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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇ ENERGY CORPORATION,
AN OKLAHOMA CORPORATION,
AND
HACL, LTD.,
A TEXAS LIMITED PARTNERSHIP
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TABLE OF CONTENTS
Page No.
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1. Purchase and Sale of the Shares; Due Diligence; etc. . . . . . . . -1-
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(a) Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
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(b) The Closing . . . . . . . . . . . . . . . . . . . . . . . . -1-
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(c) Due Diligence . . . . . . . . . . . . . . . . . . . . . . . -2-
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2. Representations and Warranties of the Company . . . . . . . . . . . -2-
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(a) Due Organization and Qualification . . . . . . . . . . . . . -2-
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(b) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . -2-
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(c) Authorization . . . . . . . . . . . . . . . . . . . . . . . -3-
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(d) Capital Stock . . . . . . . . . . . . . . . . . . . . . . . -3-
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(e) Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
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(f) SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . -4-
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(g) Absence of Certain Changes . . . . . . . . . . . . . . . . . -5-
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(h) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . -5-
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(i) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
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(j) Compliance with Laws . . . . . . . . . . . . . . . . . . . . -6-
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(k) Contracts, Agreements, Plans and Commitments . . . . . . . . -6-
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(l) Employee Benefit Matters . . . . . . . . . . . . . . . . . . -7-
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(m) Environmental Compliance . . . . . . . . . . . . . . . . . . -8-
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(n) Condition of Property . . . . . . . . . . . . . . . . . . . -9-
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3. Representations and Warranties of the Purchaser . . . . . . . . . . -10-
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(a) Due Organization . . . . . . . . . . . . . . . . . . . . . . -10-
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(b) Authorization . . . . . . . . . . . . . . . . . . . . . . . -10-
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(c) Purchase for Investment . . . . . . . . . . . . . . . . . . -10-
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4. Conditions to the Obligations of the Company . . . . . . . . . . . -11-
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(a) Representations and Warranties True . . . . . . . . . . . . -11-
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(b) Performance . . . . . . . . . . . . . . . . . . . . . . . . -11-
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(c) Injunctions . . . . . . . . . . . . . . . . . . . . . . . . -11-
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(d) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . -11-
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(e) Officer's Certificate . . . . . . . . . . . . . . . . . . . -11-
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5. Conditions to the Obligations of the Purchaser . . . . . . . . . . -12-
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(a) Representations and Warranties True . . . . . . . . . . . . -12-
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(b) Performance . . . . . . . . . . . . . . . . . . . . . . . . -12-
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(c) Injunctions . . . . . . . . . . . . . . . . . . . . . . . . -12-
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(d) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . -12-
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(e) Officer's Certificate . . . . . . . . . . . . . . . . . . . -12-
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(f) Shareholder Approval . . . . . . . . . . . . . . . . . . . . -12-
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(g) Information Statement . . . . . . . . . . . . . . . . . . . -12-
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6. Covenants of the Company . . . . . . . . . . . . . . . . . . . . . -12-
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(a) Interim Operations of the Company . . . . . . . . . . . . . -12-
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(b) Access . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
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(c) Notification of Certain Matters . . . . . . . . . . . . . . -14-
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(d) Publicity . . . . . . . . . . . . . . . . . . . . . . . . . -14-
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(e) Board Representation . . . . . . . . . . . . . . . . . . . . -15-
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(f) Listing on Securities Exchanges . . . . . . . . . . . . . . -15-
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(g) Acquisition of Voting Securities . . . . . . . . . . . . . . -15-
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7. Covenants of the Purchaser . . . . . . . . . . . . . . . . . . . . -15-
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(a) Efforts to Obtain Compressor Leases and Oil and Gas
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Properties . . . . . . . . . . . . . . . . . . . . . . . . . -15-
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(b) Confidentiality . . . . . . . . . . . . . . . . . . . . . . -16-
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(c) Cooperation . . . . . . . . . . . . . . . . . . . . . . . . -16-
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8. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . -16-
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(a) Right to Request Registration . . . . . . . . . . . . . . . -16-
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(b) Other Registrations . . . . . . . . . . . . . . . . . . . . -16-
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(c) Terms and Conditions . . . . . . . . . . . . . . . . . . . . -17-
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(d) Underwriting . . . . . . . . . . . . . . . . . . . . . . . . -18-
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9. Termination; Effect of Termination . . . . . . . . . . . . . . . . -18-
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(a) Termination . . . . . . . . . . . . . . . . . . . . . . . . -18-
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(b) Effects of Termination . . . . . . . . . . . . . . . . . . . -19-
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10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
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(a) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
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(b) Survival of Representations, Warrants and Covenants . . . . -20-
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(c) Successors and Assigns . . . . . . . . . . . . . . . . . . . -20-
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(d) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
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(e) Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
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(f) Governing Law . . . . . . . . . . . . . . . . . . . . . . . -21-
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(g) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . -21-
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(h) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
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(i) Captions . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
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(j) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . -21-
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of October
16, 1996, and is by and between ▇▇▇▇▇▇▇ ENERGY CORPORATION, an Oklahoma
corporation (the "Company") and HACL, LTD., a Texas limited partnership or its
assigns (the "Purchaser"). The Company and the Purchaser are collectively
referred to herein as the "Parties" and individually as a "Party".
W I T N E S E T H :
WHEREAS, the Company wishes to sell to the Purchaser, and the Purchaser
wishes to purchase from the Company, 8,000,000 shares (the "Shares") of common
stock, $0.01 par value per share ("Common Stock"), and warrants (the
"Warrants") which, upon exercise, will entitle the holder to purchase 8,000,000
shares of Common Stock pursuant to the form of Warrant attached hereto as
Exhibit A and incorporated herein by reference of the Company for an aggregate
cash purchase price of $4,400,000, plus the additional consideration described
herein upon the terms and subject to the conditions set forth below; and
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, hereby contract and agree as follows:
1. Purchase and Sale of the Shares; Due Diligence; etc.
(a) Purchase. On the terms and subject to the conditions
contained herein, at the closing (the "Closing") referred to in Section 1(b)
hereof, the Company will issue and deliver to the Purchaser a certificate
registered in the name of the Purchaser evidencing the Shares, and the
Purchaser will pay to the Company, in full payment of the purchase price for
the Shares, the aggregate sum of $4,400,000 in cash (the "Purchase Price").
Payment of the Purchase Price shall be made by wire transfer of immediately
available funds to the order of the Company and/or by physical delivery of a
cashier's check.
(b) The Closing. The Closing shall occur at the offices of
the Company, or at such location as the Parties may mutually agree, at 10:00
A.M. local time, on the later to occur of (i) December 16, 1996 or (ii) the
fifth business day after all conditions to the Purchaser's obligations to close
as set forth in this Agreement have been satisfied on such other date and at
such other time as the Parties may agree (the "Closing Date"). In addition at
the Closing, the Company will issue to the Purchaser or its Designee(s) the
Warrants and each Party will also deliver such
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certificates, opinions, documents and instruments as may be necessary to
consummated the transactions contemplated hereby.
(c) Due Diligence. The Parties agree that the obligation of
the Purchaser to the close the transaction evidenced by this Agreement is
subject to Purchaser satisfactorily completing its due diligence on or before
October 30, 1996 (the "Due Diligence Expiration Date"). If, after the Due
Diligence Expiration Date, Purchaser elects not to close, it may cancel this
Agreement by mailing or otherwise sending to the Company within one business
day after the Due Diligence Expiration Date, written notice of its intent to
terminate this Agreement ("Termination Notice"). Upon mailing or otherwise
sending to the Company the Termination Notice, the Purchaser shall be deemed
released from all of its obligations, liabilities, and duties under this
Agreement and this Agreement shall be considered to be terminated and of no
further force or effect as of such date.
2. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser as follows:
(a) Due Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Oklahoma, with corporate power to own its properties and
to conduct its business as now conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
the failure to so qualify will not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(b) Subsidiaries. For the purposes of this Agreement, the
term "Subsidiary" means any entity of which securities or other ownership
interests are owned directly or indirectly by the Company. Equity Compressors,
Inc., an Oklahoma corporation, is the sole Subsidiary of the Company (the
"Subsidiary"). The Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority to carry on
its business as it is now being conducted. The Subsidiary is duly qualified to
do business and in good standing as a foreign corporation in each jurisdiction
where the properties owned, leased or operated, or the business conducted by it
require such qualification except where the failure to be so qualified or in
good standing would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole. All the outstanding shares of capital stock of
the Subsidiary have been duly authorized and validly issued and are fully paid,
nonassessable, and were not issued in violation of the preemptive rights of any
person. All of the shares of capital stock of the Subsidiary are owned,
directly or indirectly, by the Company and there are no outstanding
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subscriptions, options, warrants, rights, convertible securities or other
agreements or commitments of any character relating to the issued or unissued
capital stock or other securities of the Subsidiary obligating the Subsidiary
to issue any securities. There are no stockholders' agreements, option
agreements, voting agreements, agreements covering the purchase or sale of
securities or other agreements to which the Company or the Subsidiary is a
party, or by which the Company or the Subsidiary is bound, which cover or
relate to the capital stock or other securities of the Subsidiary.
(c) Authorization. The Company has the requisite corporate
power to enter into this Agreement and to carry out its obligations hereunder.
This Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms. Other than the approval of the stockholders of the
Company as to the amendment of the Company's certificate of incorporation to
increase the number of authorized but unissued shares of Common Stock and the
consent of the Company's lenders, neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor
compliance with the terms, conditions hereof will create a breach or violation
of any of the terms, conditions or provisions of the Company's charter or
bylaws or of any material agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company, any Subsidiary or any of their
respective material properties may be bound, or constitute a default or create
a right of termination or acceleration thereunder, or result in the creation of
imposition of any securities interest, mortgage, lien, charge or encumbrance of
any nature whatsoever upon the Company, any Subsidiary or any of their
respective material properties or assets. Other than the approval of an
amendment of the Company's Certificate of Incorporation to increase the number
of authorized but unissued shares of Common Stock, there is no requirement
under Oklahoma corporate law or the rules of the NASDAQ small cap market that
require the vote or approval of the shareholders of the Company as to any of
the transactions contemplated by this Agreement.
(d) Capital Stock. The authorized capital stock of the
Company consists of (i) 20,000,000 shares of Common Stock, of which at
September 30, 1996, 13,040,816 shares were validly issued and outstanding,
fully paid, nonassessable and not entitled to any preemptive rights, and 9,000
shares were held in treasury, and (ii) 1,000,000 shares of preferred stock
$1.00 par value per share of which at September 30, 1996, no shares of
preferred stock were issued or outstanding, and no shares were held in
treasury. In addition, at September 30, 1996, an aggregate of approximately
1,290,000 shares of Common Stock (including authorized but unissued shares)
were reserved for issuance pursuant to presently existing options and future
options under currently existing stock option plans described on Schedule 2(d)
attached hereto. Except as set
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forth above, there are no other shares of capital stock of the Company
authorized, issued, or outstanding and there are no outstanding subscriptions,
options, warrants, rights, convertible securities, or any other agreements or
commitments of any character relating to the issued or unissued capital stock
or other securities of the Company or the Subsidiary obligating the Company or
the Subsidiary to issue, deliver, or sell, or cause to be issued, delivered or
sold, additional shares of capital stock of the Company or the Subsidiary or
obligating the Company or the Subsidiary to grant, extend, or enter into any
subscription, option, warrant, right, convertible security or other similar
agreement or commitment. There are no outstanding obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any securities of
the Company or any Subsidiary. Except as disclosed on Schedule 2(d), neither
the Company nor the Subsidiary has any obligation to issue, transfer,
contribute, or sell any shares of capital stock or other securities of the
Company or the Subsidiary pursuant to any employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any employment, severance, or other similar contract, arrangement
or policy or any plan or arrangement providing for insurance coverage, workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits or for deferred compensation, profit sharing,
bonuses, stock options, stock appreciation, or other forms of compensation or
benefits (including post-retirement insurance, compensation, or benefits)
which, in each case, (i) is maintained, administered, or contributed to by the
Company or any of its affiliates, and (ii) covers any employee or former
employee of the Company or any of its affiliates or under which the Company or
any of its affiliates has any liability, or otherwise.
(e) Issuance. The Shares, when sold and delivered by the
Company to the Purchaser pursuant to this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock, free and
clear of any security interest, lien, charge or encumbrance whatsoever. The
shares of Common Stock, when issued to the Purchaser or its designee(s)
pursuant to the exercise of the Warrants, will be duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock, free and clear of
any security interest, lien, charge or encumbrance whatsoever No Stockholder
or other approval is required for the valid issuance of the Shares or the
Warrants to the Purchaser pursuant to this Agreement.
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(f) SEC Reports. The Company has filed all forms, reports,
schedules, statements and registration statements required to be filed by it
with the Securities and Exchange Commission (the "Commission") since January 1,
1991 (collectively, the "SEC Reports"). As of their respective dates, the SEC
Reports did not contain any untrue statement of 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, except for any
statement or omission in any SEC Report which was corrected in a later SEC
Report. The financial statements of the Company included in the SEC Reports
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis, present fairly in accordance with generally
accepted accounting principles the consolidated financial position, results of
operations and changes in financial position of the company and its
consolidated subsidiaries as of the dates and for the periods indicated and
conform in all material respects to all applicable requirements under the
Securities Exchange Act of 1934 ("Exchange Act"). Except as reflected in the
SEC Reports, the Company as of the date of such SEC Reports has no material
liabilities, obligations, or claims of any nature (whether absolute, accrued,
contingent or otherwise and whether due or to become due), including, without
limitation, any tax liabilities or under funded pension plans, and the Company
does not have any knowledge of any basis for the existence of or the assertion
against the Company of any such liability, obligation or claim as of such date.
(g) Absence of Certain Changes. Except as disclosed in the
SEC Reports, since December 31, 1995, the Company and the Subsidiary have
conducted their respective businesses in the ordinary and usual course in all
material respects taking the Company and the Subsidiary as a whole, and there
has not been any material adverse change in the financial condition,
properties, business, results of operations or prospectus of the Company and
the Subsidiary taken as a whole. The Company has not paid any cash dividends
with respect to its Common Stock and no dividend on the Common Stock has been
declared which remains unpaid.
(h) Litigation. Except as disclosed in the SEC Reports, there
is no claim, suit, action or proceeding pending or, to the knowledge of the
Company, threatened against or affecting the Company or the Subsidiary which
can reasonably be expected to affect materially and adversely the business,
properties, financial condition or prospects of the Company and the Subsidiary
taken as whole. There is no outstanding order, writ, injunction or decree or,
to the knowledge of the Company, any claim or investigation of any court,
governmental agency or arbitration tribunal materially and adversely affecting
or which can reasonably be expected to materially and adversely affect the
Company, the Subsidiary, or their respective properties, assets or business,
franchises, licenses or permits under which they operate.
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(i) Consents. Except (i) for filings to be made pursuant to
Regulation D promulgated by the Commission under the Securities Act of 1933, as
amended, (ii) for compliance with the requirements of any applicable blue sky
laws, and (iii) as otherwise provided in this Agreement, no governmental or
other consent, approval, hearing, filing, registration or other action,
including the passage of time, is necessary for the execution and delivery of
this Agreement or consummation of the transactions contemplated hereby to occur
without material detriment to the Company and its Subsidiaries.
(j) Compliance with Laws. The Company and each Subsidiary has
complied with and is currently complying with all applicable federal, state and
local laws, rules, ordinances and regulations, the noncompliance with which
would have a material adverse effect on the Company and its Subsidiaries taken
as a whole.
(k) Contracts, Agreements, Plans and Commitments. Schedule
2(k) attached hereto sets forth a list of all material written and oral
agreements, if any, contracts, agreements, plans and commitments, including all
amendments, modifications and supplements thereto, to which the Company or the
Subsidiary is a party or by which the Company, the Subsidiary or any of their
assets or properties are bound as of the date hereof (the "Contracts"). For
the purposes of this Section 2(k), a contract shall be considered material if
such contract or any series of similar contracts involving the same subject
matter involves $50,000 or more in services to be rendered or obligations
during any twelve month period. The Company and the Subsidiary have each
complied with the provisions of all Contracts and no default or event of
default exists under any of such agreements and such agreements constitute
valid and legally binding obligations of the Company and the Subsidiary and, to
best knowledge of the Company, of each other Person that is a party thereto
enforceable against each party in accordance with their terms. To the best of
the Company's knowledge, the Contracts together with any other written or oral
agreements, contracts, plans and commitments that the Company may have in place
(whether or not listed on Schedule 2(k)) comprise all of the contracts,
agreements, plans and commitments required in order to conduct the business of
the Company and the Subsidiary as it has been and is now being conducted. The
issuance of the Shares and the Warrants at the Closing will not (a) adversely
affect the force and effect of any of the Contracts, (b) constitute a breach or
default (or a condition but for the expiration of time or the giving of notice
would constitute a breach or default) under the Contracts or (c) give any party
a right of first refusal or option to acquire any asset of the Company or the
Subsidiary.
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(l) Employee Benefit Matters.
(i) Schedule 2(l) attached hereto sets forth each
"employee benefit plan" (within the meaning of Section 3(3) of
ERISA), stock purchase plan, stock option plan, fringe benefit
plan, bonus plan and any other deferred compensation agreement or
plan or funding arrangement sponsored, maintained or to which
contributions are made (a "Plan") by the Company, any Subsidiary,
or any of their affiliates or any other organization which is a
member of a controlled group of organizations (within the meaning
of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code
of 1986, as amended (the "Code") of which the Company or any of
the Subsidiaries is a member (the "Controlled Group").
(ii) The Company has delivered to the Purchaser current,
accurate and complete copies of each Plan (including all trust
agreements, funding vehicles and other instruments relating
thereto) and, to the extent applicable, copies of the most recent
(a) Internal Revenue Service determination letter and any
outstanding request for a determination letter for each Plan; (b)
Form 5500; (c) attorneys' response to an auditor's request for
information for any Plan; and (d) any ruling letter and any
outstanding request for a ruling letter with respect to the tax-
exempt status of any voluntary employees' beneficiary association
("VEBA") which is implementing any Plan.
(iii) With respect to each Plan: (a) each Plan which is
an "employee pension benefit plan" (as such term is defined in
ERISA Section 3(2)) has received a favorable determination letter
as to its qualification under the Code; (b) each VEBA which is
intended to implement any Plan has received a favorable ruling or
determination letters to its tax-exempt status; (c) all forms,
documents and other materials have been filed with the Securities
and Exchange Commission or otherwise distributed as required by
the Securities Act of 1933 or the Exchange Act or any regulation
or rule promulgated thereunder; and (d) there are no leased
employees (as such term is defined in Code Section 414(n)) that
must be taken into account with respect to the requirements set
forth under Code Section 414(n)(3).
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(iv) Neither the Company nor the Subsidiary presently
maintains, or within the last 60 months has maintained any (a)
"multiemployer plan" (within the meaning of Section 3(37) of
ERISA), or (b) defined benefit plan.
(v) With respect to any Plan which is an employee
welfare benefit plan (within the meaning of ERISA Section 3(1)):
(a) each and every Plan which is a group health plan (as such
term is defined in Code Section 5000(b) complies in all material
respects with the applicable requirements of Code Section 4980B;
and (b) each Plan (including any Plan covering former employees
of the Company) may be amended or terminated by the Company, any
Subsidiary or the Purchaser on or at any time after the Closing
Date.
(vi) Neither the Company nor the Subsidiary maintains
any post-retirement health and life insurance plans for employees
and retirees.
(m) Environmental Compliance. For purposes of this
Agreement, "Environmental Laws" shall mean laws, including without
limitation, federal, state or local laws, ordinances, rules,
regulations, interpretations and orders of courts or governmental
agencies or authorities relating to pollution or protection of the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface, and subsurface strata), including without
limitation, the Comprehensive Environmental Response Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act
of 1987, the Resource Conservation and Recover Act of 1976, the
Hazardous and Solid Waste Amendment of 1984, and the Hazardous Materials
Transportation Act, and any other laws relating to pollution or
protection of the environment, or to the manufacture, processing,
distribution, use, treatment, handling, storage, disposal or
transportation or Hazardous Substances (hereafter defined). Except as
set forth on Schedule 2(m) attached hereto:
(1) The Company and the Subsidiary are in compliance in
all material respects with all applicable Environmental Laws and
has obtained and is in compliance with all permits, licenses and
other authorizations required under any Environmental Law. There
is no past or present event, condition or circumstance that is
likely to interfere with the conduct of the business of the
Company or any Subsidiary in the manner now conducted or which
would interfere in any material respect with the Company's or any
Subsidiary's compliance with Environmental Laws or constitute a
violation thereof.
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(2) Neither the Company nor the Subsidiary has leased,
operated or owned any facilities or real property with respect to
which the Company or such Subsidiary is subject to any actual or,
to the knowledge of the Company, after due inquiry, potential
action, claim, investigation, review or other proceeding before
any governmental, judicial or regulatory body, under any
Environmental Law.
(3) Neither the Company nor any Subsidiary has sent
hazardous substances as defined in the Environmental Laws
("Hazardous Substances") to any offsite commercial waste
management facilities for reuse, recycling, reclamation,
treatment, storage or disposal.
(4) Neither the Company nor the Subsidiary is subject to
any actual, or, to the knowledge of the Company, after due
inquiry, potential proceeding under any Environmental Law with
respect to any such facility presently or previously used by the
Company, the Subsidiary or their predecessors.
(5) There are no Hazardous Substances in any inactive,
closed or abandoned storage or disposal areas or facilities on
property currently or in the past leased, operated or owned by
the Company, any Subsidiary or their predecessors.
(6) No property currently, or in the past, leased
operated or owned by the Company, any Subsidiary or their
predecessors, is subject to actual or, to the knowledge of the
Company, after due inquiry, potential investigation by federal,
state or local officials or private litigation as a result of any
previous onsite management, treatment, storage or disposal of
Polluting Substances.
(7) There are no underground storage tanks located on any
property owned or leased by the Company or the Subsidiary. All
above ground storage tanks owned or lease by the Company or the
Subsidiary are in material compliance with all applicable
Environmental Laws. The Company have or will provide the
Purchaser with copies of all permits or licenses pertaining to
such above ground storage tanks.
(n) Condition of Property. The Company's compressors
and other personal property have been maintained in accordance with
industry standards and are sufficient for the Company's operations as
currently conducted.
-9-
13
3. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company as follows:
(a) Due Organization. The Purchaser is a limited partnership
duly formed and validly existing under the laws of the State of Texas with
power to own its properties and to conduct its business as now conducted.
(b) Authorization. The Purchaser has duly authorized,
executed and delivered this Agreement and this Agreement is a valid and binding
agreement of the Purchaser enforceable in accordance with its terms.
(c) Purchase for Investment. The Purchaser is purchasing the
Shares for its own account and not with a view to or for sale in connection
with any public distribution thereof within the meaning of the Securities Act,
and any sale, transfer or other disposition of the Shares by the Purchaser will
be made in compliance with all applicable provisions of the Securities Act and
the rules and regulations promulgated thereunder. The Purchaser agrees:
(i) to the placement on the certificate representing
the Shares to be purchased by the Purchaser pursuant to this Agreement
of the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE TEXAS SECURITIES ACT OR THE OKLAHOMA
SECURITIES ACT. NEITHER THE RECORD NOR THE BENEFICIAL
OWNERSHIP OF SAID SHARES MAY BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SAID
SHARES UNDER SAID ACTS AND ANY OTHER APPLICABLE STATE
SECURITIES LAWS OR RULES UNLESS, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY, EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SAID ACTS ARE AVAILABLE WITH
RESPECT TO SUCH SALE OR TRANSFER AND SAID SALE OR TRANSFER
IS MADE PURSUANT TO AND IN STRICT COMPLIANCE WITH THE
TERMS AND CONDITIONS OF SAID EXEMPTIONS."
and to abide by the requirements and restrictions contained in the
foregoing legend.
(ii) to the entry of stop transfer orders with the
transfer agent (or agents) and the registrar (or registrars) of the
Company against the transfer other than in compliance with the
requirements of this Agreement of legended securities of which the
Purchaser from time to time is the Beneficial Owner.
-10-
14
(d) Each of the partners of the Purchaser or its designee or
its assigns is an accredited investor, as that term is defined in Regulation D,
is an experienced and sophisticated investor knowledgeable about investments
such as the Common Stock and the Warrants and is capable of evaluating the
merits and risks of the investment contemplated hereby and has the financial
means to bear the financial risks of this investment, including the potential
loss of all of such investment and has acquired his or her interest in the
Purchaser or its designee for investment purposes only and not with a view to
distribution thereof.
(e) Purchaser has been provided with copies of the Company's
annual report on Form 10-KSB for the year ended December 31, 1995, quarterly
reports on Form 10-QSB for the fiscal quarters ended on March 31, 1996 and June
30, 1996, and the proxy statement submitted to the shareholders of the Company
in connection with its annual meeting of shareholders held May 29, 1996. Any
additional information requested by Purchaser has been provided by the Company.
4. Conditions to the Obligations of the Company. The
obligations of the Company under this Agreement are subject to the fulfillment
at the Closing referred to in Section 1(b) hereof of each of the following
conditions:
(a) Representations and Warranties True. The representations
and warranties in this Agreement made by the Purchaser shall have been true in
all material respects when made, and shall be true in all material respects on
the Closing Date as though such representations and warranties were made at
such date.
(b) Performance. The Purchaser shall have performed and
complied in all material respects with all agreements, covenants, obligations
and conditions required by this Agreement to be performed or complied with by
them prior to the closing.
(c) Injunctions. No preliminary or permanent injunction or
other final order by any United States Federal or state court shall have been
issued which prevents the purchase or sale of the shares pursuant hereto.
(d) Legal Opinion. The Company shall have received an opinion
of Schlanger, Mills, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP dated the Closing Date, as to the
matters referred to in Sections 3(a) and (b).
(e) Officer's Certificate. The Company shall have delivered a
certificate of an officer of the Purchaser, dated the Closing Date, certifying
as to the matters referred to in Sections 4(a) and (b).
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15
5. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser under this Agreement are subject to the
fulfillment at the Closing referred to in Section 1(b) hereof of each of the
following conditions:
(a) Representations and Warranties True. The representations
and warranties in this Agreement made by the Company shall have been true in
all material respects when made, and shall be true in all material respects on
the Closing Date as though such representations and warranties were made at
such date.
(b) Performance. The Company shall have performed and
complied in all material respects with all agreements, covenants, obligations
and conditions required by this Agreement to be performed or complied with by
them.
(c) Injunctions. No preliminary or permanent injunction or
other final order by any United States Federal or state court shall have been
issued which prevents the purchase or sale of the shares pursuant hereto.
(d) Legal Opinion. The Purchaser shall have received an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A Professional Corporation, dated the Closing
Date, as to the legal matters referred to in Sections 2(a), (b), (c) and (d).
(e) Officer's Certificate. The Purchaser shall have delivered
a certificate of an executive officer of the Company, dated the Closing Date,
certifying as to the matters referred to in Sections 5(a) and (b).
(f) Shareholder Approval. The Shareholders of the Company
shall have approved the amendment of the Company's Certificate of Incorporation
to increase the number of authorized but unissued shares of Common Stock to
40,000,000;
(g) Information Statement. The Company will have provided to
the Shareholders of the Company an information statement in compliance with
Section 14(f) of the Exchange Act.
6. Covenants of the Company. The Company covenants and
agrees with the Purchaser as follows:
(a) Interim Operations of the Company. The Company covenants
and agrees that, prior to the Closing Date (unless the Purchaser shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement), except as contemplated by this Agreement:
(i) the business of the Company and its Subsidiaries
shall be conducted in all material respects only in the ordinary and
usual course and each of the Company and
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16
its Subsidiaries shall use its best efforts to preserve its business
organization intact and maintain its existing relations with customers,
governmental agencies, suppliers, employees, distributors and business
associates in all material respects;
(ii) the Company shall not (a) sell or pledge or agree
to sell or pledge any stock or other ownership interest owned by it in
any of its Subsidiaries (other than in connection with the exercise of
currently outstanding stock options); (b) amend its Certificate of
Incorporation or Bylaws; (c) split, combine or reclassify the
outstanding shares of its voting securities; (d) declare, set aside or
pay any dividend payable in cash, stock or property with respect to the
Common Stock or the Preferred Stock or (e) increase the number of
members of the Board of Directors of the Company;
(iii) neither the Company nor any of its Subsidiaries
shall (a) issue, sell, pledge, dispose of or encumber any additional
shares of, or securities convertible or exchangeable for, or options,
warrants, calls, commits or rights of any kind to acquire any securities
or ownership interest in another Person, including any share of its
capital stock or other ownership interest of any class of the Company or
its Subsidiaries or any other property or assets; (b) transfer, lease,
license, sell, mortgage, pledge, dispose of or encumber any assets
material to the Company and its Subsidiaries taken as a whole, or incur
or modify any indebtedness or other liability material to the Company
and its Subsidiaries taken as a whole, except in the ordinary course of
its business; (c) acquire directly or indirectly by redemption or
otherwise any shares of the capital stock of the Company of any class;
or (d) authorize capital expenditures in excess of $100,000 in the
aggregate, except in the ordinary course of business, or make any
acquisition of, or investment in, assets or stock of any other person in
excess of $100,000 in the aggregate.
(iv) except as disclosed in Schedule 6(a)(iv) neither
the Company nor any of its Subsidiaries shall grant any severance or
termination pay to, or enter into any employment or severance agreement
with, any director, officer or other employee of the Company or its
Subsidiaries; and neither the Company nor any of its Subsidiaries shall
establish, adopt, enter into or amend any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement
for the benefit of any directors, officers or employees;
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17
(v) neither the Company nor any of its Subsidiaries
shall modify, amend or terminate any of its contracts material to the
Company and its Subsidiaries taken as a whole or waive, release or
assign any similarly material rights or claims.
(vi) neither the Company nor any of its Subsidiaries
shall take any action that will cause any representation or warranty
contained in this Agreement to become no longer true and correct; and
(vii) neither the Company nor any of its Subsidiaries
will enter into an agreement to do any of the foregoing.
(b) Access. Upon reasonable notice, the Company shall (and
shall cause each of its Subsidiaries to) afford the Purchaser's officers,
employees, counsel, accountants, financial advisors and other authorized
representatives (the "Representatives") access, during normal business hours
throughout the period prior to the Closing Date, to its properties, books,
contracts and records and, during such period, the Company shall (and shall
cause each of its Subsidiaries to) furnish promptly to Purchaser such
information concerning its business, properties and personnel as Purchaser may
reasonably request, provided that no investigation pursuant to this Section
6(b) shall affect or be deemed to modify any representation or warranty of the
Company.
(c) Notification of Certain Matters. The Company shall give
prompt notice to the Purchaser of: (i) any notice of, or other communication
relating to, a default or event which, with notice or lapse of time or both,
would become a default, received by the Company or any of its Subsidiaries
subsequent to the date of this Agreement and prior to the Closing Date, under
any contract material to the financial condition, properties, business, results
of operations or prospects of the Company and its Subsidiaries taken as a whole
to which the Company or any of its Subsidiaries is a party or is subject; (ii)
any material adverse change in the financial condition, properties, businesses,
results of operations or prospects of the Company and its Subsidiaries taken as
a whole. Each of the Company and the Purchaser shall give prompt notice to the
other Party of any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement where the failure to obtain
such consent could have a material adverse effect on the financial condition,
properties, business, results of operations or prospects of the Company and its
Subsidiaries taken as a whole or materially hinder or materially make more
burdensome the consummation of the transactions contemplated by this Agreement.
-14-
18
(d) Publicity. The initial press release by the Parties
concerning this transaction shall be a joint press release. Thereafter and
until after closing, neither the Company nor the Purchaser shall issue, or
cause the publication of, any press releases or otherwise make public
statements with respect to the transactions contemplated hereby or make any
filings with any federal or state governmental or regulatory agency or with any
national securities exchange with respect thereto, without the consent of the
other Party, which consent shall not be unreasonably withheld, provided,
however, that either Party may make such disclosures without the consent of the
other Party if advised by counsel that such disclosure is necessary under
applicable law or rule.
(e) Board Representation. As promptly as practicable
following the Closing Date, the Company will elect to its Board of Directors up
to eight persons designated by the Purchaser. Thereafter, so long as the
Purchaser or its affiliates own any of the Shares or the Warrants, the Company
will include among its Board of Directors' nominees a sufficient number of
persons designated by Purchaser such that the percentage of the Board of
Directors proposed to be composed of such designees is proportionately equal
(to the nearest whole directorship) to the percentage of outstanding Common
Stock which the Purchaser then has beneficial ownership. Notwithstanding the
foregoing, during the term of this Agreement the Purchaser will be entitled to
have always not less than three designees nominated to the Company's Board of
Directors.
(f) Listing on Securities Exchanges. The Company will list
the Shares and will maintain the listing of the Shares on each national
securities exchange on which the Common Stock may be listed.
(g) Acquisition of Voting Securities. The Company will not
oppose any action by the Purchaser to acquire shares of Common Stock, except
that, to the extent the fiduciary duties of the Board of Directors of the
Company require that they seek an offer from third persons to acquire or merge
with the Company, the Company may seek such offers.
7. Covenants of the Purchaser. The Purchaser covenants and
agrees with the Company as follows:
(a) Efforts to Obtain Compressor Leases and Oil and Gas
Properties. As additional consideration for the purchase of the Preferred
Stock and the Warrants pursuant hereto, Purchaser commits and agrees to use its
reasonable efforts to effect the actions contemplated by Section 1.5 of the
Warrant which are necessary for the Warrants to vest and become exercisable;
provided, however, that in no event shall the Purchaser be required to expend
its own
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19
funds or guarantee any obligations of the Company in order to satisfy the
obligations contained in this Section (7)(a).
(b) Confidentiality. Purchaser will not, and will cause its
Representatives not to, use any information obtained pursuant to Section 6(b)
or previously obtained from the Company in contemplation of entering into this
Agreement for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Subject to the requirements of law, pending
consummation of the transactions herein contemplated, Purchaser will keep
confidential, and will cause its Representatives to keep confidential, all
information and documents obtained pursuant to Section 6(b) or previously
obtained from the Company in contemplation of entering into this Agreement.
Upon any termination of this Agreement, Purchaser will collect and deliver to
the Company all documents obtained by it or any of its Representatives then in
their possession and any copies thereof.
(c) Cooperation. The Purchaser shall cooperate with the
Company in consummating the transactions contemplated by this Agreement.
8. Registration Rights.
(a) Right to Request Registration. At any time after the
second anniversary of the Closing, upon the written request of the Purchaser,
the Company will use its best efforts promptly to file (but in any event within
45 days of such request) with the Commission a registration statement under the
Securities Act, on such appropriate form as the Company shall select, covering
any of the Shares not freely tradeable under Rule 144 and any shares of Common
Stock issued to the Purchaser in connection with the exercise of the Warrants
and will use its reasonable efforts to cause such registration statement to
become effective as soon as practicable following such request; provided,
however, that the Company will not be required to file any such registration
statement during any period of time when (i) the Company is contemplating a
public offering of its securities and, in the judgment of the managing
underwriter thereof (or the Company, if such offering is not underwritten) such
filing would have an adverse effect on the contemplated offering, or (ii) the
Company is possession of material information that it deems advisable not to
disclose in a registration statement, or (iii) the Company is engaged in any
program for the repurchase of Common Stock. In addition, the Company shall not
be required (i) to effect any registration pursuant to this Section 8(a) unless
at least 2,000,000 shares of Common Stock are to be sold by the Purchaser, or
(ii) to file at the request of the Purchaser more than a total of two
registration statements under this Section 8(a) or more than one such
registration statement in any twelve month period.
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(b) Other Registrations. If the Company shall at any time
propose the registration under the Securities Act of an offering of Common
Stock for its own account, the Company shall give notice as promptly as
practicable of such proposed registration to the Purchaser and the Company will
use all reasonable efforts to cause the offering of such shares of Common Stock
owned by the Purchaser as the Purchaser shall request within 15 days after the
receipt of such notice to be included, upon the same terms (including the
method of distribution) in any such offering; provided, however, that (i) the
Company shall not be required to give notice or include such Shares of Common
Stock in any such registration if the proposed registration is (A) a
registration of a stock option or compensation plan or of securities issued or
issuable pursuant to any such plan or otherwise on Form S-8 or any successor
form, or (B) a registration of securities proposed to be issued (X) in exchange
for securities or assets of, or in connection with a merger or consolidation
with, another corporation, or (Y) any issuance or any offering of Common Stock
made solely to its existing shareholders in connection with a rights offering
or solely to employees and consultants of the Company; (ii) the Company shall
not be required to include such number of Shares of Common Stock in any such
registrations to which the Company and the Purchaser are advised in writing by
the Company's investment banking firm that the inclusion of such Shares of
Common Stock would, in the opinion of such firm, unreasonably interfere with
the successful marketing of such Shares of Common stock; and (iii) the Company
may, without the consent of the Purchaser, withdraw such registration statement
and abandon the proposed offering in which the Purchaser had requested to
participate.
(c) Terms and Conditions. The registration rights of the
Purchaser pursuant to this Section 8 are subject to the following terms and
conditions:
(i) The Purchaser shall provide the Company with such
information with respect to the Shares of Common Stock to be sold, the
plans for the proposed disposition thereof and such other information as
shall, in the opinion of counsel for the Company, be necessary to enable
the Company to include in such registration statement all material facts
required to be disclosed with respect to the Purchaser.
(ii) The Company shall bear the cost of the
registration, including, but not limited to, all registration and filing
fees (including Blue Sky registration and filing fees), printing
expenses (including for such number of prospectuses and other filed
material as the Purchaser shall reasonably request), and fees and
disbursements of counsel and accountants for the Company (subject,
however, to subparagraph (iii) below), except that the Purchaser shall
pay the fees and disbursements of its counsel and the underwriting fees
and
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21
selling commissions applicable to the Shares of Common Stock sold by the
Purchaser.
(iii) The Company shall not be required to furnish any
audited financial statements at the request of Purchaser other than
those statements customarily prepared at the end of its fiscal year,
unless the Purchaser shall agree to reimburse the company for the out-
of-pocket costs incurred by the company in the preparation of such other
audited financial statements;
(iv) The Company shall be required to amend or
supplement and otherwise keep it effective and current such registration
statement for a period of 90 days following its effective date; and
(v) Purchaser shall not be entitled to exercise any
registration right provided for in this Section 8 after the sixth
anniversary of the Closing Date. Notwithstanding any other provision of
this Section 8 to the contrary, the registration rights granted
hereunder will terminate prior to the sixth anniversary of the Closing
Date upon the first day Purchaser is able to sell all of the shares of
Common Stock acquired pursuant to this Agreement without material
restriction and without registration under the applicable federal and
state securities laws.
(d) Underwriting. The Company and the Purchaser each agrees
in connection with any registration of shares of Common Stock contemplated by
this Section 8, (A) to enter into an appropriate underwriting agreement
containing items and provisions (including reasonable provisions as to
indemnification) customary in such agreements, (B) to permit the Company, in
its sole discretion, to select the managing underwriter(s) and (C) to provide
the Purchaser and its representatives with reasonable opportunity for due
diligence. The indemnification provisions referred to in Clause (A) above
shall include an indemnification by the Company of the underwriters and the
Purchaser, except that such selling stockholders shall indemnify the Company
and the underwriters as to information provided pursuant to Section 8(c)(i) and
the underwriters shall indemnify the Company and such selling stockholders as
to information provided by such underwriters.
9. Termination; Effect of Termination.
(a) Termination. This Agreement may be terminated:
(i) by either the Company or the Purchaser if the
Closing shall not have occurred by December 31, 1996;
(ii) by the Company if the conditions set forth in
Section 4 hereof shall not be satisfied on the Closing Date;
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22
(iii) by the Purchaser if the conditions set forth in
Section 5 hereof shall not be satisfied on the Closing date;
(iv) by the Purchaser if Shareholder approval of the
Amendment of the Certificate of Incorporation of the Company to increase
the authorized number of shares of Common Stock to 40,000,000 is not
obtained by December 16, 1996;
(v) by the Purchaser if on or before the Due Diligence
Expiration Date, the Purchaser has not received binding proxies from 10
or fewer Shareholders of the Company committing to vote all of their
shares of Common Stock (at least 50% of outstanding shares) held by such
person in favor of the Amendment of the Company's Certificate of
Incorporation to increase the number of shares of Common Stock as set
forth above;
(vi) Upon the mutual written consent of both Parties.
(b) Effects of Termination. The following provisions shall
apply in the event of a termination of this Agreement:
(i) If this Agreement is terminated by the Company or by the
Purchaser as permitted under Section 9(a)(i), (ii) or (iii), hereof and not as
the result of the failure of either Party to perform its obligations hereunder
without lawful justification, such termination shall be without liability to
any Party to this Agreement or any stockholder, director, officer, employee,
agent or representative of such Party.
(ii) If this Agreement is terminated under Section 9(a)(i) or
(iii) because the Company has breached or is in default under this Agreement,
the Purchaser will be entitled to specific performance or a right to pursue a
suit for damages.
(iii) If this Agreement is terminated as a result of the failure
of the Purchaser to perform its obligations hereunder under Section 9(a)(i) or
Section 9(a)(ii) because the Purchaser has breached or is in default under this
Agreement the Company will be entitled to specific performance or a right to
pursue a suit for damages.
10. Miscellaneous.
(a) Remedies. The Purchaser and the Company each acknowledge
and agree that the other Party would be irreparably damaged in the event any of
the provisions of this Agreement were not performed by the other in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that each Party shall be entitled to an injunction or injunctions to redress
breaches of this Agreement and to specifically enforce the terms
-19-
23
and provisions hereof in any action instituted in any court of the United
States or any state thereof having subject matter jurisdiction, in addition to
any other remedy to which such Party may be entitled, at law or in equity. In
addition to a right for injunctive relief, the Purchaser shall also have a
right to bring a cause of action for damages if there is a breach or inaccuracy
by the Company of its representations, warranties, covenants or agreements, or
the Company has failed to comply with the conditions for closing. It is
understood that if the Purchaser elects to close this transaction in spite of
there being a breach or inaccuracy of the Company's representations,
warranties, covenants or agreements or failure to comply with the conditions
for closing, then such closing of this transaction by the Purchaser shall not
waive the Purchaser's rights to enforce a claim for damages against the
Company.
(b) Survival of Representations, Warrants and Covenants. All
representations, warranties and covenants contained herein shall survive the
execution of this Agreement and the consummation of the transactions
contemplated hereby.
(c) Successors and Assigns. This Agreement shall be binding
upon, and inure to the benefit of, the Parties and their respective heirs,
personal representatives, successors, assigns and Affiliates, but shall not be
assignable by any Party hereto without the prior written consent of the other
Party; provided, however, that the Purchaser may assign the right to purchase a
portion of the Shares to a joint venture or partnership, subject to compliance
with applicable securities laws.
(d) Notices. Any notice or other communication provided for
herein or given hereunder to a Party hereto shall be in writing and shall be
given by delivery, by telex, telecopier, recognized overnight delivery service,
or by mail (registered or certified mail, postage prepaid, return receipt
requested) to the respective parties as follows:
If to the Company:
▇▇▇▇▇▇▇ Energy Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A Professional Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Tower
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Lynnwood ▇. ▇▇▇▇▇, ▇▇.
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24
If to the Purchaser:
c/o Energy Transfer Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
with a copy to:
Schlanger, Mills, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(e) Waiver. No Party may waive any of the terms or conditions
of this Agreement except by a duly signed writing referring to the specific
provision to be waived.
(f) Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Oklahoma.
(g) Entire Agreement. This Agreement (including the Annex
hereto) constitutes the entire agreement and supersedes all other and prior
agreements and understandings, both written and oral, between the Parties and
their affiliates.
(h) Expenses. Except as otherwise expressly contemplated
herein to the contrary, regardless of whether the transactions contemplated
hereby are consummated, each Party shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
(i) Captions. The Section and Paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
(j) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
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25
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and delivered on the day and year first above written.
▇▇▇▇▇▇▇ ENERGY CORPORATION
By:
----------------------------
Title: President and Chief
Executive Officer
HACL, LTD.
BY: SIX-DAWACO, INC., its
general partner
By:
---------------------------
Title:
------------------------
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