth in Article 8 have been satisfied or waived, subject to the
rights of termination and abandonment hereinafter set forth (the "Closing
Date").
2.3 Effects of the Merger.
(a) At the Effective Time (i) the separate existence of Sub shall cease and
Sub shall be merged with and into the Company, (ii) the Certificate of
Incorporation of the Company, as the Continuing Corporation, shall be amended to
read in its entirety as set forth in Exhibit A, (iii) the Bylaws of Sub as in
effect immediately prior to the Effective Time shall be the Bylaws of the
Continuing Corporation, and (iv) the officers and
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directors of Sub at the Effective Time shall be the officers and directors of
the Continuing Corporation and hold office as provided in the Bylaws of the
Continuing Corporation.
(b) At and after the Effective Time, the Continuing Corporation shall
possess all the rights, privileges, powers and franchises of a public as well as
of a private nature, and be subject to all the restrictions, disabilities and
duties of each of the Constituent Corporations; and all and singular rights,
privileges, powers and franchises of each of the Constituent Corporations, and
all property, real, personal and mixed, and all debts due to either of the
Constituent Corporations on whatever account, as well as for stock subscriptions
and all other things in action or belonging to each of the Constituent
Corporations, shall be vested in the Continuing Corporation, and all property,
rights, privileges, powers and franchises, and all and every other interest
shall be thereafter as effectually the property of the Continuing Corporation as
they were of the Constituent Corporations, and the title to any real estate
vested by deed or otherwise, in either of the Constituent Corporations, shall
not revert or be in any way impaired; but all rights of creditors and all liens
upon any property of either of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities and duties of the Constituent
Corporations shall thereafter attach to the Continuing Corporation, and may be
enforced against it to the same extent as if such debts and liabilities had been
incurred by it.
ARTICLE 3
CONVERSION OF SHARES; PAYMENT
OF MERGER CONSIDERATION
3.1 Conversion of Shares. As of the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any shares of capital stock
of Sub or the Company:
(a) All issued and outstanding shares of Stock of the Company shall be
canceled and extinguished and each share shall be converted into the right to
receive $15.75 in cash (the "Merger Consideration"). Until surrendered, the
certificates representing shares of the Company's Stock shall represent for all
purposes only the right to receive the Merger Consideration. At and after the
Effective Time, the holders of such certificates shall cease to have any rights
as stockholders of the Company, except such rights, if any, as they may have
pursuant to the GCL.
(b) Each issued and outstanding share of the capital stock of Sub shall be
converted into and become one validly issued, fully paid and non-assessable
share of Common Stock, par value $.01 per share, of the Continuing Corporation.
Until surrender, each certificate representing shares of Sub Common Stock shall,
following the Merger, represent for all purposes a like number of shares of
Common Stock of the Continuing Corporation as the number of shares of Common
Stock of Sub formerly represented by such certificate.
(c) The parties acknowledge that options to purchase shares of Stock (the
"Options") shall not be converted into and become rights to purchase shares of
Common Stock of the Continuing Corporation. Accordingly, the Company shall take
all necessary action to provide that all options under the Benefit Plans listed
on Schedule 4.16 shall become exercisable in full prior to the Effective Date of
the Merger, in accordance with the terms of the relevant Benefit Plans. For
purposes of this Agreement, all shares of Stock receivable upon exercise of the
Options and the Warrant shall be deemed outstanding at the Effective Time of the
Merger, to the extent the Options and the Warrant have not, in fact, been
exercised, and holders of such Options and the Warrant shall be entitled to
receive the Merger Consideration payable for the aggregate number of shares of
Stock subject to such Options or the Warrant less the sum of (i) any applicable
withholding and (ii) the aggregate amount of the exercise price for the
aggregate number of shares of Stock subject to such Option or the Warrant.
3.2 Payment.
(a) Simultaneously with the execution and delivery of this Agreement,
$5,000,000 (the "Deposit Escrow") shall be delivered to Bank One, Texas,
National Association to be held in escrow pursuant to the Escrow Agreement in
the form of Exhibit B hereto (the "Escrow Agreement"). At the Closing, Buyer and
the Company shall cause the Deposit Escrow to be released to the Disbursing
Agent.
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(b) Five Business Days prior to the Effective Date, the Company shall
designate a bank account to receive the Aggregate Merger Consideration. Sub
shall, immediately prior and as a condition to the Merger, pay the Aggregate
Merger Consideration less the amount of the Deposit Escrow by wire transfer to
the account designated by the Company and such Aggregate Merger Consideration
shall thereafter be disbursed to the stockholders of the Company by the
Disbursing Agent.
(c) As soon as practicable after the Effective Time, the Disbursing Agent
shall mail or otherwise cause to be delivered to each record holder of
certificates representing shares of the Company's Stock who has not already
delivered a transmittal form and related stock certificates to the Disbursing
Agent, a notice and transmittal form for use in effecting the surrender of such
holder's stock certificates for payment therefor. Upon surrender to the
Disbursing Agent of stock certificates together with such letter of transmittal
duly executed, the holder of such certificate(s) shall be entitled to receive in
exchange therefor cash in an amount equal to the product of the number of shares
of Stock previously represented by such certificate and the Merger
Consideration, and such certificate shall forthwith be canceled. Any cash
deposited with the Disbursing Agent for payment to former stockholders of the
Company pursuant to this Agreement which remains unclaimed after the expiration
of six months after the Effective Date shall be delivered to the Continuing
Corporation by the Disbursing Agent (together with any interest earned thereon)
and thereafter the Disbursing Agent shall not be liable to any person claiming
the same and former stockholders of the Company shall be entitled to look only
to the Company (subject to abandoned property, escheat and other similar laws)
for payment of the Merger Consideration upon due surrender of their stock
certificates.
(d) All payments made in respect of shares of Stock of the Company which
are made in accordance with the terms of this Article shall be deemed to have
been made in full satisfaction of all rights pertaining to such shares of Stock.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer and Sub as follows:
4.1 Organization and Good Standing. The Company and each Subsidiary is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of formation, and has full power and authority to carry on its
business as it is now being conducted. The Company and each Subsidiary is
qualified as a foreign corporation and is in good standing under the laws of
each jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect.
4.2 Capitalization of the Company. The authorized capital stock of the
Company consists of 15,000,000 shares of Common Stock, par value $.10 per share
(the "Stock"), of which 4,774,031 shares are issued and outstanding and
1,000,000 shares of Preferred Stock, par value $1.00 per share, of which no
shares are issued and outstanding as of May 1, 1997. All the outstanding shares
of Stock have been validly issued and are fully paid and nonassessable. Except
as described in the Company's SEC Reports, (i) no shares of capital stock of the
Company are held in treasury, (ii) there are no other issued or outstanding
equity securities of the Company and (iii) there are no other issued or
outstanding securities of any of the Company convertible at any time into equity
securities of the Company. Except for outstanding stock options granted pursuant
to the Company's stock option plans, rights pursuant to the Company's Rights
Plan and the Warrant, the Company is not subject to any commitment or obligation
that would require the issuance or sale of additional shares of capital stock of
the Company at any time under options, subscriptions, warrants, rights or any
other obligations that require the Company to purchase or redeem any common
stock or other securities convertible into, exchangeable for or evidencing the
right to subscribe for any shares of capital stock of or other ownership right
in the Company.
4.3 Subsidiaries. The Company has no Subsidiaries except Hawg Hauling &
Disposal, Inc., a West Virginia corporation, Alamco-Delaware, Inc., a Delaware
corporation and Phoenix-Alamco Ventures, a West Virginia limited liability
company. All of the outstanding shares of capital stock of each of the
wholly-owned
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Subsidiaries (Hawg Hauling & Disposal, Inc. and Alamco-Delaware, Inc.) are duly
authorized, validly issued, fully paid and nonassessable and are owned of record
by the Company and fifty percent of the membership interests in Phoenix-Alamco
Ventures are owned by the Company. There are no existing options, warrants,
calls, commitments or agreements obligating any Subsidiary to issue shares of
capital stock of any Subsidiary to any person or that require any of the
Subsidiaries to purchase or redeem any common stock or other securities
convertible into, exchangeable for or evidencing the right to subscribe for any
shares of capital stock or other ownership interest in any Subsidiary. Except as
set forth on Schedule 4.3, neither the Company nor its Subsidiaries directly or
indirectly owns any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any corporation, partnership, joint
venture or other business association or entity.
4.4 Authority; No Conflicts.
(a) The Company has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject only to the approval of
this Agreement and the Merger by the Company's stockholders. This Agreement has
been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Buyer and Sub, constitutes the valid
and binding obligation of the Company, enforceable in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
creditors rights generally and (ii) the availability of injunctive relief and
other equitable remedies.
(b) Except as described on Schedule 4.4, neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will (i) conflict with or result in any violation or breach of any provision of
the Certificate of Incorporation or Bylaws of the Company, or (ii) result in any
violation or breach of, or constitute a default under the terms, conditions or
provisions of any agreement, indenture, mortgage or instrument to which the
Company or any Subsidiary is a party or to which their property is subject, or
(iii) subject to obtaining the approval of the Company's stockholders of the
Merger and compliance with the requirements of Section 4.6 below, conflict with
or result in any violation of any judgment, order, decree, statute or law
applicable to the Company or any of its Subsidiaries or any of its or their
properties or assets, except, in the case of (ii) and (iii) for any such
conflicts, violations, defaults, terminations, cancellations or accelerations
which would not have a Material Adverse Effect.
(c) Except as contemplated by this Agreement, no consent, approval, order
or authorization of, or registration, declaration or filing with any
Governmental Authority is required by or with respect to the Company or any of
its Subsidiaries in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
4.5 SEC Filings. The Company has filed all forms, reports and documents
required to be filed by the Company with the SEC and has previously furnished to
Buyer a true and complete copy of each of (i) its Annual Report on Form 10-K for
each of the years ended December 31, 1996, 1995 and 1994, and any amendments
thereto, (ii) its Quarterly Report on Form 10-Q for the period ended March 31,
1997, and the periods ended March 31, June 30 and September 30 in each of the
years 1996, 1995 and 1994, and any amendments thereto, (iii) its definitive
proxy statement with respect to the annual meeting of stockholders in each of
the years 1995 and 1994, and (iv) all other reports or other correspondence
filed by it with the SEC pursuant to the Exchange Act, since January 1, 1994, in
each case, as filed with the SEC (collectively, together with any forms, reports
and documents filed by the Company with the SEC after the date hereof until the
Closing, the "Company SEC Reports"). Each such report, when filed, complied in
all material respects with the requirements of the Exchange Act and all
applicable regulations thereunder and, as of their respective dates, none of
such reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Any statement contained in any Company SEC Report shall be
deemed to be modified, corrected or superseded to the extent that a statement
contained in any subsequent Company SEC Report modifies, corrects, or supersedes
such statement.
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4.6 Consents. Except (i) for filings, consents, approvals and
authorizations that the failure to obtain or make would not have a Material
Adverse Effect, (ii) as set forth on Schedule 4.6 hereto or (iii) for filings
pursuant to the H-S-R Act (to the extent necessary), no filing, consent,
approval or authorization of any governmental authority or of any third party on
the part of the Company or any Subsidiary is required in connection with the
execution and delivery of this Agreement or the consummation of any of the
transactions contemplated hereby.
4.7 No Brokers. Neither the Company nor anyone acting on its behalf has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the sale of the Company and the
transactions contemplated by this Agreement, other than the Company's engagement
of Principal Financial Securities, Inc. as financial advisor to the Company.
4.8 Proxy Statement. None of the information included in the Proxy
Statement (as amended or supplemented) will, at the time the Proxy Statement is
mailed or at the time of the meeting of stockholders of the Company to which the
Proxy Statement relates, contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation or warranty is made with respect to information relating to Buyer
or Sub supplied by Buyer or Sub for inclusion in the Proxy Statement. The Proxy
Statement will comply in all material respects, as to form and otherwise, with
the requirements of the Exchange Act and the rules and regulations promulgated
by the SEC thereunder.
4.9 Absence Of Changes. Except as disclosed on Schedule 4.9, from March 31,
1997 until the date hereof, there has not been any:
(a) transaction by the Company or any Subsidiary except in the ordinary
course of business as conducted on that date;
(b) capital expenditure by the Company or any Subsidiary exceeding
$2,000,000;
(c) material adverse change with respect to the Companies;
(d) destruction, damage to, or loss of any asset of the Company or any
Subsidiary (whether or not covered by insurance) that could have a Material
Adverse Effect;
(e) labor trouble affecting the Company or any Subsidiary that could have a
Material Adverse Effect;
(f) change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization policies or rates) by the
Company or any Subsidiary;
(g) re-valuation by the Company or any Subsidiary of any of its Assets;
(h) declaration, setting aside or payment of a dividend or other
distribution in respect to the capital stock of the Company or any Subsidiary,
or any direct or indirect redemption, purchase or other acquisition by the
Company or any Subsidiary of any of its shares of capital stock;
(i) increase in the salary or other compensation payable or to become
payable by the Company or any Subsidiary to any of its officers, directors or
employees, or the declaration, payment or commitment or obligation of any kind
for the payment by the Company or any Subsidiary of a bonus or other additional
salary or compensation to any such person except, in each case any increase or
payment in the ordinary course of business or pursuant to existing contractual
arrangements;
(j) sale or transfer of any Asset of the Company or any Subsidiary, except
in the ordinary course of business;
(k) amendment or termination of any material Contract, to which the Company
or any Subsidiary is a party, except in the ordinary course of business;
(l) loan by the Company or any Subsidiary to any Person or guaranty by the
Company or any Subsidiary of any loan;
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(▇) mortgage, pledge or other encumbrance of any Asset of the Company or
any Subsidiary other than as provided under existing bank credit arrangements
(as identified on Schedule 4.4) or other contracts;
(n) waiver or release of any material right or claim of the Company or any
Subsidiary other than settlements of pending litigation in the ordinary cause;
(o) issuance or sale by the Company or any Subsidiary of any shares of its
capital stock of any class, or of any other of its securities, except upon
exercise of outstanding options or warrants for the Company's stock; or
(p) agreement by the Company or any Subsidiary to do any of the things
described in the preceding clauses (a) through (o).
4.10 Absence of Undisclosed Liabilities. Except as set forth in the Company
SEC Reports filed prior to the date of this Agreement, at the date of the most
recent audited financial statements of the Company included in the Company SEC
Reports, neither the Company nor any of its Subsidiaries had, and since such
date neither the Company nor any of such Subsidiaries has incurred, any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by generally accepted accounting principles to be set
forth on a financial statement or in the notes thereto or which, individually or
in the aggregate, could reasonably be expected to have a Material Adverse Effect
on the Company.
4.11 Tax Returns. Within the times and in the manner prescribed by Law, the
Company and each Subsidiary have filed all federal, state and local tax returns
required by Law and have paid all taxes, assessments and penalties due and
payable. The federal income tax returns of the Company and each Subsidiary have
been audited by the Internal Revenue Service for the fiscal year ended December
31, 1993, and the results of that audit are accurately reflected in the
financial statements filed with the Company SEC Reports. The provisions for
taxes reflected in the financial statements are adequate for any and all
federal, state, county and local taxes for the period ending on the date of the
financial statements and for all prior periods, whether or not disputed. There
are no present disputes as to taxes of any nature payable by the Company or any
Subsidiary.
4.12 Trade Names and Rights. Schedule 4.12 sets forth all trade names,
trademarks, service marks and copyrights and their registrations, owned by the
Company or any Subsidiary or in which it has any rights or licenses, together
with a brief description of each. To the Company's knowledge, neither the
Company nor any Subsidiary has infringed, and is not now infringing, on any
trade name, trademarks, service ▇▇▇▇, copyright or other right belonging to any
other person, firm or corporation. Except as set forth in Schedule 4.12, neither
the Company nor any Subsidiary is a party to any license, agreement or
arrangement, whether as licensor, licensee, or otherwise, with respect to any
trademarks, service marks and trade names or applications for them, or any
copyrights. The Company and each Subsidiary own, or hold adequate licenses or
other rights to use, all trademarks, service marks, trade names and copyrights
necessary for their respective businesses as now conducted by them.
4.13 Material Contracts. Except for (i) Contracts which are terminable
within a year from the date hereof and (ii) Contracts providing for aggregate
consideration of less than $250,000 in any fiscal year, Schedule 4.13 sets forth
a complete and current list of all material Contracts of the Company and the
Subsidiaries.
4.14 Contracts and Permits. Each material Contract and material Permit is
valid and binding upon each party thereto and is in full force and effect
according to its terms, and there have been no amendments, modifications or
supplements thereto other than such as are specifically described on Schedule
4.14. Except as set forth on Schedule 4.14, to the Company's knowledge, there is
no default or claim of default under any material Contract or material Permit
and no event has occurred which, with the passage of time or the giving of
notice (or both), would constitute a default by the Company or any Subsidiary,
or any other party thereto, under any material Contract or material Permit, or
would permit modification, acceleration or termination of any material Contract
or material Permit, or result in the creation of any lien or encumbrance on any
of the Assets which would have Material Adverse Effect. Except as indicated on
Schedule 4.14, none of the material Contracts or material Permits will require
the consent of or notice to any Person thereto with respect to any of the
transactions contemplated hereby, except to the extent that the failure to
obtain such consent or provide
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notice will not have a Material Adverse Effect. None of the material Permits
requires the payments of any further extraordinary fees except as listed on
Schedule 4.14, nor, to the Company's knowledge, do any facts or circumstances
exist which would indicate that the Company or any Subsidiary will not be
entitled to renew any material Permit upon its expiration or would be required
to pay an extraordinary fee or charge in connection therewith. Except for the
Permits listed on Schedule 4.14 and except where the failure to have such
Permits would not have a Material Adverse Effect, no other Permit is required
for the operation of the businesses of the Company or any Subsidiaries as
presently conducted.
4.15 Labor Matters. Except as set forth on Schedule 4.15, there are no
collective bargaining agreements or other labor union agreements or
understandings to which the Company or any of its Subsidiaries is a party or by
which any of them is bound, nor is it nor any of its Subsidiaries the subject of
any proceeding asserting that it or any subsidiary has committed an unfair labor
practice or seeking to compel it to bargain with any labor organization as to
wages or conditions. Except as set forth on Schedule 4.15, to the best knowledge
of the Company, since December 31, 1993, neither the Company nor any of its
Subsidiaries has encountered any labor union organizing activity, or had any
actual or threatened employee strikes, work stoppages, slowdowns or lockouts.
4.16 Benefit Plans. Neither the Company nor any Subsidiary contributes to
or has any current or future liability for any Benefit Plan, except for the
Benefit Plans set forth on Schedule 4.16, and they do not, and have not had or
contributed to, any Benefit Plans which are "Multiemployer Plans" within the
meaning of Sections 3(2) and 3(37)(A) of ERISA or "defined benefit plans" within
the meaning of Section 3(35) of ERISA.
Except as set forth on Schedule 4.16:
(a) Each Benefit Plan and related trust intending to qualify under Section
401 and 501(a), respectively, of the Code does so qualify in form and operation
in all material respects; a favorable determination letter has been received
from the Internal Revenue Service with respect to each such plan and trust; and
there have been no amendments to the respective plan or trust since the date of
such determination letter;
(b) Each Benefit Plan and each funding medium which may be attendant
thereto, including group annuity contracts, has been in all material respects
operated and administered in accordance with its provisions and applicable Law;
(c) The Company has made or will have made prior to the Closing all other
contributions or payments required to be paid or accrued with respect to such
Benefit Plan;
(d) Other than routine claims for benefits under the Benefit Plans in the
ordinary course of business, there are no actions, suits or claims pending or,
to the knowledge of the Company threatened against any Benefit Plan or any of
its assets, to the knowledge of the Company there are no actions, suits or
claims pending or threatened against any fiduciary of any Benefit Plan and the
Company has no knowledge of any facts which could give rise to any such actions,
suits or claims which if adversely determined would be expected to have a
material adverse effect on the Company or the financial position of any Benefit
Plan or qualified status under the Code or ERISA of any Benefit Plan;
(e) The Company and the Subsidiaries and their respective affiliates,
directors, officers, representatives and employees have not, with respect to the
Benefit Plans, engaged in any "prohibited transaction" (as such term is defined
in the Code and ERISA) which has not been exempted under the statutory as
opposed to administrative provisions of Section 408 of ERISA, and, to the
Company's knowledge, no such Benefit Plan, related trust, trustee, administrator
or other "party-in-interest" (as defined in ERISA) has engaged directly or
indirectly, in any transaction to which any sanctions, taxes or penalties on or
with respect to prohibited transactions may be imposed under the Code or ERISA;
(f) The Company and the Subsidiaries and their respective directors,
officers, representatives and employees, and, to the best of Seller's knowledge,
any other "fiduciary" (as defined in ERISA), has not, with respect to any
Benefit Plan, committed any breach of fiduciary responsibility imposed by ERISA
or any other
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applicable Law which could subject the Company or any of the Subsidiaries, or
any of their respective directors or officers to a material liability under
ERISA or any Laws; and
(g) No Benefit Plan provides any material medical, life, disability or
other form of welfare benefits to employees or independent contractors of the
Company or any Subsidiary beyond termination of their employment with the
Company or any Subsidiary, as the case may be, by reason of retirement or
otherwise, other than coverage that may be required under Code Section 4980B or
Part 6 of ERISA, or under any continuation of coverage provisions of the laws of
any state or locality. The Company and its Subsidiaries have complied with all
material requirements under Code Section 4980B and Part 6 of ERISA and all
applicable laws of any state or locality with regard to continuation of
benefits.
4.17 Litigation. Except as disclosed on Schedule 4.17, there is no suit,
action, proceeding or investigation pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries or their respective officers and directors (in their capacity as
such) nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company or any of its
Subsidiaries having, or which, insofar as reasonably foreseen, in the future
could have, any such effect.
4.18 Absence of Sensitive Payments. Since December 31, 1991, neither the
Company nor any wholly-owned Subsidiary nor, to the knowledge of the Company,
Phoenix-Alamco Ventures, or any of their respective directors, officers, agents,
stockholders or employees has:
(a) made or has agreed to make any contributions, payments or gifts of
funds or property through any governmental official, employee or agent where
either the payment or purpose of such contribution, payment or gift was or is
illegal under applicable Law (foreign or domestic);
(b) established or maintained any unrecorded fund or asset for any purpose,
or has made any false or artificial entries on any of its books or records for
any reason; or
(c) made or had agreed to make any contribution or expenditure, or had
reimbursed any political gift or contribution or any expenditure made by any
other person to candidates for public office, whether federal, state or local
(foreign or domestic) where such contributions were or would be in violation of
applicable Law.
4.19 Compliance with Laws. Neither the Company nor any of its Subsidiaries
has violated or failed to comply with any statute, law, ordinance, regulation,
rule, permit or order of any Federal, state or local government, domestic or
foreign, or any Governmental Entity, applicable to the Company or any of its
Subsidiaries or their respective business, assets, or operations, except for
violations and failures to comply that could not, individually or in the
aggregate, reasonably be deemed to have a Material Adverse Effect on the
Company.
4.20 Disclaimers. THE EXPRESS REPRESENTATIONS AND WARRANTIES OF THE COMPANY
CONTAINED IN THIS ARTICLE 4 ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND
THE COMPANY EXPRESSLY DISCLAIMS ANY AND ALL SUCH OTHER WARRANTIES. WITHOUT
LIMITATION OF THE FOREGOING, THE COMPANY SHALL NOT BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, OR
RELATING TO THE TITLE, CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR
PURPOSE OR FITNESS FOR ANY PURPOSE, WITH RESPECT TO THE COMPANY AND ITS
SUBSIDIARIES OR ITS OR THEIR ASSETS. BUYER SHALL HAVE INSPECTED, OR WAIVED (AND
UPON CLOSING SHALL BE DEEMED TO HAVE WAIVED) ITS RIGHT TO INSPECT, ANY
PROPERTIES OF THE COMPANIES FOR ALL PURPOSES AND SATISFIED ITSELF AS TO THE
TITLE TO SUCH PROPERTIES, THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH
SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS RELATED TO THE
PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES, ASBESTOS
AND OTHER MAN MADE FIBERS, OR NATURALLY OCCURRING RADIOACTIVE MATERIALS. BUYER
IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE TITLE RECORDS
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AND PROPERTIES OF THE COMPANIES, AND BUYER SHALL, EXCEPT AS PROVIDED OTHERWISE
HEREIN, ACCEPT ALL OF THE SAME IN THEIR "AS IS, WHERE IS" CONDITION. ALSO
WITHOUT LIMITATION OF THE FOREGOING, THE COMPANY MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE ACCURACY OR
COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR
MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO BUYER IN
CONNECTION WITH THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, RELATIVE TO
PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY)
ATTRIBUTABLE TO THE PROPERTIES OF THE COMPANIES OR THE COMPANIES' TITLE OR
RIGHTS THERETO OR THE ABILITY OR POTENTIAL OF THE PROPERTIES TO PRODUCE
HYDROCARBONS OR THE ENVIRONMENTAL CONDITION OF THE PROPERTIES OR ANY OTHER
MATTERS CONTAINED IN THE DATA OR ANY OTHER MATERIALS FURNISHED OR MADE AVAILABLE
TO BUYER BY THE COMPANY OR BY THE COMPANY'S AGENTS OR REPRESENTATIVES OR BY ANY
OTHER PARTY. ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION
AND OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED OR OTHERWISE MADE AVAILABLE OR
DISCLOSED TO BUYER ARE PROVIDED TO BUYER AS A CONVENIENCE AND SHALL NOT CREATE
OR GIVE RISE TO ANY LIABILITY OF OR AGAINST THE COMPANY AND ANY RELIANCE ON OR
USE OF THE SAME SHALL BE AT BUYER'S SOLE RISK TO THE MAXIMUM EXTENT PERMITTED BY
LAW.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER AND SUB
Buyer and Sub hereby jointly and severally represent and warrant to the
Company as follows:
5.1 Organization and Good Standing. Each of Buyer and Sub is a corporation
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation. Each of Buyer and Sub has full power and
authority to carry on its business as it is now being conducted.
5.2 Execution and Effect of Agreement. Each of Buyer and Sub has full power
and authority to enter into this Agreement. The consummation of the transactions
contemplated hereby has been duly authorized by all necessary action on the part
of Buyer and Sub. This Agreement has been duly executed and delivered by Buyer
and Sub and constitutes a legal, valid and binding obligation of Buyer and Sub,
enforceable against Buyer and Sub in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and to the exercise of judicial
discretion in accordance with general principles of equity (whether applied by a
court of law or equity).
5.3 No Conflicts. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) violate any of
the provisions of the charter or by-laws of Buyer and Sub, (ii) to Buyer's or
Sub's Knowledge, violate any provision of applicable law, rule or regulation
which violation would have a material adverse effect on the business or
financial condition of Buyer or Sub or prevent or materially interfere with
Buyer's or Sub's ability to perform hereunder or (iii) conflict with or result
in a breach of, or give rise to a right of termination of, or accelerate the
performance required by the terms of any judgment, court order or consent
decree, or any agreement, indenture, mortgage or instrument to which either
Buyer or Sub is a party or to which their respective properties are subject, or
constitute a default thereunder, except where such conflict, breach, right of
termination, acceleration or default would not have a material adverse effect on
the business or financial condition of Buyer or Sub or prevent or materially
interfere with Buyer's or Sub's ability to perform hereunder.
5.4 Consents. Except (i) as set forth on Schedule 5.4 hereto, or (ii) for
filings pursuant to the H-S-R Act, to the extent necessary, no filing, consent,
approval or authorization of any governmental authority or of any third party on
the part of Buyer or Sub is required in connection with the execution and
delivery of this Agreement by Buyer or Sub or the consummation of any of the
transactions contemplated hereby.
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5.5 Availability of Funds. Buyer and Sub have available and will have
available on the Closing Date sufficient funds to enable them to consummate the
transactions contemplated by this Agreement, including the payment of the
Aggregate Merger Consideration. At the Company's request, Buyer and Sub shall
provide the Company with evidence reasonably satisfactory to the Company of the
availability of such funds.
5.6 No Brokers. Neither Buyer nor Sub nor anyone acting on their behalf has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the purchase of the Company and
the transactions contemplated by this Agreement. Buyer has obtained at its sole
expense an opinion from Bear ▇▇▇▇▇▇▇ & Co. in form and substance satisfactory to
Buyer as to the consideration payable in connection with the Merger.
5.7 Proxy Statement and Other Information. None of the information relating
to Buyer or Sub which is supplied by Buyer for inclusion in the Proxy Statement
(as amended or supplemented) will, at the time the Proxy Statement is mailed or
at the time of the meeting of the stockholders of the Company to which the Proxy
Statement relates, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation or warranty is otherwise made by Buyer or Sub with respect to the
Proxy Statement.
ARTICLE 6
ADDITIONAL PROVISIONS REGARDING
REPRESENTATIONS AND WARRANTIES
6.1 Limitation: No Survival. Except as specifically set forth herein or in
any Schedule, Exhibit or other document delivered pursuant hereto, no party has
made any representation or warranty with respect to the transactions to be
consummated hereunder. The representations and warranties herein shall not
survive the Closing.
6.2 Right to Update Schedules. The Company shall have the right, without
being deemed to be in breach of its representations and warranties set forth in
this Agreement, to supplement or amend the Schedules to this Agreement with
respect to any matter arising after the date hereof or, as to any representation
and warranty that is limited to Company's Knowledge, discovered by Company
between the date hereof and the Closing Date. Copies of any amended or
supplemented Schedules shall be promptly provided to the Buyer. Any such amended
or supplemented disclosure shall not give Buyer or Sub the right not to proceed
to Closing, unless the facts underlying such amended or supplemented disclosure
have a Material Adverse Effect.
6.3 Schedules and Exhibits. Any fact or item disclosed in any Schedule or
Exhibit hereto shall be deemed to have been disclosed in all other Schedules or
Exhibits requiring such disclosure and for purposes of all other representations
and warranties made herein.
ARTICLE 7
ADDITIONAL COVENANTS AND UNDERTAKINGS
7.1 Stockholder Approval.
(a) As soon as reasonably practicable following the date of this Agreement,
the Company shall take all action necessary in accordance with the Exchange Act,
the laws of the State of Delaware and its Certificate of Incorporation and
Bylaws to call, give notice of and convene a meeting (the "Meeting") of its
stockholders to consider and vote upon the approval and adoption of this
Agreement and the Merger and for such other purposes as may be necessary or
desirable. The Board of Directors of the Company shall, subject to its fiduciary
duties, recommend that the Company's stockholders vote to approve and adopt this
Agreement and the Merger and any other matters to be submitted to the Company's
stockholders in connection therewith. The Board of Directors of the Company
shall, subject to its fiduciary duties, use its reasonable best efforts to
solicit and secure from stockholders of the Company such approval and adoption,
which efforts include
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without limitation causing the Company to solicit stockholder proxies therefor
and to advise Buyer upon its request from time to time as to the status of the
stockholder vote then tabulated.
(b) Promptly following the date of this Agreement, the Company shall
prepare and file with the SEC under the Exchange Act and the rules and
regulations promulgated by the SEC thereunder, a preliminary draft of the Proxy
Statement. Buyer and Sub shall have an opportunity to preview all filings to be
made with the SEC and cooperate fully with the Company in the preparation and
filing of the Proxy Statement and any amendments and supplements thereto. The
Proxy Statement shall not be filed, and no amendment or supplement thereto shall
be made by the Company, without in each case, prior consultation with Buyer and
Sub. The Company will use its best efforts to have any review of the Proxy
Statement conducted by the SEC promptly. As soon as reasonably practicable
following the date of this Agreement, the Company shall cause to be mailed a
definitive Proxy Statement to its stockholders entitled to vote at the Meeting
promptly following completion of any review by, or in the absence of such
review, the termination of any applicable waiting period of, the SEC.
7.2 Further Assurances and Assistance. Buyer, Sub and the Company agree
that each will execute and deliver to the other any and all documents, in
addition to those expressly provided for herein, that may be necessary or
appropriate to implement the provisions of this Agreement, whether before, at or
after the Closing. The parties agree to cooperate with each other to any extent
reasonably required in order to accomplish fully the transactions herein
contemplated.
7.3 Access to Information.
(a) The Company has made available to Buyer the information requested by
Buyer in its letter dated April 24, 1997, as indicated in the Company's
correspondence dated May 2, 1997 and May 19, 1997. Buyer acknowledges that the
Company, prior to the date of this Agreement, has given Buyer, Sub and their
respective employees and counsel full and complete access to all officers,
employees, offices, properties, agreements, records and affairs of the Company
or otherwise relating to the Business (including but not limited to all of the
Company's existing title files, title opinions, division order files, marketing
files, accounting and production revenue disbursement files and production,
severance and ad valorem tax records), has provided Buyer with all regularly
prepared financial statements of the Company and copies of such information
concerning the Company and the Business as Buyer and Sub may have reasonably
requested.
(b) The Company from and after the date of this Agreement and until the
Closing Date, shall give Buyer, Sub and their respective employees and counsel
full and complete access upon reasonable notice during normal business hours, to
all officers, employees, offices, properties, agreements, records and affairs of
the Company or otherwise relating to the Business, will provide Buyer with all
regularly prepared financial statements of the Company, and will provide copies
of such information concerning the Company and the Business as Buyer or Sub may
reasonably request; provided however, that the foregoing shall not permit Buyer,
Sub or any agent thereof to (i) disrupt the Business or (ii) contact any
employee of the Company without providing reasonable prior notice to the Company
and allowing a representative of the Company to be present. Buyer shall return
all copies so made to the Company if the Closing does not occur. BUYER
RECOGNIZES AND AGREES THAT ALL MATERIALS PREPARED BY THIRD PARTIES AND MADE
AVAILABLE TO IT IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREBY PURSUANT
TO THIS SECTION ARE MADE AVAILABLE TO IT AS AN ACCOMMODATION AND WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND AS TO THE ACCURACY AND COMPLETENESS OF
SUCH MATERIALS. NO WARRANTY OF ANY KIND IS MADE BY THE COMPANY AS TO ANY OF SUCH
INFORMATION SUPPLIED TO BUYER OR WITH RESPECT TO THE COMPANY'S PROPERTIES TO
WHICH ANY OF SUCH INFORMATION RELATES, AND BUYER EXPRESSLY AGREES THAT ANY
CONCLUSIONS DRAWN THEREFROM SHALL BE THE RESULT OF ITS OWN INDEPENDENT REVIEW
AND JUDGMENT.
(c) To the extent not completed prior to the date of the Agreement, the
Company shall make a good faith effort to obtain for Buyer, or Buyer's
authorized representatives, upon adequate notice to the Company, physical access
to the Company's properties for the purpose of inspecting same. Buyer recognizes
that some of the properties are operated by parties other than the Company and
that the Company's ability to obtain access
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to such properties, and the manner and extent of such access, is subject to the
consent of such third parties. Buyer agrees to comply fully with the rules,
regulations and instructions issued by the Company (and, where properties are
operated by other parties, such other parties) regarding the actions of Buyer
while upon, entering or leaving the properties. If Buyer exercises rights of
access under this Section or otherwise, or conducts examinations or inspections
under this Section or otherwise, then (a) such access, examination and
inspection shall be at Buyer's sole risk, cost and expense and Buyer waives and
releases all claims against the Company (and its affiliates and the directors,
officers, employees, attorneys, contractors and agents of the Company and such
affiliates) arising in any way therefrom or in any way connected therewith or
arising in connection with the conduct of its directors, officers, employees,
attorneys, contractors and agents in connection therewith and (b) Buyer shall
indemnify, defend and hold harmless the Company (and its affiliates and the
officers, directors, employees, attorneys, contractors and agents of the Company
and such affiliates) from any and all claims, actions, causes of action,
liabilities, damages, losses, costs or expenses (including, without limitation,
court costs and attorney's fees), or liens or encumbrances for labor or
materials, arising out of or in any way connected with such matters.
7.4 Conduct of Business Prior to Closing. Except as contemplated by this
Agreement, from and after the date hereof the Company shall use commercially
reasonable efforts (without requiring the Company to incur material costs or
expenses outside the ordinary course of the Business) to conduct such Business
in the ordinary course. Except as contemplated by this Agreement or as consented
to by Buyer (which consent shall not unreasonably be withheld), from and after
the date hereof the Company shall act, and shall cause the Companies to act, as
follows:
(a) The Companies will not adopt any material change in any method of
accounting or accounting practice, except as contemplated or required by GAAP;
(b) The Companies will not amend their charters or by-laws;
(c) Except (i) for the disposition of obsolete equipment in the ordinary
course of business, or (ii) as set forth on Schedule 7.4 hereto, the Companies
will not sell, mortgage, pledge or otherwise dispose of any material assets or
properties owned or used in the operation of their Business;
(d) Subject to the provisions of Section 7.7 hereof, the Companies will not
merge or consolidate with, or agree to merge or consolidate with, or purchase or
agree to purchase all or substantially all of the assets of, or otherwise
acquire, any other business entity;
(e) Except as provided pursuant to the terms of the Company's Rights Plan
or in connection with the exercise of any outstanding stock options and
warrants, the Companies will not authorize for issuance, issue or sell any
additional shares of its capital stock or any securities or obligations
convertible into shares of its capital stock or issue or grant any option,
warrant or other right to purchase any shares of its capital stock;
(f) The Companies will not incur, or agree to incur, any debt for borrowed
money other than borrowings under the Company's existing revolving credit
facility;
(g) The Company will not declare, set aside, or pay, directly or
indirectly, any dividend, cash or stock, or other distribution in respect to its
securities (except in accordance with past practices and without any increase
from the previous dividends paid by the Company);
(h) No stock of the Company shall be redeemed or acquired by the Companies
(other than as permitted by subparagraph (e) hereof);
(i) Except with respect to increases in the salary of employees who are not
officers or directors of the Company that arise pursuant to normal merit reviews
in the ordinary course of business, between the date of this Agreement and prior
to the Closing Date, the Company shall not make any increase in the compensation
payable to any employee, officer or director of any of the Companies without the
prior approval of Buyer;
(j) The Company shall not make or cause to be made any amendment to any
Benefit Plan;
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(k) The Company shall use commercially reasonable efforts to preserve the
business relationships of the Companies, their directors, officers, employees or
agents, suppliers, customers, and others having business relations with the
Companies;
(l) The Companies shall use commercially reasonable efforts to develop,
maintain and operate the Oil and Gas Properties which are operated by them in a
good and workmanlike manner and conduct themselves with respect to the Oil and
Gas Properties which are not operated by them in substantially the same manner
as heretofore;
(m) The Company shall use commercially reasonable efforts to maintain the
insurance now in force with respect to the Companies (or insurance that is
substantially equivalent); and
(n) The Companies shall use all commercially reasonable efforts to keep the
Oil and Gas Contracts (taken as a whole) in full force and effect in all
material respects, unless any such Oil and Gas Contract terminates pursuant to
its own terms or in the ordinary course of business and to otherwise perform and
comply with all of the material covenants and conditions contained in such Oil
and Gas Contracts in all material respects (except for good faith disputes).
7.5 H-S-R Act. Each of Buyer and Sub and the Company shall, within ten
Business Days following the date hereof, file, if necessary, duly completed and
executed Pre-Merger Notification and Report Forms as required under the H-S-R
Act and shall otherwise use their respective best efforts (without requiring any
of Buyer, Sub or the Company to incur material costs or expenses) to comply
promptly with any requests made by the Federal Trade Commission or the
Department of Justice pursuant to the H-S-R Act or the regulations promulgated
thereunder. All filing fees and other payments in connection with the H-S-R Act
shall be paid by Buyer.
7.6 Books and Records. Following the Closing, Buyer and Sub shall permit
the Company (i) to have reasonable access to the books and records of Buyer and
Sub and those retained or maintained by the Company relating to the operation of
the Business prior to the Closing or after the Closing to the extent related to
transactions or events occurring prior to the Closing, and (ii) to have
reasonable access to employees of the Company, Buyer and Sub to obtain
information relating to such matters. Buyer and Sub shall maintain such books
and records for a period of seven years following the Closing.
7.7 Inquiries and Negotiations. The Company shall immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any Person conducted heretofore in respect of the acquisition of all or any
substantial part of the business and properties of the Company, whether by sale
of assets or shares of capital stock of the Company, or by merger,
consolidation, recapitalization, liquidation or similar transaction including
the Company (each, an "Acquisition Transaction"). The Company shall not, and
shall not permit its officers, employees, representatives, or agents to,
directly or indirectly, (i) solicit or initiate discussions or negotiations
with, or provide any non-public information to, any person other than Buyer or
its affiliates concerning an Acquisition Transaction, or (ii) otherwise solicit,
initiate or encourage inquiries or the submissions or any proposal contemplating
an Acquisition Transaction. The Company shall promptly communicate to Buyer the
terms of any inquiry or proposal which it may receive in respect of an
Acquisition Transaction. The Company's notification under this Section 7.7 shall
include the identity of the person making such proposal or any other such
information with respect thereto as Buyer may reasonably request. Nothing
contained in this Agreement shall be construed to prohibit the Company from (a),
if advised in writing by counsel to be required by fiduciary obligations under
applicable law, providing non-public information to, and participating in
negotiations with, a Person who has made a bona fide offer to effect an
Acquisition Transaction for an all cash purchase price in excess of the
Aggregate Merger Consideration and (b) accepting an offer for an Acquisition
Transaction which the Board of Directors of the Company, on the advice in
writing of its financial advisor, believes is more favorable to the Company's
stockholders than the Merger contemplated hereby; provided, however, in the
event that an offer for an Acquisition Transaction is accepted by the Company
pursuant to this Section, the provisions of Section 10.3 shall be applicable.
7.8 Indemnification; Director's and Officer's Insurance. After the
Effective Time, the Continuing Corporation shall indemnify and hold harmless
(and shall also advance expenses as incurred to the fullest
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extent permitted under applicable law) to each person who is now, or has been
prior to the date hereof or who becomes prior to the Effective Time an officer
or director of the Company or any of its subsidiaries (the "Indemnified
Parties") against (i) all losses, claims, damages, costs, expenses (including
without limitation counsel fees and expenses), settlement payments or
liabilities arising out of, or in connection with any claim, demand, action,
suit, proceeding or investigation based in whole or in part on, or arising in
whole or in part out of, the fact that such person is or was an officer or
director of the Company whether or not pertaining to any matter existing or
occurring at or prior to the Effective Time and whether or not asserted or
claimed prior to or at or after the Effective Time ("Indemnified Liabilities")
and (ii) all Indemnified Liabilities based in whole or in part on, or arising in
whole or in part out of, or pertaining to this Agreement, any Related Agreement
or the transactions contemplated hereby or thereby, in each case to the fullest
extent permitted for officers and directors under the Certificate of
Incorporation and Bylaws of The Columbia Gas System, Inc. Any determination
required to be made with respect to whether an Indemnified Party's conduct
complies with the standards set forth under applicable law or the Certificate of
Incorporation or Bylaws of The Columbia Gas System, Inc. shall be made by
independent counsel mutually acceptable to the Continuing Corporation and the
Indemnified Party. The parties hereto intend, to the extent not prohibited by
applicable law, that the indemnification provided for in this Section 7.8 shall
apply without limitation to negligent acts or omissions by an Indemnified Party.
The Continuing Corporation shall maintain, for not less than five years after
the Effective Time, director's and officer's liability insurance with an
aggregate limit of liability of $15,000,000 covering each Indemnified Person on
terms not materially less favorable than the insurance maintained in effect by
the Company on the date hereof in terms of coverage (including without
limitation types of claims, time period of claims, exclusions and persons
covered), amounts and deductibles and including coverage with respect to claims
arising or events which occurred before the Effective Time. Buyer hereby
guarantees the payment and performance of the Continuing Corporation's
obligations in this Section 7.8 and shall provide the indemnification provided
herein only in the event such insurance coverage is not available or such
coverage is denied. Each Indemnified Party is intended to be a third party
beneficiary of this Section 7.8 and may specifically enforce its terms. This
Section 7.8 shall not limit or otherwise adversely affect any rights any
Indemnified Party may have under any agreement with the Company or under the
Company's Certificate of Incorporation or Bylaws.
7.9 Notice of Default. The Company shall give written notice to Buyer
promptly after the Company or any of its Subsidiaries obtains knowledge of the
occurrence, or promptly after the receipt by the Company or any of its
Subsidiaries of any notice claiming or alleging the occurrence of:
(a) any event or omission which would result in any of the Company's
representations and warranties contained in this Agreement being or becoming
materially inaccurate or misleading; or
(b) any material breach by Company of this Agreement.
7.10 Benefit Matters After Closing.
(a) Continuation of Benefits. Buyer shall maintain the Company's existing
401(k) Savings and Protection Plan and medical, life and disability insurance
plans until at least December 31, 1997.
(b) Waiver of Pre-existing Conditions. If any employee of the Company
becomes eligible to participate in a medical, dental or health plan of the Buyer
(or its affiliates) after the Closing Date, the Buyer shall cause such plan to
waive any pre-existing condition limitations for conditions covered under the
applicable medical, dental or health plans. If an employee becomes eligible to
participate in a group term life insurance plan maintained by the Buyer or its
affiliates, the Buyer shall cause such plan to waive any medical certification
for such employee up to the amount of coverage provided under Buyer's plans.
(c) Continuation Coverage. The Continuing Corporation shall perform the
duties required of a successor employer with respect to continuation coverage
required by Section 4980B of the Code, including, but not limited to, making
such coverage available to the employees of the Company on and after the Closing
Date upon their termination of employment with the Continuing Corporation to the
extent required by law.
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ARTICLE 8
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARTIES TO CLOSE
8.1 Conditions Precedent to the Obligation of Buyer and Sub. The obligation
of Buyer and Sub to consummate the Closing is subject to the fulfillment or
waiver, on or prior to the Closing Date, of each of the following conditions
precedent:
(a) The Company shall have complied in all material respects with its
agreements and covenants contained herein to be performed at or prior to the
Closing, and the representations and warranties of the Company contained herein,
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though made on and as of the Closing Date, except that
representations and warranties that were made as of a specified date shall
continue on the Closing Date to have been true as of the specified date, and
Buyer and Sub shall have received an officer's certificate in form and substance
satisfactory to Buyer and its counsel of the Company, dated as of the Closing
Date, certifying as to the fulfillment of the condition set forth in this
Section 8.1 (a) ("Company's Bring-Down Certificate").
(b) No statute, rule or regulation, or order of any court or administrative
agency shall be in effect which restrains or prohibits Buyer or Sub from
consummating the transactions contemplated hereby and no proceeding seeking such
an order shall have been instituted or threatened.
(c) All applicable waiting periods under the H-S-R Act shall have expired
or been terminated.
(d) All consents identified on Schedule 4.6 shall have been received.
(e) This Agreement and the Merger shall have been approved and adopted by
the affirmative vote of the holders of a majority of the outstanding shares of
the Company's Stock.
(f) The Rights issued to the stockholders of the Company pursuant to the
Rights Plan shall have been redeemed in accordance with the terms of the Rights
Plan.
(g) Buyer shall have received the written opinion of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, counsel for the Company, dated the Closing Date in form and substance
reasonably satisfactory to Buyer and its counsel relating to due incorporation,
authorization and noncontravention of the Agreement with Law and material
Contracts (and the transactions contemplated thereby) to which the Company is a
party.
(h) Buyer shall have received an opinion from its financial advisor, in
form and substance satisfactory to it, to the effect that the Merger is fair
from a financial point of view to the Buyer. Buyer acknowledges that it has
received such opinion dated as of the date hereof satisfying this condition.
(i) The Indemnification Agreements between the Company and the individuals
identified on Schedule 8.1 (collectively, the "Indemnification Agreements")
shall have been amended by the Company and the scheduled individuals to (x)
limit the aggregate amount of indemnification provided by such agreements to
$15,000,000 and (y) require the Continuing Corporation to obtain and maintain
the insurance required by Section 7.8 hereof to insure performance by the
Continuing Corporation of its obligations under such amended Indemnification
Agreements, it being understood that in no event will the aggregate amount of
such indemnification or insurance coverage exceed $15,000,000 with respect to
the Indemnification Agreements.
8.2 Conditions Precedent to the Obligation of the Company. The obligation
of the Company to consummate the Closing is subject to the fulfillment or
waiver, on or prior to the Closing Date, of each of the following conditions
precedent:
(a) Each of Buyer and Sub shall have complied in all material respects with
its agreements and covenants contained herein to be performed at or prior to the
Closing, and the representations and warranties of Buyer and Sub contained
herein shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though made on and as of the Closing Date,
except that representations and warranties that were made as of a specified date
shall continue on the Closing Date to have been true as of the specified date,
and the Company shall have received officer's certificates of Buyer and Sub,
dated as of the
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Closing Date, certifying as to the fulfillment of the condition set forth in
this Section 8.2(a) ("Buyer's Bring-Down Certificate").
(b) No statute, rule, or regulation or order of any court or administrative
agency shall be in effect which restrains or prohibits the Company from
consummating the transactions contemplated hereby and no proceeding seeking such
an order shall have been instituted or threatened.
(c) All applicable waiting periods under the H-S-R Act shall have expired
or been terminated.
(d) Sub shall have delivered to the Company the Aggregate Merger
Consideration.
(e) This Agreement and the Merger shall have been approved and adopted by
the affirmative vote of the holders of a majority of the outstanding shares of
the Company's Stock.
(f) The Rights issued to the stockholders of the Company pursuant to the
Rights Plan shall have been redeemed in accordance with the terms of the Rights
Plan.
(g) The Company's Board of Directors shall have received an opinion from
its financial advisor, in form and substance satisfactory to the Board, as of
the date of this Agreement and as of the mailing date of the Proxy Statement
referred to as Section 7.1(b) hereof, to the effect that the Merger is fair from
a financial point of view to the stockholders of the Company and such opinion
shall not have been withdrawn on or prior to the Closing Date.
(h) All payments required pursuant to the terms of the Benefits Plans by
virtue of the Merger shall have been made.
(i) Buyer shall have either paid in full all indebtedness owed by the
Company to Bank One, Texas, National Association or it shall have obtained the
consent of such bank to the Merger.
ARTICLE 9
EXPENSES
Each party will pay its own fees, expenses, and disbursements and those of
its counsel in connection with the subject matter of this Agreement (including
the negotiations with respect hereto and the preparation of any documents) and
all other costs and expenses incurred by it in the performance and compliance
with all conditions and obligations to be performed by it pursuant to this
Agreement or as contemplated hereby. The payment of costs and expenses by Buyer
or the Company shall not reduce the Aggregate Merger Consideration. Buyer shall
cause the Continuing Corporation to make all payments which under this Article
were to be paid by the Company on or prior to the Closing Date, but which are
not so paid prior to the Effective Time, including, without limitation, fees
payable to the Company's financial advisor.
ARTICLE 10
TERMINATION
10.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to Closing: (a) by mutual
written consent of Buyer, Sub and the Company; (b) by the Board of Directors of
the Company if the Board of Directors shall have withdrawn or modified in a
manner adverse to Buyer or Sub its approval or recommendation of the Merger in
order to approve an Acquisition Transaction with any third party; (c) by the
Company if stockholder approval is not obtained or (d) by any party to this
Agreement, upon written notice to the other parties, at any time after October
15, 1997 except that the right to terminate this Agreement pursuant to this
Article 10 shall not be available to (A) the Company, if the failure to
consummate the Closing on or before such date was caused by or resulted from
Company's failure to fulfill any of its obligations under this Agreement or (B)
Buyer or Sub, if the failure to consummate the Closing on or before such date
was caused by or resulted from Buyer's or Sub's failure to fulfill any of their
obligations under this Agreement. Upon such termination, all further obligations
of the parties hereto shall become null and void and no party shall have any
liability to any other party, unless
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the basis for such termination was the failure by such party to fulfill its
covenants and agreements set forth herein. Notwithstanding anything to the
contrary herein, (i) the provisions of the Confidentiality Letter dated as of
March 14, 1997 between Buyer and the Company (the "Confidentiality Agreement"),
shall remain in effect either until the Closing, if it occurs, or for the stated
term thereof, if there is no Closing and (ii) the Escrow Agreement shall remain
in effect in accordance with its terms.
10.2 Deposit Escrow. Notwithstanding anything to the contrary contained in
this Agreement, if Buyer or Sub shall default in their respective obligations to
consummate this Agreement other than as a result of the failure by the Company
to fulfill its obligations under Article 8 of this Agreement, then the Company
shall be entitled to receive on demand the Deposit Escrow.
10.3 Break-Up Fee. In the event that the Company terminates this Agreement
pursuant to Article 10.1 (b) above, the Company shall pay to Buyer within ten
(10) days of termination of this Agreement the sum of EIGHT MILLION DOLLARS
($8,000,000) in immediately available funds as directed by Buyer. This
obligation shall survive termination of this Agreement and shall be Buyer's sole
remedy in the event of termination by the Company pursuant to Article 10.1 (b).
ARTICLE 11
NOTICES
All notices, requests, consents, payments, demands, and other communications
required or contemplated under this Agreement shall be in writing and (a)
personally delivered or sent via telecopy (receipt confirmed), or (b) sent by
Federal Express or other reputable overnight delivery service (for next Business
Day delivery), shipping prepaid, as follows:
If to Buyer or Sub to:
Columbia Natural Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇, President and CEO
With a copy to:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇, General Counsel
Columbia Natural Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to the Company to:
Alamco, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other Persons or addresses as any Person may request by notice given
as aforesaid. Notices shall be deemed given and received at the time of personal
delivery or completed telecopying, or, if sent by Federal Express or such other
overnight delivery service one Business Day after such sending.
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ARTICLE 12
MISCELLANEOUS
12.1 Headings. The headings contained in this Agreement (including but not
limited to the titles of the Schedules and Exhibits hereto) have been inserted
for the convenience of reference only, and neither such headings nor the
placement of any term hereof under any particular heading shall in any way
restrict or modify any of the terms or provisions hereof. Terms used in the
singular shall be read in the plural, and vice versa, and terms used in the
masculine gender shall be read in the feminine or neuter gender when the context
so requires.
12.2 Schedules and Exhibits. All Schedules, Annexes and Exhibits attached
to this Agreement constitute an integral part of this Agreement as if fully
rewritten herein.
12.3 Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
12.4 Entire Agreement. This Agreement, the Related Agreements and the
documents to be delivered hereunder and thereunder constitute the entire
understanding and agreement between the parties hereto concerning the subject
matter hereof. All negotiations and writings between the parties hereto are
merged into this Agreement, and there are no representations, warranties,
covenants, understandings, or agreements, oral or otherwise, in relation thereto
between the parties other than those incorporated herein or to be delivered
hereunder.
12.5 Governing Law. This Agreement is to be delivered in and should be
construed in accordance with and governed by the laws of the State of Delaware
without giving effect to conflict of laws principles.
12.6 Modification. Except as provided in Section 6.2, this Agreement cannot
be modified or amended except in writing signed by each of the parties hereto.
After approval of the Merger by the stockholders of the Company, no amendment
may be made which decreases the Aggregate Merger Consideration or otherwise
materially adversely affects the stockholders of the Company without the further
approval of the stockholders of the Company.
12.7 Successors and Assigns. Neither this Agreement nor any of the rights
and obligations hereunder shall be assigned, delegated, sold, transferred,
sublicensed, or otherwise disposed of by operation of law or otherwise, without
the prior written consent of each of the other parties hereto. In the event of
such permitted assignment or other transfer, all of the rights, obligations,
liabilities, and other terms and provisions of this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by and against, the respective
successors and assigns of the parties hereto, whether so expressed or not.
12.8 Waiver. Any waiver of any provision hereof (or in any related document
or instrument) shall not be effective unless made expressly and in a writing
executed in the name of the party sought to be charged. The failure of any party
to insist, in any one or more instances, on performance of any of the terms or
conditions of this Agreement shall not be construed as a waiver or
relinquishment of any rights granted hereunder or of the future performance of
any such term, covenant, or condition, but the obligations of the parties with
respect hereto shall continue in full force and effect.
12.9 Severability. The provisions of this Agreement shall be deemed
severable, and if any part of any provision is held to be illegal, void,
voidable, invalid, nonbinding or unenforceable in its entirety or partially or
as to any party, for any reason, such provision may be changed, consistent with
the intent of the parties hereto, to the extent reasonably necessary to make the
provision, as so changed, legal, valid, binding, and enforceable. If any
provision of this Agreement is held to be illegal, void, voidable, invalid,
nonbinding or unenforceable in its entirety or partially or as to any party, for
any reason, and if such provision cannot be changed consistent with the intent
of the parties hereto to make it fully legal, valid, binding and enforceable,
then such provisions shall be stricken from this Agreement, and the remaining
provisions of this Agreement shall not in any way be affected or impaired, but
shall remain in full force and effect.
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12.10 Announcements. From the date of this Agreement, all further public
announcements relating to this Agreement or the transactions contemplated hereby
will be made only as agreed upon jointly by the parties hereto, except that
nothing herein shall prevent the Company, Buyer or Sub from making any
disclosure in connection with the transactions contemplated by this Agreement if
required by applicable law or otherwise as a result of its being a public
company, provided that prior notice of such disclosure is given to the other
party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first written above.
Alamco, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
President and CEO
Columbia Natural Resources, Inc.
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------
President and CEO
Appalachian Acquisition Company
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------
President
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ANNEX I
DEFINITIONS
As used in the attached Agreement and Plan of Merger, the following terms
shall have the corresponding meaning set forth below:
a. "Acquisition Transaction" has the meaning set forth in Section 7.7 of
the Agreement.
b. "Aggregate Merger Consideration" means an amount equal to the product of
the total number of shares of Stock outstanding immediately prior to the Merger
and the Merger Consideration.
c. "Assets" means properties, privileges, rights, interests and claims for
interests therein, tangible and intangible, of every type and description, to
and including, trademarks, trade names, labels and brands of the Company and its
Subsidiaries.
d. "Agreement" has the meaning set forth in the preamble to the attached
Agreement and Plan of Merger.
e. "Benefit Plan" means any pension, profit sharing, savings, bonus,
phantom stock, severance, incentive, option, insurance, welfare or other
employee benefit plans, contracts or arrangements providing for employee or
director remuneration or benefits.
f. "Business" means the natural gas and oil operations of the Company.
g. "Business Day" means any day on which banks in New York City are open
for business.
h. "Buyer" has the meaning set forth in the preamble to the Agreement.
i. "Buyer's Bring-Down Certificate" has the meaning set forth in Section
8.2(a) of the Agreement.
j. "Certificate of Merger" has the meaning set forth in Section 2.1 of the
Agreement.
k. "Closing" has the meaning set forth in Section 2.2 of the Agreement.
l. "Closing Date" has the meaning set forth in Section 2.2 of the
Agreement.
m. "Code" means the Internal Revenue Code of 1986, as amended.
n. "Companies" means the Company and each of its Subsidiaries.
o. "Company" has the meaning set forth in the preamble to the Agreement.
p. "Company SEC Reports" has the meaning set forth in Section 4.5 of the
Agreement.
q. "Company's Bring-Down Certificate" has the meaning set forth in Section
8.1 (a) of this Agreement.
r. "Company's Knowledge" means the actual knowledge, with due inquiry being
required, of the officers or directors of the Companies.
s. "Confidentiality Agreement" has the meaning set forth in Section 10(a)
of the Agreement.
t. "Contracts" means any contract or instrument, including without
limitation, any mortgages, deeds of trust, notes or guarantees, leases, pledges,
liens, charges or conditional sales agreements to which the Person referred to
is a party or by which any of its Assets may be bound.
u. "Disbursing Agent" means Bank One, or such other person as the Company
may determine.
v. "Effective Time" has the meaning set forth in Section 2.1 of the
Agreement.
w. "ERISA" means the Employee Retirement Income Security Act of 1994.
x. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
y. "GAAP" means generally accepted accounting principles.
z. "GCL" has the meaning set forth in Section 2.1 of the Agreement.
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aa. "H-S-R Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
bb. "Indemnified Liabilities" has the meaning set forth in Section 7.8 of
the Agreement.
cc. "Indemnified Parties" has the meaning set forth in Section 7.8 of the
Agreement.
dd. "Law" means applicable state and federal law and rules and regulations
promulgated thereunder.
ee. "Material Adverse Effect" shall mean a material adverse effect on the
business or financial condition of the Companies taken as a whole.
ff. "Meeting" has the meaning set forth in Section 7.1 of the Agreement.
hh. "Merger" has the meaning set forth in the recitals to the Agreement.
ii. "Merger Consideration" has the meaning set forth in Section 3.1 of the
Agreement.
jj. "Oil and Gas Contracts" means all of the oil and gas leases, operating
agreements, unit agreements, farmout agreements, farmin agreements, joint
venture agreements, partnership agreements, gas purchase and sale agreements,
gas gathering agreements, gas processing agreements, gas transportation
agreements, surface leases, licences, permits, rights-of-way, easements, and
other contracts and agreements of every nature and kind which are presently in
force and effect and which relate to the Oil and Gas Properties.
kk. "Oil and Gas Properties" means the interests of the Company or any
Subsidiary in (i) the ▇▇▇▇▇, together with the oil and gas leases and lands
related to each Well, (ii) the oil and gas leases and lands identified by the
Company as being owned by the Company, and (iii) the perpetual mineral
interests, term mineral interests, executive rights and other interests in real
property identified by the Company as being owned by the Company and its
Subsidiaries.
ll. "Options" has the meaning set forth in Section 3.1(c) of the Agreement.
mm. "Permit" means any federal or state governmental approval,
authorization, certificate, franchise, license or permit.
nn. "Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government (or agency or political subdivision thereof).
oo. "Proxy Statement" means a proxy statement as contemplated by Rules 14
a-1 et. seq. under the Exchange Act.
pp. "Related Agreement" means any document delivered at the Closing and any
contract which is to be entered into at the Closing or otherwise pursuant to
this Agreement, including, without limitation the Confidentiality Agreement.
qq. "Reserve Report" means the Evaluation of Oil and Gas Reserves for the
Interests of Alamco, Inc. in Certain Properties located in Kentucky, Tennessee
and West Virginia, effective as of January 1, 1997, prepared by ▇▇▇▇▇▇ &
Company.
rr. "Rights Plan" means the Company's Preferred Stock Purchase Rights Plan
adopted on November 30, 1994.
ss. "SEC" means the Securities and Exchange Commission.
tt. "Stock" has the meaning set forth in Section 4.2 of the Agreement.
uu. "Sub" has the meaning set forth in the preamble to the Agreement.
vv. "Subsidiary" means any person which is an affiliate within the meaning
of the regulations promulgated under the Securities Act of 1933, as such
regulations and act are amended or in effect on the date in question.
ww. "Tax" means any federal, state, local, domestic or foreign income tax,
premium tax, ad valorem tax, excise tax, sales tax, use tax, franchise tax,
employment, payroll or withholding tax, real or personal property
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tax, windfall profits tax, transfer tax, or other tax, together with and
including, without limitation, any and all interest, fines, penalties and
additions to tax resulting from, relating to, or incurred in connection with
such tax or any content or dispute thereof.
xx. "Warrant" means the warrant in respect of 50,000 shares of Common Stock
of the Company exercisable by Principal/▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc., now known
as Principal Financial Securities, Inc.
yy. "▇▇▇▇▇" means the oil and gas ▇▇▇▇▇ and the units that are identified
in the Reserve Report or that are owned by the Company.
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