Exhibit 10.1
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SECURITIES PURCHASE AGREEMENT
BY AND AMONG
THE PARTNERS OF
PRIORITY POWER MANAGEMENT, LTD.
AND
PPM DALLAS, LTD.,
AS SELLERS,
PRIORITY POWER MANAGEMENT, LTD.
AND
PPM DALLAS, LTD.,
AND
AMEN PROPERTIES, INC.,
AND
NEMA PROPERTIES, LLC,
AS BUYERS
DATED AS OF
MAY 18, 2006
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of May
18, 2006, is entered into by and among Amen Properties, Inc. ("AMEN") and NEMA
Properties, LLC ("NEMA" and together with Amen, the "BUYERS"); and Priority
Power Management I, L.L.C. ("PPM GP") and Priority Power Management Dallas, LLC,
("PPM DALLAS GP", and together with PPM GP, the "GENERAL PARTNERS"); and the
Limited Partners of Priority Power Management, Ltd. identified on SCHEDULE 2.1
(the "PPM LIMITED PARTNERS") and of PPM Dallas, Ltd. identified on SCHEDULE 2.1
(the "PPM DALLAS LIMITED PARTNERS", and together with the PPM Limited Partners,
the "LIMITED PARTNERS"); and Priority Power Management, Ltd. ("PPM") and PPM
Dallas, Ltd. ("PPM DALLAS", and, together with PPM, the "PARTNERSHIPS"). All of
the foregoing are each sometimes referred to herein individually as a "PARTY"
and collectively as the "PARTIES."
RECITALS:
A. PPM GP owns all of the general partner interests (the "PPM GP INTERESTS") and
the PPM Limited Partners own limited partner interests (the "PPM LP INTERESTS"
and together with the PPM GP Interest, the "PPM INTERESTS") in PPM, and PPM
Dallas GP owns all of the general partner interests (the "PPM DALLAS GP
INTERESTS") and the PPM Dallas Limited Partners own (or will own at Closing) all
of the limited partner interests (the "PPM DALLAS LP INTERESTS" and together
with the PPM Dallas GP Interest, the "PPM DALLAS INTERESTS") in PPM Dallas, each
as described on SCHEDULE 2.1. The General Partners and the Limited Partners are
referred to herein individually as a "SELLER" and collectively as the
"SELLERS").
▇. ▇▇▇▇▇▇▇ have agreed to sell, and Buyers have agreed to purchase, the PPM
Interests and the PPM Dallas Interests (collectively, the "PARTNERSHIP
INTERESTS") pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE 1. -- DEFINITIONS
1.1. CERTAIN DEFINED TERMS. As used in this Agreement, each of the
following terms is defined below:
"AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries or otherwise,
controls, is controlled by, or is under common control with, such Person.
"AGREEMENT" is defined in the preamble hereto.
"AMEN" means Amen Properties, Inc.
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"APPLICABLE ENVIRONMENTAL LAWS" means all Applicable Laws in effect at
any time pertaining to pollution or the protection of the environment, including
those relating to waste materials and/or hazardous substances.
"APPLICABLE LAW" means any statute, law, rule, or regulation or any
judgment, order, writ, injunction, or decree of any Governmental Entity to which
a specified Person or property is subject.
"APPRAISAL" means that certain appraisal of PPM and PPM Dallas prepared
by Arrow Business Appraisers, Inc. and dated as of September 30, 2005.
"BALANCE SHEET DATE" is defined in SECTION 4.8.
"BUYERS" is defined in the preamble hereto.
"BUYER INDEMNIFIED PARTIES" is defined in SECTION 9.3.
"CLOSING" is defined in SECTION 3.1.
"CLOSING DATE" is defined in SECTION 3.1.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder by the Treasury Department of the United
States.
"DAMAGES" means losses, claims, damages, judgments, settlements,
penalties, obligations, costs, liabilities and expenses (including reasonable
attorneys' fees and expenses), of any nature whatsoever, which result from or
arise out of an action, petition, plea, charge, complaint, suit, litigation,
arbitration, mediation, hearing or similar event, occurrence or proceeding.
"EFFECTIVE DATE" means April 1, 2006.
"ENCUMBRANCES" means liens, charges, pledges, options, mortgages, deeds
of trust, security interests, claims, restrictions (whether on voting, sale,
transfer, disposition, or otherwise), easements, and other encumbrances of every
type and description, whether imposed by law, agreement, understanding, or
otherwise.
"FINANCIAL STATEMENTS" is defined in SECTION 4.7.
"GENERAL PARTNER INTERESTS" means all of the PPM GP Interests and the
PPM Dallas GP Interests.
"GENERAL PARTNERS" is defined in the preamble hereto.
"GOVERNMENTAL ENTITY" means any court or tribunal in any jurisdiction
(domestic or foreign) or any public, governmental, or regulatory body, agency,
department, commission, board, bureau, or other authority or instrumentality
(domestic or foreign).
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"HAZARDOUS SUBSTANCE" means any substance defined as a hazardous
substance under any Applicable Environmental Law.
"INTELLECTUAL PROPERTY" shall mean all of the following, owned or used
in the current or contemplated business of the Partnerships: (i) trademarks and
service marks, trade dress, product configurations, trade names and other
indications of origin, applications or registrations in any jurisdiction
pertaining to the foregoing and all goodwill associated therewith; (ii)
patentable inventions, discoveries, improvements, ideas, know-how, formula
methodology, processes, technology, software (including password unprotected
interpretive code or source code, object code, development documentation,
programming tools, drawings, specifications and data) and applications and
patents in any jurisdiction pertaining to the foregoing, including re-issues,
continuations, divisions, continuations-in-part, renewals or extensions; (iii)
trade secrets, including confidential information and the right in any
jurisdiction to limit the use or disclosure thereof; (iv) copyrights in
writings, designs software, mask works or other works, applications or
registrations in any jurisdiction for the foregoing and all moral rights related
thereto; (v) database rights; (vi) Internet Web sites, domain names and
applications and registrations pertaining thereto and all intellectual property
used in connection therewith; (vii) rights under all agreements relating to the
foregoing; (viii) books and records pertaining to the foregoing; and (ix) claims
or causes of action arising out of or related to past, present or future
infringement or misappropriation of the foregoing.
"LIMITED PARTNERS" is defined in the preamble hereto.
"LIMITED PARTNER INTERESTS" means all of the PPM LP Interests and the
PPM Dallas LP Interests.
"MATERIAL CONTRACTS" is defined in SECTION 4.9.
"NEMA" means NEMA Properties, LLC.
"NOTES" is defined in SECTION 2.2.
"ORGANIZATIONAL DOCUMENTS" is defined in SECTION 4.1.
"PERMITS" is defined in SECTION 4.19.
"PPM" is defined in the preamble hereto.
"PPM DALLAS" is defined in the preamble hereto.
"PPM DALLAS GP" is defined in the preamble hereto.
"PPM DALLAS INTERESTS" is defined in the Recitals.
"PPM DALLAS LIMITED PARTNERS" is defined in the preamble hereto.
"PPM GP" is defined in the preamble hereto.
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"PPM INTERESTS" is defined in the Recitals.
"PPM LIMITED PARTNERS" is defined in the preamble hereto.
"PARTNERSHIP AGREEMENTS" is defined in SECTION 4.1.
"PARTNERSHIP INTERESTS" is defined in the Recitals.
"PARTNERSHIPS" is defined in the Recitals.
"PARTY" is defined in the preamble hereto.
"PERMITTED ENCUMBRANCE" means (a) statutory liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith; (b) mechanics', carriers',
workers', repairers', and similar Encumbrances arising or incurred in the
ordinary course of business for amounts that are not yet due and payable that
are not material to the business, operations and financial condition of the
Properties; (c) zoning, entitlement and other land use and environmental
regulations by any Governmental Entity, provided that such regulations have not
been violated; and (d) such other imperfections in title, charges, easements,
restrictions and Encumbrances which do not materially detract from the value of
or materially interfere with the present use of any Property subject thereto or
affected thereby.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, enterprise, unincorporated
organization, or Governmental Entity.
"PROCEEDINGS" means all proceedings, actions, claims, suits,
investigations, and inquiries by or before any arbitrator or Governmental
Entity.
"PROPERTIES" means, collectively, the properties, assets, rights, and
interests owned, used, and operated by the Partnerships.
"PURCHASE PRICE" is defined in SECTION 2.2.
"REQUIRED CONSENT" means the approval of Sellers owning in excess of
50% of the total Partnership Interests of each Partnership.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" and "SELLERS" are defined in the recitals.
"SELLER INDEMNIFIED PARTIES" is defined in SECTION 9.2.
"SELLER PARTIES" and "SELLER PARTY" means the Partnerships and Sellers.
"TAXES" means any federal, state, local, or foreign income taxes or
similar assessments, or any sales, use, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code Section 59A), customs, ad valorem,
duties, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
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ARTICLE 2. -- TRANSACTION
2.1. AGREEMENT TO SELL AND PURCHASE. At the Closing, but effective as
of the Effective Date, and on the terms and subject to the conditions set forth
in this Agreement, Sellers will transfer to Buyers the Partnership Interests,
free and clear of all Encumbrances, as follows:
(a) each of the General Partners will transfer to Amen all of
the General Partner Interests owned by it as reflected on SCHEDULE 2.1;
and
(b) each of the Limited Partners will transfer to NEMA all of
the Limited Partner Interests owned by it as reflected on
SCHEDULE 2.1.
2.2. PURCHASE PRICE. In consideration of the sale of the Partnership
Interests hereunder, Buyers will deliver to Sellers an aggregate purchase price
of $3,730,051.14 (the "PURCHASE PRICE"), consisting of (a) an aggregate of
$500,000 in cash or cash equivalent at Closing, and (b) a promissory note in
substantially the form attached hereto as EXHIBIT A payable by Amen and NEMA to
each of the Sellers which together have the aggregate original principal amount
of $3,230,051.14 (the "NOTES"), which will accrue interest at the annual rate of
seven and seventy-five one hundredths percent (7.75%) and be payable in equal
quarterly installments of principal and accrued interest beginning at the end of
the first full calendar quarter after the Closing Date and maturing on December
31, 2013. The Purchase Price will be allocated among the Sellers as set forth on
SCHEDULE 2.1. The Purchase Price allocated to PPM with respect to its PPM Dallas
LP Interests shall not be paid to PPM, but shall be included in the amounts of
the Purchase Price to be paid directly to the holders of the PPM Interests as
reflected on SCHEDULE 2.1.
ARTICLE 3. -- CLOSING
3.1. CLOSING. The closing of the transactions contemplated hereby (the
"CLOSING") will take place on May 19, 2006 at the principal office of Amen, or
at such earlier time as selected by Buyers or at such other time or place or on
such other date as the Parties may agree; provided that Buyers have the right to
extend the Closing Date by up to sixty (60) days by giving written notice to the
General Partners. The date on which the Closing occurs is herein referred to as
the "CLOSING DATE," but the transaction described herein shall be effective as
of the Effective Date.
3.2. CLOSING DELIVERIES. At the Closing,
(a) Buyers will (i) deliver the Purchase Price to Sellers, and
(ii) deliver to Sellers the various certificates, instruments, and
documents referred to in SECTION 7.1. Sellers shall be solely
responsible for providing the allocation of the Purchase Price among
them as set forth on SCHEDULE 2.1, and Buyers shall not be responsible
for nor have any liability with respect to such matters.
(b) Each Seller (i) will execute and deliver to Buyers an
Assignment of Partnership Interest in substantially the form attached
hereto as EXHIBIT B conveying to Buyers all of such Seller's right,
title and interest in and to the Partnership Interests; (ii) will
execute and deliver to Buyers, to the extent the Partnership Agreements
provide that the Partnership Interests are to be represented by
certificates, certificate(s) representing all of the Partnership
Interests; (iii) will deliver such consents and approvals as may be
necessary for Buyers to become a substitute limited partner or
replacement general partner, as the case may be, in each of the
Partnerships; and (iv) will execute and deliver the various
certificates, instruments, and documents referred to in SECTION 7.2.
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ARTICLE 4. -- REPRESENTATIONS AND WARRANTIES OF SELLER
Each Limited Partner represents and warrants to the Buyers as to such
Limited Partner and its Partnership Interest only and to the knowledge of such
Limited Partner, and each of the General Partners and the Partnerships
represents and warrants to Buyers, as of the date hereof and as of the Closing
Date, that:
4.1. ORGANIZATIONAL MATTERS. Each Seller Party that is an entity is
duly organized, validly existing, and in good standing under the laws of its
state of organization. No Proceeding to dissolve any Seller Party that is an
entity is pending or, to the best knowledge of the Seller Parties, threatened.
Each Seller Party is duly authorized to conduct its business and is in good
standing under the laws of each jurisdiction where such qualification is
required. Each Seller Party has the requisite power and authority necessary to
own or lease its properties and to carry on its businesses as currently
conducted and any business in which it currently proposes to engage. Sellers
have delivered to Buyers correct and complete copies of each of the limited
partnership agreements of the Partnerships (the "PARTNERSHIP AGREEMENTS"), the
certificates of limited partnership of the Partnerships, and all other similar
documents, instruments or certificates executed, adopted, or filed in connection
with the creation, formation, or organization of the Partnerships, including any
amendments thereto, all as described on SCHEDULE 4.1 (collectively as provided
to Buyers, the "ORGANIZATIONAL DOCUMENTS"). No Seller Party is in breach of any
provision of the Organizational Documents of either Partnership. Neither
Partnership owns any equity interests in any person, except for PPM's ownership
of PPM Dallas LP Interests.
4.2. PARTNERSHIP INTERESTS. Each Seller is the record and beneficial
owner of the Partnership Interest owned by such Seller as designated on SCHEDULE
2.1, and upon consummation of the transactions contemplated hereby, Buyers will
acquire, good, valid, and marketable title to all of the Partnership Interests,
free and clear of all Encumbrances. No other person owns or has any right to own
any of the Partnership Interests. Sellers possess full authority and legal right
to sell, transfer and assign to Buyers such Partnership Interests. There are no
claims pending, or, to the knowledge of Sellers, threatened against either the
Partnership or Sellers that concern or affect title to such Partnership
Interests, or that seek to compel the issuance of partnership interests or other
securities of either Partnership. The Partnership Interests are duly authorized,
validly issued, fully paid and non-assessable and are not subject to preemptive
rights. The Partnership Interests constitute all of the outstanding equity
securities of the Partnerships. Except as otherwise provided in the
Organizational Documents, (i) there are no existing warrants, options,
conversion rights, calls or other commitments of any character pursuant to which
either Partnership, or any partner thereof, may become obligated to increase or
decrease any Person's limited or general partner interest or admit any Person as
a partner; (ii) neither Partnership has any commitment or obligation (contingent
or otherwise) to increase or decrease any Person's limited or general partner
interest or admit any Person as a partner; or (iii) the Partnership Interests
are not subject to any agreements or understandings among any Persons with
respect to the voting or transfer thereof.
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4.3. AUTHORITY RELATIVE TO THIS AGREEMENT. Each Seller Party has full
power and authority to execute, deliver, and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance by such Seller Party of this Agreement, and the consummation by it
of the transactions contemplated hereby, have been duly authorized by all
necessary action of such Seller Party. This Agreement has been duly executed and
delivered by each Seller Party and constitutes, and each other agreement,
instrument, or document executed or to be executed by such Seller Party in
connection with the transactions contemplated hereby has been, or when executed
will be, duly executed and delivered by such Seller Party and constitutes, or
when executed and delivered will constitute, a valid and legally binding
obligation of each such Seller Party, enforceable against such Seller Party in
accordance with their respective terms.
4.4. NONCONTRAVENTION. The execution, delivery, and performance by each
Seller Party of this Agreement and the consummation by it of the transactions
contemplated hereby do not and will not (a) conflict with or result in a
violation of any provision of the Organizational Documents or the governing
documents of such Seller Party (if such Seller is an entity), (b) conflict with
or result in a violation of any provision of, or constitute (with or without the
giving of notice or the passage of time or both) a default under, or give rise
(with or without the giving of notice or the passage of time or both) to any
right of termination, cancellation, or acceleration under, any material bond,
debenture, note, mortgage, indenture, lease, contract, agreement, or other
material instrument or obligation to which any Seller Party is a party, (c)
result in the creation or imposition of any Encumbrance upon the Partnership
Interests or the Properties, or (d) violate any Applicable Law binding upon any
Seller Party or require a consent, approval, order or authorization of, or
declaration, filing, or registration with, any Governmental Entity.
4.5. BROKERS OR FINDERS. No Seller Party has incurred, and no Seller
Party will incur, directly or indirectly, as a result of any action taken by any
Seller Party under this Agreement, any liability for brokerage or finders' fees
or commissions or any similar charges in connection with this Agreement, for
which Buyers or any Partnership will have any liability.
4.6. COMPLIANCE WITH LAWS. Each Partnership and its respective
predecessors and Affiliates has complied with all applicable laws, and each
Seller Party is not aware of any violations, whether alleged or acknowledged, of
any applicable regulations, rules or orders promulgated by the Public Utility
Commission of Texas, or any other federal or state regulatory agency, or any of
their predecessor agencies, which affect in any respect the operation or value
of the Partnerships or the Properties.
4.7. FINANCIAL STATEMENTS. The financial statements for each of the
Partnerships which have been provided to Buyers (the "FINANCIAL STATEMENTS")
were prepared in accordance with generally accepted accounting principles
consistently applied, and accurately and completely represent the financial
condition of each of the Partnerships, respectively, as of the dates set forth
therein, and are consistent with the books and records of the Partnership.
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4.8. SUBSEQUENT EVENTS. Except as set forth in SCHEDULE 4.8, since the
date of the most recent Financial Statements which include a balance sheet (the
"BALANCE SHEET DATE") each of the Partnerships have operated in the ordinary
course of business and there has not been any material adverse change with
respect to any Partnership. Without limiting the foregoing, since that date,
none of the following have occurred:
(a) neither Partnership has sold, leased, transferred, or
assigned any assets other than for a fair consideration in the ordinary
course of business;
(b) neither Partnership has entered into any contract or
agreement (or series of related contracts or agreements), or any
amendment or modification of any contract or agreement, either
involving more than $50,000 or outside the ordinary course of business;
(c) no Encumbrance has been imposed upon any of the
Properties;
(d) neither Partnership has made any capital expenditure (or
series of related capital expenditures) involving more than $25,000
individually, $50,000 in the aggregate, or outside the ordinary course
of business;
(e) neither Partnership has issued any note, bond, or other
debt security or created, incurred, assumed, or guaranteed any
liability for borrowed money or capitalized lease;
(f) neither Partnership has delayed or postponed the payment
of accounts payable or other liabilities outside the ordinary course of
business;
(g) neither Partnership has canceled, compromised, waived, or
released any claim or cause of action (or series of related claims or
causes of action) outside the ordinary course of business;
(h) there has been no change made or authorized to the
Organizational Documents of either Partnership;
(i) neither Partnership has issued, sold, or otherwise
disposed of any of its limited or general partner interests;
(j) neither Partnership has declared, set aside, or paid any
dividend or made any distribution with respect to its limited and
general partner interests (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its limited or general partner
interests;
(k) neither Partnership has experienced any damage,
destruction, or loss (whether or not covered by insurance) to its
Properties in excess of $25,000;
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(l) neither Partnership has made any loan to, or entered into
any other transaction with, any of its directors, officers, employees
or Affiliates;
(m) neither Partnership has entered into any employment,
collective bargaining, or similar contract or modified the terms of any
existing such contract;
(n) neither Partnership has committed to pay any bonus or
granted any increase in the base compensation (i) of any director,
officer, or employee thereof that is a Seller or an Affiliate thereof,
or (ii) outside of the ordinary course of business, of any of its other
employees;
(o) neither Partnership has adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or similar
contract for the benefit of any of its directors, officers, or
employees;
(p) neither Partnership has made any other change in
employment terms for (i) any officer or employee thereof that is a
Seller or an Affiliate thereof, or (ii) outside of the ordinary course
of business, any of its other directors, officers, or employees;
(q) neither Partnership has made or pledged to make any
charitable or other capital contribution;
(r) neither Partnership has discharged or satisfied any lien
or paid any obligation or liability, absolute or contingent, other than
current liabilities incurred and paid in the ordinary course of
business and consistent with past practices;
(s) neither Partnership has made any material change in any of
the accounting principles followed by it or the method of applying such
principles;
(t) neither Partnership has made any change in any material
Tax election or the manner Taxes are reported;
(u) there has not been any other occurrence, event, incident,
action, failure to act, or transaction with respect to the Partnerships
either involving more than $25,000 (individually or in the aggregate)
or outside the ordinary course of business; and
(v) neither Partnership has committed to any of the foregoing.
4.9. LIABILITIES. Except as set forth on SCHEDULE 4.9, neither
Partnership has any liability (and there is no basis for any present or future
claims, causes of action or orders against any of them giving rise to any
liability), except for (a) liabilities quantified on the face of the Financial
Statements (rather than in any notes thereto) and not heretofore paid or
discharged, and (b) liabilities which have arisen after the Balance Sheet Date
in the ordinary course of business which, individually or in the aggregate, are
not material and are of the same character and nature as the liabilities
quantified on the face of the Financial Statements as of the Balance Sheet Date,
none of which results from or relates to any breach of contract, breach of
warranty, tort, infringement, or breach of law or arose out of any claim, cause
of action or order.
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4.10. INSURANCE. SCHEDULE 4.10 contains accurate and complete (i) lists
of all insurance policies currently carried by the Partnerships, and (ii) lists
of all insurance losses or workers' compensation claims received for the past
three policy years. Copies of all insurance policies currently in effect have
been or will be provided to Buyers. Such insurance policies evidence all of the
insurance that either Partnership is required to carry pursuant to contracts to
which it is a party or applicable law. Such insurance policies are currently in
full force and effect and will remain in full force and effect through their
current terms. No insurance carried by any Partnership has ever been canceled by
the insurer and no Partnership has ever been denied coverage.
4.11. LABOR; EMPLOYEES.
(a) To each Seller Party's knowledge, no executive, key
employee, or group of employees has any plans to terminate employment
with any Partnership. No Partnership is a party to or bound by any
collective bargaining agreement, nor has any of them experienced any
strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. No Seller Party has any knowledge of
any organizational effort currently being made or threatened by or on
behalf of any labor union with respect to employees of any Partnership.
Neither Partnership has any or has ever had any employee benefit plans.
No Partnership has committed any unfair labor practice. The
Partnerships are in full compliance with all laws regarding employment,
wages, hours, equal opportunity, collective bargaining and payment of
social security and other taxes. Except as provided in SECTION 6.7, the
employment of all persons and officers employed by the Partnerships are
terminable at will without any penalty or severance obligation of any
kind on the part of the employer. All sums due for employee
compensation and benefits and all vacation time owing to any employees
of the Partnerships have been duly and adequately accrued on the
accounting records of the Partnerships.
(b) All employee benefit plans and all other employee benefit
arrangements, policies or payroll practices, including, without
limitation, any arrangement, policy or practice providing severance
pay, bonuses, commissions, profit-sharing, savings, incentive, change
of control, parachute, stock purchase, stock options, insurance,
deferred compensation, or other similar fringe or employee benefits,
covering former or current employees of the Partnerships, or under
which the Partnerships has any obligation or liability, are and have
been maintained and administered in all material respects in accordance
with their express terms and with the requirements of applicable law.
True and complete copies of all such plans and arrangements have been
provided or made available to the Buyers prior to the date hereof.
4.12. TITLE TO AND CONDITION OF PROPERTIES. The Properties owned by
each of the Partnerships are included in the Financial Statements and located on
the Partnerships' premises. The Partnerships have good, marketable, and
indefeasible title to, or a valid leasehold interest in, all real property,
buildings, machinery, equipment, and other tangible assets that are included in
the Financial Statements, located on their premises or necessary for the conduct
of their respective businesses as currently conducted and as currently proposed
to be conducted, in each case free and clear of all Encumbrances, other than
Permitted Encumbrances. Each such tangible asset is free from material defects
(patent and latent), has been maintained in accordance with normal industry
practice, is in good operating condition (subject to normal wear and tear), and
is suitable for the purposes for which it is currently used and currently is
proposed to be used. There exists no unrecorded document or agreement that would
result in the impairment or loss of the Partnerships' title to any of the
Properties or the value therefore or impede the operations thereof by the
Partnerships. All buildings, plants and structures each Partnership owns or uses
lie wholly within the boundaries of the real property such Partnership owns and
do not encroach upon any other Person's property.
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4.13. INTELLECTUAL PROPERTY. The Partnerships own all right, title and
interest in and to, or has a valid and enforceable license to use all the
Intellectual Property used by it in connection with the Partnerships'
businesses, which represents all intellectual property rights necessary to the
conduct of the Partnerships' businesses as now conducted and presently
contemplated. The Partnerships are in compliance with all contractual
obligations relating to the protection of such of the Intellectual Property as
it uses pursuant to license or other agreement. There are no conflicts with or
infringements of any Intellectual Property by any third party. The conduct of
the Partnerships' businesses as currently conducted or contemplated does not
conflict with or infringe any proprietary right of any third party. There is no
claim, suit, action or proceeding pending or, to the knowledge of the
Partnerships, threatened against the Partnerships: (i) alleging any such
conflict or infringement with any third party's proprietary rights; or (ii)
challenging the Partnerships' ownership or use of, or the validity or
enforceability of any Intellectual Property. No present or former employee,
officer or director of the Partnerships, or agent or outside contractor of the
Partnerships, holds any right, title or interest, directly or indirectly, in
whole or in part, in or to any Intellectual Property. To the Seller Parties'
knowledge: (i) none of the Intellectual Property has been used, disclosed or
appropriated to the detriment of the Partnerships for the benefit of any Person
other than the Partnerships; and (ii) no employee, independent contractor or
agent of the Partnerships has misappropriated any trade secrets or other
confidential information of any other Person in the course of the performance of
his or her duties as an employee, independent contractor or agent of the
Partnerships.
Any programs, modifications, enhancements or other inventions,
improvements, discoveries, methods or works of authorship ("WORKS") that were
created by employees of the Partnerships were made in the regular course of such
employees' employment or service relationships with the Partnerships using the
Partnerships' facilities and resources and, as such, constitute works made for
hire. Each such employee who has created Works or any employee who in the
regular course of his employment may create Works and all consultants have
signed an assignment or similar agreement with the Partnerships confirming the
Partnerships' ownership or, in the alternate, transferring and assigning to the
Partnerships all right, title and interest in and to such programs,
modifications, enhancements or other inventions including copyright and other
intellectual property rights therein.
4.14. SOFTWARE. The Partnerships owns or has valid licenses to use,
reproduce, modify, distribute and sublicense all copies of the operating and
applications computer software programs and databases owned or used by the
Partnerships that are material to the conduct of the Partnerships' businesses as
now conducted and as presently contemplated to be conducted (collectively, the
"SOFTWARE"), and neither of the Partnerships has not sold, licensed, leased or
otherwise transferred or granted any interest or rights in or to any portion
thereof. To the knowledge of the Seller Parties, none of the Software used by
the Partnerships, nor any use thereof, conflicts with, infringes upon or
violates any intellectual property or other proprietary right of any other
Person and, to the knowledge of the Partnerships, no claim, suit, action or
other proceeding with respect to any such infringement or violation is
threatened or pending. Each of the Partnerships has taken the steps reasonably
necessary to protect its right, title and interest in and to the Software,
including, without limitation, the execution of appropriate confidentiality
agreements. The Partnerships possess or have access to the original and all
copies of all documentation and all source code or password protected code, as
applicable for all the Software it owns. Upon consummation of the transactions
contemplated by this Agreement, the Partnerships will continue to own all the
Software owned by it, free and clear of all claims, liens, encumbrances,
obligations and liabilities and, with respect to all agreements for the lease or
license of Software which require consents or other actions as a result of the
consummation of the transactions contemplated by this Agreement in order for the
Partnerships to continue to use and operate such Software after the Closing
Date, the Partnerships will have obtained such consents or taken such other
actions so required.
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4.15. MATERIAL CONTRACTS. Seller Parties have provided to Buyers true
and correct copies of all material contracts, agreements, leases, mortgages,
instruments or other documents to which either of the Partnerships or their
respective Properties are subject or bound (the "MATERIAL CONTRACTS"). Each
Partnership, each Seller and, to the Seller Parties' knowledge, each other party
thereto, has complied with and is not in default under any such Material
Contracts. No event has occurred which, with notice or lapse of time, would
constitute a breach or default under any Material Contract, and no party has
repudiated any provision of the contracts. Without limiting the generality of
the foregoing, neither Partnership has any obligation or liability to refund or
reimburse any fees, charges or other revenues. All Material Contracts are in
full force and effect and will not be terminated or give rise to a termination
right or otherwise be effected by this Agreement or the transactions
contemplated hereby.
4.16. TAXES. Each Partnership has filed all federal, state and other
Tax reports or returns, if any, required to be filed by such Partnership. All
Taxes shown on such Tax reports or returns and all other Taxes and assessments
owed by each Partnership have been properly and timely paid. Each Partnership
has made all required deposits for Taxes and has established adequate reserves
for Taxes. No taxing authority or agency is now asserting or, to the knowledge
of any Seller Party, threatening to assert against either Partnership any
deficiency or claim for additional Taxes or interest thereon or penalties in
connection therewith. Neither Partnership has granted any waiver of any statute
of limitations with respect to, or any extension of a period of assessment of,
any Taxes.
4.17. CONSENTS. There are no preferential rights of purchase or
consents to assign in favor of third parties with respect to any of the
Partnership Interests and no consents to transfers thereof are required, except
as may be contained in the Partnership Agreements, all of which have been waived
or obtained.
4.18. ENVIRONMENTAL. At no time during either of the Partnerships'
ownership thereof have the Properties been used by the Partnerships or by anyone
else during any period of time for the generation, storage, or disposal of a
Hazardous Substance or as a landfill or a waste disposal site for regulated
waste. With respect to the Properties, no Partnership has entered into, and, to
the best knowledge of each Seller, no predecessor to either of the Partnerships
or operator of any Properties has entered into, or is subject to, any contracts,
agreements or Applicable Environmental Laws that relate to the future use of any
of the Properties or that require any change in the present condition of any of
the Properties. Neither the execution of this Agreement nor the consummation of
the transactions contemplated by this Agreement will violate any agreements,
consents, orders, decrees, judgments, license, or permit conditions, or, to the
best knowledge of each Seller, require the consent or approval of any agency
charged with enforcing any Applicable Environmental Law.
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4.19. LICENSES AND PERMITS. Each of the Partnerships has obtained and
holds in good standing all licenses, permits, variances, exemptions, orders,
franchises, approvals and authorizations of all Governmental Entities necessary
for the lawful conduct of its business and the lawful ownership, use and
operation of its assets ("PERMITS"). None of the Permits will be adversely
affected by the consummation of the transactions contemplated under this
Agreement or requires any filing or consent in connection therewith. Each of the
Partnerships is in compliance with the terms of the Permits and no investigation
or review by any Governmental Entity with respect to either Partnership is
pending or, to the knowledge of the Seller Parties, threatened.
4.20. PROCEEDINGS. There is no claim, dispute, suit, action,
investigation, or other proceeding before any Governmental Entity, nor
threatened, against either of the Partnerships or any of the Properties that has
or might result in the impairment or loss of the Partnerships' title to any of
the Properties or the value thereof or impede the operation of the Properties.
4.21. CERTAIN BUSINESS RELATIONSHIPS. Except as set forth on SCHEDULE
4.21, none of the Sellers nor any of their Affiliates (a) have been involved in
any business arrangement or relationship with either Partnership within the past
12 months, (b) own any asset that is used in either Partnership's business, and
(c) has any claim or cause of action against either Partnership.
4.22. ACCOUNTS RECEIVABLE.
(a) All of the accounts, notes and loans receivable that have
been recorded on the books of each of the Partnerships are bona fide
and represent accounts, notes and loans receivable validly due for
goods sold or services rendered and are reasonably expected to be
collected in full within 120 days after the applicable invoice or note
maturity date (other than such accounts, notes and loans receivable,
that individually or in the aggregate are less than $50,000 as of the
date hereof);
(b) All of such accounts, notes and loans receivable are free
and clear of any and all Encumbrances and other adverse claims and
charges, and none of such accounts, notes or loans receivable is
subject to any offset or claim of offset; and
(c) None of the obligors on such accounts, notes or loans
receivable has given notice to either of the Partnerships that it will
or may refuse to pay the full amount or any portion thereof.
4.23. SECURITIES LAW REPRESENTATIONS. Each Seller makes the following
representations with respect to the Note to be received by such Seller as part
of the Purchase Price:
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(a) EACH SELLER IS ABLE TO BEAR THE ECONOMIC RISK OF ITS
INVESTMENT IN THE NOTE FOR AN INDEFINITE PERIOD OF TIME. THE NOTES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY STATE, AND THEREFORE CANNOT BE
TRANSFERRED OR SOLD UNLESS THE NOTES ARE SUBSEQUENTLY REGISTERED UNDER
THE SECURITIES ACT, AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS
AN EXEMPTION OR EXCEPTION FROM SUCH REGISTRATION IS AVAILABLE AND SUCH
AVAILABILITY OF THE EXEMPTION SHALL BE ESTABLISHED TO THE SATISFACTION
OF AMEN AND ITS COUNSEL. EACH SELLER ALSO RECOGNIZES THAT NO FEDERAL OR
STATE AGENCY HAS PASSED UPON THE NOTE OR MADE ANY FINDING OR
DETERMINATION AS TO THE FAIRNESS OF THE ACCEPTANCE OF THE NOTE. Each
Seller acknowledges and understands that there is no public market for
the Note and that no market for the Note is likely to develop.
(b) Each Seller recognizes that his acceptance of the Note
involves a high degree of risk which may result in the loss of the
total amount of the principal thereof. Each Seller acknowledges that
such Seller is aware of and has carefully considered all risks incident
to the acquisition of the Note. Each Seller has carefully considered
and understands and accepts all such risks.
(c) Each Seller is acquiring the Note for such Seller's own
account (as principal) for investment and not with a view to the
distribution or resale thereof, and has not offered or sold any portion
of the Note and has no present intention of dividing the Note with
others or of reselling or otherwise disposing of any portion of the
Note.
(d) Each Seller has had the opportunity to review the publicly
available information concerning Amen and has determined that such
information is sufficient to make an informed investment decision. Each
Seller has sufficient knowledge and experience in financial and
business matters to enable such Seller to evaluate the merits and risks
of an investment in the Note. In addition, in reaching the conclusion
that each Seller desires to accept the Note, such Seller has carefully
evaluated its financial resources and investments, has consulted with
such legal, accounting and other experts as necessary, and acknowledges
that such Seller is able to bear the economic risks of this investment.
(e) Each Seller is an "accredited investor" as such term is
defined in Rule 501 under the Securities Act. Each Seller will provide
to Amen such information as may be reasonably requested by Amen to
enable it to satisfy itself as to accredited status of the each Seller
and the knowledge and experience of each Seller and his ability to bear
the economic risk of an investment in the Note.
4.24. INFORMATION PROVIDED. All representations and warranties made by
each Seller Party and all other oral or written information provided by each
Seller Party to Buyers (including without limitation the Appraisal) is and are
true, correct and complete in all material respects.
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ARTICLE 5. -- REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers represent and warrant to Seller that:
5.1. ORGANIZATION; EXISTENCE; QUALIFICATION. Amen is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware. NEMA is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Nevada.
5.2. AUTHORITY RELATIVE TO THIS AGREEMENT. Each Buyer has full
corporate or company power and authority to execute, deliver, and perform this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery, and performance by each Buyer of this Agreement, and the consummation
by it of the transactions contemplated hereby, have been duly authorized by all
necessary corporate or company action of each Buyer. This Agreement has been
duly executed and delivered by Buyers and constitutes, and each other agreement,
instrument, or document executed or to be executed by Buyers in connection with
the transactions contemplated hereby has been, or when executed will be, duly
executed and delivered by Buyers and constitutes, or when executed and delivered
will constitute, a valid and legally binding obligation of Buyers, enforceable
against Buyers in accordance with their respective terms.
5.3. NONCONTRAVENTION. The execution, delivery, and performance by
Buyers of this Agreement and the consummation by it of the transactions
contemplated hereby do not and will not (a) conflict with or result in a
violation of any provision of the organizational documents of Buyers, (b)
conflict with or result in a violation of any provision of, or constitute (with
or without the giving of notice or the passage of time or both) a default under,
or give rise (with or without the giving of notice or the passage of time or
both) to any right of termination, cancellation, or acceleration under, any
bond, debenture, note, mortgage, indenture, lease, contract, agreement, or other
instrument or obligation to which Buyers are a party, or (c) violate any
Applicable Law binding upon Buyers or require a consent, approval, order or
authorization of, or declaration, filing or registration with, any Governmental
Entity.
5.4. SECURITIES LAWS COMPLIANCE. Each of the Buyers (a) is acquiring
the Partnership Interests for its own account and not with a view to
distribution within the meaning of Section 2(11) of the Securities Act, (b) is
an "accredited investor" as such term is defined in Rule 501(a) under the
Securities Act, (c) has sufficient knowledge and experience in financial and
business matters so as to be able to evaluate the merits and risk of an
investment in the Partnership Interests and is able financially to bear the
risks thereof and (d) understands that the Partnership Interests will, upon
purchase, be characterized as "restricted securities" under state and federal
securities laws and that under such laws and applicable regulations the
Partnership Interests may be resold without registration under such laws only in
certain limited circumstances.
5.5. BROKERS OR FINDERS. Buyers have not incurred, and will not incur,
directly or indirectly, as a result of any action taken by Buyers under this
Agreement, any liability for brokerage or finders' fees or commissions or any
similar charges in connection with this Agreement, for which any Seller has or
will have any liability.
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ARTICLE 6. -- COVENANTS OF SELLER PARTIES AND BUYERS
6.1. GENERAL. Buyers and each Seller Party will use their reasonable
best efforts to take all action and to do all things necessary in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the conditions to the Closing set
forth in ARTICLE 7), and each Seller Party agrees not to take any action which
might effect any Partnership Interest and not to vote, consent, act or determine
not to act under the Partnership Agreements without the prior written consent of
Buyers. The General Partners will operate, manage and administer the
Partnerships in a good and workmanlike manner consistent with past practices,
and cause each of the Partnerships to carry on the business of the Partnerships
in substantially the same manner as before execution of this Agreement,
including without limitation maintaining all insurance, Permits and Material
Contracts in full force and effect and maintaining the Property in accordance
with industry standards. The General Partners will, except for emergency action
taken in the face of serious risk to life, property or the environment (a)
submit to Buyers, for prior written approval, all requests for operating or
capital expenditures and all proposed contracts, agreements and actions relating
to (i) any indebtedness to be incurred by the Partnerships or any sale of any of
the Properties, (ii) the Partnership Interests, the Partnerships or the
Properties which involve individual commitments of more than $10,000 or which
would create any burdens on either of the Partnerships, the Partnership
Interests or the Properties, or (iii) all activities described in SECTION 4.8 or
outside the ordinary course of business of either of the Partnerships; (b)
consult with, inform and advise Buyers regarding all material matters concerning
the operation, management and administration of the Partnerships and the
Properties; and (c) obtain Buyers' written approval prior to voting, consenting,
acting or determining not to act under any operating, unit, joint venture,
partnership or similar agreement, including the Partnership Agreements. No
Seller Party will take any action that is designed or intended to have the
effect of discouraging any lessor, licensor, customer, supplier, or other
business associate of either of the Partnerships from maintaining at least as
favorable business relationships with the Partnerships after the Closing as it
maintained with the Partnerships prior to the Closing. Each of the Seller
Parties will, and will cause its Affiliates to, refer all customer inquiries
relating to the businesses of the Partnerships to Buyers, or an Affiliate
thereof, from and after the Closing.
6.2. CONSENTS AND APPROVALS.
(a) Following the execution of this Agreement, each Seller
Party will use its reasonable best efforts to obtain as soon as
practicable (but in any event prior to the Closing) all consents
necessary for each Seller Party to consummate the transactions
contemplated hereby and to perform its obligations hereunder. Each
Seller Party will use its reasonable best efforts to satisfy or cause
to be satisfied each of the conditions to the Closing set forth in
ARTICLE 7.
(b) Following the execution of this Agreement, Buyers will use
reasonable best efforts to obtain as soon as practicable (but in any
event prior to the Closing) all consents necessary for Buyers to
consummate the transactions contemplated hereby and to perform its
other obligations hereunder. Buyers will use reasonable best efforts to
satisfy or cause to be satisfied each of the conditions to the Closing
set forth in ARTICLE 7.
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6.3. FULL ACCESS AND DUE DILIGENCE.
(a) At all times during the term of this Agreement, the
General Partners will permit representatives of Buyers to have full
access at all reasonable times to all premises, Properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to each of the Partnerships to conduct due diligence reviews
(including without limitation to conduct an audit of the Financial
Statements and other financial information), together with the
opportunity to discuss the Partnership and its business with the
Partnership or its partners, officers, accountants, employees,
consultants, agents and counsel, all as Buyers deem reasonably
necessary or appropriate for the purposes of familiarizing Buyers with
the Partnership and its business. Buyers may make copies of such
records, at their expense, but shall immediately return all such copies
so made if this Agreement is terminated.
(b) Without limiting the foregoing, the General Partners shall
provide to Buyers promptly on or before execution of this Agreement
copies of the Financial Statements and Material Contracts and other
information requested by Buyers for the purpose of conducting a due
diligence review of the Partnerships, the Properties and the
Partnership Interests.
6.4. NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the others of any material adverse development causing a breach of any such
Party's representations and warranties herein. No disclosure by any Party
pursuant to this SECTION 6.4 will be deemed to amend or supplement any of the
schedules or to prevent or cure any misrepresentation or breach of warranty.
6.5. EXCLUSIVITY. The Seller Parties will not solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any of the Partnership Interests or the Properties (including
any acquisition structured as a merger, consolidation, or share exchange) during
the term of this Agreement.
6.6. CONFIDENTIALITY. From and after the Closing Date, each Seller will
treat and hold as confidential all information (the "CONFIDENTIAL INFORMATION")
concerning the businesses and affairs of Buyers or the Partnerships, refrain
from using any of the Confidential Information except in connection with this
Agreement, and deliver promptly to Buyers or destroy, at the request and option
of Buyers, all tangible embodiments (and all copies) of the Confidential
Information which are in Seller's possession. If any Seller is requested or
required (by oral question or request for information or documents in any
action) to disclose any Confidential Information, such Seller will notify Buyers
promptly of the request or requirement so that Buyers may seek an appropriate
protective order or waive compliance with this Section 6.6. If, in the absence
of a protective order or the receipt of a waiver hereunder, any Seller is, on
the written advice of counsel, compelled to disclose any Confidential
Information to any Governmental Entity, arbitrator, or mediator or else stand
liable for contempt, that Seller may disclose the Confidential Information to
the Governmental Entity, arbitrator, or mediator; provided, however, that the
disclosing Seller will use its best efforts to obtain, at the request of Buyers,
an order or other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed as Buyers will
designate.
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6.7. EMPLOYMENT AGREEMENT. Prior to Closing, each Partnership shall
enter into employment agreements in form and substance acceptable to Amen with
each key employee of each such Partnership as identified on SCHEDULE 6.7 and any
other employee determined by Amen during its due diligence to be a key employee.
6.8. POST CLOSING OBLIGATIONS. From and after Closing for so long as
any amount remains payable under the Notes, Buyers agree (a) not to sell or
otherwise dispose of any material assets of the Partnerships except in the
ordinary course of business, (b) enter into any business in direct competition
with the Partnerships other than through the Partnerships, or (c) take any
action which would reasonably be expected to make it impossible to further
conduct the business of the Partnership.
6.9. EXPENSES. Each Party shall be responsible for all of its own
expenses, including but not limited to, legal, accounting and other professional
fees and the fees of its financial advisors incurred with respect to this
Agreement and the transactions provided for herein.
6.10. FURTHER ASSURANCES. After Closing, each of the Parties will
execute, acknowledge and deliver to the other such further instruments, and take
such other action, as may be reasonably requested in order to more effectively
assure to each of the Parties all of the respective properties, rights, titles,
interests, estates and privileges intended to be assigned, delivered or inuring
to the benefit of each of the Parties in consummation of the transactions
contemplated hereby.
ARTICLE 7. -- CONDITIONS TO OBLIGATIONS OF THE PARTIES
7.1. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS. The
obligations of Sellers to consummate the transactions contemplated by this
Agreement will be subject to the fulfillment or waiver by a Required Consent on
or prior to the Closing of each of the following conditions:
(a) Each and every representation of Buyers under this
Agreement will be true and accurate in all material respects (without
giving effect to any language therein that limits the scope of or
otherwise qualifies any such representation or warranty based on any
standard of materiality or any similar concept) as of the date when
made and will be deemed to have been made again at and as of the time
of the Closing and will at and as of such time of the Closing be true
and accurate in all material respects (without giving effect to any
language therein that limits the scope of or otherwise qualifies any
such representation or warranty based on any standard of materiality or
any similar concept) except as to changes specifically contemplated by
this Agreement, and Sellers will have received a certificate of an
executive officer of Buyers to the foregoing effect.
(b) Buyers will have performed and complied in all material
respects with each and every covenant, agreement, and condition
required by this Agreement to be performed or complied with by Buyers
prior to or at the Closing, and Sellers will have received a
certificate of an executive officer of Buyers to the foregoing effect.
(c) No Proceeding will, on the Closing Date, be pending or
threatened before any Governmental Entity seeking to restrain,
prohibit, or obtain Damages in connection with the consummation of the
transactions contemplated by this Agreement.
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(d) All consents and approvals necessary to permit the
consummation of the transactions contemplated by this Agreement will
have been obtained, and, with respect to any applicable consents of
Governmental Entities, no stay or appeal will have been entered and be
pending.
7.2. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYERS. The obligations
of Buyers to consummate the transactions contemplated by this Agreement will be
subject to the fulfillment or waiver on or prior to the Closing of each of the
following conditions:
(a) Each and every representation of each Seller Party under
this Agreement will be true and accurate in all material respects
(without giving effect to any language therein that limits the scope of
or otherwise qualifies any such representation or warranty based on any
standard of materiality or any similar concept) as of the date when
made and will be deemed to have been made again at and as of the time
of the Closing and will at and as of such time of the Closing be true
and accurate in all material respects (without giving effect to any
language therein that limits the scope of or otherwise qualifies any
such representation or warranty based on any standard of materiality or
any similar concept) except as to changes specifically contemplated by
this Agreement, and Buyers will have received a certificate from each
Seller Party to the foregoing effect.
(b) Seller Parties will have performed and complied in all
material respects with each and every covenant, agreement and condition
required by this Agreement to be performed or complied with by Seller
Parties prior to or at the Closing, and Buyers will have received a
certificate from each Seller Party to the foregoing effect.
(c) No Proceeding will, on the Closing Date, be pending or
threatened before any Governmental Entity seeking to restrain,
prohibit, or obtain Damages in connection with the consummation of the
transactions contemplated by this Agreement.
(d) With respect to each Seller Party, Buyers will have also
received a certificate executed by an authorized officer or other
representative of such Seller Party certifying as to (i) such Seller
Party's organizational documents, (ii) such Seller Party's good
standing, (iii) the resolutions in which the board of directors or
other managing body of such Seller Party approving the transactions
contemplated hereby, and (iv) the incumbency and authority of such
Seller Party's officers or other representatives who execute any
documents on behalf of the Seller Party in connection with this
Agreement.
(e) Buyers shall be fully satisfied with all matters reviewed
in connection with their due diligence in accordance with SECTION 6.3.
(f) All consents and approvals necessary to permit the
consummation of the transactions contemplated by this Agreement will
have been obtained, and, with respect to any applicable consents of
Governmental Entities, no stay or appeal will have been entered and be
pending.
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ARTICLE 8. -- TERMINATION
8.1. 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 Sellers and Buyers;
(b) by either Sellers or Buyers if any governmental authority
shall have issued any injunction or taken any other action permanently
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby and such injunction or other action
shall have become final and nonappealable;
(c) by either of Sellers or Buyers if the Closing shall not
have occurred by July 19, 2006, provided, however, that the right to
terminate this Agreement under this Section 8.1(c) shall not be
available to any party whose breach of any representation or warranty
or failure to fulfill any covenant or agreement under this Agreement
has been the cause of or resulted in the failure of the Closing to
occur on or before such date;
(d) by Buyers if (i) Sellers shall have failed to comply in
any material respect with any of the covenants or agreements contained
in this Agreement to be complied with or performed by Sellers at or
prior to such date of termination; (ii) any representation or warranty
of Sellers contained in this Agreement shall not be true in all
material respects when made or at the time of termination as if made on
such date of termination (except to the extent it relates to a
particular date); or (iii) any condition set forth in SECTION 7.2 is
not satisfied or waived at or prior to Closing; or
(e) by Sellers if (i) Buyers shall have failed to comply in
any material respect with any of the covenants or agreements contained
in this Agreement to be complied with or performed by Buyers at or
prior to such date of termination; (ii) any representation or warranty
of Buyers contained in this Agreement shall not be true in all material
respects when made or on or at the time of termination as if made on
such date of termination (except to the extent it relates to a
particular date); or (iii) any condition set forth in SECTION 7.1 is
not satisfied or waived at or prior to Closing.
8.2. EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
this ARTICLE 8 this Agreement will forthwith become null and void and have no
effect without any liability on the part of any Party or their respective
Affiliates, except for the provisions of this SECTION 8.2 and such other
portions of this Agreement as are necessary to the enforcement and construction
of SECTION 8.2. Nothing in this Agreement will, however, relieve any Party of
any liability for breach of this Agreement occurring prior to such termination
or for breach of any provision of this Agreement that specifically survives
termination hereunder. Buyers will have all remedies provided herein and all
remedies at law or in equity in the event of a breach of this Agreement by any
Seller Party. The prevailing party in any legal proceeding brought under or to
enforce the provisions of this Agreement will be additionally entitled to
recover court costs and reasonable attorneys' fees from the non-prevailing
party.
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ARTICLE 9. - SURVIVAL AND INDEMNIFICATION
9.1. SURVIVAL. The representations and warranties contained in ARTICLE
4 and ARTICLE 5 of this Agreement, and the covenants and other agreements made
under this Agreement, including, without limitation, covenants in respect of
indemnification, will survive the Closing without limitation and will remain
fully enforceable in accordance with their terms.9.2. INDEMNIFICATION BY BUYERS.
Buyers will protect, defend, indemnify and hold harmless Sellers and their
respective partners, members, managers, stockholders, officers, directors,
employees, Affiliates, agents, representatives, successors and assigns (the
"SELLER INDEMNIFIED PARTIES"), from and against any and all Damages sustained by
any of the Seller Indemnified Parties as a result of any breach of any
representation, covenant, or agreement of Buyers contained in this Agreement or
in any of the certificates, instruments, or documents delivered by Buyers
pursuant hereto.
9.3. INDEMNIFICATION BY SELLER PARTIES. Seller Parties will protect,
defend, indemnify and hold harmless Buyers and their members, managers,
stockholders, officers, directors, employees, Affiliates, agents,
representatives, successors and assigns (the "BUYER INDEMNIFIED PARTIES"), from
and against any and all Damages sustained by any of the Buyer Indemnified
Parties as a result of any breach of any representation, covenant, or agreement
of any Seller Party contained in this Agreement, or in any of the certificates,
instruments, or documents delivered by any Seller Party pursuant hereto or as a
result of events with respect to either of the Partnerships or any Partnership
Interests which occurred prior to the Closing Date.
9.4. LIMITATION ON INDEMNIFICATION. Notwithstanding anything set forth
in this ARTICLE 9, each Limited Partner's liability or obligation arising under
this ARTICLE 9 shall be limited to the remaining amount owing under the Note
payable to such Limited Partner at the time such liability or obligation arises,
and shall only be enforced by an offset against the amount owing under such
Note; such Limited Partner shall not have any personal liability under this
ARTICLE 9.
ARTICLE 10. -- MISCELLANEOUS
10.1. NOTICES. Except as otherwise expressly provided herein, all
communications required or permitted under this Agreement will be in writing and
any communication or delivery hereunder will be deemed to have been duly given
and received when actually delivered to the address of the Parties to be
notified as set forth below and addressed as follows:
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If to Seller Parties, as follows:
Priority Power Management I, L.L.C.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to Buyers:
Amen Properties, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Provided, however, that any notice required under this Agreement will be
effective if given verbally within the time provided, so long as such verbal
notice is followed by written notice thereof in the manner provided herein
within 24 hours following the end of such time period. Any Party may, by written
notice so delivered to the other, change the address to which delivery will
thereafter be made.
10.2. WAIVER. Any of the terms, provisions, covenants, representations,
warranties or conditions hereof may be waived only by a written instrument
executed by the Party waiving compliance. Except as otherwise expressly provided
in this Agreement, the failure of any Party at any time or times to require
performance of any provision hereof will in no manner affect such Party's right
to enforce the same. No waiver by any Party of any condition, or of the breach
of any term, provision, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, will
be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or of the breach of any
other term, provision, covenant, representation or warranty.
10.3. BINDING EFFECT; ASSIGNMENT. All of the terms, provisions,
covenants, obligations, indemnities, representations, warranties and conditions
of this Agreement will be enforceable by the Parties and their respective
successors and assigns. The rights of each Party under this Agreement are
personal to that Party and may not be assigned or transferred to any other
party, firm, corporation or other entity, without the prior, express and written
consent of the other Parties, except that Buyers will have the right to assign
any of its rights and obligations hereunder to one or more Affiliates of Buyers
without such consent. Any attempt to assign this Agreement in violation of the
foregoing will be absolutely void. The non-assigning Party may condition its
consent to assign this Agreement on the assigning Party providing appropriate
guarantee of its assignee's performance.
10.4. TAXES. Upon Closing, Sellers will be responsible for and will pay
all Taxes attributable to or arising from the ownership of the Partnership
Interests on or prior to the Effective Date, and Buyers will be responsible for
and will pay all Taxes attributable to or arising from the ownership or
operation of the Partnership Interests after the Effective Date. Any Party which
pays such Taxes for the other Party will be entitled to prompt reimbursement
upon evidence of such payment. Each Party will be responsible for its own
federal income Taxes, if any, as may result from this transaction.
10.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS OTHERWISE APPLICABLE TO SUCH DETERMINATIONS.
22
10.6. ENTIRE AGREEMENT AND AMENDMENT. This Agreement embodies the
entire agreement between the Parties related to the subject matter hereof and
replaces and supersedes all prior agreements, arrangements and understandings
related to the subject matter hereof, whether written or oral. No other
statement, or promise made by any Party, or to any employee, officer or agent of
any Party, which is not contained in this Agreement or in a written agreement
signed by the Parties will be binding or valid. This Agreement may be
supplemented, altered, amended, modified or revoked by writing only, signed by
the Parties hereto. The headings herein are for convenience only and will have
no significance in the interpretation hereof. The Parties stipulate and agree
that this Agreement will be deemed and considered for all purposes, as prepared
through the joint efforts of the Parties, and will not be construed against one
party or the other as a result of the preparation, submittal or other event of
negotiation, drafting or execution thereof. It is understood and agreed that
there will be no third-party beneficiary of this Agreement, and that the
provisions hereof do not impart enforceable rights in anyone who is not a party
or a successor or assignee of a party hereto.
10.7. EXHIBITS. All Exhibits and Schedules attached to this Agreement,
and the terms of those Exhibits and Schedules which are referred to in this
Agreement, are made a part hereof and incorporated herein by reference.
10.8. DELIVERY OF FILES AFTER CLOSING. Any files and records relating
to the Partnerships or the Properties will be provided by Seller Parties to
Buyers as soon as reasonably possible after the Closing Date at a location to be
specified by Buyers. Any transportation, postage, or delivery costs from any
Seller Parties' offices will be at Buyers' sole cost, risk and expense.
10.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each and every counterpart will be deemed for all purposes one
agreement. Faxed signatures shall be deemed effective and binding for all
purposes.
10.10. CONSENT TO TRANSFERS OF PARTNERSHIP INTERESTS. The Seller
Parties consent to, and waive any and all rights to acquire, notices or other
restrictions on transfer relating to, the transfer of partnership interests in
the Partnerships by other partners of each of the Partnerships to Buyers,
whether set forth in the Organizational Documents or otherwise.
10.11. SPECIFIC PERFORMANCE. The Parties hereby acknowledge and agree
that the failure of any party to this Agreement to perform its obligations
hereunder in accordance with their specific terms or to otherwise comply with
such obligations, including its failure to take all actions as are necessary on
its part of the consummation of the transaction contemplated hereby, will cause
irreparable injury to the other Parties to this Agreement for which damages,
even if available, will not be an adequate remedy. Accordingly, each of the
Parties hereto hereby consents to the issuance of injunctive relief by any court
of competent jurisdiction to compel performance of any Party's obligations,
including an injunction to prevent breaches, and to the granting by any such
court of the remedy of specific performance of the terms and conditions hereof.
23
10.12. ACTIONS BY SELLERS. Any action or decision to be taken or made
by Sellers in this Agreement shall be taken or made upon the approval of a
Required Consent, and upon such approval such action or decision shall be
binding upon all of the Sellers.
[Remainder of this Page Intentionally Left Blank]
24
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
BUYERS:
AMEN PROPERTIES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NEMA PROPERTIES LLC
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[Additional Signature Pages Follow]
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
PARTNERSHIPS:
PRIORITY POWER MANAGEMENT, LTD.
By: Priority Power Management I, L.L.C.,
its general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
PPM DALLAS, LTD.
By: Priority Power Management Dallas, LLC,
its general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
GENERAL PARTNERS:
PRIORITY POWER MANAGEMENT I, L.L.C.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
PRIORITY POWER MANAGEMENT DALLAS, LLC
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
ANTHEM OIL AND GAS, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
---------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
BTA OIL PRODUCERS
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
ENERQUEST OIL & GAS, LTD.
By: EnerQuest Property Management, LLC,
its general partner
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
TCTB II, LTD.
By: ,
-----------------------------------
its general partner
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
PETROLINK ENERGY ADVISORS, INC.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ENERGY, INC.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
ENDEAVOR ENERGY RESOURCES, LP
By: ,
-------------------------------------
its general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
J. ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., L.P.
By: ,
-----------------------------------
its general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
MCGRAW BROTHERS INVESTMENTS
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
MORIAH INVESTMENT PARTNERS
By: ,
---------------------------------------
its general partner
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement,
or caused this Agreement to be executed by their duly authorized
representatives, all as of the day and year first above written.
LIMITED PARTNER:
OAKDALE VENTURES, LTD.
By: ,
---------------------------------
its general partner
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
CLEAR FORK, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
----------------------------------------------
FROSTY ▇▇▇▇▇▇▇, JR., Separate Property
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
CDW ENERGY INVESTMENT PARTNERS, LTD.
By: ,
--------------------------------------
its general partner
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
LIMITED PARTNER:
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇
SCHEDULE 2.1
LIST OF SELLERS AND ALLOCATION OF PURCHASE PRICE
I. PPM Dallas Allocated
Partnership Interest Purchase
(Limited Partner Interest Price
NAMES UNLESS OTHERWISE INDICATED)
----- ---------------------------
-----------------------------------
CASH NOTE
Priority Power Management Dallas, LLC 1.00000% (GP) $ 1,169.72 $ 7,556.48
▇▇▇▇ ▇▇▇▇ 34.65000% 40,530.60 261,831.79
Priority Power Management, Ltd. 64.35000% 75,271.11(1) 486,259.04(1)
(1) To be paid directly to the holders of the PPM Interests and is included
in the amounts reflected below.
II. PPM Allocated
Partnership Interest Purchase
(Limited Partner Interest Price(1)
NAMES UNLESS OTHERWISE INDICATED)
----- ---------------------------
CASH NOTE
Priority Power Management I, LLC 1.32231% (GP) $ 6,060.29 $ 39,150.44
Anthem Oil and Gas, Inc. 43.42784% 199,029.66 1,285,751.93
▇▇▇▇▇▇▇ ▇▇▇▇▇ 3.41316% 15,642.50 101,052.15
BTA Oil Producers 3.30578% 15,150.38 97,873.00
EnerQuest Oil & Gas, Ltd. 3.30578% 15,150.38 97,873.00
TCTB II, Ltd. 3.30578% 15,150.38 97,873.00
Petrolink Energy Advisors, Inc. 3.30578% 15,150.38 97,873.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Energy, Inc. 3.30578% 15,150.38 97,873.00
Endeavor Energy Resources, LP 3.30578% 15,150.38 97,873.00
J. ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇ 3.30578% 15,150.38 97,873.00
▇▇▇▇▇▇▇▇, Jr., ▇.▇.
▇▇▇▇▇▇ Brothers Investments 1.65289% 7,575.19 48,936.50
Moriah Investment Partners 1.65290% 7,575.24 48,936.82
Oakdale Ventures, Ltd. 1.32231% 6,060.14 39,149.12
Clear Fork, Inc. 1.98347% 9,090.24 58,723.85
Frosty ▇▇▇▇▇▇▇, Jr., Separate Property 14.15074% 64,852.80 418,955.69
CDW Energy Investment Partners, Ltd. 1.32231% 6,060.14 39,149.12
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 1.98347% 9,090.24 58,723.85
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ 1.32231% 6,060.14 39,149.12
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.66116% 3,030.10 19,574.72
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇ 0.66116% 3,030.10 19,574.72
▇▇▇▇▇ ▇. ▇▇▇▇▇ 0.66116% 3,030.10 19,574.72
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 1.32231% 6,060.14 39,149.12
(1) Includes a portion of the Purchase Price allocated to PPM with respect
to its PPM Dallas LP Interests and to be paid directly to these holders
of PPM Interests.
SCHEDULE 4.1
ORGANIZATIONAL DOCUMENTS
1. Certificate of Limited Partnership of Priority Power Management, Ltd.
filed with the Secretary of State of the State of Texas on January 26,
2001.
2. Limited Partnership Agreement of Priority Power Management, Ltd. dated
January 29, 2001.
3. Certificate of Limited Partnership of PPM Dallas, Ltd. filed with the
Secretary of State of the State of Texas on September 23, 2003.
4. Limited Partnership Agreement of PPM Dallas, Ltd. dated September 5,
2003.
SCHEDULE 4.8
SUBSEQUENT EVENTS
None.
SCHEDULE 4.9
LIABILITIES
None.
SCHEDULE 4.10
INSURANCE
-------------------------------- --------------------------- ------------------
CARRIER INSURANCE TYPE POLICY NUMBER
-------------------------------- --------------------------- ------------------
Guardian Health Group ID 00 385573
American Hallmark Ins. Co., Commercial Gen. Liability 44-CL-404692-04
aka Clarendon National Ins. Co.
American Hallmark Ins. Co., Automobile Liability 44-CL-404692-04
aka Clarendon National Ins. Co.
American Hallmark Ins. Co., Excess Liability 44-CU-402164-04
aka Clarendon National Ins. Co.
Hartford, aka Twin City Fire Workers Comp. 46WECPK6096
Insurance Company
-------------------------------- --------------------------- ------------------
------------ ------------ ------------------------------------------ --------------------------------
EFF. DATE EXP. DATE LIMITS OF LIABILITY INSURED
------------ ------------ ------------------------------------------ --------------------------------
Month to Month Unlimited ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
9/21/2005 9/21/2006 Cash Occurrence $1,000,000.00 Priority Power Management, LLC
Damaged to Rented
Premises each occurrence $50,000.00 " "
Med Exp (any one person) excluded " "
Personal & Adv Injury $1,000,000.00 " "
General Aggregate $2,000,000.00 " "
Products-Comp/OP Agg Included " "
9/21/2005 9/21/2006 Combined Single Limit $1,000,000.00 Priority Power Management, LLC
9/21/2005 9/21/2006 Each Occurrence $1,000,000.00 Priority Power Management, LLC
12/19/2005 12/19/2006 Each Accident $1,000,000.00 Priority Power Management, LLC
Disease - each employee $1,000,000.00 " "
Disease - Policy Limit $1,000,000.00 " "
------------ ------------ ------------------------- ---------------- --------------------------------
SCHEDULE 4.21
CERTAIN BUSINESS RELATIONSHIPS
Aggregation and Consulting Services Agreements between the Partnerships
and the following Sellers and/or their Affiliates, as amended:
1. J. ▇▇▇▇ ▇▇▇▇▇▇▇▇
2. Endeavor Energy Resources LP
3. Aghorn Operating Inc.
4. ClayDesta Buildings LP
5. Southwest Royalties, Inc.
6. BTA Oil Producers
7. Brothers Production Company
8. Clear Fork, Inc.
9. CrownQuest, LLC
SCHEDULE 6.7
KEY EMPLOYEES
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
Exhibit A
EXHIBIT A
FORM OF PROMISSORY NOTE
$_______________ PROMISSORY NOTE __________, 2006
---------------
FOR VALUE RECEIVED, the undersigned, Amen Properties, Inc. and NEMA
Properties, LLC (hereinafter called "MAKERS"), promise to pay to the order of
__________________________________ _______________________ ("PAYEE"), the
principal sum of __________________________________ and __/100 Dollars
($______________) in coin or currency of the United States of America, together
with interest thereon from and after the date hereof until paid in full at the
rate of 7.75% per annum, but in no event shall the interest exceed the maximum
amount of nonusurious interest allowed from time to time by applicable law
("HIGHEST LAWFUL RATE").
The outstanding principal and accrued and unpaid interest of this
Promissory Note (this "NOTE") is due and payable in equal quarterly installments
of principal and interest, beginning the last day of the first full calendar
quarter following closing under that certain Securities Purchase Agreement among
Makers, as buyers, and Payee and others, as sellers, dated May 18, 2006 (the
"PURCHASE AGREEMENT"), and continuing on the last day of each calendar quarter
thereafter until December 31, 2013, the maturity date of this Note when all
remaining principal and accrued and unpaid interest of this Note will be fully
due and payable. No payment shall be past due and no default will occur
hereunder if such payment is made within ten (10) days of the due date.
This Note is given pursuant and subject to the Purchase Agreement. This
Note is one of a number of promissory notes given under the Purchase Agreement
(the "RELATED NOTES"), and the amount of any payment made on this Note will be
in proportion to the face amount of this Note compared to the aggregate face
amount of this Note and all the Related Notes. No payment will be made on this
Note unless contemporaneous payments are made on all of the Related Notes, and
no payments will be made on the Related Notes unless a contemporaneous payment
is made on this Note.
Makers may prepay all or any portion of the remaining principal balance
or accrued interest at any time, and from time to time, without penalty or fee.
Any prepayment hereunder shall be applied first to accrued and unpaid interest,
if any, owing on this Note and the balance to principal.
All agreements between the Makers and Payee, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency shall the interest paid or agreed to be paid to Payee exceed the
maximum amount permitted under applicable law. If, under any circumstance
whatsoever, interest would otherwise be payable to Payee at a rate in excess of
the Highest Lawful Rate, then the interest payable to Payee shall be reduced to
the maximum amount permitted under applicable law, and if under any circumstance
whatsoever Payee shall ever receive anything of value deemed interest by
applicable law which would exceed interest at the Highest Lawful Rate, then any
excessive interest paid shall be applied to the reduction of the principal
amount hereunder and not to the payment of interest or if such excess interest
exceeds the unpaid principal balance hereof, such excess shall be refunded to
Makers. All interest paid or agreed to be paid to Payee shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of this Note
so that the rate of interest hereon is uniform throughout the term hereof. This
paragraph shall control all agreements between the undersigned and the Payee.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS EXCEPT FOR CONFLICTS OF LAWS PRINCIPALS WHICH WOULD RESULT IN THE LAWS
OF ANOTHER JURISDICTION TO APPLY.
A-1
THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, each Maker has executed this Note as of the ___ day
of _________, 2006.
AMEN PROPERTIES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address:
▇▇▇ ▇. ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
NEMA PROPERTIES, LLC
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address:
▇▇▇ ▇. ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
A-2
Exhibit B
EXHIBIT B
FORM OF ASSIGNMENT OF PARTNERSHIP INTEREST
("ASSIGNOR"), with offices at , for the payment of Ten and No/100
Dollars ($10.00) and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and subject to the terms and conditions hereof,
hereby grants, sells, assigns, transfers, conveys and delivers to
__________________________________ ("ASSIGNEE"), with offices at ▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, all of Assignor's right, title and interest in
and to the following:
(a) partnership interests in Priority Power Management, Ltd., a Texas
limited partnership, owned of record or beneficially by Assignor, free and clear
of all Encumbrances; and
(b) partnership interests in PPM Dallas, Ltd., a Texas limited
partnership, owned of record or beneficially by Assignor, free and clear of all
Encumbrances.
Assignor will, at any time and from time to time after the date hereof,
upon Assignee's request and for no further consideration, execute, acknowledge,
and deliver or cause to be executed and delivered, all further documents or
instruments necessary to effect the transaction embodied in this Assignment of
Partnership Interest. This Assignment of Partnership Interest is executed
pursuant and subject to that certain Securities Purchase Agreement dated May 18,
2006 by and between Assignor and Assignee (the "AGREEMENT"). Capitalized terms
used but not defined herein shall have the meanings assigned thereto in the
Agreement.
The representations and warranties set forth in the Agreement are
hereby incorporated herein by reference.
This Assignment of Partnership Interest is made with full substitution
and subrogation of Assignee, its successors and assigns, to the rights of
Assignor under, in and to all warranties made by others with respect to the
rights, titles and interests being conveyed hereunder.
To have and to hold the same unto Assignee and its successors and
assigns forever.
B-1
EXECUTED as of __________________________.
ASSIGNOR:
By:
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Name:
-----------------------------------
Title:
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ASSIGNEE:
By:
-------------------------------------
Name:
-----------------------------------
Title:
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B-2