<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MAY 21, 1997
VENUS EXPLORATION, INC.
(F/K/A XPLOR CORPORATION)
(Exact name of registrant as specified in its charter)
DELAWARE 0-14334 13-3299127
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
700 NORTH ST. MARY'S STREET
SAN ANTONIO, TEXAS 78205
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (210) 225-4722
<PAGE> 2
ITEM 1. CHANGES IN CONTROL OF THE REGISTRANT.
On May 21, 1997, Xplor Corporation (the "Registrant" or "Xplor")
closed the transactions contemplated by a certain Property Acquisition
Agreement (the "Property Acquisition Agreement"), dated April 29, 1997, by and
between the Registrant, The New Venus Exploration, Inc., a Texas corporation
("Venus") and Lomak Production I L.P., a Texas limited partnership and Lomak
Resources LLC, an Oklahoma limited liability company (together, "Lomak"),
pursuant to which Registrant has acquired substantially all of Venus' assets in
exchange for 5,626,473 shares of common stock of the Registrant and warrants
("Acquisition Warrants") to purchase an additional 272,353 shares of common
stock of the Registrant. For financial accounting purposes Venus is deemed to
be the acquiring entity. In addition, pursuant to the Property Acquisition
Agreement, the Registrant has acquired certain properties from Lomak in
exchange for 2,037,171 shares of common stock of the Registrant and Acquisition
Warrants to purchase an additional 272,353 shares of common stock of the
Registrant. At the same time, Lomak acquired from an existing stockholder of
the Registrant 97,008 shares of Common Stock for an aggregate consideration of
$194,016 and 80,000 Acquisition Warrants. Venus is expected to liquidate
shortly and distribute the Xplor shares and warrants to its former
stockholders. The information set forth herein with respect to share ownership
reflects the Venus liquidation and distribution as well as Lomak's transaction
with the existing stockholder described above. In connection with the
transaction the Registrant assumed debt obligations of Venus under a term loan
facility with Stratum, Group Energy Partners, L.P. In connection with that
term loan facility, affiliates of Venus executed an Equity Conversion Agreement
and a Warrant Issuance Agreement that granted an affiliate of the lender an
option to acquire equity securities in Venus. Those obligations were not
assumed by the Registration, and satisfy these rights of Stratum, as part of
the Property Acquisition Agreement, the former stockholders of Venus pro rata
placed 589,882 shares, approximately 10.5%, of the Registrant's common stock
issuable to them in escrow. Shares set forth herein as beneficially owned by
former Venus stockholders and groups include shares in this escrow. The
description of the Property Acquisition Agreement included herein does not
purport to be complete and is qualified in its entirety by reference to the
terms of the Property Acquisition Agreement, a copy of which is attached hereto
as Exhibit 2 and incorporated herein by reference.
The Property Acquisition Agreement provides, among other things,
that the Board of Directors of the Registrant shall be composed, as soon as
permitted following the closing, of four directors nominated by the Board of
Directors of Venus, one director nominated by the Board of Directors of Lomak
and two directors who have theretofore been directors of the Company. The
appointments of the new directors became effective on June 2, 1997, which is
ten days following the later of the filing of a Schedule 14f-1 with the
Commission and its mailing to stockholders of the Registrant. The closing
under the Property Acquisition Agreement thus effects a change in the majority
of the Board of Directors of the Company.
The following table sets forth the information as to beneficial
ownership of shares by each person known to the Registrant to own 5% or more of
the shares giving effect to the closing under the Property Acquisition
Agreement based upon shares of Common Stock outstanding plus shares deemed
outstanding pursuant to Securities and Exchange Commission Rule 13d-3(d)(1).
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<PAGE> 3
<TABLE>
<CAPTION>
Name and Address Amount & Nature of
of Beneficial Owner Beneficial Ownership(1) Percent of Class
- ------------------- -------------------- ----------------
<S> <C> <C>
Eugene L. Ames, Jr. 3,478,605(2) 35.27%
700 N. St. Mary's Street
San Antonio, TX 78205
Lomak Petroleum, Inc. 2,326,532(3) 23.52%
500 Throckmorton Street
Fort Worth, TX 76102
J. Morton Davis 1,066,512(4) 10.96%
44 Wall Street
New York, NY 10005
</TABLE>
Prior to the closing of the Property Acquisition Agreement, J.
Morton Davis owned beneficially approximately 51.6% of the outstanding shares
of common stock of Xplor and therefore
- -------------------------
(1) All persons named have sole voting and investment power, except as
otherwise noted.
(2) Includes (i) 295,303 shares and 14,290 Acquisition Warrants owned by
Eugene L. Ames, Jr.; (ii) 1,168,211 shares and 56,548 Acquisition Warrants
owned by Ellen R. Y. Ames, the spouse of Eugene L. Ames, Jr.; (iii) 407,924
shares and 19,746 Acquisition Warrants owned by Venus Oil Company which is
controlled by Mr. and Mrs. Eugene L. Ames, Jr.; and (iv) 1,446,563 shares and
70,020 Acquisition Warrants owned by Ames family members and others which are
subject to a Voting Trust Agreement together with the shares and shares
issuable upon the exercise of the Acquisition Warrants listed in (i) and (ii)
under which Eugene L. Ames, Jr. has sole voting power. Ellen R. Y. Ames may be
deemed to own 1,224,759 shares or 12.55% of the Company's Common Stock.
(3) Includes Acquisition Warrants to purchase 192,353 shares.
(4) Includes: (i) 766,307 shares owned by D.H. Blair Investment Banking
Corp. ("Blair Investment"); (ii) warrants to purchase 10,000 shares at $2.125
per share expiring June 10, 1997 owned by Blair Investment; (iii) warrants to
purchase 20,000 shares at $3.29 per share expiring September 1, 1999 owned by
Blair Investment; (iv) 163,411 shares owned by Rivkalex Corp. ("Rivkalex"); (v)
70,954 shares owned by Rosalind Davidowitz, Mr. Davis' spouse; and (vi) 35,840
shares owned by Parliament Hill Corporation ("PHC"). Mr. Davis is the sole
stockholder of Blair Investment. Blair Investment may be deemed to
beneficially own 796,307 or 8.18% of the Company's Common Stock. Mr. Davis has
sole power to vote or to direct the vote, to dispose or to direct the
disposition of shares owned by Blair Investment. Ms. Davidowitz and the Board
of Directors of PHC, of which Mr. Davis is a director and Chairman, have the
power to vote or to direct the vote, to dispose or to direct the disposition of
shares owned by PHC. Ms. Davidowitz has sole voting and dispositive control of
the shares owned by herself and Rivkalex. Mr. Davis disclaims beneficial
ownership of all shares attributed to Rosalind Davidowitz and Rivkalex. PHC is
a private corporation of which Rosalind Davidowitz beneficially owns 72.5% and
Blair Investment beneficially owns 13.4%. The number of shares shown does not
include 503,000 shares beneficially owned by Kinder Investments, L.P.
("Kinder") the ownership of which are disclaimed by Mr. Davis, Ms. Davidowitz
and Blair Investment. Kinder's General Partner is Kenton E. Wood who has sole
voting and dispositive power over shares owned by Kinder. Mr. Wood is also
Chief Executive Officer and a director and stockholder of D.H. Blair & Co.,
Inc. ("Blair"). Certain limited partners of Kinder are also stockholders of
Blair. The limited partners of Kinder are the children and grandchildren of J.
Morton Davis and Rosalind Davidowitz.
-3-
<PAGE> 4
may have been in a position to control Xplor. As a result of the closing of the
Property Acquisition Agreement, Venus and its shareholders own approximately
58% and Mr. Davis owns approximately 10.8%, respectively, of the outstanding
common stock of Xplor. Accordingly, Venus and its shareholders may be deemed
to have acquired control of Xplor from Mr. Davis. In addition, Mr. Eugene L.
Ames, Jr. has become the Chief Executive Officer of the Registrant and
beneficially owns 35.27% of its outstanding shares of common stock and
accordingly, may be deemed to have acquired control of Xplor from Mr. Davis.
A Stockholders Agreement (the "Stockholders Agreement") was also
entered into among certain former stockholders of Venus, including Messrs.
Eugene L. Ames, Jr., other members of the Ames family and certain other former
Venus stockholders including the Venus-designated directors (collectively, the
"Ames Group" which owns beneficially 3,721,600 shares), D. H. Blair Investment
Banking Corp., Rivkalex Corp., Rosalind Davidowitz and Parliament Hill
Corporation (collectively the "Blair Group" which owns beneficially 1,066,512
shares) and Lomak. The Stockholders Agreement provides that parties will vote
their shares of the Company for the four nominees for election as directors of
the Company designated by the Ames Group, two nominees designated by the Blair
Group and one nominee designated by Lomak. The Blair Group's right to
designate two nominees is reduced to the right to designate one nominee
effective with the 1998 Annual Meeting of Stockholders of the Company and
ceases altogether effective with the 1999 Annual Meeting of the Stockholders.
The Stockholders Agreement also provides for certain rights of first refusal
and rights of participation between the Ames Group and Lomak in the event of a
proposed sale of shares by either. It has a term of three years but terminates
earlier as to any party in the event that such party's beneficial ownership of
the Company's shares falls below 250,000 shares.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
See Item 1 for a brief description of the Property Acquisition
Agreement. A copy of a press release regarding the closing of the Property
Acquisition Agreement and a separate press release regarding the signing to the
Property Acquisition Agreement are attached hereto as Exhibits 99.1 and 99.2,
respectively, and each are incorporated herein by reference. The description
of the Property Acquisition Agreement included herein does not purport to be
complete and is qualified in its entirety by reference to the terms of the
Property Acquisition Agreement, a copy of which is attached hereto as Exhibit 2
and incorporated herein by reference. The Registrant filed a Schedule 14f-1 on
May 21, 1997, and mailed copies to its stockholders on May 22 and 23, 1997.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Effective June 3, 1997, the Registrant replaced Arthur Andersen
LLP ("AA") with KPMG Peat Marwick LLP as the Registrant's independent
accountant at the recommendation of the Board of Directors of the Registrant.
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<PAGE> 5
AA's reports on the financial statements of the Registrant for
the past two years have not contained an adverse opinion or a disclaimer of
opinion. Nor were either of such reports qualified or modified as to
uncertainty, audit scope, or accounting principles. During the two most recent
fiscal years and the interim period since the end of the Registrant's fiscal
1996, there have not been any disagreements with AA on any matter of accounting
principles or practices, financial statements or disclosure, or auditing or
scope of procedure, which disagreement(s), if not resolved to the satisfaction
of AA, would have caused it to make reference to the subject matter of the
disagreement(s) in connection with its report.
ITEM 5. OTHER EVENTS.
The parties to the Property Acquisition Agreement have agreed
that as a result of the transactions contemplated thereby, the following
changes with respect to the Registrant have been made or will be made within a
reasonable period of time after the date hereof: (i) the name of the Registrant
will be changed to Venus Exploration, Inc; (ii) the trading symbol of the
registrant on the NASDAQ Small-Cap Market has been changed to "VENX" and (iii)
the principal corporate offices of the Registrant will be moved to 700 North
St. Mary's Street, San Antonio, Texas 78205.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b) The Registrant will file the financial statements and pro forma
financial information required to be filed pursuant to Item 7 of
Form 8-K within 60 days after the date of this Form 8-K pursuant
to an amendment to this Form 8-K.
(c) Exhibits
2.1 Property Acquisition Agreement, dated April 29, 1997,
among Xplor Corporation, The New Venus Exploration, Inc.,
Lomak Production I L.P.,and Lomak Resources LLC.
2.2 Agreement and Plan of Merger by and between Venus
Exploration, Inc. and Xplor Corporation, dated as of June
3, 1997.
2.3 Certificate of Ownership and Merger of Venus Exploration,
Inc. into Xplor Corporation, dated as of June 3, 1997.
16. Letter from Arthur Andersen LLP dated June 5, 1997.
20. Schedule 14f-1 filed by Xplor Corporation on May 21, 1997
(Incorporated herein by reference to such filing).
99.1 Press Release dated May 5, 1997.
99.2 Press Release dated May 22, 1997.
-5-
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
VENUS EXPLORATION, INC.
(F/K/A XPLOR CORPORATION)
Date: June 5, 1997 By: /s/ EUGENE L. AMES, JR.
---------------------------------
Eugene L. Ames, Jr.
Chief Executive Officer
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<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1 Property Acquisition Agreement, dated April 29, 1997,
among Xplor Corporation, The New Venus Exploration, Inc.,
Lomak Production I L.P.,and Lomak Resources LLC.
2.2 Agreement and Plan of Merger by and between Venus
Exploration, Inc. and Xplor Corporation, dated as of June
3, 1997.
2.3 Certificate of Ownership and Merger of Venus Exploration,
Inc. into Xplor Corporation, dated as of June 3, 1997.
16. Letter from Arthur Andersen LLP dated June 5, 1997.
20. Schedule 14f-1 filed by Xplor Corporation on May 21, 1997
(Incorporated herein by reference to such filing).
99.1 Press Release dated May 5, 1997.
99.2 Press Release dated May 22, 1997.
</TABLE>
<PAGE> 1
EXHIBIT 2.1
4/26/97
================================================================================
PROPERTY ACQUISITION AGREEMENT
dated as of April 29, 1997
by and among
XPLOR CORPORATION
THE NEW VENUS EXPLORATION, INC.
LOMAK PRODUCTION I L.P.
LOMAK RESOURCES LLC
================================================================================
<PAGE> 2
Table of Contents
<TABLE>
<S> <C>
ARTICLE I
VENUS EXCHANGE AND LOMAK EXCHANGE . . . . . . . . . . . . . . . . . . 1
Section 1.01. Venus Exchange and Lomak Exchange . . . . . . . . . . 1
Section 1.02. Closing. . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.03. Issuance of Xplor Stock and Warrants . . . . . . . . . 2
Section 1.04. Dissolution of Venus . . . . . . . . . . . . . . . . . 2
Section 1.05. Code Sections 351 and 368(a)(1)(C) . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XPLOR . . . . . . . . . . . . . . . 3
Section 2.01. Organization, Etc. . . . . . . . . . . . . . . . . . . 3
Section 2.02. Capitalization . . . . . . . . . . . . . . . . . . . . 3
Section 2.03. Authorization . . . . . . . . . . . . . . . . . . . . 4
Section 2.04. No Violation . . . . . . . . . . . . . . . . . . . . . 4
Section 2.05. Approvals . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.06. Xplor 10-K and Proxy Statement . . . . . . . . . . . . 5
Section 2.07. Absence of Certain Changes . . . . . . . . . . . . . . 6
Section 2.08. Litigation . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.09. No Default . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.10. Compliance with Laws . . . . . . . . . . . . . . . . . 7
Section 2.11. Oil and Gas Reserves; Wells . . . . . . . . . . . . . 7
Section 2.12. Title to Xplor Leases . . . . . . . . . . . . . . . . 8
Section 2.13. Other Real Property Owned or Leased . . . . . . . . . 10
Section 2.14. Title to Other Assets, Properties and Rights
and Related Matters . . . . . . . . . . . . . . . . . 10
Section 2.15. No Misleading Statements . . . . . . . . . . . . . . . 11
Section 2.16. Brokerage Fees . . . . . . . . . . . . . . . . . . . . 11
Section 2.17. Indebtedness. . . . . . . . . . . . . . . . . . . . . 11
Section 2.18. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.19. Material Contracts . . . . . . . . . . . . . . . . . . 13
Section 2.20. No Undisclosed Liabilities . . . . . . . . . . . . . . 13
Section 2.21. No Vote Required . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VENUS . . . . . . . . . . . . . . . 13
Section 3.01. Organization, Etc. . . . . . . . . . . . . . . . . . . 13
Section 3.02. Capitalization . . . . . . . . . . . . . . . . . . . . 14
Section 3.03. Authorization . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
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<TABLE>
<S> <C>
Section 3.04. No Violation . . . . . . . . . . . . . . . . . . . . . 15
Section 3.05. Approvals . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.06. Venus Financial Statements . . . . . . . . . . . . . . 16
Section 3.07. Absence of Certain Changes . . . . . . . . . . . . . . 16
Section 3.08. Litigation . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.09. No Default . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.10. Compliance with Laws . . . . . . . . . . . . . . . . . 17
Section 3.11. Oil and Gas Reserves; Wells . . . . . . . . . . . . . 18
Section 3.12. Title to Venus Leases . . . . . . . . . . . . . . . . 18
Section 3.13. Other Real Property Owned or Leased . . . . . . . . . 20
Section 3.14. Title to Other Assets, Properties and Rights
and Related Matters . . . . . . . . . . . . . . . . . 20
Section 3.15. No Misleading Statements . . . . . . . . . . . . . . . 21
Section 3.16. Brokerage Fees . . . . . . . . . . . . . . . . . . . . 21
Section 3.17. Indebtedness . . . . . . . . . . . . . . . . . . . . . 21
Section 3.18. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.19. Material Contracts . . . . . . . . . . . . . . . . . . 23
Section 3.20. No Undisclosed Liabilities . . . . . . . . . . . . . . 23
Section 3.21. Vote Required; Solicitation . . . . . . . . . . . . . 23
Section 3.22. Ownership of Shares. . . . . . . . . . . . . . . . . . 23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LOMAK ENTITIES . . . . . . . . 23
Section 4.01. Organization, Etc. . . . . . . . . . . . . . . . . . . 23
Section 4.02. Authorization . . . . . . . . . . . . . . . . . . . . 24
Section 4.03. No Violation . . . . . . . . . . . . . . . . . . . . . 24
Section 4.04. Approvals . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.05. Lomak Financial Statements . . . . . . . . . . . . . . 25
Section 4.06. Absence of Certain Changes . . . . . . . . . . . . . . 26
Section 4.07. Litigation . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.08. No Default . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.09. Compliance with Laws . . . . . . . . . . . . . . . . . 26
Section 4.10. Oil and Gas Reserves; Wells . . . . . . . . . . . . . 27
Section 4.11. Title to Lomak Leases . . . . . . . . . . . . . . . . 27
Section 4.12. No Misleading Statements . . . . . . . . . . . . . . . 27
Section 4.13. Brokerage Fees . . . . . . . . . . . . . . . . . . . . 28
Section 4.14. Indebtedness . . . . . . . . . . . . . . . . . . . . . 28
Section 4.15. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.16. Material Contracts . . . . . . . . . . . . . . . . . . 28
Section 4.17. No Undisclosed Liabilities . . . . . . . . . . . . . . 28
Section 4.18. No Vote Required . . . . . . . . . . . . . . . . . . . 28
</TABLE>
ii
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<TABLE>
<S> <C>
ARTICLE V
COVENANTS OF XPLOR . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.01. Conduct of Xplor . . . . . . . . . . . . . . . . . . . 29
Section 5.02. Access to Records . . . . . . . . . . . . . . . . . . 31
Section 5.03. No Other Bids . . . . . . . . . . . . . . . . . . . . 31
Section 5.04. Maintenance of Business . . . . . . . . . . . . . . . 31
Section 5.05. Compliance with Obligations . . . . . . . . . . . . . 32
Section 5.06. SEC and NASDAQ Filings; Venus Stockholder
Approval . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
COVENANTS OF VENUS . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.01. Conduct of Venus . . . . . . . . . . . . . . . . . . . 32
Section 6.02. Access to Records . . . . . . . . . . . . . . . . . . 34
Section 6.03. No Other Bids . . . . . . . . . . . . . . . . . . . . 35
Section 6.04. Maintenance of Business . . . . . . . . . . . . . . . 35
Section 6.05. Compliance with Obligations . . . . . . . . . . . . . 35
Section 6.06. Venus Stockholder Approval . . . . . . . . . . . . . . 35
ARTICLE VII
COVENANTS OF THE LOMAK ENTITIES . . . . . . . . . . . . . . . . . . . 36
Section 7.01. Conduct of the Lomak Entities . . . . . . . . . . . . 36
Section 7.02. Access to Records . . . . . . . . . . . . . . . . . . 37
Section 7.03. No Other Bids . . . . . . . . . . . . . . . . . . . . 37
Section 7.04. Maintenance of the Lomak Properties . . . . . . . . . 37
Section 7.05. Compliance with Obligations . . . . . . . . . . . . . 37
Section 7.06. Venus Stockholder Approval . . . . . . . . . . . . . . 37
ARTICLE VIII
COVENANTS OF ALL PARTIES . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.01. Board of Directors, Officers of Xplor; Employees of
Venus . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.02. Advice of Changes . . . . . . . . . . . . . . . . . . 38
Section 8.03. Regulatory Approvals . . . . . . . . . . . . . . . . . 39
Section 8.04. Actions Contrary to Stated Intent . . . . . . . . . . 39
Section 8.05. Certain Filings . . . . . . . . . . . . . . . . . . . 39
Section 8.06. Public Announcements . . . . . . . . . . . . . . . . . 40
Section 8.07. Confidentiality . . . . . . . . . . . . . . . . . . . 40
Section 8.08. Issuance of Xplor Shares After Closing . . . . . . . . 41
ARTICLE IX
CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 9.01. Conditions to All Parties' Obligations . . . . . . . . 41
Section 9.02. Conditions to the Obligations of Xplor to Effect the
Venus Exchange and Lomak Exchange . . . . . . . . . . 42
</TABLE>
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<TABLE>
<S> <C>
Section 9.03. Conditions to the Obligations of Venus to Effect the
Venus Exchange . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.04. Conditions to the Obligations of the Lomak Entities
to Effect the Lomak Exchange . . . . . . . . . . . . . . . . . 45
ARTICLE IX-A
ADJUSTMENTS AFTER CLOSING FOR LOMAK PROPERTIES . . . . . . . . . . . 47
9A.01. Adjustment for Interim Operations . . . . . . . . . . . . . . 47
ARTICLE X
TERMINATION, AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . 49
Section 10.01. Termination . . . . . . . . . . . . . . . . . . . . . 49
Section 10.02. Effect of Termination . . . . . . . . . . . . . . . . 51
Section 10.03. Amendment . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.04. Waiver . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XI
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XII
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.01. Taking of Necessary Action; Specific Performance . . 56
Section 12.02. Survival of Representations and Warranties . . . . . 57
Section 12.03. Effect of Due Diligence . . . . . . . . . . . . . . . 57
Section 12.04. Expenses . . . . . . . . . . . . . . . . . . . . . . 57
Section 12.05. Successors and Assigns . . . . . . . . . . . . . . . 57
Section 12.06. Entire Agreement . . . . . . . . . . . . . . . . . . 57
Section 12.07. Notices . . . . . . . . . . . . . . . . . . . . . . . 58
Section 12.08. Applicable Law . . . . . . . . . . . . . . . . . . . 59
Section 12.09. Counterparts . . . . . . . . . . . . . . . . . . . . 59
Section 12.10. Headings . . . . . . . . . . . . . . . . . . . . . . 59
Xplor Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . Schedule A
Xplor Reserve Report . . . . . . . . . . . . . . . . . . . . . . . Schedule AA
Xplor Other Properties . . . . . . . . . . . . . . . . . . . . . . Schedule AAA
Venus Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . Schedule B
Venus Reserve Report . . . . . . . . . . . . . . . . . . . . . . . Schedule BB
Venus Other Properties . . . . . . . . . . . . . . . . . . . . . . Schedule BBB
Lomak Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . Schedule C
Lomak Reserve Report . . . . . . . . . . . . . . . . . . . . . . . Schedule CC
Warrants, form of . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit 1.03
Xplor Directors and Officers, post Closing . . . . . . . . . . . . Exhibit 8.01
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C>
Stockholders Agreement . . . . . . . . . . . . . . . . . . . . Exhibit 9.01(e)
Opinion of Jones & Faye, P.L.L.C. . . . . . . . . . . . . . . Exhibit 9.02(d)(i)
Opinion of Rubin Baum Levin Constant & Friedman . . . . . . Exhibit 9.02(d)(ii)
Opinion of Neville Shaver Hubbard & McLean . . . . . . . . . Exhibit 9.03(d)(i)
Share Purchase and Sale Agreement . . . . . . . . . . . . . . . Exhibit 9.03(i)
</TABLE>
v
<PAGE> 7
4/26/97
PROPERTY ACQUISITION AGREEMENT
PROPERTY ACQUISITION AGREEMENT, dated as of April 29, 1997 (the
"Agreement"), by and among Xplor Corporation, a Delaware corporation ("Xplor"),
The New Venus Exploration, Inc., a Texas corporation ("Venus"), and Lomak
Production I L.P., a Texas limited partnership and Lomak Resources LLC, an
Oklahoma limited liability company (respectively, "Production" and "Resources"
and together the "Lomak Entities"). Certain capitalized terms used herein are
defined in Article XI hereof.
WHEREAS, each of the parties to this Agreement have determined to
engage in an exchange described in Section 351 of the Internal Revenue Code of
1986, as amended ("Code"), pursuant to which Xplor will acquire all of the
assets and liabilities of Venus in exchange for shares of the common stock,
$0.01 par value, of Xplor ("Xplor Stock") and warrants to purchase Xplor Stock
(the "Venus Exchange"); and simultaneously with the Venus Exchange, Xplor will
acquire certain assets of the Lomak Entities in exchange for shares of Xplor
Stock and warrants to purchase Xplor Stock (the "Lomak Exchange");
WHEREAS, each of Venus and Xplor has determined to engage in the
Venus Exchange so that it will qualify as a tax-free reorganization under
368(a)(1)(C) of the Code.
NOW, THEREFORE, in consideration of the premises, the
representations, warranties and agreements herein contained and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions set forth herein, the parties
hereby agree as follows:
ARTICLE I
VENUS EXCHANGE AND LOMAK EXCHANGE
Section 1.01. Venus Exchange and Lomak Exchange.
(a) At the Closing and subject to and upon the terms of this
Agreement, Xplor shall acquire substantially all of the assets of Venus and
shall assume substantially all of the liabilities of Venus in exchange for the
Xplor shares and warrants as herein provided.
(b) Simultaneously with the Venus Exchange, the Lomak Entities
will effect the Lomak Exchange by conveying all of their respective rights,
titles and interests in the assets referred to and described in Article IV
hereof (the "Lomak Properties") to Xplor, subject only to the liabilities set
forth in the Lomak Financial
<PAGE> 8
Statements referred to in Section 4.06 hereof and to such adjustments as are
required by Article IX-A hereof.
Section 1.02. Closing.
(a) Subject to the provisions of Article VII hereof, the closing
(the "Closing") of the Venus Exchange and Lomak Exchange shall take place at
10:00 a.m., Central Time, at the offices of Venus no later than the second
Business Day after satisfaction of the latest to occur of the conditions set
forth in Article IX hereof (other than the delivery of the officers'
certificates and opinions referred to therein which are to be delivered on the
date of the Closing, and other than any conditions which are waived in
accordance with said Article) or such other time, place or date as the parties
may agree. Failure to consummate the transactions provided for in this
Agreement on the date and time selected pursuant to this Section 1.02(a) shall
not, except as permitted by Article X hereof, result in the termination of this
Agreement and shall not relieve any party to this Agreement of any obligation
hereunder.
(b) The Venus Exchange and Lomak Exchange shall become effective
at the close of business on the Closing Date, provided that certain adjusting
payments may be required between Xplor and the Lomak Entities in accordance
with Article IX-A hereof.
Section 1.03. Issuance of Xplor Stock and Warrants.
(a) As of the Closing, Venus will convey all its assets to Xplor
(except for the assets listed on Schedule 1.03 hereto), and Xplor will assume
all the liabilities of Venus (except for the liabilities listed on Schedule
1.03 hereto), in exchange for 5,626,473 fully-paid, validly issued and
non-assessable shares of Xplor Stock plus warrant(s) to purchase 272,353 shares
of Xplor Stock in the form of Exhibit 1.03 hereto ("Warrant(s)").
(b) As of the Closing, Production will convey its Lomak
Properties to Xplor in exchange for the issuance by Xplor of 1,813,082
fully-paid, validly issued and non-assessable shares of Xplor Stock plus
Warrant(s) to purchase an aggregate of 242,394 shares of Xplor Stock, and
Resources will convey its Lomak Properties to Xplor in exchange for the
issuance by Xplor of 224,089 fully-paid, validly issued and non-assessable
shares of Xplor Stock plus Warrant(s) to purchase an aggregate of 29,959 shares
of Xplor Stock.
Section 1.04. Dissolution of Venus. As a part of the
transactions contemplated hereby and conditioned on the Closing of the Venus
Exchange, Venus expects to distribute the Xplor Shares and Warrants it receives
hereunder to its shareholders and to dissolve promptly following the Closing.
2
<PAGE> 9
Section 1.05. Code Sections 351 and 368(a)(1)(C). The
transactions contemplated by this Agreement are intended to constitute an
exchange as described in Section 351 of the Code, and, as between Venus and
Xplor, an exchange as described in Section 368(a)(1)(C) of the Code. The
parties hereto shall not report or take any position with any taxing authority
inconsistent with such description.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XPLOR
Except as set forth (by reference to the applicable Section of
this Agreement) in Xplor's disclosure schedule previously delivered to Venus
and the Lomak Entities (the "Xplor Disclosure Schedule"), a copy of which is
attached hereto as Schedule A, Xplor hereby agrees and represents and warrants
to Venus and the Lomak Entities as follows:
Section 2.01. Organization, Etc. Xplor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and corporate authority to
conduct its business as it is now being conducted and to own, operate or lease
the properties and assets it currently owns, operates or holds under lease.
Xplor is duly qualified or licensed to do business and is in good standing as a
foreign corporation in each jurisdiction where the character of its business or
the nature of its properties or assets makes such qualification or licensing
necessary, except where the failure to so qualify or be licensed would not have
a Material Adverse Effect. Schedule 2.01 to the Xplor Disclosure Schedule sets
forth a list of each jurisdiction in which Xplor is licensed or qualified to
transact business as a foreign entity. Xplor has heretofore delivered to Venus
and the Lomak Entities true and correct copies of its Certificate of
Incorporation and Bylaws as in effect on the date hereof. Schedule 2.01 to the
Xplor Disclosure Schedule sets forth a list of the officers and directors of
Xplor on the date hereof.
Section 2.02. Capitalization. The authorized capital stock of
Xplor consists of 15,000,000 shares of common stock, $.01 par value per share,
of which only 2,037,171 shares are issued and outstanding as of the date hereof
and 1,000,000 shares of Preferred Stock, $.01 par value per share, no shares of
which are issued and outstanding as of the date hereof. 558,502 shares of
Xplor Stock are held as treasury shares. The designations, powers,
preferences, rights, qualifications, limitations and restrictions in respect of
each class and series of authorized capital stock of Xplor are as set forth in
Xplor's Certificate of Incorporation, and all such designations, powers,
preferences, rights, qualifications, limitations and restrictions are valid,
binding and enforceable and in accordance with all applicable laws. All
outstanding shares of Xplor Stock have been duly authorized and validly issued
and are fully paid and non-assessable. All of the outstanding shares of Xplor
Stock were issued in compliance with all applicable Federal and state
securities laws. None of the
3
<PAGE> 10
outstanding securities has been issued in violation of any pre-emptive rights,
rights of first refusal or similar rights. Except as set forth in the Xplor
Disclosure Schedule, there are no outstanding options, warrants, convertible
securities, calls, rights, commitments, preemptive rights or agreements or
instruments or understandings or other securities of any character to which
Xplor is a party or by which Xplor is bound, obligating Xplor to issue, deliver
or sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of capital stock of Xplor or any securities or obligations
convertible into or exchangeable for such shares or to grant, extend or enter
into any such option, warrant, convertible security, call, right, commitment,
preemptive right or agreement. There are no outstanding obligations,
contingent or otherwise, of Xplor to purchase, redeem or otherwise acquire any
capital stock of Xplor. There are no voting trust agreements or other
contracts, agreements, arrangements, commitments, plans or understandings
restricting or otherwise relating to voting, dividend or other rights with
respect to Xplor's capital stock. There are no bonds, debentures, notes or
other indebtedness having the right to vote (or convertible into securities
having the right to vote) on any matters on which Xplor stockholders may vote
issued or outstanding. There is no liability for dividends declared or
accumulated but unpaid with respect to any of the shares of Xplor Stock. Upon
delivery of the certificates for the shares of Xplor Stock to be issued in the
Venus Exchange and in the Lomak Exchange in accordance with the terms of this
Agreement, such shares will be validly issued, fully paid and non-assessable.
Section 2.03. Authorization. Xplor has all requisite corporate
power and corporate authority to enter into this Agreement and each of the
other agreements contemplated hereby, to carry out its obligations under this
Agreement and each of the other agreements contemplated hereby and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by Xplor of this Agreement, the consummation of the transactions
contemplated hereby and the performance by Xplor of its obligations hereunder
have been duly authorized by all necessary corporate action. This Agreement
has been duly executed and delivered by Xplor and, assuming that this
Agreement constitutes the legal, valid and binding obligation of the other
parties hereto, constitutes the legal, valid and binding obligation of Xplor,
enforceable against it in accordance with its terms.
Section 2.04. No Violation. The execution and delivery of this
Agreement by Xplor does not, and the consummation by Xplor of the transactions
contemplated hereby, and compliance with the terms hereof will not, (a)
conflict with, or result in any violation of or default (with or without notice
or lapse of time or both) or loss of any benefit under, any provision of its
Certificates of Incorporation or By-laws; (b) conflict with, or result in any
violation of or default (with or without notice or lapse of time or both) or
loss of any benefit under, any permit, concession, grant, assignment,
franchise, license, law, rule or regulation, or any judgment, decree or order
of any court or other governmental agency or instrumentality to which Xplor is
a party or to which any of its
4
<PAGE> 11
respective properties or assets is subject; (c) conflict with, or result in a
breach or violation of or default (with or without notice or lapse of time or
both) or loss of any benefit under, or accelerate the performance required by,
the terms of any material agreement, contract, indenture or other instrument to
which Xplor is a party or to which any of its properties is subject, or
constitute a default or loss of any right thereunder or an event which, with
the lapse of time or notice or both, might result in a material default or loss
of any material right thereunder or the creation of any lien, charge or
encumbrance upon any of the properties or assets of Xplor; or (d) result in any
suspension, revocation, impairment, forfeiture or non-renewal of any material
Lease of Xplor.
Section 2.05. Approvals. The execution and delivery of this
Agreement and each other agreement contemplated hereby, the performance by
Xplor of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby by Xplor will not require the
consent, approval, order or authorization of any Governmental Entity or
Regulatory Authority or any other Person under any statute, law, rule,
regulation, permit, license, agreement, indenture or other instrument to which
Xplor is a party or to which any of its properties are subject, and no
declaration, filing or registration with any Governmental Entity or Regulatory
Authority is required or advisable by Xplor in connection with the execution
and delivery of this Agreement and each other agreement contemplated hereby,
the performance by Xplor of its obligations hereunder and thereunder the
consummation by Xplor of the transactions contemplated hereby and thereby other
than (i) compliance with any applicable requirements under the Exchange Act and
the Securities Act, (ii) foreign and state securities and "blue sky" laws, and
(iii) such other filings or registrations with, or authorizations, consents or
approvals of, governmental bodies, agencies, officials or authorities, the
failure of which to make or obtain would not have a Material Adverse Effect, or
would not materially adversely affect the ability of Xplor or to consummate the
Venus Exchange or Lomak Exchange.
Section 2.06. Xplor 10-K and Proxy Statement.
(a) Xplor has delivered to Venus and the Lomak Entities its
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the
"Xplor 10-K") and its most recent proxy statement which is dated May 18, 1996
(the "Proxy Statement"). Neither the Xplor 10-K nor the Proxy Statement
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading, and the Xplor 10-
K (including the financial statements contained therein), and the Proxy
Statement as of its filing date, complied as to form in all material respects
with the applicable requirements of the Exchange Act and the applicable rules
and regulations thereunder.
5
<PAGE> 12
(b) The financial statements of Xplor (including the related
notes) included in the Xplor 10-K fairly present the financial position of
Xplor and the results of operations and changes in financial condition as of
the dates and periods therein specified. Such financial statements (including
the related notes) (i) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein) and with applicable accounting requirements
and published rules and regulations of the SEC with respect thereto and (ii)
reflect all liabilities of Xplor, whether or not accrued and whether contingent
or absolute, including, without limitation, those relating to taxes,
environmental compliance and hazardous materials, Leases, contracts and
"employee benefit plans" as such term is defined in Section 3(3) of ERISA and
all Encumbrances as are required to be reflected therein by such applicable
principles, requirements, rules and regulations.
Section 2.07. Absence of Certain Changes. Since December 31,
1996, there has not been (i) any Material Adverse Change in the assets or
liabilities, or in the business or condition, financial or otherwise, or in the
results of operations or prospects, of Xplor (ii) any adverse change in the
assets or liabilities or in the business or condition, financial or otherwise,
of Xplor except in the ordinary course of business, (iii) any increase or
establishment of any reserve for taxes or any other liability on Xplor's books
or other provision therefor, except as appropriate and consistent with past
practice; (iv) any change by Xplor in tax methods, principles or elections or
in accounting methods or principles that would be required to be disclosed
under generally accepted accounting principles; (v) any declaration, setting
aside or payment of any dividend or other distribution with respect to any
Xplor Stock; (vi) any issuance of any stock, bonds, options, warrants or other
securities by Xplor or any repurchase, redemption or other acquisition by Xplor
of any outstanding shares of Xplor Stock or any other equity securities of, or
other ownership interests in, Xplor; (vii) any cancellation of debt by Xplor or
waiver of any claim or right of substantial value to Xplor; (viii) any
borrowing, agreement to borrow funds or guaranty by Xplor or any termination or
amendment of any evidence of indebtedness, contract, agreement, deed, mortgage,
lease, license or other instrument to which Xplor is bound or by which Xplor or
any of its properties or assets is bound other than in the ordinary course of
business and consistent with past practice; or (ix) except for the execution of
this Agreement, any material transaction by Xplor, including, but not limited
to, any sale, lease or other disposition of properties and assets of Xplor,
other than in the ordinary course of business and consistent with past
practices, and any merger or consolidation of Xplor with any other entity, and,
to the best knowledge of Xplor, no fact or condition exists or is contemplated
or threatened which could reasonably be anticipated to cause such a change in
the future.
Section 2.08. Litigation. There is no action, suit,
arbitration, proceeding or, to the best knowledge of Xplor, investigation
pending or, to the best knowledge of
6
<PAGE> 13
Xplor, threatened against or affecting or involving Xplor or any of its
properties, assets or rights or any of its officers, directors or employees in
their capacities as such, whether at law or equity ("Xplor Litigation"), and
Xplor has no knowledge of any facts that are likely to give rise to any Xplor
Litigation, that (in any case) is likely to have a Material Adverse Effect nor
is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against Xplor or any of its officers,
directors or employees in their capacities as such that is likely to have a
Material Adverse Effect or affect the ability of Xplor to consummate the
transactions contemplated by this Agreement.
Section 2.09. No Default. Xplor is not in default or violation
(and no event has occurred which, with notice or the lapse of time or both,
would constitute a default or violation) of any term, condition or provision of
(i) its Certificate of Incorporation and Bylaws, (ii) any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which it is
now a party or by which it or any of its properties or assets may be bound or
(iii) any order, writ, injunction, decree, statute, rule or regulation
applicable to it, except in the case of (ii) and (iii) for defaults or
violations which individually or in the aggregate would not have a Material
Adverse Effect.
Section 2.10. Compliance with Laws. Xplor is in compliance
with all applicable laws, rules or regulations relating to or affecting the
operation, conduct or ownership of its properties or business, other than
violations that individually or in the aggregate would not, and insofar as may
reasonably be foreseen in the future will not, have a Material Adverse Effect,
except as described in Schedule 2.10 to the Xplor Disclosure Schedule. Neither
Xplor nor, to the best of Xplor's knowledge, any officer, consultant or
employee of Xplor (in their capacity as such), is in default with respect to
any order, writ, injunction or decree known to or served upon Xplor of any
Governmental Entity or Regulatory Authority, which default would have a
Material Adverse Effect. To the best of Xplor's knowledge, there is no
existing law, rule, regulation or order, whether Federal, state or local, which
would prohibit or materially restrict Xplor from, or otherwise materially
adversely affect Xplor in, conducting its business in any jurisdiction in which
it is now conducting business. Xplor holds all permits, licenses, variances,
exemptions, orders, franchises and approvals of all Governmental Entities
necessary for the lawful conduct of its business (the "Xplor Permits"), except
where the failure so to hold would not have a Material Adverse Effect. Xplor
is in compliance with the terms of the Xplor Permits, except where the failure
so to comply would not have a Material Adverse Effect.
Section 2.11. Oil and Gas Reserves; Wells.
(a) Xplor has provided to Venus and the Lomak Entities an
engineering report reviewed by Ryder Scott Company, independent petroleum
engineers, setting forth Xplor's oil and gas reserves and values as of December
31, 1996 (the "Xplor
7
<PAGE> 14
Reserve Report"), a copy of which is attached hereto as Schedule AA. The Xplor
Reserve Report sets forth a list of all Leases comprising Xplor's oil and gas
reserves and, to the best of Xplor's knowledge, accurately reflects Xplor's oil
and gas reserves as of its date and as of the date hereof, subject to normal
production. Xplor is not aware of any change to its Leases since the date of
the Xplor Reserve Report that could have a Material Adverse Effect. The
independent petroleum engineers were provided full access to Xplor's reserve
records and all other relevant information.
(b) Except as set forth in Schedule 2.11 to the Xplor Disclosure
Schedule, there is no well operated by Xplor, and to Xplor's knowledge, there
is no well operated by a third party on behalf of Xplor, that (i) is no longer
producing in commercial quantities and for which there are no definitive plans
to attempt to restore production in commercial quantities, (ii) is subject to
an exception to a requirement to plug and abandon issued by regulatory
authority having jurisdiction over the well, or (iii) has been plugged and
abandoned but has not been plugged and abandoned or reclaimed in accordance
with all applicable laws, and the proper plugging and abandonment or
reclamation of which would or could reasonably be expected to have a Material
Adverse Effect on Xplor.
Section 2.12. Title to Xplor Leases. As to the interests in
each of the Leases listed in the Xplor Reserve Report, such interests include
100% of the interests in such Leases owned by Xplor as of the date hereof, and
upon Closing, Xplor will have that title to such interests which
(i) entitles Xplor to receive not less than the interest shown in
Xplor Reserve Report as the "Net Revenue Interest" with respect to such Lease
in all hydrocarbons produced, saved and marketed from such Lease and in all
hydrocarbons produced, saved or marketed from any unit of which such Lease
forms a part and allocated to such Lease, all without reduction, suspension or
termination of such Net Revenue Interest throughout the duration of such Lease;
(ii) obligates Xplor to bear a percentage of the costs and
expenses relating to the maintenance and development of, and operations
relating to, such Lease in an amount not greater than the "Working Interest"
set forth in the Xplor Reserve Report with respect to such Lease; and
(iii) is free and clear of all liens, Encumbrances (except for
Permitted Encumbrances), gas imbalances, obligations or defects and is not
subject to any matters which will result in a breach of any representation or
warranty of Xplor herein affecting title.
8
<PAGE> 15
With respect to such Leases and any unit agreements, pooling agreements,
communitization agreements or other similar documents affecting or creating
interests therein,
(s) all such interests are valid and in full force and effect;
(t) neither Xplor, nor to the knowledge of Xplor, any other
party is in default under any contract, agreement or arrangement affecting such
Leases, except such defaults as would not have a Material Adverse Effect on
Xplor.
(u) except as set forth on Schedule 2.12 of the Xplor
Disclosure Schedule, there is no contract, agreement or arrangement (i)
requiring an expenditure now or in the future by the owner of the interest of
more than $50,000 or imposing an obligation or non contingent liability now or
in the future on the owner of the interests of more than $50,000, (ii)
involving the purchase or sale of hydrocarbons and which cannot be terminated
without penalty on thirty (30) days notice or less and/or (iii) governing the
operations among the working interest owners of the Leases which contains any
provision that is objectionable or unacceptable on the basis of generally
recognized industry standards applicable to the area where the affected Lease
is situated and which would have a material adverse effect on the ownership,
use, value or operation of the affected Lease;
(v) there are no express obligations to engage in continuous
development operations in order to maintain any such lease or other interest in
full force and effect except as described in the Xplor Reserve Report;
(w) there are no provisions applicable to such Leases or other
documents or interests which increase the royalty share of the lessor or the
overriding royalty interest of any other party or increase or decrease the
working interest of such interest without corresponding change in the Net
Revenue Interest;
(x) there are no royalty provisions which expressly prohibit
the payment of royalty on the basis of proceeds received under a prudently
negotiated arms-length contract;
(y) except for Pugh Clause provisions and similar provisions
relating to development of all zones, upon establishment of production in
commercial quantities and until such production should cease, such Leases may
be maintained in full force and effect over the economic life of the property
involved in accordance with the respective habendum clauses contained in the
Leases beyond the respective primary terms set forth in such Leases; and
9
<PAGE> 16
(z) there are no fixed lease terms which cannot be extended by
production at the end of the term.
Section 2.13. Other Real Property Owned or Leased. Schedule AAA
hereto contains a list and brief description of all interests in real property
owned or leased by Xplor other than the Leases referred to in Section 2.12, as
well as all buildings and other structures and material improvements located on
such real property (including a brief description of the use to which such
property is being put or for which it was intended and in the case of any such
property which is leased, the name of the lessor, requirement of consent of the
lessor to assignment (including assignment by way of merger or change of
control), termination date or notice requirement with respect to termination,
annual rental and renewal or purchase options). With respect to such other real
property such interests represent all the interests in real property reasonably
required for the efficient operation of the Xplor Leases and, except as set
forth in Schedule AAA:
(i) Xplor is the owner or lessee, as the case may be, of all
such real property, free and clear of all Encumbrances (except Permitted
Encumbrances);
(ii) Xplor has made available to Venus and the Lomak Entities
true and correct copies of all leases referred to in Schedule AAA hereto;
(iii) All improvements on such real property conform in all
material respects to applicable Federal, state, local and foreign laws and
regulations (including applicable environmental and occupational safety and
health laws and regulations) and zoning and building ordinances, and such real
property is zoned for the various purposes for which it is presently being
used;
(iv) All improvements on such real property are generally in good
operating condition and repair and there does not exist any condition which
interferes with the economic value or use thereof. None of the buildings and
structures located on such real property nor any appurtenances thereto or
equipment thereon, nor the operation or maintenance thereof, violates in any
manner any restrictive covenants or encroaches on any property owned by others
nor does any building or structure of third parties encroach upon such
property. No condemnation proceeding is pending or threatened with respect to
any such property.
Section 2.14. Title to Other Assets, Properties and Rights and
Related Matters. Schedule AAA hereto contains a list and brief description of
all other assets, properties and rights which are owned, leased or used by
Xplor in the conduct of its business in addition to those assets referred to in
Sections 2.12 and 2.13. Xplor has good and marketable title to all such
assets, properties and rights, including all such assets, properties and rights
reflected in the Xplor 10-K as well as such of like kind and
10
<PAGE> 17
character acquired after the date thereof (except inventory or other property
sold or otherwise disposed of since that date in the ordinary course of
business) free and clear of all Encumbrances of any kind or character, except
(i) those set forth in Schedule AAA hereto and (ii) Permitted Encumbrances.
Such assets, properties and rights are generally in good operating condition
and repair (ordinary wear and tear excepted), and there does not exist any
condition which interferes with the economic value or use thereof. Except as
provided in this Section 2.14, XPLOR MAKES NO AND DISCLAIMS ANY REPRESENTATION
OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW, STATUTE OR
OTHERWISE, AS TO (i) THE QUALITY, CONDITION OR OPERABILITY OF ANY PERSONAL
PROPERTY OR EQUIPMENT, (ii) ITS MERCHANTABILITY, (iii) ITS FITNESS FOR ANY
PARTICULAR PURPOSE OR (iv) ITS CONFORMITY TO MODELS OR SAMPLES OF MATERIALS
AND, EXCEPT AS PROVIDED IN THIS SECTION, ALL PERSONAL PROPERTY AND EQUIPMENT IS
DELIVERED "AS IS, WHERE IS" IN THE CONDITION IN WHICH THE SAME EXISTS. Except
as set forth in Schedule AAA hereto, such assets, properties and rights shall
include all rights, properties, and interests in properties and assets (real,
personal and mixed, tangible and intangible, and all leases, licenses and other
agreements) necessary or desirable to permit Xplor to obtain the full economic
benefit of its business and of its ownership of the Xplor Leases as
contemplated hereby.
Section 2.15. No Misleading Statements. This Agreement, the
information and Schedules and Exhibits referred to herein and the information
that has been furnished to Venus and the Lomak Entities by Xplor in connection
with the transactions contemplated hereby do not include any untrue statement
of a material fact and do not omit to state any material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. Notwithstanding the foregoing, Xplor has
not and does not make any representation or warranty regarding any forecast or
projection of future events, pricing, valuation or results of future operations
of, or related to, Xplor's properties. Nothing in this Agreement shall be
considered as an assurance that any such forecast or projection will be correct
or is likely to be correct.
Section 2.16. Brokerage Fees. Xplor has not retained any
financial advisor, broker, agent or finder or paid or agreed to pay any
financial advisor, broker, agent or finder on account of this Agreement or any
transaction contemplated hereby or any transaction of like nature that would be
required to be paid by Xplor.
Section 2.17. Indebtedness. Except as described in Schedule
2.17 to the Xplor Disclosure Schedule, Xplor has no outstanding indebtedness or
financing agreements or obligations under guaranties of third party debt.
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Section 2.18. Taxes
(a) Except as set forth on Schedule 2.18(a) to the Xplor
Disclosure Schedule, each of Xplor and any affiliated, combined or unitary
group of which any Xplor is or was a member has (i) timely (taking into account
any extensions) filed all federal and all material state, local and foreign
returns, declarations, reports, estimates, information returns and statements
("Returns") required to be filed or sent by or with respect to it in respect of
any Taxes, (B) timely paid all Taxes that are due and payable (except for audit
adjustments not material in the aggregate or to the extent that liability
therefor is reserved for in the Xplor's most recent audited financial
statements) for which Xplor may be liable, (C) established reserves that are
adequate for the payment of all Taxes not yet due and payable with respect to
the results of operations of Xplor through the date hereof, and (D) complied in
all material respects with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes and has in all material respects timely
withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over.
(b) Schedule 2.18(a) to the Xplor Disclosure Schedule sets forth
the last taxable period through which the federal income Tax Returns of Xplor
have been examined by the Internal Revenue Service ("IRS") or otherwise closed.
Except to the extent being contested in good faith, all material deficiencies
asserted as a result of such examinations and any examination by any applicable
state or local taxing authority have been paid, fully settled or adequately
provided for in Xplor's most recent audited financial statements. No material
federal, state or local income or franchise tax audits or other administrative
proceedings or court proceedings are presently pending with regard to any
federal, state or local income or franchise Taxes for which Xplor would be
liable, and no material deficiency for any such income or franchise Taxes has
been proposed, asserted or assessed pursuant to such examination against Xplor
by any federal, state or local taxing authority with respect to any period
other than as set forth in Schedule 2.18(a) to the Xplor Disclosure Schedule.
(c) Xplor has not executed or entered into (and prior to the
close of business on the Closing Date will not execute or enter into) with the
IRS or any taxing authority (i) any agreement or other document extending or
having the effect of extending the period for assessments or collection of any
federal, state or local income or franchise Taxes for which Xplor would be
liable or (ii) a closing agreement pursuant to Section 7121 of the Code, or any
predecessor provision thereof or any similar provision of state or local income
tax law that relates to the assets or operations of Xplor.
(d) Xplor is not a party to an agreement that provides for the
payment of any amount that would constitute a "parachute payment" within the
meaning of Section 280G of the Code.
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(e) Xplor is not a party to or bound by any tax sharing agreement
or similar agreement or arrangement.
Section 2.19. Material Contracts. The Xplor 10-K includes,
incorporates or specifically refers to all of the material contracts,
agreements, plans and commitments to which Xplor is a party or by which Xplor
or any of its properties or assets is bound:
Section 2.20. No Undisclosed Liabilities. There is no existing,
contingent or threatened liability, obligation, Encumbrance or claim of any
nature (absolute, accrued, contingent or otherwise) that relates to Xplor or
has been asserted or threatened to be asserted against Xplor, other than
liabilities pursuant to this Agreement.
Section 2.21. No Vote Required. No vote of the holders of any
class or series of Xplor capital stock is necessary to approve the issuance of
Xplor Stock pursuant to this Agreement and the transactions contemplated
hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VENUS
Except as set forth (by reference to the applicable Section of
this Agreement) in Venus' disclosure schedule previously delivered to the Xplor
and the Lomak Entities (the "Venus Disclosure Schedule"), a copy of which is
attached hereto as Schedule B, Venus hereby agrees and represents and warrants
to Xplor and the Lomak Entities as follows:
Section 3.01. Organization, Etc. Venus is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power and corporate authority to conduct
its business as it is now being conducted and to own, operate or lease the
properties and assets it currently owns, operates or holds under lease. Venus
is duly qualified or licensed to do business and is in good standing as a
foreign corporation in each jurisdiction where the character of its business or
the nature of its properties or assets makes such qualification or licensing
necessary, except where the failure to so qualify or be licensed would not have
a Material Adverse Effect. Schedule 3.01 to the Venus Disclosure Schedule sets
forth a list of each jurisdiction in which Venus is licensed or qualified to
transact business as a foreign entity. Venus has heretofore delivered to Xplor
and the Lomak Entities true and correct copies of its respective Certificate of
Incorporation (and other documents of record with the Secretary of State of
Texas) and Bylaws as in effect on the date hereof. Schedule 3.01 to the Venus
Disclosure Schedule sets forth a list of the officers and directors of each of
Venus on the date hereof and all information with respect to all individuals
affiliated with Venus who will be directors and executive
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officers of Xplor following the Closing required by SEC Rule 14f-1 under the
Exchange Act.
Section 3.02. Capitalization.
The authorized capital stock of Venus consists of 400,000,000 shares of
Common Stock (par value of $0.001 per share), 200,000,000 shares of Convertible
Shares (par value of $0.001 per share) and 200,000,000 shares of Convertible
Redeemable Preference Shares (par value of $0.001 per share). No shares of
Venus Stock are held as treasury shares. The designations, powers,
preferences, rights, qualifications, limitations and restrictions in respect of
each class and series of authorized capital stock of Venus are as set forth in
Venus's Certificate of Incorporation or otherwise of record with the Secretary
of State of Texas, and all such designations, powers, preferences, rights,
qualifications, limitations and restrictions are valid, binding and enforceable
and in accordance with all applicable laws. All outstanding shares of Venus
Stock have been duly authorized and validly issued and are fully paid and
non-assessable. All of the outstanding shares of Venus Stock were issued in
compliance with all applicable Federal and state securities laws. None of the
outstanding securities has been issued in violation of any pre-emptive rights,
rights of first refusal or similar rights. Except as set forth in the Venus
Disclosure Schedule, there are no outstanding options, warrants, convertible
securities, calls, rights, commitments, preemptive rights or agreements or
instruments or understandings or other securities of any character to which
Venus is a party or by which Venus is bound, obligating Venus to issue, deliver
or sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of capital stock of Venus or any securities or obligations
convertible into or exchangeable for such shares or to grant, extend or enter
into any such option, warrant, convertible security, call, right, commitment,
preemptive right or agreement. There are no outstanding obligations,
contingent or other, of Venus to purchase, redeem or otherwise acquire any
capital stock of Venus. There are no voting trust agreements or other
contracts, agreements, arrangements, commitments, plans or understandings
restricting or otherwise relating to voting, dividend or other rights with
respect to Venus's capital stock. There are no bonds, debentures, notes or
other indebtedness having the right to vote (or convertible into securities
having the right to vote) on any matters on which Venus stockholders may vote
issued or outstanding. There is no liability for dividends declared or
accumulated but unpaid with respect to any of the shares of Venus Stock.
Section 3.03. Authorization. Venus has all requisite corporate
power and corporate authority to enter into this Agreement and each of the
other agreements contemplated hereby, to carry out its respective obligations
under this Agreement and each of the other agreements contemplated hereby and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery by Venus of this Agreement, the consummation of the transactions
contemplated hereby and the
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performance by Venus of its obligations hereunder have been duly authorized by
all necessary corporate action except Venus Stockholder Approval. This
Agreement has been duly executed and delivered by Venus; and, assuming that
this Agreement constitutes the legal, valid and binding obligation of the other
parties hereto, constitutes the legal, valid and binding obligation of Venus,
enforceable against Venus in accordance with its terms, subject to Venus
Stockholder Approval.
Section 3.04. No Violation. The execution and delivery of this
Agreement by Venus does not, and the consummation by Venus of the transactions
contemplated hereby, and compliance with the terms hereof will not, (a)
conflict with, or result in any violation of or default (with or without notice
or lapse of time or both) or loss of any benefit under, any provision of its
Certificate of Incorporation (or other documents of record with the Secretary
of State of Texas) or By-laws; (b) conflict with, or result in any violation of
or default (with or without notice or lapse of time or both) or loss of any
benefit under, any permit, concession, grant, assignment, franchise, license,
law, rule or regulation, or any judgment, decree or order of any court or other
governmental agency or instrumentality to which Venus is a party or to which
any of its properties or assets is subject; (c) conflict with, or result in a
breach or violation of or default (with or without notice or lapse of time or
both) or loss of any benefit under, or accelerate the performance required by,
the terms of any material agreement, contract, indenture or other instrument to
which Venus is a party or to which any of its properties is subject, or
constitute a default or loss of any right thereunder or an event which, with
the lapse of time or notice or both, might result in a material default or loss
of any material right thereunder or the creation of any lien, charge or
encumbrance upon any of the properties or assets of Venus; or (d) result in any
suspension, revocation, impairment, forfeiture or non-renewal of any material
Lease of Venus.
Section 3.05. Approvals. The execution and delivery of this
Agreement and each other agreement contemplated hereby, the performance by
Venus of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby by Venus will not require the
consent, approval, order or authorization of any Governmental Entity or
Regulatory Authority or any other Person under any statute, law, rule,
regulation, permit, license, agreement, indenture or other instrument to which
Venus is a party or to which any of its properties are subject, and no
declaration, filing or registration with any Governmental Entity or Regulatory
Authority is required or advisable by Venus in connection with the execution
and delivery of this Agreement and each other agreement contemplated hereby,
the performance by Venus of its obligations hereunder and thereunder, the
consummation by Venus of the transactions contemplated hereby and thereby other
than (i) compliance with any applicable requirements under the Exchange Act and
the Securities Act, (ii) foreign and state securities and "blue sky" laws, and
(iii) such other filings or registrations with, or authorizations, consents or
approvals of, governmental bodies, agencies, officials or authorities, the
failure of which to make or obtain would
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not have a Material Adverse Effect, or would not materially adversely affect
the ability of Venus to consummate the Venus Exchange.
Section 3.06. Venus Financial Statements.
(a) Venus has delivered to Xplor and the Lomak Entities true,
correct and complete copies of the audited balance sheet of Venus Energy PLC as
of December 31, 1996 and notes thereto with the independent accountants' report
of KPMG Peat Marwick LLP thereon as well as an income statements and statements
of cash flows for periods including the period ended December 31, 1996 (the
"Venus Financial Statements").
(b) The Venus Financial Statements (including the related notes)
fairly present the financial position of Venus and the results of operations
and changes in financial condition as of the dates and periods therein
specified. Such financial statements (including the related notes) (i) have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein) and (ii) reflect all liabilities of Venus, whether or not accrued and
whether contingent or absolute, including, without limitation, those relating
to taxes, environmental compliance and hazardous materials, Leases, contracts
and "employee benefit plans" as such term is defined in Section 3(3) of ERISA
and all Encumbrances as are required to be reflected therein by such applicable
principles, requirements, rules and regulations.
Section 3.07. Absence of Certain Changes. Since December 31,
1996, there has not been (i) any Material Adverse Change in the assets or
liabilities, or in the business or condition, financial or otherwise, or in the
results of operations or prospects, of Venus (ii) any adverse change in the
assets or liabilities or in the business or condition, financial or otherwise,
of Venus except in the ordinary course of business, (iii) any increase or
establishment of any reserve for taxes or any other liability on Venus 's books
or other provision therefor, except as appropriate and consistent with past
practice; (iv) any change by Venus in tax methods, principles or elections or
in accounting methods or principles that would be required to be disclosed
under generally accepted accounting principles; (v) any declaration, setting
aside or payment of any dividend or other distribution with respect to any
Venus Stock; (vi) any issuance of any stock, bonds, options, warrants or other
securities by Venus or any repurchase, redemption or other acquisition by Venus
of any outstanding shares of Venus Stock or any other equity securities of, or
other ownership interests in, Venus; (vii) any cancellation of debt by Venus or
waiver of any claim or right of substantial value to Venus; (viii) any
borrowing, agreement to borrow funds or guaranty by Venus or any termination or
amendment of any evidence of indebtedness, contract, agreement, deed, mortgage,
lease, license or other instrument to which Venus is bound or by which Venus or
any of its properties or assets is bound other than in the ordinary course of
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business and consistent with past practice; or (ix) except for the execution of
this Agreement, any material transaction by Venus, including, but not limited
to, any sale, lease or other disposition of properties and assets of Venus, and
any merger or consolidation of Venus with any other entity, other than in the
ordinary course of business and consistent with past practices and, to the best
knowledge of Venus, no fact or condition exists or is contemplated or
threatened which could reasonably be anticipated to cause such a change in the
future.
Section 3.08. Litigation. There is no action, suit,
arbitration, proceeding or, to the best knowledge of Venus, investigation
pending or, to the best knowledge of Venus, threatened against or affecting or
involving Venus or any of their respective properties, assets or rights or any
of their officers, directors or employees in their capacities as such, whether
at law or equity ("Venus Litigation"), and Venus has no knowledge of any facts
that are likely to give rise to any Venus Litigation, that (in any case) is
likely to have a Material Adverse Effect nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against Venus or any of its officers, directors or employees in their
capacities as such that is likely to have a Material Adverse Effect or affect
the ability of Venus to consummate the transactions contemplated by this
Agreement.
Section 3.09. No Default. Venus is not in default or violation
(and no event has occurred which, with notice or the lapse of time or both,
would constitute a default or violation) of any term, condition or provision of
(i) its Certificate of Incorporation and Bylaws, (ii) any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which it is
now a party or by which it or any of its properties or assets may be bound or
(iii) any order, writ, injunction, decree, statute, rule or regulation
applicable to it, except in the case of (ii) and (iii) for defaults or
violations which individually or in the aggregate would not have a Material
Adverse Effect.
Section 3.10. Compliance with Laws. Venus is in compliance with
all applicable laws, rules or regulations relating to or affecting the
operation, conduct or ownership of its properties or business, other than
violations that individually or in the aggregate would not, and insofar as may
reasonably be foreseen in the future will not, have a Material Adverse Effect,
all of which are described in Schedule 3.10 to the Venus Disclosure Schedule.
Neither Venus nor, to the best of Venus's knowledge, any officer, consultant or
employee of Venus (in their capacity as such), is in default with respect to
any order, writ, injunction or decree known to or served upon Venus of any
Governmental Entity or Regulatory Authority, which default would have a
Material Adverse Effect. To the best of Venus's knowledge, there is no
existing law, rule, regulation or order, whether Federal, state or local, which
would prohibit or materially restrict Venus from, or otherwise materially
adversely affect Venus in, conducting its business in any jurisdiction in which
it is now conducting business. Venus holds all
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permits, licenses, variances, exemptions, orders, franchises and approvals of
all Governmental Entities necessary for the lawful conduct of their respective
businesses (the "Venus Permits"), except where the failure so to hold would not
have a Material Adverse Effect. Venus is in compliance with the terms of the
Venus Permits, except where the failure so to comply would not have a Material
Adverse Effect.
Section 3.11. Oil and Gas Reserves; Wells.
(a) Venus has provided to Xplor and the Lomak Entities
engineering reports reviewed by the following independent petroleum engineers:
Williamson Petroleum Consultants; Hite, Powers & Associates; and Cawley,
Gillespie, setting forth Venus's oil and gas reserves and values as of December
31, 1996, April 1, 1997 and March 31, 1997, respectively, copies of which are
attached hereto as Schedule BB (collectively, the "Venus Reserve Report"). The
Venus Reserve Report sets forth a list of all Leases comprising Venus's oil and
gas reserves and, to the best of Venus's knowledge, accurately reflects Venus's
oil and gas reserves as of its date and as of the date hereof, subject to
normal production. Venus is not aware of any change to its Leases since the
date of the Venus Reserve Report that could have a Material Adverse Effect.
The independent petroleum engineers were provided full access to Venus's
reserve records and all other relevant information.
(b) Except as set forth in Schedule 3.11 to the Venus Disclosure
Schedule, there is no well operated by Venus, and to Venus's knowledge, there
is no well operated by a third party on behalf of Venus, that (i) is no longer
producing in commercial quantities and for which there are no definitive plans
to attempt to restore production in commercial quantities, (ii) is subject to
an exception to a requirement to plug and abandon issued by regulatory
authority having jurisdiction over the well, or (iii) has been plugged and
abandoned but has not been plugged and abandoned or reclaimed in accordance
with all applicable laws, and the proper plugging and abandonment or
reclamation of which would or could reasonably be expected to have a Material
Adverse Effect on Venus.
Section 3.12. Title to Venus Leases. As to the interests in
each of the Leases listed in the Venus Reserve Report, such interests include
100% of the interests in such Leases owned by Venus as of the date hereof, and
upon Closing, Venus will convey to Xplor that title to such interests that
will:
(i) entitle Xplor to receive not less than the interest shown in
Venus Reserve Report as the "Net Revenue Interest" with respect to such Lease
in all hydrocarbons produced, saved and marketed from such Lease and or all
hydrocarbons produced, saved or marketed from any unit of which such Lease
forms a part and allocated to such Lease, all without reduction, suspension or
termination of such Net Revenue Interest throughout the duration of such Lease;
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(ii) obligate Xplor to bear a percentage of the costs and
expenses relating to the maintenance and development of, and operations
relating to, such Lease in an amount not greater than the "Working Interest"
set forth in the Venus Reserve Report with respect to such Lease; and
(iii) is free and clear of all liens, Encumbrances (except for
Permitted Encumbrances), gas imbalances, obligations or defects and is not
subject to any matters which will result in a breach of any representation or
warranty of Venus herein affecting title.
With respect to such Leases and any unit agreements, pooling agreements,
communitization agreements or other similar documents affecting or creating
interests therein:
(v) all such interests are valid and in full force and effect;
(w) neither Venus, nor to the knowledge of Venus, any other party
is in default under any contract, agreement or arrangement affecting such
Leases, except such defaults as would not have a Material Adverse Effect on
Venus.
(x) except as set forth on Schedule 3.12 of the Venus Disclosure
Schedule, there is no contract, agreement or arrangement (i) requiring an
expenditure now or in the future by the owner of the interest of more than
$50,000 or imposing an obligation or non contingent liability now or in the
future on the owner of the Interests of more than $50,000, (ii) involving the
purchase or sale of hydrocarbons and which cannot be terminated without penalty
on thirty (30) days notice or less and/or (iii) governing the operations among
the working interest owners of the Leases which contains any provision that is
objectionable or unacceptable on the basis of generally recognized industry
standards applicable to the area where the affected Lease is situated and which
would have a material adverse effect on the ownership, use, value or operation
of the affected Lease;
(y) except for Pugh Clause provisions and similar provisions
relating to development of all zones, upon establishment of production in
commercial quantities and until such production should cease, such Leases may
be maintained in full force and effect over the economic life of the property
involved in accordance with the respective habendum clauses contained in the
Leases beyond the respective primary terms set forth in such Leases; and
(z) there are no fixed lease terms which cannot be extended by
production at the end of the term.
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Section 3.13. Other Real Property Owned or Leased. Schedule BBB
hereto contains a list and brief description of all interests in real property
owned or leased by Venus other than the Leases referred to in Section 3.12, as
well as all buildings and other structures and material improvements located on
such real property (including a brief description of the use to which such
property is being put or for which it was intended and in the case of any such
property which is leased, the name of the lessor, requirement of consent of the
lessor to assignment (including assignment by way of merger or change of
control), termination date or notice requirement with respect to termination,
annual rental and renewal or purchase options). With respect to such other real
property such interests represent all the interests in real property reasonably
required for the efficient operation of the Venus Leases and, except as set
forth in Schedule BBB:
(i) Venus is the owner or lessee, as the case may be, of all such
real property, free and clear of all Encumbrances (except Permitted
Encumbrances);
(ii) Venus has made available to Xplor and the Lomak Entities
true and correct copies of all leases referred to in Schedule BBB hereto;
(iii) All improvements on such real property conform in all
material respects to applicable Federal, state, local and foreign laws and
regulations (including applicable environmental and occupational safety and
health laws and regulations) and zoning and building ordinances, and such real
property is zoned for the various purposes for which it is presently being
used;
(iv) All improvements on such real property are generally in good
operating condition and repair and there does not exist any condition which
interferes with the economic value or use thereof. None of the buildings and
structures located on such real property nor any appurtenances thereto or
equipment thereon, nor the operation or maintenance thereof, violates in any
manner any restrictive covenants or encroaches on any property owned by others
nor does any building or structure of third parties encroach upon such
property. No condemnation proceeding is pending or threatened with respect to
any such property.
Section 3.14. Title to Other Assets, Properties and Rights and
Related Matters. Schedule BBB hereto contains a list and brief description of
all other assets, properties and rights which are owned, leased or used by
Venus in the conduct of its business in addition to those assets referred in
Sections 3.12 and 3.13. Venus has good and marketable title to all such
assets, properties and rights, including all such assets, properties and rights
reflected in the Venus Financial Statements as well as such of like kind and
character acquired after the date thereof (except inventory or other property
sold or otherwise disposed of since that date in the ordinary course of
business) free and clear of all Encumbrances of any kind or character, except
(i) those
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set forth in Schedule BBB hereto and (ii) Permitted Encumbrances. Such assets,
properties and rights are generally in good operating condition and repair
(ordinary wear and tear excepted), and there does not exist any condition which
interferes with the economic value or use thereof. Except as provided in this
Section 3.14, VENUS MAKES NO AND DISCLAIMS ANY REPRESENTATION OR WARRANTY,
WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW, STATUTE OR OTHERWISE, AS
TO (i) THE QUALITY, CONDITION OR OPERABILITY OF ANY PERSONAL PROPERTY OR
EQUIPMENT, (ii) ITS MERCHANTABILITY, (iii) ITS FITNESS FOR ANY PARTICULAR
PURPOSE OR (iv) ITS CONFORMITY TO MODELS OR SAMPLES OF MATERIALS AND, EXCEPT AS
PROVIDED IN THIS SECTION, ALL PERSONAL PROPERTY AND EQUIPMENT IS DELIVERED "AS
IS, WHERE IS" IN THE CONDITION IN WHICH THE SAME EXISTS. Except as set forth
in Schedule BBB hereto, such assets, properties and rights shall include all
rights, properties, and interests in properties and assets (real, personal and
mixed, tangible and intangible, and all leases, licenses and other agreements)
necessary or desirable to permit Venus to obtain the full economic benefit of
its business and of its ownership of the Venus Leases as contemplated hereby.
Section 3.15. No Misleading Statements. This Agreement, the
information and Schedules and Exhibits referred to herein and the information
that has been furnished to Xplor and the Lomak Entities by Venus in connection
with the transactions contemplated hereby do not include any untrue statement
of a material fact and do not omit to state any material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. Notwithstanding the foregoing, Venus has
not and does not make any representation or warranty regarding any forecast or
projection of future events, pricing, valuation or results of future operations
or, or related to, Venus' properties. Nothing in this Agreement shall be
considered as an assurance that any such forecast or projection will be correct
or is likely to be correct.
Section 3.16. Brokerage Fees. Venus has not retained any
financial advisor, broker, agent or finder or paid or agreed to pay any
financial advisor, broker, agent or finder on account of this Agreement or any
transaction contemplated hereby or any transaction of like nature that would be
required to be paid by Venus.
Section 3.17. Indebtedness Except as described in Schedule 3.17
to the Venus Disclosure Schedule, Venus has no outstanding indebtedness or
financing agreements or obligations under guaranties of third party debt.
Section 3.18. Taxes.
(a) Except as set forth on Schedule 3.18(a) to the Venus
Disclosure Schedule, each of Venus and any affiliated, combined or unitary
group of which any
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Venus is or was a member has (i) timely (taking into account any extensions)
filed all federal and all material state, local and foreign returns,
declarations, reports, estimates, information returns and statements
("Returns") required to be filed or sent by or with respect to it in respect of
any Taxes, (B) timely paid all Taxes that are due and payable (except for audit
adjustments not material in the aggregate or to the extent that liability
therefor is reserved for in the Venus's most recent audited financial
statements) for which Venus may be liable, (C) established reserves that are
adequate for the payment of all Taxes not yet due and payable with respect to
the results of operations of Venus through the date hereof, and (D) complied in
all material respects with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes and has in all material respects timely
withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over.
(b) Schedule 3.18(a) to the Venus Disclosure Schedule sets forth
the last taxable period through which the federal income Tax Returns of Venus
have been examined by the Internal Revenue Service ("IRS") or otherwise closed.
Except to the extent being contested in good faith, all material deficiencies
asserted as a result of such examinations and any examination by any applicable
state or local taxing authority have been paid, fully settled or adequately
provided for in Venus's most recent audited financial statements. No material
federal, state or local income or franchise tax audits or other administrative
proceedings or court proceedings are presently pending with regard to any
federal, state or local income or franchise Taxes for which Venus would be
liable, and no material deficiency for any such income or franchise Taxes has
been proposed, asserted or assessed pursuant to such examination against Venus
by any federal, state or local taxing authority with respect to any period
other than as set forth in Schedule 3.18(a) to the Venus Disclosure Schedule.
(c) Venus has not executed or entered into (and prior to the
close of business on the Closing Date will not execute or enter into) with the
IRS or any taxing authority (i) any agreement or other document extending or
having the effect of extending the period for assessments or collection of any
federal, state or local income or franchise Taxes for which Venus would be
liable or (ii) a closing agreement pursuant to Section 7121 of the Code, or any
predecessor provision thereof or any similar provision of state or local income
tax law that relates to the assets or operations of Venus.
(d) Venus is not a party to an agreement that provides for the
payment of any amount that would constitute a "parachute payment" within the
meaning of Section 280G of the Code.
(e) Venus is not a party to or bound by any tax sharing agreement
or similar agreement or arrangement.
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Section 3.19. Material Contracts. Schedule 3.19 to Venus
Disclosure Schedule sets forth a complete list of all material contracts,
agreements, plans and commitments to which Venus is a party or by which Venus
or any of its properties or assets is bound:
Section 3.20. No Undisclosed Liabilities There is no existing,
contingent or threatened liability, obligation, Encumbrance or claim of any
nature (absolute, accrued, contingent or otherwise) that relates to Venus or
has been asserted or threatened to be asserted against Venus, other than
liabilities pursuant to this Agreement or arising after the date of the Venus
Financial Statements in the ordinary course of business and consistent with
past practice.
Section 3.21. Vote Required; Solicitation. A vote of the
holders of two-thirds of each class of the capital stock of Venus is necessary
to constitute Venus Stockholder Approval of the Venus Exchange. To the
knowledge of Venus, the character and number of the stockholders of Venus are
such that Venus Stockholder Approval may be solicited and obtained, and the
Venus Exchange consummated, pursuant to SEC Regulation D under the Securities
Act.
Section 3.22. Ownership of Shares. To the knowledge of Venus,
none of its stockholders, who will receive the shares of Xplor Stock issued to
Venus at the Closing upon the contemplated dissolution of Venus, has any plan
or intention of selling or otherwise disposing of such shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LOMAK ENTITIES
Except as set forth (by reference to the applicable Section of
this Agreement) in the disclosure schedule of the Lomak Entities previously
delivered to the Xplor and Venus (the "Lomak Disclosure Schedule"), a copy of
which is attached hereto as Schedule C, each of the Lomak Entities hereby
agrees and represents and warrants to Xplor and Venus, severally with respect
to itself and the Lomak Properties being conveyed by it hereunder and jointly
and severally respect to Section 4.06 hereof, as follows:
Section 4.01. Organization, Etc. Production is a limited
partnership duly organized, validly existing and in good standing under the
laws of Texas, and Resources is a limited liability company duly organized,
validly existing and in good standing under the laws of Oklahoma and each has
all requisite power and authority to conduct its business as it is now being
conducted and to own, operate or lease the properties and assets it currently
owns, operates or holds under lease. Each of Production and Resources is duly
qualified or licensed to do business and is in good standing in each
jurisdiction where the character of its business or the nature of its
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properties makes such qualification or licensing necessary, except where the
failure to so qualify or be licensed would not have a Material Adverse Effect.
Each of Production and Resources has heretofore delivered to Xplor and Venus
true and correct copies of its respective limited partnership agreement and
articles of organization and operating agreement in effect on the date hereof
("Lomak Governing Documents"). Schedule 4.01 to the Lomak Disclosure Schedule
sets forth a list of the general partner(s) and manager(s) of each Production
and Resources on the date hereof and all information with respect to the
individual affiliated with the Lomak Entities who will be a director of Xplor
following the Closing required by SEC Rule 14f-1 under the Exchange Act.
Section 4.02. Authorization. Each of Production and Resources
has all requisite power and authority to enter into this Agreement and each of
the other agreements contemplated hereby, to carry out its respective
obligations under this Agreement and each of the other agreements contemplated
hereby and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by Production and Resources of this Agreement, the
consummation of the transactions contemplated hereby and the performance by
Production and Resources of their respective obligations hereunder have been
duly authorized by all necessary action. This Agreement has been duly executed
and delivered by each of Production and Resources; and, assuming that this
Agreement constitutes the legal, valid and binding obligation of the other
parties hereto, constitutes the legal, valid and binding obligation of each of
Production and Resources, enforceable against each of Production and Resources
in accordance with its terms.
Section 4.03. No Violation. The execution and delivery of this
Agreement by each of Production and Resources do not, and the consummation by
each of Production and Resources of the transactions contemplated hereby, and
compliance with the terms hereof will not, (a) conflict with, or result in any
violation of or default (with or without notice or lapse of time or both) or
loss of any benefit under, any provision of their respective Lomak Governing
Documents; (b) conflict with, or result in any violation of or default (with or
without notice or lapse of time or both) or loss of any benefit under, any
permit, concession, grant, assignment, franchise, license, law, rule or
regulation, or any judgment, decree or order of any court or other governmental
agency or instrumentality to which Production or Resources is a party or to
which any of their respective properties or assets is subject; (c) conflict
with, or result in a breach or violation of or default (with or without notice
or lapse of time or both) or loss of any benefit under, or accelerate the
performance required by, the terms of any material agreement, contract,
indenture or other instrument to which Production or Resources is a party or to
which any of their respective properties is subject, or constitute a default or
loss of any right thereunder or an event which, with the lapse of time or
notice or both, might result in a material default or loss of any material
right thereunder or the creation of any lien, charge or encumbrance upon any of
the Lomak Properties; or (d) result in
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any suspension, revocation, impairment, forfeiture or non-renewal of any
material Lease of Production or Resources constituting part of the Lomak
Properties.
Section 4.04. Approvals. The execution and delivery of this
Agreement and each other agreement contemplated hereby, the performance by each
of Production and Resources of its respective obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby by Production and Resources will not require the consent, approval,
order or authorization of any Governmental Entity or Regulatory Authority or
any other Person under any statute, law, rule, regulation, permit, license,
agreement, indenture or other instrument to which Production or Resources is a
party or to which any of its properties are subject, and no declaration, filing
or registration with any Governmental Entity or Regulatory Authority is
required or advisable by Production or Resources in connection with the
execution and delivery of this Agreement and each other agreement contemplated
hereby, the performance by each of Production and Resources of its respective
obligations hereunder and thereunder the consummation by Production and
Resources of the transactions contemplated hereby and thereby other than
filings or registrations with, or authorizations, consents or approvals of,
governmental bodies, agencies, officials or authorities, the failure of which
to make or obtain would not have a Material Adverse Effect, or would not
materially adversely affect the Lomak Properties.
Section 4.05. Lomak Financial Statements.
(a) The Lomak Entities have delivered to Xplor and Venus true,
correct and complete copies of a statement of assets and liabilities of the
Lomak Properties as of December 31, 1996 and the related statements of revenues
and direct operating expenses for the fiscal year then ended together with
accompanying notes prepared by the Lomak Entities (the "Lomak Financial
Statements").
(b) The Lomak Financial Statements fairly present the financial
position of the Lomak Properties and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements (and accompanying notes), subject to independent audit
review and adjustment, (i) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein) and with applicable accounting
requirements and published rules and regulations of the SEC and (ii) reflect
all liabilities of the Lomak Properties, whether or not accrued and whether
contingent or absolute, including, without limitation, those relating to
severance and production taxes as are required to be reflected therein by such
applicable principles, requirements, rules and regulations.
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Section 4.06. Absence of Certain Changes. Since December 31,
1996, there has not been any Material Adverse Change in the condition,
financial or otherwise, or in the results of operations or prospects, of the
Lomak Properties.
Section 4.07. Litigation. There is no action, suit,
arbitration, proceeding or, to the best knowledge of the Lomak Entities,
investigation pending or, to the best knowledge of the Lomak Entities,
threatened against or affecting or involving Production or Resources or any of
their respective properties, assets or rights or any of their officers,
directors or employees in their capacities as such, whether at law or equity
("Lomak Litigation"), and the Lomak Entities have no knowledge of any facts
that are likely to give rise to any Lomak Litigation, that (in any case) is
likely to have a Material Adverse Effect nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against Production or Resources or any of their partners, managers or employees
in their capacities as such that is likely to have a Material Adverse Effect or
affect the ability of Production or Resources to consummate the transactions
contemplated by this Agreement.
Section 4.08. No Default. The Lomak Entities are not in default
or violation (and no event has occurred which, with notice or the lapse of time
or both, would constitute a default or violation) of any term, condition or
provision of (i) the Lomak Governing Documents (ii) any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which either
is now a party or by which either it or any of its properties or assets may be
bound or (iii) any order, writ, injunction, decree, statute, rule or regulation
applicable to it, except in the case of (ii) and (iii) for defaults or
violations which individually or in the aggregate would not have a Material
Adverse Effect.
Section 4.09. Compliance with Laws. Each of Production and
Resources is in compliance with all applicable laws, rules or regulations
relating to or affecting the operation, conduct or ownership of their
respective properties or business, other than violations that individually or
in the aggregate would not, and insofar as may reasonably be foreseen in the
future will not, have a Material Adverse Effect, all of which are described in
Schedule 4.09 to the Lomak Disclosure Schedule. Neither the Lomak Entities
nor, to the best of the Lomak Entities' knowledge, any partner, manager,
consultant or employee of Production or Resources (in their capacity as such),
is in default with respect to any order, writ, injunction or decree known to or
served upon Production or Resources of any Governmental Entity or Regulatory
Authority, which default would have a Material Adverse Effect. To the best of
the Lomak Entities' knowledge, there is no existing law, rule, regulation or
order, whether Federal, state or local, which would prohibit or materially
restrict Production or Resources from, or otherwise materially adversely affect
Production or Resources in, conducting its business in any jurisdiction in
which it is now conducting business. Production and Resources hold all
permits, licenses, variances, exemptions, orders, franchises and
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approvals of all Governmental Entities necessary for the lawful conduct of
their respective businesses (the "Lomak Entities Permits"), except where the
failure so to hold would not have a Material Adverse Effect. Production and
Resources are in compliance with the terms of the Lomak Entities Permits,
except where the failure so to comply would not have a Material Adverse Effect.
Section 4.10. Oil and Gas Reserves; Wells. The Lomak Entities
have provided to Xplor and Venus an engineering report reviewed by Wright &
Company, Inc. setting forth oil and gas reserves comprising the Lomak
Properties and their values as of December 31, 1996 (the "Lomak Reserve
Report"), a copy of which is attached hereto as Schedule CC. The Lomak Reserve
Report sets forth a list of all Leases comprising the oil and gas reserves of
the Lomak Properties and, to the best of the Lomak Entities' knowledge,
accurately reflects such oil and gas reserves as of its date and as of the date
hereof, subject to normal production. The Lomak Entities are not aware of any
change to their Leases since the date of the Lomak Reserve Report that could
have a Material Adverse Effect. Wright & Company, Inc. were provided full
access to the Lomak Entities' reserve records and all other relevant
information.
Section 4.11. Title to Lomak Leases. As to the interests in
each of the Leases listed in the Lomak Reserve Report, such interests include
100% of the interests in such Leases owned by the Lomak Entities as of the date
hereof, and upon Closing, the Lomak Entities will convey to Xplor that title to
such interests which will:
(i) entitle Xplor to receive not less than the interest shown in
the Lomak Reserve Report as the "Net Revenue Interest" with respect to such
Lease in all hydrocarbons produced, saved and marketed from such Lease and in
all hydrocarbons produced, saved or marketed from any unit of which such Lease
forms a part and allocated to such Lease, all without reduction, suspension or
termination of such Net Revenue Interest throughout the duration of such Lease;
(ii) obligate Xplor to bear a percentage of the costs and
expenses relating to the maintenance and development of, and operations
relating to, such Lease in an amount not greater than the "Working Interest"
set forth in the Lomak Reserve Report with respect to such Lease; and
(iii) be free and clear of all liens, Encumbrances (except for
Permitted Encumbrances), gas imbalances, obligations or defects and is not
subject to any matters which will result in a breach of any representation or
warranty of the Lomak Entities herein affecting title.
Section 4.12. No Misleading Statements. This Agreement, the
information and Schedules and Exhibits referred to herein and the information
that has been furnished to Xplor and Venus by the Lomak Entities in connection
with the
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transactions contemplated hereby do not include any untrue statement of a
material fact and do not omit to state any material fact necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. Notwithstanding the foregoing, the Lomak
Entities have not and do not make any representation or warranty regarding any
forecast or projection of future events, pricing, valuation or results of
future operations or, or related to, the Lomak Properties. Nothing in this
Agreement shall be considered as an assurance that any such forecast or
projection will be correct or is likely to be correct.
Section 4.13. Brokerage Fees. the Lomak Entities have retained
no financial advisor, broker, agent or finder or paid or agreed to pay any
financial advisor, broker, agent or finder on account of this Agreement or any
transaction contemplated hereby or any transaction of like nature that would be
required to be paid by Production or Resources.
Section 4.14. Indebtedness. At Closing, the Lomak Entities will
have no outstanding indebtedness or financing agreements or obligations under
guaranties of third party debt which burden or relate to the Lomak Properties.
Section 4.15. Taxes. The Lomak Entities have paid and/or made
provision for the payment of all Taxes payable as the result of their ownership
and/or operation of the Lomak Properties, and as of the Closing Xplor will
assume title to the Lomak Properties free and clear of all claims or liens for
Taxes accruing for all periods prior to the Closing, except as contemplated by
Article IX-A hereof.
Section 4.16. Material Contracts. Schedule 4.18 to the Lomak
Disclosure Schedule sets forth a complete list of all material contracts,
agreements, plans and commitments relating to the Lomak Properties subject to
which Xplor will take title to the Lomak Properties.
Section 4.17. No Undisclosed Liabilities There is no existing,
contingent or threatened liability, obligation, Encumbrance or claim of any
nature (absolute, accrued, contingent or otherwise) that relates to the Lomak
Properties or has been asserted or threatened to be asserted against the Lomak
Entities, other than liabilities pursuant to this Agreement or arising after
the date of the Lomak Financial Statements in the ordinary course of business
and consistent with past practice.
Section 4.18. No Vote Required. No vote or consent of the
partners, managers or members of the Lomak Entities which has not been obtained
is necessary for the execution of this Agreement and the consummation of the
transactions contemplated hereby.
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ARTICLE V
COVENANTS OF XPLOR
Xplor agrees that:
Section 5.01. Conduct of Xplor. From the date hereof until the
Closing and except as contemplated herein, Xplor shall in all material respects
conduct its business in the ordinary course. Without limiting the generality of
the foregoing, from the date hereof until the Closing, except as expressly
contemplated by this Agreement, without the written consent of Venus and the
Lomak Entities:
(a) Xplor will not adopt or propose any change in its Certificate
of Incorporation or Bylaws, or enter into any agreement or incur any
obligation, the terms of which would be violated by the consummation of the
transactions contemplated by this Agreement;
(b) Xplor will not:
(i) enter into any contract, agreement, plan or
arrangement with any director, officer or employee of Xplor, including,
without limitation, any written contract, agreement, plan or arrangement which
provides for the making of any payments, the acceleration of vesting of any
benefit or right or any other entitlement contingent upon (A) the consummation
of the transactions contemplated hereby or (B) the termination of employment
after the consummation of the transactions contemplated hereby;
(ii) enter into or amend any employment agreements (oral
or written) to increase the compensation payable or to become payable by it to
any of its employees or otherwise materially alter its employment relationship
with, officers, directors or consultants over the amount payable as of the date
hereof, or increase the compensation payable to any other employees, or adopt
or amend any employee benefit plan or arrangement (oral or written); or
(iii) loan or advance any money to any officer, director,
employee, stockholder or consultant of Xplor or to any other third party other
than travel advances in the ordinary course of business which do not exceed
$1,000 at any time outstanding to any one person;
(c) Except as expressly contemplated by this Agreement, Xplor
will not (i) purchase, acquire, issue, deliver, sell or authorize or propose
the issuance, delivery or sale of any stock appreciation rights or of any
shares of its capital stock of any class or any securities convertible into or
exchangeable for, or rights, warrants or options to acquire, any such shares or
convertible or exchangeable securities, (ii) make any
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changes in its capital structure or (iii) enter into any agreement or
understanding or take any preliminary action with respect to the matters
referred to in clause (i) or (ii) of this paragraph (c);
(d) Xplor will keep in full force and effect its existing
insurance policies and will not modify or reduce the coverage thereunder;
(e) Xplor will not (i) declare or pay any dividend or make any
other distribution to holders of its capital stock, (ii) split, combine or
reclassify any of its capital stock or propose or authorize the issuance of any
other securities in respect of or in lieu of or in substitution for any shares
of its capital stock, (iii) repurchase, redeem or otherwise acquire any shares
of its capital stock or (iv) take any preliminary action with respect thereto;
(f) Xplor will not incur any indebtedness (including without
limitation by way of guarantee or the issuance and sale of debt securities or
rights to acquire debt securities), or incur any account payable except in the
ordinary course of business consistent with past practice, or enter into or
modify any contract, agreement, commitment or arrangement with respect to the
foregoing;
(g) Xplor will not (i) sell, lease, release, forfeit or otherwise
dispose of, or create any mortgage liens, security interests or other
encumbrances on, any of its properties or assets having a book or market value
in excess of $10,000 in the aggregate or that are otherwise material,
individually or in the aggregate, to the business, results of operations or
financial condition of Xplor or (ii) enter into, or consent to the entering
into of, any agreement granting a preferential right to sell, lease, release,
forfeit or otherwise dispose of or create any mortgage liens, security
interests or other encumbrances on, any of such properties or assets or the
production therefrom;
(h) Xplor will not (i) enter into any new line of business; (ii)
change its investment, liability management and other material policies in any
material respect; (iii) incur or commit to any capital expenditures,
obligations or liabilities in connection therewith other than capital
expenditures, obligations or liabilities that (a) are listed on Schedule 5.01
of the Xplor Disclosure Schedule or (b) individually do not exceed $10,000 and
in the aggregate do not exceed $10,000; (iv) acquire or agree to acquire by
merging or consolidating with, or acquire or agree to acquire by purchasing a
substantial portion of the assets of or equity interest in, or in any other
manner, any business or Person; (v) otherwise, except as to the acquisition of
materials and supplies necessary for the conduct of its business in the
ordinary course and consistent with past practice, acquire or agree to acquire
any assets for a total consideration in the aggregate in excess of $10,000; or
(vi) make any investment in any Person or (vii) authorize, recommend, propose
or announce an intention to adopt a plan of complete, or partial liquidation or
dissolution of Xplor;
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(i) Xplor will not (i) change its method of accounting in effect
at December 31, 1996 or (ii) change its fiscal year;
(j) Xplor will not settle or compromise, or agree to settle or
compromise, any suit or other litigation matter or any matter in an arbitration
proceeding for any material amount; and
(k) Xplor will not agree or commit to do any of the foregoing.
Section 5.02. Access to Records. At all reasonable times from
and after the date hereof until the Closing, Xplor shall afford Venus and the
Lomak Entities and their accountants, counsel, financial advisors and other
representatives full and complete access to the properties, employees and
officers of Xplor and to all books, accounts, financial and other records and
contracts of every kind of Xplor; provided, however, that no investigation
pursuant to this Section 5.02 shall affect any representation or warranty given
by Xplor hereunder.
Section 5.03. No Other Bids. From the date of this Agreement
until the Closing, Xplor shall not, nor shall it authorize or permit any
officer, director, partner or employee of, or any investment banker, attorney,
accountant or other representative or agent retained by Xplor to, ( i)
entertain, encourage, solicit or initiate any inquiries or the making of any
proposal that may reasonably be expected to lead to any "Takeover Proposal" or
(ii) except to the extent its Board of Directors determines, upon advice of
outside counsel, that such Board of Directors is otherwise required by its
fiduciary duties, participate in any discussions or negotiations, or provide
third parties with any information, relating to any such inquiry or proposal.
Xplor shall immediately advise Venus and the Lomak Entities of any such
inquiries or proposals. As used in this Section 5.03, "Takeover Proposal"
shall mean any proposal for a merger or other Business Combination involving
Xplor or for the acquisition of a substantial equity interest in Xplor or a
substantial portion of the assets of Xplor, in each case other than the
transactions contemplated hereby, and "substantial equity interest" shall mean
any equity ownership representing beneficial ownership of 10% percent or more
of the outstanding Xplor Shares.
Section 5.04. Maintenance of Business. From the date of this
Agreement until the Closing, Xplor will use its commercially reasonable efforts
to carry on its business, keep available the services of its officers and
employees and preserve its relationships with those of its suppliers,
licensors, licensees, customers and others having business relationships with
it that are material to its business in substantially the same manner as they
have prior to the date hereof. If Xplor becomes aware of a material
deterioration or facts which are likely to result in a material deterioration
in the relationship with any Person having a material business relationships
with it, Xplor will
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promptly bring such information to the attention of Venus and the Lomak
Entities in writing.
Section 5.05. Compliance with Obligations. Prior to the
Closing, Xplor will use its commercially reasonable efforts to comply with (a)
all applicable Federal, state and local laws, rules and regulations, (b) all
agreements and obligations, including its Certificate of Incorporation and
Bylaws, by which it, its properties or its assets may be bound, and (c) all
Leases, decrees, orders, writs, injunctions, judgments, statutes, rules and
regulations applicable to it, its properties or its assets.
Section 5.06. SEC and NASDAQ Filings; Venus Stockholder
Approval. Xplor shall timely file all reports required to be filed by it with
the SEC and NASDAQ between the date hereof and the Closing and shall deliver to
Venus and the Lomak Entities copies of all such reports promptly after the same
are filed. Xplor shall also cooperate with Venus in connection with the
solicitation of Venus Stockholder Approval of the Venus Exchange and use
commercially reasonable efforts to provide the information and documentation
necessary to ensure compliance with the applicable requirements of federal,
state and foreign securities laws as contemplated by Section 6.06 hereof. On
the Closing Date or as soon thereafter as practicable, Xplor shall also file
with the SEC and send to its stockholders the notice required by SEC Rule 14f-1
occasioned by the reconstitution of the Xplor Board of Directors provided for
by Section 8.01 hereof.
ARTICLE VI
COVENANTS OF VENUS
Except as disclosed in Schedule 6.00 respecting the repatriation
of Venus from the United Kingdom to Texas, Venus agrees that:
Section 6.01. Conduct of Venus. From the date hereof until the
Closing and except as contemplated herein, Venus shall in all material respects
conduct its business in the ordinary course. Without limiting the generality of
the foregoing, from the date hereof until the Closing, except as expressly
contemplated by this Agreement, without the written consent of Xplor and the
Lomak Entities:
(a) Venus will not adopt or propose any change in its Certificate
of Incorporation or Bylaws, or enter into any agreement or incur any
obligation, the terms of which would be violated by the consummation of the
transactions contemplated by this Agreement;
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(b) Venus will not:
(i) enter into any contract, agreement, plan or
arrangement with any director, officer or employee of Venus, including,
without limitation, any written contract, agreement, plan or arrangement which
provides for the making of any payments, the acceleration of vesting of any
benefit or right or any other entitlement contingent upon (A) the consummation
of the transactions contemplated hereby or (B) the termination of employment
after the consummation of the transactions contemplated hereby;
(ii) enter into or amend any employment agreements (oral
or written) to increase the compensation payable or to become payable by it to
any of its employees or otherwise materially alter its employment relationship
with, officers, directors or consultants over the amount payable as of the date
hereof, or increase the compensation payable to any other employees, or adopt
or amend any employee benefit plan or arrangement (oral or written); or
(iii) loan or advance any money to any officer, director,
employee, stockholder or consultant of Venus or to any other third party other
than travel advances in the ordinary course of business which do not exceed
$1,000 at any time outstanding to any one person;
(c) Except as expressly contemplated by this Agreement, Venus
will not (i) purchase, acquire, issue, deliver, sell or authorize or propose
the issuance, delivery or sale of any stock appreciation rights or of any
shares of its capital stock of any class or any securities convertible into or
exchangeable for, or rights, warrants or options to acquire, any such shares or
convertible or exchangeable securities, (ii) make any changes in its capital
structure or (iii) enter into any agreement or understanding or take any
preliminary action with respect to the matters referred to in clause (i) or
(ii) of this paragraph (c);
(d) Venus will keep in full force and effect its existing
insurance policies and will not modify or reduce the coverage thereunder;
(e) Venus will not (i) declare or pay any dividend or make any
other distribution to holders of its capital stock, (ii) split, combine or
reclassify any of its capital stock or propose or authorize the issuance of any
other securities in respect of or in lieu of or in substitution for any shares
of its capital stock, (iii) repurchase, redeem or otherwise acquire any shares
of its capital stock or (iv) take any preliminary action with respect thereto;
(f) Venus will not incur any indebtedness (including without
limitation by way of guarantee or the issuance and sale of debt securities or
rights to acquire debt
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securities), or incur any account payable except in the ordinary course of
business consistent with past practice, or enter into or modify any contract,
agreement, commitment or arrangement with respect to the foregoing;
(g) Venus will not (i) sell, lease, release, forfeit or otherwise
dispose of, or create any mortgage liens, security interests or other
encumbrances on, any of its properties or assets having a book or market value
in excess of $10,000 in the aggregate or that are otherwise material,
individually or in the aggregate, to the business, results of operations or
financial condition of Venus or (ii) enter into, or consent to the entering
into of, any agreement granting a preferential right to sell, lease, release,
forfeit or otherwise dispose of or create any mortgage liens, security
interests or other encumbrances on, any of such properties or assets or the
production therefrom;
(h) Venus will not (i) enter into any new line of business; (ii)
change its investment, liability management and other material policies in any
material respect; (iii) incur or commit to any capital expenditures,
obligations or liabilities in connection therewith other than capital
expenditures, obligations or liabilities that (a) are listed on Schedule
6.01(h) of the Venus Disclosure Schedule or (b) individually do not exceed
$50,000 and in the aggregate do not exceed $50,000; (iv) acquire or agree to
acquire by merging or consolidating with, or acquire or agree to acquire by
purchasing a substantial portion of the assets of or equity interest in, or in
any other manner, any business or Person; (v) otherwise, except as to the
acquisition of materials and supplies necessary for the conduct of its business
in the ordinary course and consistent with past practice, acquire or agree to
acquire any assets for a total consideration in the aggregate in excess of
$10,000; or (vi) make any investment in any Person or (vii) authorize,
recommend, propose or announce an intention to adopt a plan of complete, or
partial liquidation or dissolution of Venus;
(i) Except as set forth on Schedule 6.01(i), Venus will not (i)
change its method of accounting in effect at December 31, 1996 or (ii) change
its fiscal year;
(j) Venus will not settle or compromise, or agree to settle or
compromise, any suit or other litigation matter or any matter in an arbitration
proceeding for any material amount; and
(k) Venus will not agree or commit to do any of the foregoing.
Section 6.02. Access to Records. At all reasonable times from
and after the date hereof until the Closing, Venus shall afford Xplor and the
Lomak Entities and their accountants, counsel, financial advisors and other
representatives full and complete access to the properties, employees and
officers of Venus and to all books, accounts, financial and other records and
contracts of every kind of Venus; provided,
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however, that no investigation pursuant to this Section 6.02 shall affect any
representation or warranty given by Venus hereunder.
Section 6.03. No Other Bids. From the date of this Agreement
until the Closing, Venus shall not, nor shall it authorize or permit any
officer, director, partner or employee of, or any investment banker, attorney,
accountant or other representative or agent retained by Venus to, ( i)
entertain, encourage, solicit or initiate any inquiries or the making of any
proposal that may reasonably be expected to lead to any "Takeover Proposal" or
(ii) except to the extent its Board of Directors determines, upon advice of
outside counsel, that such Board of Directors is otherwise required by its
fiduciary duties, participate in any discussions or negotiations, or provide
third parties with any information, relating to any such inquiry or proposal.
Venus shall immediately advise Xplor and the Lomak Entities of any such
inquiries or proposals. As used in this Section 6.03, "Takeover Proposal"
shall mean any proposal for a merger or other Business Combination involving
Venus or for the acquisition of a substantial equity interest in Venus or a
substantial portion of the assets of Venus, in each case other than the
transactions contemplated hereby, and "substantial equity interest" shall mean
any equity ownership representing beneficial ownership of 10% percent or more
of the outstanding Venus Shares.
Section 6.04. Maintenance of Business. From the date of this
Agreement until the Closing, Venus will use its commercially reasonable efforts
to carry on its business, keep available the services of its officers and
employees and preserve its relationships with those of its suppliers,
licensors, licensees, customers and others having business relationships with
it that are material to its business in substantially the same manner as they
have prior to the date hereof. If Venus becomes aware of a material
deterioration or facts which are likely to result in a material deterioration
in the relationship with any Person having a material business relationships
with it, Venus will promptly bring such information to the attention of Xplor
and the Lomak Entities in writing.
Section 6.05. Compliance with Obligations. Prior to the
Closing, Venus will use its commercially reasonable efforts to comply with (a)
all applicable Federal, state and local laws, rules and regulations, (b) all
agreements and obligations, including its Certificate of Incorporation and
Bylaws, by which it, its properties or its assets may be bound, and (c) all
Leases, decrees, orders, writs, injunctions, judgments, statutes, rules and
regulations applicable to it, its properties or its assets.
Section 6.06. Venus Stockholder Approval. Venus shall promptly
solicit Venus Stockholder Approval of the Venus Exchange in compliance with the
applicable requirements of applicable federal, state and foreign securities
laws.
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ARTICLE VII
COVENANTS OF THE LOMAK ENTITIES
The Lomak Entities agree that:
Section 7.01. Conduct of the Lomak Entities. From the date
hereof until the Closing and except as contemplated herein, the Lomak Entities
shall in all material respects conduct their businesses relating to the Lomak
Properties in the ordinary course. Without limiting the generality of the
foregoing, from the date hereof until the Closing, except as expressly
contemplated by this Agreement, without the written consent of Xplor and Venus:
(a) the Lomak Entities will not adopt or propose any change in
the Lomak Governing Documents, or enter into any agreement or incur any
obligation, the terms of which would be violated by the consummation of the
transactions contemplated by this Agreement;
(b) the Lomak Entities will not enter into any contract,
agreement, plan or arrangement which would interfere with or limit Xplor's
title to the Lomak Properties or the ability of Xplor to obtain the full
economic benefit of its ownership of the Lomak Properties as contemplated
hereby;
(c) the Lomak Entities will keep in full force and effect its
existing insurance policies and will not modify or reduce the coverage
thereunder;
(d) the Lomak Entities will not (i) sell, lease, release, forfeit
or otherwise dispose of, or create any mortgage liens, security interests or
other encumbrances on, any of the Lomak Properties having a book or market
value in excess of $10,000 in the aggregate or that are otherwise material,
individually or in the aggregate, to the results of operations or financial
condition of the Lomak Properties or (ii) enter into, or consent to the
entering into of, any agreement granting a preferential right to sell, lease,
release, forfeit or otherwise dispose of or create any mortgage liens, security
interests or other encumbrances on, any of the Lomak Properties or the
production therefrom;
(e) the Lomak Entities will not, with respect to the Lomak
Properties to the extent that they have any control as a non-operator of the
Lomak Properties, (i) incur or commit to any capital expenditures, obligations
or liabilities in connection therewith other than capital expenditures,
obligations or liabilities that (a) are listed on Schedule 7.01 of the Lomak
Disclosure Schedule or (b) individually do not exceed $10,000 and in the
aggregate do not exceed $10,000; (ii) acquire or agree to acquire by merging or
consolidating with, or acquire or agree to acquire by purchasing a substantial
portion of the assets of or equity interest in, or in any other manner, any
business or Person; (iii) otherwise, except as to the acquisition of materials
and supplies necessary for the
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operation of the Lomak Properties in the ordinary course and consistent with
past practice, acquire or agree to acquire any assets for a total consideration
in the aggregate in excess of $10,000; or (iv) authorize, recommend, propose or
announce an intention to adopt a plan of complete, or partial liquidation or
dissolution of the Lomak Entities;
(f) the Lomak Entities will not , with respect to the Lomak
Properties, settle or compromise, or agree to settle or compromise, any suit or
other litigation matter or matter in an arbitration proceeding for any material
amount; and
(g) the Lomak Entities will not agree or commit to do any of the
foregoing.
Section 7.02. Access to Records. At all reasonable times from
and after the date hereof until the Closing, the Lomak Entities shall afford
Xplor and Venus and their accountants, counsel, financial advisors and other
representatives full and complete access to the properties, employees and
officers of the Lomak Entities and to all books, accounts, financial and other
records and contracts of every kind of the Lomak Entities; provided, however,
that no investigation pursuant to this Section 7.02 shall affect any
representation or warranty given by the Lomak Entities hereunder.
Section 7.03. No Other Bids. From the date of this Agreement
until the Closing, the Lomak Entities shall not, nor shall they authorize or
permit any partner, manager or employee of, or any investment banker, attorney,
accountant or other representative or agent retained by the Lomak Entities to,
entertain, encourage, solicit or initiate any inquiries or the making of any
proposal that may reasonably be expected to lead to any disposition of all or
any part of the Lomak Properties.
Section 7.04. Maintenance of the Lomak Properties. If, after
the date hereof, the Lomak Entities become aware of a material deterioration or
facts which are likely to result in a material deterioration in the
relationship with any Person having a material business relationships with the
Lomak Properties, the Lomak Entities will promptly bring such information to
the attention of Xplor and Venus in writing.
Section 7.05. Compliance with Obligations. Prior to the
Closing, the Lomak Entities will use commercially reasonable efforts to comply
with (a) all applicable Federal, state and local laws, rules and regulations,
(b) all agreements and obligations, including the Lomak Governing Documents, by
which they or the Lomak Properties may be bound, and (c) all Leases, decrees,
orders, writs, injunctions, judgments, statutes, rules and regulations
applicable to them and the Lomak Properties.
Section 7.06. Venus Stockholder Approval. The Lomak Entities
shall also cooperate with Venus in connection with the solicitation of Venus
Stockholder Approval of the Venus Exchange and use commercially reasonable
efforts to provide the
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information and documentation necessary to ensure compliance with the
applicable requirements of federal, state and foreign securities laws as
contemplated by Section 6.06 hereof.
ARTICLE VIII
COVENANTS OF ALL PARTIES
Each party to this Agreement agrees that:
Section 8.01. Board of Directors, Officers of Xplor; Employees
of Venus. As of the Closing, Xplor's Board of Directors will be reconstituted
to consist of seven members to assume office as soon as permitted by SEC Rule
14f-1. Two of the proposed directors will be designated by the persons
currently members of the Board of Directors of Xplor, four of the proposed
directors will be designated by Board of Directors of Venus and one of the
proposed directors will be designated by the Board of Directors of Lomak
Petroleum Inc. Those persons are named in Exhibit 8.01. As of the Closing,
the officers of Xplor shall be as set forth in Exhibit 8.01 hereof. After the
Closing, Xplor agrees to employ, to the extent available, all of the employees
of Venus on the same terms and conditions as they are currently employed, and
Venus shall use its commercially reasonable best efforts to cause its employees
to accept such employment.
Section 8.02. Advice of Changes. Each party will promptly
advise the other such parties in writing of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with the
Venus Exchange or the Lomak Exchange;
(b) any notice or other communication from any Governmental
Entity or Regulatory Authority in connection with the Venus Exchange or the
Lomak Exchange;
(c) any actions, suits, claims, investigation or other judicial
proceedings commenced or threatened which, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to this
Agreement or which relate to the consummation of the Venus Exchange or the
Lomak Exchange;
(d) any event known to it occurring subsequent to the date of
this Agreement that would render any of its representations or warranties
contained in this Agreement, if made on or as of the date of such event or the
Closing Date, untrue, inaccurate or misleading in any material respect (other
than an event so affecting a representation or warranty which is expressly
limited to a state of facts existing at a time prior to the occurrence of such
event); and
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(e) any Material Adverse Change with respect to such party.
Each party will promptly provide each other copies of all filings made by such
party with any Governmental Entity or Regulatory Authority in connection with
this Agreement and the transactions contemplated hereby.
From time to time prior to the Closing, each of Xplor, Venus and the Lomak
Entities will promptly supplement or amend its respective Disclosure Schedule
and the Exhibits hereto with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required
to be set forth or described in such Schedule and Exhibits hereto. No
supplement or amendment of a Schedule or Exhibit made pursuant to this Section
shall be deemed to cure any breach of, affect or otherwise diminish any
representation or warranty made in this Agreement unless the other parties
hereto specifically agree thereto in writing.
Section 8.03. Regulatory Approvals. Prior to the Closing, each
party shall execute and file, or join in the execution and filing of, any
application or other document that may be necessary in order to obtain the
authorization, approval or consent of any Governmental Entity or Regulatory
Authority which may be reasonably required, or that one of the other parties
may reasonably request, in connection with the consummation of the Venus
Exchange or the Lomak Exchange. Each party shall use its commercially
reasonable efforts to obtain all such authorizations, approvals and consents.
Section 8.04. Actions Contrary to Stated Intent. Each party will
use its commercially reasonable efforts to cause the representations and
warranties contained in this Agreement with respect to such party to continue
to be true and correct and to obtain satisfaction of the conditions to Closing
relevant to such party. No party shall take any action that would, or might
reasonably be expected to, result in any of its representations and warranties
set forth herein being or becoming untrue in any material respect, or in any of
the conditions to the Venus Exchange or the Lomak Exchange set forth in Article
IX not being satisfied.
Section 8.05. Certain Filings. The parties shall cooperate with
one another:
(a) in determining whether any action by or in respect of, or
filing with, any Governmental Entity or Regulatory Authority is required, or
any actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement; and
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(b) in seeking any such actions, consents, approvals or waivers
or making any such filings, furnishing information required in connection
therewith and seeking timely to obtain any such actions, consents, approvals or
waivers.
Section 8.06. Public Announcements. Xplor, Venus and the Lomak
Entities will consult with one another before issuing any press release or
making any public statement with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by applicable law as
evidenced by a written opinion from counsel, will not issue any such press
release or make any such public statement prior to such consultation and
unanimous agreement on the terms of such press release or other public
statement.
Section 8.07. Confidentiality. Each party hereto hereby agrees
to retain in strict confidence all Confidential Information received from any
other party hereto pursuant to, or in connection with, this Agreement. For
purposes of this Agreement, "Confidential Information" means all information
and data of any kind belonging to any party which by its nature is confidential
or proprietary and all other information and data which is so identified in
writing by any party. No party shall disclose any Confidential Information to
any person, firm or corporation or use any such Confidential Information for
any purpose not contemplated by this Agreement. Notwithstanding the foregoing,
each party may disclose Confidential Information to its directors, officers,
employees, attorneys and consultants, to the extent required for the
performance of its obligations under this Agreement, and to the extent required
by law, regulation or judicial order; provided that, such disclosure shall be
conditioned on and subject to the restrictions on disclosure set forth in this
Section 8.07.
The obligations of nondisclosure and nonuse pursuant to this
Section 8.07 shall not apply with respect to any Confidential Information which
any party can establish by written records:
(a) was known to such party prior to the disclosure thereof by
any other party or was subsequently and independently developed without
reference to the Confidential Information by such party; or
(b) was in the public domain prior to the disclosure thereof to
such party or subsequently entered the public domain by some means other than
as a result of a breach of this Agreement by such party; or
(c) was subsequently disclosed to such party by a third party
having a lawful right to make the disclosure.
The undertakings of each party pursuant to this Section 8.07 shall survive the
expiration or termination of this Agreement.
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Section 8.08. Issuance of Xplor Shares After Closing. Xplor
agrees that for a period of 30 days after the Closing hereunder it will not
issue additional shares of Xplor Stock (unless legally obligated to do so) if
in the reasonable opinion of tax advisers to the parties such issuance would
jeopardize the tax treatment contemplated by Section 1.05 hereof. This
covenant shall survive the Closing.
ARTICLE IX
CONDITIONS TO CLOSING
Section 9.01. Conditions to All Parties' Obligations. The
obligations of all the parties to this Agreement to effect the Venus Exchange
and Lomak Exchange shall be subject to the fulfillment of the following
conditions:
(a) Venus Stockholder Approval shall have been obtained by Venus,
and the Board of Directors and officers of Xplor shall have been reconstituted
as contemplated by Section 8.01 hereof, effective upon Closing, and all other
officers and directors of Xplor shall have resigned in writing.
(b) No temporary restraining order, preliminary or permanent
injunction or other order or restraint issued by any court of competent
jurisdiction, no order, decree, restraint or pronouncement by any Governmental
Entity or Regulatory Authority, and no other legal restraint or prohibition
which would prevent or have the effect of preventing the consummation of the
Venus Exchange or the Lomak Exchange shall have been issued or adopted or be in
effect;
(c) All material permits, approvals, filings and consents
required or advisable to be obtained or made, and all waiting periods required
or contemplated to expire, prior to the consummation of the Venus Exchange and
the Lomak Exchange under applicable federal laws of the United States or
applicable laws of any state or foreign country having jurisdiction over the
Venus Exchange, the Lomak Exchange and the other transactions contemplated
herein shall have been obtained, made or expired, as the case may be (all such
permits, approvals, filings and consents and the lapse of all such waiting
periods being referred to as the "Requisite Regulatory Approvals"), and all
such Requisite Regulatory Approvals shall be in full force and effect;
(d) The shares of Xplor Stock to be issued hereunder shall have
been included for quotation on NASDAQ SmallCap Market;
(e) A Stockholders Agreement substantially in the form set form
as Exhibit 9.01(e) shall have been entered into by the Ames Group, the Blair
Group and Lomak Petroleum Inc. (as such terms are defined in such Agreement);
and
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(f) The Venus Exchange and the Lomak Exchange shall be
consummated simultaneously.
Section 9.02. Conditions to the Obligations of Xplor to Effect
the Venus Exchange and Lomak Exchange. The obligations of Xplor under this
Agreement to effect the Venus Exchange and Lomak Exchange are subject to the
fulfillment at or prior to the Closing of the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Venus and of the Lomak Entities respectively
set forth in Articles III and IV hereof shall be true and correct in all
material respects as of the date when made and at and as of the Closing except
for such changes as are permitted by this Agreement (except to the extent a
representation or warranty speaks only as of an earlier date).
(b) Covenants and Agreements. Venus and the Lomak Entities shall
have duly performed and complied with, in all material respects their
respective covenants, agreements and conditions required by this Agreement to
be performed by or complied with by them prior to or at the Closing.
(c) Consents. All consents required for the consummation of the
Venus Exchange and the Lomak Exchange under any agreement, contract or Lease
described in any Exhibit or Schedule hereto or referred to herein, or for the
continued enjoyment by Xplor of the benefits of any such agreement, contract or
Lease after the Venus Exchange and the Lomak Exchange, shall have been
obtained.
(d) Opinion of Counsel. Xplor shall have received the opinion of
Jones & Faye, P.L.L.C., counsel to Venus, and the opinion of Rubin Baum Levin
Constant & Friedman, counsel to the Lomak Entities, in form and content
reasonably satisfactory to Xplor, substantially in the form of Exhibit
9.02(d)(i) and Exhibit 9.02(d)(ii) hereof, respectively.
(e) Certificates of Venus and the Lomak Entities. Xplor shall
have received certificates of Venus and the Lomak Entities reasonably
satisfactory in form and substance to Xplor, executed on behalf of Venus and
the Lomak Entities by an executive officer, partner or manager, as to
compliance with the matters set forth in paragraphs (a), (b), (c) and (h) of
this Section 9.02.
(f) No Adverse Decision. There shall not be any material action
taken or threatened, or any statute, rule, regulation or order enacted,
entered, overtly threatened, or deemed applicable to the transactions
contemplated hereby, by any Governmental Entity or Regulatory Authority or
court that, whether in connection with the grant of a Requisite Regulatory
Approval, any agreement proposed by any
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Governmental Entity or Regulatory Authority, or otherwise, which (i) requires
or could reasonably be expected to require any divestiture by Venus or the
Lomak Entities of a portion of its assets or business that Xplor in its
reasonable judgment believes will have a Material Adverse Effect on Xplor (ii)
imposes any condition upon either of such entities or their assets that in
Xplor's reasonable judgment (x) would be materially burdensome to Xplor or (y)
would materially increase the costs incurred or that will be incurred by Xplor
as a result of consummating the Venus Exchange and the Lomak Exchange and the
other transactions contemplated hereby. There shall be no action, suit,
investigation or proceeding pending overtly threatened by or before any
Governmental Entity which (i) seeks to restrain, enjoin, prevent the
consummation of or otherwise affect the transactions contemplated by this
Agreement or (ii) questions the validity or legality of any such transactions
or seeks to recover damages or to obtain other relief in connection with any
such transactions.
(g) Proceedings; Receipt of Documents. All corporate and other
proceedings taken or required to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in form and substance to Xplor and Xplor's counsel, and Xplor and
Xplor's counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as Xplor or its
counsel may reasonably request. Xplor shall also have received such other
agreements, instruments, approvals, opinions and other documents as it may
reasonably request.
(h) Adverse Change. Neither Venus nor the Lomak Properties shall
have suffered any Material Adverse Change except as set forth in the Venus
Disclosure Schedule or the Lomak Disclosure Schedule, as the case may be,
supplied as of the date of this Agreement (whether or not such change is
described in any supplement to any such Disclosure Schedule).
(i) Certified Venus Financial Statements. Xplor shall have
received copies of the audited balance sheet of Venus as of December 31, 1996
and the related statements of operations, and statements of retained earnings
and cash flows for the fiscal year then ended with notes to such financial
statements together with an independent accountants' report of KPMG Peat
Marwick LLP thereon which are substantially the same in all material respects
as the Venus Financial Statements.
(j) Stratum Documentation. The documents setting forth the
arrangements anticipated by the letter agreement dated April 25, 1997 between
Venus and Stratum, L.P. shall have been executed in form and substance
reasonably satisfactory to Xplor.
Section 9.03. Conditions to the Obligations of Venus to Effect
the Venus Exchange. The obligations of Venus under this Agreement to effect
the Venus
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Exchange are subject to the fulfillment at or prior to the Closing of the
following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Xplor and of the Lomak Entities respectively
set forth in Articles II and IV hereof shall be true and correct in all
material respects as of the date when made and at and as of the Closing, except
for such changes as are permitted by this Agreement (except to the extent a
representation or warranty speaks only as of an earlier date).
(b) Covenants and Agreements. Xplor and the Lomak Entities shall
have duly performed and complied with in all material respects their respective
covenants, agreements and conditions required by this Agreement to be performed
by or complied with by them prior to or at the Closing.
(c) Consents. All consents required for the consummation of the
Venus Exchange and the Lomak Exchange under any agreement, contract or Lease
described in any Exhibit or Schedule hereto or referred to herein, or for the
continued enjoyment by Xplor of the benefits of any such agreement, contract or
Lease after the Venus Exchange and the Lomak Exchange, shall have been
obtained.
(d) Opinion of Counsel. Venus shall have received the opinion of
Neville Shaver Hubbard & McLean, counsel to Xplor and the opinion of Rubin Baum
Levin Constant & Friedman, counsel to the Lomak Entities in form and content
reasonably satisfactory to Venus, substantially in the form of Exhibit
9.03(d)(i) and Exhibit 9.02(d)(ii) hereof, respectively.
(e) Certificates of Xplor and Lomak. Venus shall have received
certificates of Xplor and the Lomak Entities reasonably satisfactory in form
and substance to Venus, executed on behalf of each Xplor and The Lomak Entities
by an executive officer, partner or manager, as to compliance with the matters
set forth in paragraphs (a), (b), (c) and (h) of this Section 9.03.
(f) No Adverse Decision. There shall not be any material action
taken or overtly threatened, or any statute, rule, regulation or order enacted,
entered, threatened, or deemed applicable to the transactions contemplated
hereby, by any Governmental Entity or Regulatory Authority or court that,
whether in connection with the grant of a Requisite Regulatory Approval, any
agreement proposed by any Governmental Entity or Regulatory Authority, or
otherwise, which (i) requires or could reasonably be expected to require any
divestiture by Xplor or the Lomak Entities of a portion of its assets or
business that Venus in its reasonable judgment believes will have a Material
Adverse Effect on Xplor or (ii) imposes any condition upon either of such
entities or their assets that in Venus's reasonable judgment (x) would be
materially
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burdensome to Venus or Xplor or (y) would materially increase the costs
incurred or that will be incurred by Venus or Xplor as a result of consummating
the Venus Exchange and the Lomak Exchange and the other transactions
contemplated hereby. There shall be no action, suit, investigation or
proceeding pending or overtly threatened by or before any Governmental Entity
which (i) seeks to restrain, enjoin, prevent the consummation of or otherwise
affect the transactions contemplated by this Agreement or (ii) questions the
validity or legality of any such transactions or seeks to recover damages or to
obtain other relief in connection with any such transactions.
(g) Proceedings; Receipt of Documents. All corporate and other
proceedings taken or required to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in form and substance to Venus and Venus' counsel, and Venus and
Venus' counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as Venus or its
counsel may reasonably request. Venus shall also have received such other
agreements, instruments, approvals, opinions and other documents as it may
reasonably request.
(h) Adverse Change. Neither Xplor nor the Lomak Properties shall
have suffered any Material Adverse Change except as set forth in the Xplor
Disclosure Schedule or the Lomak Disclosure Schedule, as the case may be,
supplied as of the date of this Agreement (whether or not such change is
described in any supplement to such Disclosure Schedule).
(i) Percentage Interest in Xplor. Upon Closing, Venus and the
Lomak Entities shall own in the aggregate at least 80% of the outstanding
shares of Xplor Stock.
(j) Xplor Cash. At Closing, Xplor shall have at least $2.6
million in cash and cash equivalents, at least $2.4 million in net working
capital (current assets minus current liabilities) and no long-term debt.
Section 9.04. Conditions to the Obligations of the Lomak
Entities to Effect the Lomak Exchange. The obligations of the Lomak Entities
under this Agreement to effect the Lomak Exchange are subject to the
fulfillment at or prior to the Closing of the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Xplor and Venus respectively set forth in
Articles II and III hereof shall be true and correct in all material respects
as of the date when made and at and as of the Closing, except for such changes
as are permitted by this Agreement (except to the extent a representation or
warranty speaks only as of an earlier date).
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(b) Covenants and Agreements. Xplor and Venus shall have duly
performed and complied, in all material respects, with their respective
covenants, agreements and conditions required by this Agreement to be performed
by or complied with by them prior to or at the Closing.
(c) Consents. All consents required for the consummation of the
Venus Exchange and the Lomak Exchange under any agreement, contract or Lease
described in any Exhibit or Schedule hereto or referred to herein, or for the
continued enjoyment by Xplor of the benefits of any such agreement, contract or
Lease after the Venus Exchange and the Lomak Exchange, shall have been
obtained.
(d) Opinion of Counsel. The Lomak Entities shall have received
the opinion of Neville Shaver Hubbard & McLean, counsel to Xplor and the
opinion of Jones & Faye, P.L.L.C., counsel to Venus in form and content
reasonably satisfactory to The Lomak Entities, substantially in the form of
Exhibit 9.03(d)(i) and Exhibit 9.02(d)(ii) hereof, respectively.
(e) Certificates of Xplor and Venus. The Lomak Entities shall
have received certificates of Xplor and Venus reasonably satisfactory in form
and substance to the Lomak Entities, executed on behalf of Xplor and Venus by
an executive officer, as to compliance with the matters set forth in paragraphs
(a), (b), (c) and (h) of this Section 9.04.
(f) No Adverse Decision. There shall not be any material action
taken or threatened, or any statute, rule, regulation or order enacted,
entered, overtly threatened, or deemed applicable to the transactions
contemplated hereby, by any Governmental Entity or Regulatory Authority or
court that, whether in connection with the grant of a Requisite Regulatory
Approval, any agreement proposed by any Governmental Entity or Regulatory
Authority, or otherwise, which (i) requires or could reasonably be expected to
require any divestiture by Xplor or Venus of a portion of its business that the
Lomak Entities in their reasonable judgment believes will have a Material
Adverse Effect on Xplor (ii) imposes any condition upon either of such entities
or their assets that in the Lomak Entities' reasonable judgment (x) would be
materially burdensome to the Xplor or the Lomak Entities or (y) would
materially increase the costs incurred or that will be incurred by Xplor or the
Lomak Entities as a result of consummating the Venus Exchange and the Lomak
Exchange and the other transactions contemplated hereby. There shall be no
action, suit, investigation or proceeding pending or overtly threatened by or
before any Governmental Entity which (i) seeks to restrain, enjoin, prevent the
consummation of or otherwise affect the transactions contemplated by this
Agreement or (ii) questions the validity or legality of any such transactions
or seeks to recover damages or to obtain other relief in connection with any
such transactions.
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(g) Proceedings; Receipt of Documents. All corporate and other
proceedings taken or required to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Lomak Entities and the Lomak
Entities' counsel, and the Lomak Entities and their counsel shall have received
all such information and such counterpart originals or certified or other
copies of such documents as they or their counsel may reasonably request. The
Lomak Entities shall also have received such other agreements, instruments,
approvals, opinions and other documents as it may reasonably request.
(h) Adverse Change. Neither Xplor nor Venus shall have suffered
any Material Adverse Change except as set forth in the Xplor Disclosure
Schedule or the Venus Disclosure Schedule, as the case may be, supplied as of
the date of this Agreement (whether or not such change is described in any
supplement to such Disclosure Schedule).
(i) Share Purchase and Sale Agreement. A Share Purchase and Sale
Agreement substantially in the form set form as Exhibit 9.03(i) shall have been
entered into by the Lomak Petroleum Inc. and Venturetek, L.P.
(j) Percentage Interest in Xplor. Upon Closing, Venus and the
Lomak Entities shall own in the aggregate at least 80% of the outstanding
shares of Xplor Stock.
(k) Certified Venus Financial Statements. The Lomak Entities
shall have received copies of the audited balance sheet of Venus as of December
31, 1996 and the related statements of operations and statements of retained
earnings and cash flows for the fiscal year then ended with notes to such
financial statements together with an independent accountants' report of KPMG
Peat Marwick LLP thereon which are substantially the same in all material
respects as the Venus Financial Statements.
(l) Stratum Documentation. The documents setting forth the
arrangements anticipated by the letter agreement dated April 25, 1997 between
Venus and Stratum, L.P. shall have been executed in form and substance
reasonably satisfactory to the Lomak Entities.
ARTICLE IX-A
ADJUSTMENTS AFTER CLOSING FOR LOMAK PROPERTIES
9A.01. Adjustment for Interim Operations. Within ninety (90)
days after Closing a final settlement statement will be prepared by the Lomak
Entities and submitted to Xplor showing income and expenses for the Lomak
Properties during the
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period between January 1, 1997 ("Operations Effective Date") and the Closing.
Based upon such statement (subject to audit and verification thereof by Xplor),
(a) The appropriate Lomak Entities shall be credited with:
(i) The value as of the Operations Effective Date of
all hydrocarbons produced, saved and marketed from the Lomak Properties
(including all merchantable oil above the pipeline connections in tanks
at the Operations Effective Date) prior to the Operations Effective Date
for which payment has not been made to the Lomak Entities;
(ii) The amount of all costs and expenses, including,
without limitation, royalties, rentals and other charges, ad valorem and
other taxes based upon or measured by the production of hydrocarbons or
the receipt of proceeds therefrom (not including income taxes paid by
the Lomak Entities) and expenses of operation of the Lomak Properties
(including prepaid expenses, if any) which were paid by the Lomak
Entities prior to the Closing and which are, in accordance with
generally accepted accounting principles, attributable to the period
after the Operations Effective Date;
(iii) The value of any other credits attributable to the
Lomak Properties for the period prior to the Operations Effective Date,
such as prepaid insurance or a credit based upon a working interest
audit, for which payment has not been made to the Lomak Entities prior
to the Closing; and
(iv) For purposes hereof, "value as of the Operations
Effective Date" shall mean the contract price (in the case of
hydrocarbons which were sold under contract) or the adjusted spot price
(in the case of hydrocarbons not required to be sold under contract) as
of the Operations Effective Date, less royalties and overriding
royalties and severance taxes (whether or not withheld by the purchaser
of such hydrocarbons).
(b) Xplor shall be credited with:
(i) The proceeds of all hydrocarbons produced, saved
and marketed from the Lomak Properties (not including merchantable oil
above the pipeline connections in tanks at the Operations Effective
Date) after the Operations Effective Date for which payment has been
made to the Lomak Entities;
(ii) The amount of all costs and expenses, including,
without limitation, royalties, rentals and other charges, ad valorem and
other taxes based upon or measured by the production of hydrocarbons or
the receipt of proceeds
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therefrom (not including income taxes paid by the Lomak Entities) and
expenses of operation of the Lomak Properties (including prepaid
expenses, if any) which were paid by Xplor and which are, in accordance
with generally accepted accounting principles, attributable to the
period prior to the Operations Effective Date; and
(iii) Any unpaid amount attributable to a casualty loss
affecting the Lomak Properties and occurring prior to the Closing.
(c) In addition to the foregoing, the settlement statement shall
include any other debits and credits, either cash or accrued, but excluding
income and franchise taxes, which under generally accepted accounting
principles would reflect transfer of the ownership of the Lomak Properties on
the Operations Effective Date.
(d) If the Lomak Entities and Xplor agree upon the amounts set
forth in the settlement statement, the net amount to be paid by the owing
party(s) shall be paid to the owed party(s) within thirty (30) days after
receipt of the settlement statement; provided, however, that Xplor shall have
the right for a period of six (6) months from the date of the settlement
statement to audit the matters covered thereby, and to require an adjustment of
the amount so paid based upon the results of such audit. The Lomak Entities
shall pay the amount of such adjustment within ten (10) days of written demand
therefor, subject to the following subparagraph.
(e) In the event that the Lomak Entities and Xplor are unable
mutually to agree upon the amount of the settlement statement, or in the event
that the Lomak Entities shall not agree with any proposed adjustment by Xplor
after an audit conducted by Xplor pursuant to the preceding subparagraph, an
audit shall be conducted by Ernst & Young or other independent certified public
accounting firm mutually acceptable to Xplor and the Lomak Entities. The Lomak
Entities and Xplor agree to be bound by the findings of such audit insofar as
the settlement statement is concerned. The fees and expenses involved in such
audit shall be paid by the party against which an adjustment is made.
ARTICLE X
TERMINATION, AMENDMENTS AND WAIVERS
Section 10.01. Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by the unanimous consent of Xplor, Venus and the Lomak
Entities;
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(b) by Xplor or Venus or the Lomak Entities if the Closing shall
not have occurred on or before the close of business on May 15, 1997; provided
that, in any case, the terminating party is not in material breach of its
obligations hereunder;
(c) by Xplor or Venus or the Lomak Entities, if it is not in
material breach of its obligations under this Agreement, and if (A) there has
been a material breach by any other such party of any of its respective
representations and warranties hereunder such that Section 9.02(a), 9.03(a) or
9.04(a), as the case may be, will not be satisfied or (B) there has been the
willful breach on the part of any other party of any of its respective
covenants or agreements contained in this Agreement such that Section 9.02(b),
9.03(b) or 9.04(b), as the case may be, will not be satisfied, and, in both
case (A) and case (B), such breach has not been cured within ten (10) days
after notice to the breaching party;
(d) by Xplor, Venus or the Lomak Entities, if any court of
competent jurisdiction, or some other Governmental Entity or Regulatory
Authority shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the Venus
Exchange or the Lomak Exchange and such order, decree, ruling or other action
shall have become final and nonappealable;
(e) by Xplor, Venus or the Lomak Entities if Venus Stockholder
Approval shall not have been obtained by reason of the failure to obtain the
required vote upon a vote held at a duly held meeting of stockholders or at any
adjournment thereof.
(f) by Xplor, if, after the date of this Agreement, there shall
have occurred a Material Adverse Change in Venus or the Lomak Properties,
provided that any decrease in the cash held by Venus or increase in payables of
Venus related to expenses incurred in the ordinary course of business by Venus
including without limitation for the purpose of negotiating this Agreement (and
the Exhibits and Schedules hereto) and consummating the transactions
contemplated hereby (and thereby), shall not be deemed a Material Adverse
Change hereunder;
(g) by Venus, if, after the date of this Agreement, there shall
have occurred a Material Adverse Change in Xplor or the Lomak Properties,
provided that (i) any change in the market price of the Xplor Stock and/or (ii)
any decrease in the cash held by Xplor or increase in payables of Xplor related
to expenses incurred in the ordinary course of business by Xplor for the
purpose of negotiating this Agreement (and the Exhibits and Schedules hereto)
and consummating the transactions contemplated hereby (and thereby), shall not
be deemed a Material Adverse Change hereunder;
(h) by the Lomak Entities, if, after the date of this Agreement,
there shall have occurred a Material Adverse Change in Xplor or Venus provided
that (i) any change in the market price of the Xplor Stock and/or (ii) any
decrease in the cash held
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by Xplor or Venus or increase in payables of Xplor or Venus related to expenses
incurred in the ordinary course of business, including without limitation for
the purpose of negotiating this Agreement (and the Exhibits and Schedules
hereto) and consummating the transactions contemplated hereby (and thereby),
shall not be deemed a Material Adverse Change hereunder;
(i) by Xplor, Venus or the Lomak Entities, if the Board of
Directors of Xplor or Venus shall have approved or recommended any Takeover
Proposal which is financially superior to the Venus Exchange and the Lomak
Exchange and reasonably capable of being financed (as determined in each case
in good faith by such Board of Directors after consultation with financial
advisors) and such Board of Directors is advised by its outside counsel that
the fiduciary duties of such Board of Directors require acceptance or
recommendation of such Takeover Proposal.
Section 10.02. Effect of Termination. In the event of
termination of this Agreement as provided in Section 10.01 hereof, this
Agreement shall, except as provided herein with respect to Section 12.04 ,
forthwith become void and there shall not be any liability or obligation with
respect to the terminated provisions of this Agreement on the part of any of
the parties hereto or their respective officers or directors, except and to the
extent such termination results from the willful breach by a party of any of
its representations, warranties or agreements hereunder. Notwithstanding the
foregoing, if a party hereto terminates this Agreement pursuant to Section
10.01(c)(B), the party terminating the Agreement and the other non-breaching
party shall be entitled to reimbursement for all their out-of-pocket expenses
incurred in connection with this Agreement and the Venus Exchange and the Lomak
Exchange from the breaching party.
Section 10.03. Amendment. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
Section 10.04. Waiver. At any time prior to the Closing, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties of any other party hereto
contained herein or in any document delivered pursuant hereto and (iii) unless
precluded by law, waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights hereunder or otherwise shall not
constitute a waiver of such rights except as expressly provided herein.
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ARTICLE XI
DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings set forth:
Agreement shall mean this Property Acquisition Agreement.
Business Combination shall mean (i) any merger or consolidation
of a Person with or into any Person, (ii) any sale, lease, exchange,
transfer or other disposition (whether in one transaction or a series of
related transactions) of more than ten percent of a Person's assets
(including the stock or partnership interests of such Person), (iii) the
adoption of any plan or proposal for the liquidation or dissolution of
such Person, (iv) any issuance, sale, purchase or redemption of equity
securities, any reclassification of equity securities or
recapitalization of a Person and (v) any transaction having an effect
similar to those described above.
Business Day shall mean any day, other than a Saturday, Sunday or
legal holiday under the Federal laws of the United States.
Closing Date shall mean the date on which the Closing occurs.
Closing shall have the meaning given such term in Section 1.02
hereof.
Code shall mean the Internal Revenue Code of 1986, as amended.
Confidential Information shall have the meaning given such term
in Section 8.07 hereof.
Encumbrances shall mean and include security interests,
mortgages, liens, pledges, charges, easements, reservations,
restrictions, clouds, equities, rights or adverse claims of ownership or
use, or other encumbrance of any kind.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
Exchange Act shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
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Governmental Entity shall mean any foreign or domestic court,
administrative agency or commission or other governmental authority or
instrumentality.
Leases shall mean the oil and gas leases enumerated and described
in the Xplor Reserve Report, the Venus Reserve Report or the Lomak
Reserve Report, as applicable.
Lomak shall mean Lomak Petroleum Inc, a Delaware corporation.
Lomak Disclosure Schedule shall have the meaning given such term
in the recitals to Article IV hereof.
Lomak Entities shall mean Production and Resources.
Lomak Exchange shall have the meaning set forth in the recitals.
Lomak Financial Statements shall have the meaning given such term
in Section 4.05 hereof.
Lomak Governing Documents mean the limited partnership agreement
of Production and the articles of organization and operating agreement
of Resources respectively.
Lomak Properties shall have the meaning set forth in the Section
1.01 hereof.
Lomak Reserve Report shall have the meaning given such term in
Section 4.10 hereof.
Material Adverse Change shall mean a change or a development
involving a prospective change which would have a Material Adverse
Effect.
Material Adverse Effect shall mean, with respect to any Person, a
material adverse effect on the business, prospects, results of
operations, financial condition, properties or assets of such Person,
and, with respect to the Lomak Entities, a material adverse effect on
the prospects, results of operations or condition, financial or
otherwise, of the Lomak Properties. In determining whether any
individual event would result in a Material Adverse Effect,
notwithstanding that such event does not of itself have such effect, a
Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events
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would result in a Material Adverse Effect. Notwithstanding anything
herein to the contrary, Venus shall not be considered to have undergone
a Material Adverse Change or experienced a Material Adverse Effect if a
change in its business, prospects, results of operations, financial
condition, properties or assets is due predominantly to the results of
any drilling program it is conducting currently.
Operations Effective Date shall have the meaning set forth in
Section 9A.01.
Permitted Encumbrances shall mean: (i) Lessor's royalties,
overriding royalties, reversionary interests and similar burdens if the
net cumulative effect of the burdens does not operate to reduce the
proportionate interest of party lessee with respect to all oil and gas
produced from any Lease below the Net Revenue Interest as set forth in
applicable Reserve Report; (ii) division orders and sales contracts
terminable without penalty upon no more than ninety (90) days' notice to
the purchaser; (iii) preferential rights to purchase and required
third-party consents and similar agreements, but only with respect to
which waivers or consents in form reasonably satisfactory to the other
parties hereto are obtained from the appropriate party or the
appropriate time period for asserting the rights has expired without an
exercise of the rights; (iv) all rights to consent by, required notices
to, filings with or other actions by any Government Entity or Regulatory
Authority in connection with the transactions contemplated hereby, but
only if (a) the other parties are advised thereof prior to Closing, (b)
they are customarily obtained subsequent to such transaction(s) and (c)
affected party has no reasonable basis to believe that they cannot be
obtained; (v) easements, rights-of-way, servitudes, permits, surface
leases and other rights in respect of surface operations which do not
materially interfere with the operation, value or use of any of the
Leases involved, do not prevent Xplor from receiving the proceeds of
production from the Leases involved, do not reduce the interest of with
respect to all oil and gas produced from any Lease below the Net Revenue
Interest for such Lease set forth in applicable Reserve Report and do
not increase the portion of the costs and expenses relating to any Lease
that Xplor, as the case may be, will be obligated to pay above the
percentage working interest for such Lease set forth in the applicable
Reserve Report; (vi) all rights reserved to or vested in any Government
Entity or Regulatory Authority to control or regulate any of the Leases
in any manner, and all applicable laws, rules and orders of governmental
authority; (vii) any Encumbrance on or affecting any asset of a party
which is paid or discharged at or prior to the Closing;(viii)
Encumbrances for inchoate mechanics' and materialmen's
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liens for construction in progress and workmen's, repairmen's,
warehousemen's and carriers' liens arising in the ordinary course of
business which in the aggregate have a value of less than $50,000; (ix)
Encumbrances for Taxes not yet payable and for Taxes being contested in
good faith; and (x) any Encumbrance or other title defect relating to a
party which the other parties shall have expressly waived in writing.
Person shall mean an individual, corporation, partnership, joint
venture, trust or unincorporated organization, or a government or any
agency or political subdivision thereof.
Production shall mean Lomak Production I L.P., a Texas limited
partnership.
Proxy Statement shall mean the proxy statement of Xplor referred
to in Section 2.06(a) hereof.
Regulatory Authority shall mean any United States Federal, state
or local government or Governmental Entity the approval of which, or
filing with, is legally required or permitted for consummation of the
transactions contemplated by this Agreement.
Requisite Regulatory Approvals shall have the meaning given such
term in Section 9.01(c) hereof.
Resources shall mean Lomak Resources LLC, an Oklahoma limited
liability company.
SEC shall mean the Securities and Exchange Commission.
Securities Act shall mean the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
Takeover Proposal shall have the meanings given such term in
Section 5.03 and Section 6.03 hereof.
Venus shall mean The New Venus Exploration, Inc, a Texas
corporation.
Venus Disclosure Schedule shall have the meaning given such term
in the recitals to Article III hereof.
Venus Exchange shall have the meaning set forth in the recitals.
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Venus Financial Statements shall mean the financial statements
referred to in Section 3.06 hereof.
Venus Reserve Report shall have the meaning given such term in
Section 3.11 hereof.
Venus Stockholder Approval shall mean the affirmative vote of the
holders of two-thirds of the number of outstanding shares of each class
of capital stock of Venus as of the record date fixed for the purpose of
voting approval of the Venus Exchange.
Warrant(s) shall have the meaning given such term in Section
1.03.
Xplor shall mean Xplor Corporation, a Delaware corporation, and,
except where the context indicates otherwise, its subsidiaries including
the corporation and partnerships it controls.
Xplor Disclosure Schedule shall have the meaning given such term
in the recitals to Article II hereof.
Xplor Stock shall have the meaning given such term in the
recitals hereto.
Xplor 10-K shall have the meaning given such term in Section
2.06(a) hereof.
Xplor Reserve Report shall have the meaning given such term in
Section 2.11 hereof.
ARTICLE XII
GENERAL PROVISIONS
Section 12.01. Taking of Necessary Action; Specific Performance.
Subject to the terms and conditions of this Agreement, each of the parties
hereto agrees, subject to applicable laws, to use all reasonable efforts
promptly to take or cause to be taken all action and promptly to do or cause
to be done all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. Without limiting the foregoing, the parties shall use their
best efforts to obtain and make all consents, approvals, assurances and
filings of or with third parties and Governmental Entities necessary or, in
the opinion of any party, advisable for the consummation of the transactions
contemplated by this Agreement. Each party shall cooperate with the others in
good faith to help the others satisfy their obligations hereunder. If at any
time
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after the Closing any further action is necessary or desirable to carry out the
purposes of this Agreement, or to vest Xplor with full title to and benefits of
all properties, assets, rights, approvals, immunities and franchises of Venus
and the Lomak Properties or the proper officers or directors of the appropriate
party(s) shall take all such necessary action.
Section 12.02. Survival of Representations and Warranties. All
representations and warranties of Xplor, Venus and the Lomak Entities contained
herein and in any certificate executed and delivered by such parties in
connection with this Agreement shall not survive the Closing Date and shall
terminate and expire thereupon, provided that Venus and the Lomak Entities
shall use commercially reasonable best efforts in assisting Xplor to attain the
title to the properties intended to be conveyed to Xplor in the Venus Exchange
and the Lomak Exchange, respectively, and provided further that this Section
12.02 is not intended to deprive or relieve Xplor or the Lomak Entities of
their rights and obligations under Article IX-A hereof.
Section 12.03. Effect of Due Diligence. No investigation by or
on behalf of any party into the business, operations, prospects, assets or
condition (financial or otherwise) of any other party shall diminish in any way
the effect of any representations or warranties made by such other party in
this Agreement or shall relieve such other party of any of its respective
obligations under this Agreement.
Section 12.04. Expenses. Except as provided in Section 10.02,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring the same;
provided, however, that (as previously agreed orally) in the event the
transactions contemplated hereby do not close, (a) Lomak and Venus shall share
equally all expenses incurred to perform their due diligence investigations of
Xplor; (b) Xplor and Venus shall share equally all expenses incurred to perform
their due diligence investigations of the Lomak Properties; and (c) Lomak and
Xplor shall share equally all expenses incurred to perform their due diligence
investigations of Venus.
Section 12.05. Successors and Assigns. This Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties hereto.
Section 12.06. Entire Agreement. This Agreement and the other
documents referred to herein contain the entire agreement among the parties
hereto with respect to the transactions contemplated hereby, and controls and
supersedes any prior understandings, agreements or representations by or
between the parties, written or oral, which conflicts with, or may have related
to, the subject matter hereof or thereof
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in any way. This Agreement may not be amended except by written agreement
signed by all the parties.
Section 12.07. Notices. All notices or other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by telefax, by recognized overnight courier marked
for overnight delivery, or by registered or certified mail, postage prepaid,
addressed as follows:
If to Xplor: with copy to:
Xplor Corporation Neville Shaver Hubbard & McLean
16800 Greenspoint Park Drive Three Landmark Square
Suite 300 South Stamford, CT 06901
Houston, TX 77060 Attention: Richard M. Neville, Esq.
Attention: James E. Gayle Tel: 203-363-5300
Tel: 281-875-2780 Fax: 203-363-5323
Fax: 281-874-0770
If to Venus: with copies to:
Venus Exploration, Inc. Will C. Jones, IV, Esq.
700 N. St. Mary's St. - Ste. 1900 Jones & Faye, P.L.L.C.
San Antonio, TX 78205 112 E. Pecan, Suite 2500
Attention: Eugene L. Ames, Jr. San Antonio, TX 78205
Tel: 210-225-4722 Tel: 210-227-4260
Fax: 210-225-5687 Fax: 210-2274268
and
Charles Szalkowski, Esq.
Baker & Botts, LLP
910 Louisiana
Houston, TX 77002
Tel: 713-229-1480
Fax: 713-229-1522
If to the Lomak Entities: with copy to:
c/o Lomak Petroleum Inc. Walter M. Epstein, Esq.
500 Throckmorton St. - Ste. 2104 Rubin, Baum
Fort Worth, TX 76102 30 Rockefeller Plaza
Tel: 817-870-2601 New York, NY 10112
Fax: 817-870-2912 Tel: 212-698-7758
Fax: 212-698-7825
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or such other addresses as shall be furnished by like notice by such party. All
such notices and communications shall, when telefaxed (immediately thereafter
confirmed by telephone), be effective when telefaxed, or, if sent by nationally
recognized overnight courier service, be effective one Business Day after the
same has been delivered to such courier service marked for overnight delivery,
or, if mailed, be effective when received.
Section 12.08. Applicable Law. This Agreement shall be governed
by, and construed in accordance with, the internal laws of the State of
Delaware, without reference to or application of any conflicts of laws
principles.
Section 12.09. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 12.10. Headings. The headings used in this Agreement
are for convenience only and are not to be considered in construing or
interpreting any term or provision of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized representatives of the parties hereto as of
the date first written above.
XPLOR CORPORATION THE NEW VENUS EXPLORATION, INC
By: /s/ XPLOR CORPORATION By: /s/ THE NEW VENUS EXPLORATION, INC.
------------------------------ -----------------------------------
LOMAK PRODUCTION I L.P. LOMAK RESOURCES LLC
By: /s/ LOMAK PRODUCTION I L.P. By: /s/ LOMAK RESOURCES LLC
------------------------------ -----------------------------------
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EXHIBIT 1.03
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
OR THE SECURITIES LAWS OF ANY STATE, PURSUANT TO ONE OR MORE
EXEMPTIONS THEREFROM. THIS WARRANT MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER SUCH LAWS
OR PURSUANT TO EXEMPTIONS THEREUNDER.
Void after 5:00 p.m. New York Time, on October 23, 2000
Warrant to Purchase ______ Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
XPLOR CORPORATION
This is to Certify That, FOR VALUE RECEIVED, ______________.,
or assigns ("Holder"), is entitled to purchase, subject to the provisions of
this Warrant, from Xplor Corporation, a Delaware corporation ("Company"),
_______ fully paid, validly issued and nonassessable shares of Common Stock,
par value $0.01 per share, of the Company ("Common Stock") at a price of $3.00
per share at any time or from time to time during the period from the date
hereof to October 23, 2000 but not later than 5:00 p.m. New York City Time, on
October 23, 2000. The number of shares of Common Stock to be received upon the
exercise of this Warrant and the price to be paid for each share of Common
Stock may be adjusted from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise, and as adjusted from time to
time, are hereinafter sometimes referred to as "Warrant Shares" and the
exercise price of a share of Common Stock in effect at any time and as adjusted
from time to time is hereinafter sometimes referred to as the "Exercise Price".
(a) EXERCISE OF WARRANT. This Warrant may be exercised
in whole or in part at any time or from time to time on or after the date
hereof and until October 23, 2000 (the "Exercise Period"); provided, however,
that if either such day is a day on which banking institutions in the State of
New York are authorized by law to close, then this Warrant may be exercised, in
whole or in part, on the next succeeding day which shall not be such a day.
This Warrant may be exercised by presentation and surrender hereof to the
Company at its principal office, or at the office of its stock transfer agent,
if any, with the Purchase Form annexed hereto duly executed and accompanied by
payment of the Exercise Price for the number of Warrant Shares specified in
such form. As soon as practicable after each such exercise of this Warrant,
but not later than seven (7) days from the date of such exercise, the Company
shall issue and deliver to the Holder a certificate or certificates for the
Warrant Shares
<PAGE> 67
issuable upon such exercise, registered in the name of the Holder or its
designee. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable thereunder. Upon receipt by the Company of this
Warrant at its office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be physically delivered to the Holder.
(b) TRANSFER RESTRICTION LEGEND. Each certificate
representing Warrant Shares initially issued upon exercise of this Warrant,
unless at the time of exercise such Warrant Shares are registered under the
Securities Act, shall bear the following legend (and any additional legend
required by any securities exchange on which the Warrant Shares may at the time
be listed) on the face thereof:
"The securities represented hereby have not been registered under the
Securities Act of 1933, and the transfer of such securities is subject
to the restrictions set forth in the Warrant pursuant to which such
securities have been issued, a copy of which is available for
inspection at the principal executive offices of Xplor Corporation,
and no transfer of such securities shall be valid or effective unless
and until the terms and conditions of said Warrant shall have been
complied with."
Any certificate issued at any time upon transfer of, or in exchange for or
replacement of, any certificate bearing such legend (except a new certificate
issued upon completion of a public distribution of the securities represented
thereby pursuant to a registration under the Securities Act) shall also bear
such legend unless, in the opinion of counsel for the Company, or such other
counsel as shall be acceptable to the Company, in each case addressed and
delivered to the Company, the securities represented thereby need no longer be
subject to the restrictions contained in this Warrant. The provisions of this
Warrant shall be binding upon all subsequent holders of certificates bearing
the above legend and shall also be applicable to all subsequent holders of this
Warrant.
(c) RESTRICTIONS ON TRANSFER.
(1) General Restrictions. Notwithstanding any provisions
contained in this Warrant to the contrary, this Warrant and the related Warrant
Shares bearing the legend as provided in Section (b) of this Warrant shall not
be transferable except upon the conditions specified in this Section (c), which
conditions are intended, among other things, to insure compliance with the
provisions of the Securities Act in respect of the transfer of this Warrant or
of such Warrant Shares. The registered holder of this
2
<PAGE> 68
Warrant agrees that it will neither (i) transfer this Warrant prior to delivery
to the Company of the opinion of counsel referred to in, and to the effect
described in, Section (c)(2), or until registration hereof under the Securities
Act, nor (ii) transfer such Warrant Shares prior to delivery to the Company of
the opinion of counsel referred to in, and to the effect described in, Section
(c)(2), or until registration of such Warrant Shares under the Securities Act
has become effective.
(2) Statement of Intention to Transfer: Opinion of
Counsel. The registered holder of this Warrant, by its acceptance hereof,
agrees that prior to any transfer of this Warrant or any transfer of the
related Warrant Shares bearing the legend as provided in Section (b) of this
Warrant, said holder will deliver to the Company a statement setting forth
either said holder's intention with respect to the disposition of this Warrant
or of any Warrant Shares (whichever is involved in such transfer), in either
such case, together with a signed copy of the opinion of said holder's counsel
as shall be acceptable to the Company, as to the necessity or non-necessity for
registration under the Securities Act in connection with such transfer. Each
such opinion shall either be addressed to the Company or state that the Company
may rely thereon. The following provisions shall then apply:
i. If, in the opinion of said holder's counsel, the
proposed transfer of this Warrant or the proposed transfer of
such Warrant Shares may be effected without registration under
the Securities Act of this Warrant or such Warrant Shares, as
the case may be, then the registered holder of this Warrant
shall be entitled to transfer this Warrant or to transfer such
Warrant Shares in accordance with the statement of intention
delivered by said holder to the Company.
ii. If, in the opinion of said counsel, either the
proposed transfer of this Warrant or such Warrant Shares may
not be effected without registration under the Securities Act
of this Warrant or such Warrant Shares, as the case may be,
the registered holder of this Warrant shall not be entitled to
transfer this Warrant or such Warrant Shares, as the case may
be, until such registration is effective.
(d) RESERVATION OF SHARES. The Company shall at all
times reserve for issuance and/or delivery upon exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance and
delivery upon exercise of the Warrants.
(e) FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. With
3
<PAGE> 69
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges
on such exchange or listed for trading on the Nasdaq National
Market, the current market value shall be the last reported
sale price of the Common Stock on such exchange or market on
the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day, the average
closing bid and asked prices for such day on such exchange or
market; or
(2) If the Common Stock is not so listed or
admitted to unlisted trading privileges, but is traded on the
Nasdaq SmallCap Market, the current Market Value shall be the
average of the closing bid and asked prices for such day on
such market and if the Common Stock is not so traded, the
current market value shall be the mean of the last reported
bid and asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date of the
exercise of this Warrant; or
(3) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and asked
prices are not so reported, the current market value shall be
an amount, not less than book value thereof as at the end of
the most recent fiscal year of the Company ending prior to the
date of the exercise of the Warrant, determined in such
reasonable manner as may be prescribed by the Board of
Directors of the Company.
(f) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option of the Holder,
upon presentation and surrender hereof to the Company or at the office of its
stock transfer agent, if any, for other warrants of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. This Warrant is not transferable
other than by will or pursuant to the laws of descent and distribution and
except as provided under Subsection (c) hereof. Upon surrender of this Warrant
to the Company at its principal office or at the office of its stock transfer
agent, if any, with the Assignment Form annexed hereto duly executed and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute
and deliver a new Warrant in the name of the assignee named in such instrument
of assignment and this Warrant shall promptly be cancelled. This Warrant may
be divided or combined with other warrants which carry the same rights upon
presentation hereof at the principal office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by
the
4
<PAGE> 70
Holder hereof. The term "Warrant" as used herein includes any Warrants into
which this Warrant may be divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be
at any time enforceable by anyone.
(g) RIGHTS OF THE HOLDER. The Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in the Company,
either at law or equity, and the rights of the Holder are limited to those
expressed in the Warrant and are not enforceable against the Company except to
the extent set forth herein.
(h) ANTI-DILUTION PROVISIONS. The Exercise Price in
effect at any time and the number and kind of securities purchasable upon the
exercise of the Warrants shall be subject to adjustment from time to time upon
the happening of certain events as follows:
(1) In case the Company shall (i) declare a
dividend or make a distribution on its outstanding shares of
Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a
greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect at the time of the record
date for such dividend or distribution or of the effective
date of such subdivision, combination or reclassification
shall be adjusted so that it shall equal the price determined
by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common
Stock outstanding after giving effect to such action, and the
numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such action. Such
adjustment shall be made successively whenever any event
listed above shall occur.
(2) Whenever the Exercise Price payable upon
exercise of each Warrant is adjusted pursuant to Subsection
(1) above, the number of Shares purchasable upon exercise of
this Warrant shall simultaneously be adjusted by multiplying
the number of Shares initially issuable upon exercise of this
Warrant by the Exercise Price in effect on the date hereof and
dividing the product so obtained by the Exercise Price, as
adjusted.
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<PAGE> 71
(3) In the event that at any time, as a result of
an adjustment made pursuant to Subsection (1) above, the
Holder of this Warrant thereafter shall become entitled to
receive any shares of the Company, other than Common Stock,
thereafter the number of such other shares so receivable upon
exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock
contained in Subsection (1) above.
(i) REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(1) The Company shall advise the Holder of this
Warrant or of the Warrant Shares or any then holder of
Warrants or Warrant Shares (such persons being collectively
referred to herein as "holders") by written notice at least
two weeks prior to the filing of any registration statement or
post-effective amendment thereto under the Securities Act of
1933 covering securities of the Company and will for the
period until October 23, 2001, upon the request of any such
holder, include in any such registration statement such
information as may be required to permit a public offering of
the Warrant Shares. In connection with its filing of any
registration statement or post-effective amendment thereto,
the Company shall supply prospectuses and other documents as
the Holder may request in order to facilitate the public sale
or other disposition of the Warrant Shares, qualify the
Warrant Shares for sale in such states as any such holder
designates and do any and all other acts and things which may
be necessary or desirable to enable such Holders to consummate
the public sale or other disposition of the Warrant Shares.
(2) If any registration pursuant to Subsection 1
of this Section (i) shall be underwritten in whole or in part,
the Company may require that the Warrant Shares requested for
inclusion pursuant to Subsection 1 of this Section (i) be
included in the underwriting on the same terms and conditions
as the securities otherwise being sold through the
underwriters. In the event that in the good faith judgment of
the managing underwriter of such public offering the inclusion
of all of the Warrant Shares covered by a request for
registration would reduce the number of shares to be offered
by the Company or interfere with the successful marketing of
the shares of stock offered by the Company, the number of
Warrant Shares otherwise to be included in the underwritten
public offering may be reduced pro rata (by number of shares)
among the holders thereof requesting such registration or
excluded in their entirety if so required by the underwriter.
To the extent only a portion of the Warrant Shares is included
in the underwritten public offering, those Warrant
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<PAGE> 72
Shares which are thus excluded from the underwritten public
offering shall be withheld from the market by the holders
thereof for a period, not to exceed 120 days, which the
managing underwriter reasonably determines is necessary in
order to effect the underwritten public offering.
The obligation of the Company under Subsection 2 of this
Section (i) shall be limited to two registration statements.
(3) The Company shall bear the entire cost and
expense of any registration of securities initiated by it
under Subsection (1) of this Section (i) notwithstanding that
Warrant Shares may be included in any such registration. Any
holder whose Warrant Shares are included in any such
registration statement pursuant to this Section (i) shall,
however, bear the fees of his own counsel and any registration
fees, transfer taxes or underwriting discounts or commissions
applicable to the Warrant Shares sold by him pursuant thereto.
XPLOR CORPORATION
[SEAL]
By:
------------------------------
Dated: May , 1997 Name:
Title:
Attest:
- -----------------------------
Name:
Title:
7
<PAGE> 73
PURCHASE FORM
Date , 19
------------ --
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing _______ shares of Common Stock and
hereby makes payment of _______ in payment of the actual exercise price
thereof.
----------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
--------------------------------
(Please typewrite or print in block letters)
Address
-----------------------------
Signature
---------------------------
<PAGE> 74
ASSIGNMENT FORM
FOR VALUE RECEIVED, ______________ hereby sells, assigns and transfers unto
Name
-----------------------------
(Please typewrite or print in block letters)
Address
----------------------------
the right to purchase Common Stock represented by this Warrant to the extent of
______ shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint ___________ as attorney, to transfer the same on the
books of the Company with full power of substitution in the premises.
Date , 19
------------ --
Signature
-------------------
<PAGE> 75
OMITTED SCHEDULES AND EXHIBITS
The following schedules and exhibits have not been filed herewith. The
Registrant hereby agrees to supplementally furnish them to the Commission upon
request:
Xplor Disclosure Schedule Schedule A
Xplor Reserve Report Schedule AA
Xplor Other Properties Schedule AAA
Venus Disclosure Schedule Schedule B
Venus Reserve Report Schedule BB
Venus Other Properties Schedule BBB
Lomak Disclosure Schedule Schedule C
Lomak Reserve Report Schedule CC
Xplor Directors and Officers, post Closing Exhibit 8.01
Opinion of Jones & Faye, P.L.L.C. Exhibit 9.02(d)(i)
Opinion of Rubin Baum Levin Constant & Freidman Exhibit 9.02(d)(ii)
Opinion of Neville Shaver Hubbard & McLean Exhibit 9.03(d)(i)
Share Purchase and Sale Agreement Exhibit 9.03(i)
<PAGE> 1
EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
VENUS EXPLORATION, INC.
AND
XPLOR CORPORATION
DATED AS OF JUNE 3, 1997
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
Agreement entered into as of June 3, 1997 (the "Agreement") by and
between Xplor Corporation, a Delaware corporation ("Xplor") and Venus
Exploration, Inc., a Delaware corporation ("Venus") and a wholly-owned
subsidiary of Xplor. Xplor and Venus are referred to collectively herein as the
"Parties."
WHEREAS, this Agreement contemplates a merger of Venus with and into
Xplor, with Xplor being the surviving corporation thereof;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the covenants herein contained,
the Parties agree as follows:
Section 1. Definitions.
"Agreement" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in Section 2(b) below.
"Closing Date" has the meaning set forth in Section 2(b) below.
"Delaware Certificate of Merger" has the meaning set forth in
Section 2(c) below.
"DGCL" means the General Corporation Law of the State of Delaware, as
amended.
"Effective Time" has the meaning set forth in Section 2(d)(i) below.
"Merger" has the meaning set forth in Section 2(a) below.
"Parties" has the meaning set forth in the preface above.
"Surviving Corporation" has the meaning set forth in Section 2(a)
below.
"Surviving Corporation Common Stock" means the Common Stock, par value
$.01 per share, of the Surviving Corporation.
"Venus" has the meaning set forth in the preface above.
"Venus Common Stock" means the Common Stock, par value $.01 per
share, of Venus.
"Venus Stockholders" means the stockholders of record of Venus Common
Stock.
"Xplor" has the meaning set forth in the preface above.
1
<PAGE> 3
"Xplor Common Stock " means the Common Stock, par value $.01 per
share, of Xplor.
"Xplor Stockholder" means the stockholders of record of Xplor Common
Stock.
Section 2. Basic Transaction.
(a) The Merger. On the terms and subject to the conditions of this
Agreement, Venus will merge with and into Xplor (the "Merger") at the Effective
Time. Xplor shall be the corporation surviving the Merger (the "Surviving
Corporation").
(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Jones & Faye,
P.L.L.C., 112 Pecan Street, Suite 2500, San Antonio, Texas, 78205, or such
other location as Xplor shall determine, at such time and on such date as Xplor
may determine (the "Closing Date"), which time shall be at any time after June
2, 1997.
(c) Actions at the Closing. At the Closing, Xplor will cause to be
filed with the Secretary of State of the State of Delaware, as provided in
Section 253 of the DGCL, a Certificate of Ownership and Merger in substantially
the form attached hereto as Exhibit A (the "Delaware Certificate of Merger").
(d) Effect of Merger.
(i) General. The Merger shall become effective at such time
(the "Effective Time") that Xplor files the Delaware Certificate of
Merger with the Secretary of State of the State of Delaware. The
Merger shall have the effect set forth in Section 259 of the DGCL. The
Surviving Corporation may, at any time after the Effective Time, take
any action (including executing and delivering any document) in the
name and on behalf of either Venus or Xplor in order to carry out and
effectuate the transactions contemplated by this Agreement.
(ii) Certificate of Incorporation. At the Effective Time, the
Certificate of Incorporation of Xplor shall be the Certificate of
Incorporation of the Surviving Corporation, except as amended to
change the name of the Surviving Corporation to Venus Exploration,
Inc.
(iii) Bylaws. The Bylaws of Xplor as in effect at and as of
immediately prior to the Effective Time will remain the Bylaws of the
Surviving Corporation without any modification or amendment as a
result of the Merger.
(iv) Directors and Officers. The directors and officers of
Xplor in office at and as of immediately prior to the Effective Time
will remain the directors and officers of the Surviving Corporation
(retaining their respective positions and terms of office).
2
<PAGE> 4
(v) Conversion of Capital Stock. At and as of the Effective
Time, by virtue of the Merger and without any action on the part of
any holder of any capital stock of Venus, each share of Venus Common
Stock issued and outstanding immediately prior to the Effective Time
shall be canceled.
(vi) Xplor Common Stock. Each share of Xplor Common
Stock issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive one share of Surviving
Corporation Common Stock.
(vii) Name Change. The name of the Surviving Corporation
shall be changed upon the effective time of the Merger to Venus
Exploration, Inc.
Section 3. Termination.
(a) Termination of Agreement. The Parties may terminate this Agreement
(with the prior authorization of its board of directors, if applicable) by
mutual written consent at any time prior to the Effective Time.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 3(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach).
Section 6. Amendment. This Agreement may be amended at any time and
from time to time if set forth in a writing executed by each of the Parties.
[signature page follows]
3
<PAGE> 5
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
VENUS EXPLORATION, INC.:
By:
----------------------------------
Name:
----------------------------------
Title:
---------------------------------
XPLOR CORPORATION:
By:
----------------------------------
Name:
----------------------------------
Title:
---------------------------------
4
<PAGE> 1
EXHIBIT 2.3
CERTIFICATE OF OWNERSHIP AND MERGER
OF
VENUS EXPLORATION, INC.
INTO
XPLOR CORPORATION
(Pursuant to Section 253 of the General Corporation Law
of the State of Delaware)
Xplor Corporation, a corporation organized and existing under
the laws of the State of Delaware (the "Parent"), does hereby certify as
follows:
FIRST: The Parent was incorporated in Delaware on
September 5, 1985 under the name "Xplor Corporation."
SECOND: The Parent owns all of the issued and outstanding
shares of capital stock of Venus Exploration, Inc., a Delaware corporation (the
"Subsidiary").
THIRD: The Board of Directors of the Parent has determined to
merge the Subsidiary with and into the Parent and did adopt resolutions to so
merge by Written Consent in Lieu of a Meeting adopted June 3, 1997. A true and
correct copy of such resolutions is attached hereto as Exhibit A.
FOURTH: The Certificate of Incorporation of the Parent shall
continue to be the Certificate of Incorporation of the surviving corporation
until amended in accordance with applicable law, except that Article One
thereof shall be amended to read in its entirety as follows:
"The name of the Corporation is Venus Exploration, Inc."
<PAGE> 2
IN WITNESS WHEREOF, the Parent has caused this Certificate of
Ownership and Merger to be executed as of June 3, 1997.
XPLOR CORPORATION
By: /s/ John Y. Ames
------------------------------------
Name: John Y. Ames
----------------------------------
Title: President
----------------------------------
<PAGE> 3
EXHIBIT A
Pursuant to the provisions of Section 141(f) of the General
Corporation Law of the State of Delaware (the "DGCL"), the undersigned, being
all of the duly elected, qualified and acting members of the Board of Directors
(the "Board") of Xplor Corporation, a Delaware corporation (the "Corporation"),
waiving any required notice, do hereby consent in writing to the adoption of
the following resolutions without the holding of a meeting, such resolutions to
have the same force and effect as if duly adopted at a meeting of the Board
which was duly called and held in accordance with the Certificate of
Incorporation and Bylaws of the Corporation and at which all the members were
present and acting throughout:
Approval of Merger
WHEREAS, the Board of Directors has determined that it is in
the best interests of the Corporation to merge Venus Exploration, Inc., a
Delaware corporation and a wholly owned subsidiary of the Corporation
("Venus"), with and into the Corporation.
NOW, THEREFORE, BE IT RESOLVED, that the form, terms and
provisions of the Agreement and Plan of Merger (the "Plan of Merger") attached
hereto as Exhibit A are hereby approved in all respects; and further
RESOLVED, that in accordance with the Plan of Merger and
pursuant to Section 253 of the General Corporation Law of the State of Delaware
(the "DGCL"), the merger (the "Merger") of Venus with and into the Corporation
is hereby approved and adopted in all respects, and that each of the officers
of the Corporation is hereby authorized and empowered, for and on behalf of the
Corporation and in its name, to execute a certificate of ownership and merger
(the "Merger Certificate") attached hereto as Exhibit B with respect to the
Merger in such form as such officers shall approve (such approval to be
conclusively evidenced by the execution of the Merger Certificate by such
officer on behalf of the Corporation) on behalf of the Corporation in
accordance with the relevant provisions of the DGCL; and further
RESOLVED, that the amendment of Article One of the
Certificate of Incorporation of the Corporation to change the name of the
Corporation to Venus Exploration, Inc. is hereby approved; and further
RESOLVED, that the officers of the Corporation are hereby
authorized and empowered, for and on behalf of the Corporation, to cause the
Merger Certificate to be filed in the office of the Secretary of State of the
State of Delaware.
<PAGE> 4
Change in Accountant
WHEREAS, the Board of Directors has determined that it is in
the best interests of the Corporation to replace the Corporation's existing
independent accountant, Arthur Andersen LLP ("AA"), with KPMG Peat Marwick LLP
("KPMG").
NOW, THEREFORE, BE IT RESOLVED, that the officers of the
Corporation are hereby authorized to notify each of AA and KPMG of the
replacement and to do such other things as are necessary to effect such
replacement.
Change of Trading Symbol
WHEREAS, the Board of Directors has determined that it is in
the best interests of the Corporation to change its trading symbol on the
NASDAQ Small-Cap Market from "XPLR" to "VENX" in connection with the
transactions contemplated by the Plan of Merger.
NOW, THEREFORE, BE IT RESOLVED, that the officers of the
Corporation are authorized and empowered to do such things as are necessary to
effect such change of the Corporation's trading symbol; and further
General
RESOLVED, that the officers of the Corporation are each
hereby authorized and empowered, for and on behalf of the Corporation, to take
or cause to be taken any and all action, to enter into, execute and deliver any
and all certificates, agreements, applications, affidavits, acknowledgments,
instruments, contracts, statements and other documents and to do any and all
things that, in the judgment of the officer taking such action, are necessary
or advisable to effectuate and carry out the purposes and intent of the
foregoing resolutions, the taking of any such action, the execution of any such
documents and the doing of any such other things by any of such officers
conclusively to evidence the due authorization and approval thereof by this
Board; and further
RESOLVED, that all acts and deeds previously performed by any
of the officers of the Corporation prior to the date of these resolutions that
are within the authority conferred by the foregoing resolutions are hereby
approved, ratified and confirmed as the authorized acts and deeds of the
Corporation.
<PAGE> 5
IN WITNESS WHEREOF, the undersigned directors of the
Corporation have executed this Unanimous Written Consent as of the date first
above written.
/s/ Eugene L. Ames, Jr.
---------------------------------------
Eugene L. Ames, Jr.
/s/ John Y. Ames
---------------------------------------
John Y. Ames
/s/ Martin A. Bell
---------------------------------------
Martin A. Bell
/s/ J. Morton Davis
---------------------------------------
J. Morton Davis
/s/ James W. Gorman, Jr.
---------------------------------------
James W. Gorman, Jr.
/s/ Jere W. McKenny
---------------------------------------
Jere W. McKenny
/s/ John H. Pinkerton
---------------------------------------
John H. Pinkerton
<PAGE> 1
[ARTHUR ANDERSEN LETTERHEAD]
June 5, 1997
Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, D.C. 20547
We have read Item 4 included in the attached Form 8-K dated June 5, 1997, of
Venus Exploration, Inc. filed with the Securities and Exchange Commission and
are in agreement with the statements contained therein.
Very truly yours,
/s/ ARTHUR ANDERSEN LLP
<PAGE> 1
EXHIBIT 99.1
[XPLOR CORPORATION LETTERHEAD]
NEWS RELEASE
XPLOR TO EXPAND ASSETS AND DRILLING ACTIVITIES
GENE AMES TO BECOME CHAIRMAN AND CEO
HOUSTON, TEXAS, MAY 5, 1997 ... XPLOR CORPORATION
Announced today that it signed a definite agreement to acquire substantially
all of the assets and liabilities of Venus Exploration, Inc., and a group of
producing oil and gas properties from Lomak Petroleum, Inc. Venus is a private
exploration and production company based in San Antonio, Texas. Lomak is an
independent oil and gas company whose shares are listed on the New York Stock
Exchange under the symbol "LOM".
The agreement calls for Xplor to issue 5,626,473 shares of its common stock to
the stockholders of Venus, and 2,037,171 shares to Lomak. Xplor will also
issue warrants to acquire 272,353 additional shares of its common stock to both
Venus and Lomak. Upon completion of the transactions, the current stockholders
of Xplor will own 20% of the shares of Xplor, the stockholders of Venus will
own 58%, and Lomak will own 33%. Upon closing, Xplor's estimated provided oil
and gas reserves will increase from 2.7 Bcfe at year end 1996 to approximately
12.0 Bcfe. Additionally, pro forma at March 31, 1997, the Company will have
over $2.5 million in cash, net of long-term debt, and a significant inventory
of development and exploratory projects.
Upon completion of the transactions, Eugene L. Ames will assume the offices of
Chairman and CEO of Xplor. Mr. Ames is currently Chairman and CEO of Venus,
and has headed Venus and its predecessor companies for over 35 years. In 1992
and 1993, Mr. Ames served as Chairman of the Independent Petroleum Association
of America. John Y. Ames, President of Venus, will be Xplor's President, and
James E. Gayle, currently CEO of Xplor, will become Executive Vice President.
After the closing, the Xplor board of directors will include Gene and John Ames
and five outside directors. Outside directors will include current Venus
directors Jere W. McKenny, former President and director of Kerr-McGee Corp.,
and James W. Gorman, President of Cockfield Exploration, a privately held
exploration company, as well as John H. Pinkerton, Lomak's President and CEO,
and two current Xplor directors, Martian A. Bell and J. Morton Davis.
The Venus assets being acquired by Xplor include exploitation projects in 11
fields in Texas, Oklahoma and Kansas, and a portfolio of active exploration
projects in the Expanded Yegua Trend on the Texas Gulf Coast, and the Permian
Basin of West Texas. Including five Venus wells drills so far this year, Xplor
could participate in the drilling of as many as 25 development and exploration
wells in 1997. Xplor will focus on a strategy of growth through development
and exploratory drilling.
Completion of transactions, anticipated to occur before the end of the month,
is subject to several closing conditions as well as approval by the
stockholders of Venus. Xplor Corporation's shares are traded on the NASDAQ
SmallCap Market under the symbol "XPLR".
Contact: James E. Gayle, Chairman, President and CEO
Xplor Corporation (281) 875-2780
16800 Greenspoint Park Drive, Suite 300 South, Houston, Texas 77060
<PAGE> 1
EXHIBIT 99.2
[VENUS CORPORATION LOGO]
[VENUS CORPORATION LETTERHEAD]
NEWS RELEASE
- -------------------------------------------------------------------------------
FOR RELEASE MAY 22, 1997 CONTACT: EUGENE L. AMES
CHIEF EXECUTIVE OFFICER
VENUS EXPLORATION, INC.
(210) 225-4722
XPLOR & VENUS COMBINE
Xplor To Be Renamed Venus Exploration, Inc.
HOUSTON, TEXAS, MAY 22, 1997 ... Xplor Corporation announced today that it
closed the acquisition of the assets of Venus Exploration, Inc., and of a group
of producing oil and gas properties from Lomak Petroleum, Inc. (NYSE: LOM).
Both acquisitions were made in exchange for Xplor common stock and warrants to
acquire Xplor common stock and the transaction will be accounted for as an
acquisition of Xplor Corporation by Venus. Xplor (the "Company") will change
its name to "Venus Exploration, Inc.", and will change its Nasdaq trading
symbol to "VENX". The corporate headquarters will be moved from Houston to San
Antonio, Texas.
Prior shareholders of Venus now hold 58% of the Company's common stock,
while Lomak holds 22% and prior Xplor shareholders maintain 20%. The Company
has proved oil and gas reserves estimated at 12.0 Bcfe, over $2.0 million of
cash net of long-term debt, and a significant portfolio of development and
exploratory drilling projects.
The Company intends to focus on a strategy of growth through continued
development and exploratory drilling on an extensive inventory of projects
generated by Venus' exploration team. Among the fields to be developed is the
Company's new discovery in the Kismet Field of southwestern Kansas. The Venus #1
Simonson discovery well was completed on April 22, 1997, for an initial flow
rate of 295 barrels oil per day through perforations in the Mississippian Osage
formation at 6366-6380 feet. This well represents a new, deeper pay discovery
in the Kismet Field, and the Company is currently drilling an offset well. The
Company is the operator, owns a 50% working interest and controls 1,840 acres
of deep rights in the field.
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In the Expanded Yegua trend of south Texas, the Company began gas sales
in March from the 3-D seismically defined #1 Henry discovery well in the
Shanghai Field area of Wharton County, Texas. The Company is the operator and
owns a 17% working interest in this well, which currently flows approximately
4,000 Mcf gas and 225 barrels condensate per day from the upper Yegua sand at
9,400 feet. In 1997, additional development drilling is planned in other fields
in south and west Texas, and in central Oklahoma. Including five Venus wells
drilled so far this year, the Company currently plans to participate in the
drilling of as many as 25 development and exploratory wells in 1997.
In addition to Eugene L. Ames, who is Chairman and CEO, John Y. Ames is
President, and James E. Gayle, who was CEO of Xplor, has become Executive Vice
President of the Company. The Company's Board of Directors will include Gene
and John Ames and five outside directors, including two of Venus's current
outside directors, Jere W. McKenny, former President and Director of Kerr-McGee
Corp., and James W. Gorman, President of Cockfield Exploration, a privately
held exploration company, as well as John H. Pinkerton, Lomake's President &
CEO, and two current Xplor directors, Martin A. Bell and J. Morton Davis.
Xplor is currently traded on the Nasdaq SmallCap Market under the
symbol XPLR. After the name change to "Venus Exploration, Inc.", which should
be completed within two weeks, the trading symbol will be VENX.
