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EXHIBIT 4.3
The Company has issued notes substantially in the form attached hereto to each
of the following individuals and entities, obligating the Company to pay such
individuals and entities the amounts set forth opposite their names below:
Jerry L. Suits, as Trustee of the Jerry L. Suits Revocable Trust: $2,726,500
Jeanne G. Dillingham, Dana Hutton, Leslie D. Ballew and E. Gay Dillingham, as
Trustees of the Tom B. Dillingham Revocable Trust: $1,596,950
Peter C. Dillingham, as Trustee of the Peter C. Dillingham Revocable Trust:
$545,300
E. Gay Dillingham: $506,350
Leslie D. Ballew: $506,350
Jeanne G. Dillingham, as Trustee of the Brady S. Dillingham Trust: $506,350
Dana Hutton: $506,350
Jeanne G. Dillingham: $467,400
Dan L. Dillingham, as Trustee of the Dan L. Dillingham Revocable Trust:
$428,450
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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS
OF ANY STATE AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO MAKER THAT SUCH
REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
$ Houston, Texas July 31, 1998
FOR VALUE RECEIVED, the undersigned, UTI Energy Corp., a Delaware
corporation ("Maker"), hereby promises to pay to the order of ______
(collectively, the "Payee"), at _______ (the "Maturity Date"), in lawful money
of the United States of America, the principal amount of ________ ($_________),
together with interest on the unpaid balance of said principal amount from time
to time remaining outstanding, from the date hereof until maturity (howsoever
such maturity shall occur), via company check, at said address, at a rate per
annum equal to seven percent (7%).
The outstanding principal balance of this Note, together with any
accrued and unpaid interest thereon, shall be due and payable on the Maturity
Date (or, if not a Business Day, the first Business Day thereafter). Accrued
and unpaid interest on the outstanding principal amount shall be paid quarterly
on March 31, June 30, September 30 and December 31 of each year until the
Maturity Date, beginning on September 30, 1998 (or, if any such day is not a
Business Day, the first Business Day thereafter). In the event the Average
Trading Value (defined below) on any date of Maker's common stock, $.001 par
value ("Common Stock"), is greater than $30.00 per share (a "Partial Prepayment
Event"), then Maker will, after such Partial Prepayment Event and within 90
days following written notice from Payee of such Prepayment Event, prepay by
depositing into an escrow account to be governed by the Escrow Agreement
(defined below) the amount of outstanding principal that is equal to
$3,500,000.00 less the amount of any Indemnification Claims (defined below)
(whether or not previously set-off against the principal of this Note or
whether or not finally determined).
"Average Trading Value" means the average Per Share Market Value of
the Common Stock for the 30 consecutive trading days immediately preceding (and
excluding) the relevant date.
"Business Day" means any day on which banks are open for general
banking business in the State of Texas, other than on Saturday, Sunday, a legal
holiday or any other day on which banks in the State of Texas are required or
authorized by law or executive order to close.
"Debt/Total Assets Ratio" means the ratio of (i) Total Debt to (2)
Total Assets.
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"Escrow Agreement" means the Escrow Agreement in the form attached
hereto as Annex A with such changes to the terms thereto as the escrow agent
thereunder shall reasonably request, among Maker, Payee and an escrow agent
selected by Maker and reasonably satisfactory to Payee.
"Indemnification Claims" means claims for Damages (as defined in the
Merger Agreement) incurred or suffered by UTI Indemnified Parties (as defined
in Section 13.1 of the Merger Agreement).
"Merger Agreement" means the Agreement and Plan of Merger among Maker,
a wholly-owned subsidiary of Maker, Payee and SUITS Enterprises, Inc., an
Oklahoma corporation, dated of even date herewith.
"Per Share Market Value" means on any particular date (a) the closing
sales price per share of the Common Stock on such date on the principal stock
exchange on which the Common Stock is listed or, if there is no such price on
such date, then the last price on such exchange on the date nearest preceding
such date, or (b) if the Common Stock is not listed on any exchange, the
average of the high and low sales price per share of Common Stock in the
over-the-counter market, as reported by The Nasdaq Stock Market at the close
of business on such date, or, if there is no sales price, the last quoted sales
price on the date nearest preceding such date.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate or similar entity.
"Total Assets" shall mean the amount of all assets that in accordance
with generally accepted accounting principles applied on a consistent basis
would be included in the asset side of a balance sheet.
"Total Debt" shall mean the amount of all outstanding obligations for
borrowed funds that in accordance with generally accepted accounting principles
applied on a consistent basis would be included in determining total
liabilities as shown on the liability side of a balance sheet.
Maker shall have the right and privilege of prepaying this Note, in
whole or in part, at any time or from time to time without premium or penalty
or notice to the holder hereof. All amounts prepaid shall be applied first to
earned, accrued and unpaid interest and the balance, if any, shall be applied
to the payment of principal.
If any one of the following events shall occur and be continuing (an
"Event of Default"):
(a) Maker shall fail to pay timely when due, the
principal of, or accrued unpaid interest on, this Note and such
principal or interest shall remain unpaid after five business days
after written notice is received by Maker from Payee; provided,
however, that the interest rate on this Note during the period
beginning on the date such principal or interest is due and the date
such principal or interest is paid shall increase from 7% to 8% per
annum;
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(b) default shall be made in the due observance or
performance of, compliance with, any of the covenants or agreements
contained herein, which default shall remain uncured for 30 business
days after written notice thereof from Payee is received by Maker;
(c) Maker shall (i) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of it or
of all or a substantial part of its property, (ii) generally fail to
pay its debts as they come due in the ordinary course of business, or
(iii) commence, or file an answer admitting the material allegations
of or consenting to, or default in a petition filed against it in, any
case, proceeding or other action under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking to have an
order for relief entered with respect to it under the federal
Bankruptcy Code, 11 U.S.C. Section 101 et. seq., or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or the similar relief with respect to it or
its debt;
(d) a receiver, conservator, liquidator, custodian or
trustee of Maker or any of its property is appointed by the order or
decree of any court or agency or supervisory authority having
jurisdiction; or Maker obtains an order for relief under the federal
Bankruptcy Code, 11 U.S.C. Section 101 et. seq.; or any of the
property of Maker is sequestered by court order; or a petition is
filed or a proceeding is commenced against Maker under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect, which remains unstayed and in effect for 60
consecutive days;
(e) the Debt/Total Assets Ratio of Maker, or, in the
event Maker is a wholly-owned subsidiary of a public company (the
"Surviving Parent"), of the Surviving Parent, shall be greater than
60%; or
(f) an Event of Default shall occur with respect to any
other Note (as defined in the Merger Agreement) issued on the date
hereof,
then Payee, at its option, may declare the unpaid principal portion of this
Note to be forthwith due and payable, whereupon such portion of this Note and
all accrued, earned and unpaid interest shall become immediately due and
payable by Maker without demand, presentment for payment, notice of nonpayment,
protest, notice of protest, notice of intent to accelerate maturity, notice of
acceleration of maturity or any other notice of any kind to Maker, or any other
person liable hereon or with respect hereto, all of which are hereby expressly
waived by Maker and each other person liable hereon or with respect hereto,
anything contained herein or in any other documents or instruments to the
contrary notwithstanding. With respect to any unpaid principal portion of this
Note that becomes immediately due and payable due to an Event of Default
pursuant to section (e) above, payment of such unpaid principal amount shall be
made to an escrow account to be governed by the Escrow Agreement.
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As provided in Article 13 of the Merger Agreement, Maker shall have
the right to set-off and apply and reduce against its obligations hereunder
(first against interest and then against principal) any amounts owing by Payee
to Maker as a result of Payee's obligations with regard to Indemnification
Claims under the Merger Agreement. Maker shall (except to the extent
prohibited by applicable law) give written notice to Payee (at the address set
forth above or at such other address provided to Maker in writing) following
any exercise of such set-off, including the amount owed Maker by Payee under
Article 13 of the Merger Agreement that Maker desires to set-off against
principal or interest owed by Maker hereunder (the "Proposed Set-Off Amount");
provided, however, the failure to give such notice shall in no manner affect
the right of Maker in respect to set-offs and corresponding applications of
funds. During the period beginning when Maker notifies Payee of a set-off
claim for Indemnification Claims and the date the claim is resolved, interest
shall not accrue on the principal amount of this Note equal to the amount of
the Proposed Set-Off Amount; provided further, however, that if such claim is
ultimately resolved for an amount less than the Proposed Set-Off Amount (the
difference between such amount and the Proposed Set-Off Amount referred to
herein as the "Claim Amount Difference"), Maker shall pay to Payee, at the next
interest payment date, the amount of interest (to the extent not already paid)
not paid on the Claim Amount Difference prior to the ultimate resolution of
such claim. In the event there be any outstanding Indemnification Claims by
Maker that has not been resolved as of the Maturity Date of the principal
payment on this Note, Maker shall be entitled to defer payment of such
principal in than the amount that Maker believes Payee will be required to
indemnify Maker. Any amounts deposited into an escrow account to governed by
the Escrow Agreement shall continue to be subject to Maker's right of set-off
described herein.
Maker's obligation to pay principal and interest on this Notes
Receivable shall terminate immediately in the event that the Notes Receivable
(as defined in the Merger Agreement) are not repaid in full within five
business days of the date hereof.
This Note shall be governed by and construed in accordance with the
internal laws of the State of Texas and applicable federal laws of the United
States of America. This Note has been delivered and accepted and is payable at
Houston, Texas. Notices to Maker hereunder shall be delivered to the notice
addresses for Maker set forth in the Merger Agreement or such other address
provided by Maker in writing to Payee. This Note is not assignable by Payee
without the prior written consent of Maker, except that, if Payee is a trust or
estate, Payee may assign its rights hereunder to its beneficiaries provided
that such beneficiaries assume in writing (in a form reasonably satisfactory to
Maker) all of Payee's obligations under the Merger Agreement.
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EXECUTED AND EFFECTIVE as of the day and year first above written.
MAKER:
UTI ENERGY CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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EXHIBIT A
ESCROW AGREEMENT
This Escrow Agreement, dated as of ____________, 199_ (the "Closing Date"),
among UTI Energy Corp., a Delaware corporation ("Buyer"), ___________,
("Sellers"), and ___________, a ___________], as escrow agent ("Escrow
Agent").
This is the Escrow Agreement referred to in the Notes dated July 31, 1998,
payable by Buyer to Sellers, which Notes were issued pursuant to the terms and
conditions of that certain Agreement and Plan of Merger dated July 31, 1998
(the "Purchase Agreement"), among Buyer, a wholly-owned subsidiary of Buyer,
SUITS Enterprises, Inc., an Oklahoma corporation ("SUITS"), and the
shareholders of SUITS signatory thereto. Capitalized terms used in this
agreement without definition shall have the respective meanings given to them
in the Purchase Agreement.
The parties hereto, intending to be legally bound, hereby agree as follows:
1. ESTABLISHMENT OF ESCROW
(a) Pursuant to the terms of the Notes, Buyer is depositing with Escrow Agent,
an amount equal to $_________ (representing the principal and unpaid interest
on the Notes on the date hereof) in immediately available funds (as increased
by any earnings thereon and as reduced by any disbursements, amounts paid
pursuant to Section 3, amounts withdrawn under Section 5(j), or losses on
investments, the "Escrow Fund"). Escrow Agent acknowledges receipt thereof.
(b) Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard
and disburse the Escrow Fund pursuant to the terms and conditions hereof.
2. INVESTMENT OF FUNDS
The Escrow Fund shall be invested from time to time, to the extent possible, in
United States Treasury bills having a remaining maturity of 90 days or less and
repurchase obligations secured by such United States Treasury Bills, with any
remainder being deposited and maintained in a money market deposit account with
Escrow Agent, until disbursement of the entire Escrow Fund. Escrow Agent is
authorized to liquidate in accordance with its customary procedures any portion
of the Escrow Fund consisting of investments to provide for payments required
to be made under this Agreement.
3.CLAIMS
From time to time in accordance with the terms of the Purchase Agreement, Buyer
may give notice (a "Notice") to Sellers of an Indemnity Claim. Such notice
also shall be contemporaneously provided to the Escrow Agent. Indemnity Claims
shall be paid by the Escrow Agent to Buyer upon joint
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written instructions from Buyer and Sellers or upon the order of a court of
competent jurisdiction as contemplated by Section 9.
4.TERMINATION OF ESCROW
On July 30, 2002, Escrow Agent shall pay and distribute the amount of the
Escrow Fund as of such date to Sellers in the proportions set forth on Annex A
hereto, unless (i) any Indemnity Claims are then pending, in which case an
amount equal to the aggregate dollar amount of such Indemnity Claims (as shown
in the Notices of such Claims) shall be retained by Escrow Agent in the Escrow
Fund (and the balance paid to Sellers in such proportions) or (ii) Buyer has
given notice to Sellers and Escrow Agent specifying in reasonable detail the
nature of any other Indemnity Claim it may have under the Purchase Agreement
with respect to which it is unable to specify the amount of Damages, in which
case the entire amount of the Escrow Fund as of such date shall be retained by
Escrow Agent, in either case until it receives joint written instructions of
Buyer and Sellers or an order of a court of competent jurisdiction as
contemplated by Section 9.
Notwithstanding the foregoing, in the event Escrow Funds were deposited by
Buyer with the Escrow Agent as a result of the Average Trading Value (as
defined in the Notes dated July 31, 1998, payable by Buyer to the Sellers)
being greater than $30.00 per share (the "Early Release Funds"), then the
following shall apply:
(i)if the Early Release Funds were initially deposited prior to July 31, 1999,
then (A) Escrow Agent shall, on July 31, 1999, pay and distribute one-half of
the Early Release Funds as of such date to Sellers in the proportions set forth
on Annex A hereto, unless (a) any Indemnity Claims are then pending, in which
case an amount equal to the aggregate dollar amount of such Indemnity Claims
(as shown in the Notices of such Claims) shall be retained by Escrow Agent in
the Escrow Fund (and one-half of the balance of the Early Release Funds as of
such date paid to Sellers in such proportions) or (b) Buyer has given notice
to Sellers and Escrow Agent specifying in reasonable detail the nature of any
other Indemnity Claim it may have under the Purchase Agreement with respect to
which it is unable to specify the amount of Damages, in which case the entire
amount of the Early Release Funds as of such date shall be retained by Escrow
Agent, in either case until it receives joint written instructions of Buyer and
Sellers or an order of a court of competent jurisdiction as contemplated by
Section 9 and (B) Escrow Agent shall, on July 31, 2000, pay and distribute all
of the Early Release Funds as of such date to Sellers in the proportions set
forth on Annex A hereto, unless (a) any Indemnity Claims are then pending, in
which case an amount equal to the aggregate dollar amount of such Indemnity
Claims (as shown in the Notices of such Claims) shall be retained by Escrow
Agent in the Escrow Fund (and the balance of the Early Release Funds as of such
date paid to Sellers in such proportions) or (b) Buyer has given notice to
Sellers and Escrow Agent specifying in reasonable detail the nature of any
other Indemnity Claim it may have under the Purchase Agreement with respect to
which it is unable to specify the amount of Damages, in which case the entire
amount of the Early Release Funds as of such date shall be retained by Escrow
Agent, in either case until it receives joint written instructions of Buyer and
Sellers or an order of a court of competent jurisdiction as contemplated by
Section 9;
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(ii)if the Early Release Funds were initially deposited after July 30, 1999 and
prior to July 31, 2000, then (A) Escrow Agent shall immediately pay and
distribute one-half of the Early Release Funds as of the date of deposit to
Sellers in the proportions set forth on Annex A hereto and (B) Escrow Agent
shall, on July 31, 2000, pay and distribute all of the Early Release Funds as
of such date to Sellers in the proportions set forth on Annex A hereto, unless
(a) any Indemnity Claims are then pending, in which case an amount equal to the
aggregate dollar amount of such Indemnity Claims (as shown in the Notices of
such Claims) shall be retained by Escrow Agent in the Escrow Fund (and the
balance of the Early Release Funds as of such date paid to Sellers in such
proportions) or (b) Buyer has given notice to Sellers and Escrow Agent
specifying in reasonable detail the nature of any other Indemnity Claim it may
have under the Purchase Agreement with respect to which it is unable to specify
the amount of Damages, in which case the entire amount of the Early Release
Funds as of such date shall be retained by Escrow Agent, in either case until
it receives joint written instructions of Buyer and Sellers or an order of a
court of competent jurisdiction as contemplated by Section 9;
(iii)if the Early Release Funds were initially deposited on or after July 31,
2000, then Escrow Agent shall immediately pay and distribute all of the Early
Release Funds as of the date of deposit to Sellers in the proportions set forth
on Annex A hereto, unless (A) any Indemnity Claims are then pending, in which
case an amount equal to the aggregate dollar amount of such Indemnity Claims
(as shown in the Notices of such Claims) shall be retained by Escrow Agent in
the Escrow Fund (and the balance of the Early Release Funds as of such date
paid to Sellers in such proportions) or (B) Buyer has given notice to Sellers
and Escrow Agent specifying in reasonable detail the nature of any other
Indemnity Claim it may have under the Purchase Agreement with respect to which
it is unable to specify the amount of Damages, in which case the entire amount
of the Early Release Funds as of such date shall be retained by Escrow Agent,
in either case until it receives joint written instructions of Buyer and
Sellers or an order of a court of competent jurisdiction as contemplated by
Section 9;
it being understood and agreed to by the parties hereto that the foregoing
provisions of this sentence relating to payment of the Escrow Funds shall apply
only to Early Release Funds and not to any other amounts constituting part of
the Escrow Fund that was deposited with Escrow Agent. The parties agree that
the payment of Indemnity Claims hereunder shall first be applied to Early
Release Funds and then to other funds comprising part of the Escrow Fund.
5.DUTIES OF ESCROW AGENT
(a)Escrow Agent shall not be under any duty to give the Escrow Fund held by it
hereunder any greater degree of care than it gives its own similar property and
shall not be required to invest any funds held hereunder except as directed in
this Agreement.
(b)Escrow Agent shall not be liable, except for its own gross negligence or
willful misconduct, and, except with respect to claims based upon such gross
negligence or willful misconduct that are successfully asserted against Escrow
Agent, the other parties hereto shall jointly and severally indemnify and hold
harmless Escrow Agent (and any successor Escrow Agent) from and against any and
all losses, liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of and in connection
with this Agreement. Without limiting the
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foregoing, Escrow Agent shall in no event be liable in connection with its
investment or reinvestment of any cash held by it hereunder in good faith, in
accordance with the terms hereof, including, without limitation, any liability
for any delays (not resulting from its gross negligence or willful misconduct)
in the investment or reinvestment of the Escrow Fund, or any loss of interest
incident to any such delays.
(c)Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person
purporting to evidence receipt or advice or make any statement or execute any
document in connection with the provisions hereof has been duly authorized to
do so. Escrow Agent may conclusively presume that the undersigned
representative of any party hereto that is an entity other than a natural
person has full power and authority to instruct Escrow Agent on behalf of that
party unless written notice to the contrary is delivered to Escrow Agent.
(d)Escrow Agent may act pursuant to the advice of counsel with respect to any
matter relating to this Agreement and shall not be liable for any action taken
or omitted by it in good faith in accordance with such advice.
(e)Escrow Agent does not have any interest in the Escrow Fund deposited
hereunder but is serving as escrow holder only and has only possession thereof.
Any payments of income from this Escrow Fund shall be subject to withholding
regulations then in force with respect to United States taxes. The parties
hereto will provide Escrow Agent with appropriate Internal Revenue Service
Forms W-9 for tax identification number certification, or non-resident alien
certifications. Section 5(b) and this Section 5(e) shall survive
notwithstanding any termination of this Agreement or the resignation of Escrow
Agent.
(f)Escrow Agent makes no representation as to the validity, value, genuineness
or the collectability of any security or other document or instrument held by
or delivered to it.
(g)Escrow Agent shall not be called upon to advise any party as to the wisdom
in selling or retaining, or taking or refraining from any action with respect
to, any securities or other property deposited hereunder.
(h)Escrow Agent (and any successor Escrow Agent) may at any time resign as such
by delivering the Escrow Fund to any successor Escrow Agent jointly designated
by the other parties hereto in writing, or to any court of competent
jurisdiction, whereupon Escrow Agent shall be discharged of and from any and
all further obligations arising in connection with this Agreement. The
resignation of Escrow Agent will take effect on the earlier of (i) the
appointment of a successor (including a court of competent jurisdiction) and
(ii) the day that is 30 days after the date of delivery of Escrow Agent's
written notice of resignation to the other parties hereto. If at the end of
such 30-day period Escrow Agent has not received a designation of a successor
Escrow Agent, Escrow Agent's sole responsibility thereafter shall be to retain
and safeguard the Escrow Fund until receipt of a designation of successor
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Escrow Agent or a joint written disposition instruction by the other parties
hereto or receipt of a final non-appealable order of a court of competent
jurisdiction.
(i)In the event of any disagreement among the other parties hereto resulting in
adverse claims or demands being made in connection with the Escrow Fund or in
the event that Escrow Agent is in doubt as to what action it should take
hereunder, Escrow Agent shall be entitled to retain the Escrow Fund until
Escrow Agent shall have received (i) a final non-appealable order of a court of
competent jurisdiction directing delivery of the Escrow Fund or (ii) a written
agreement executed by the other parties hereto directing delivery of the Escrow
Fund, in which event Escrow Agent shall disburse the Escrow Fund in accordance
with such order or agreement. Any court order shall be accompanied by a legal
opinion by counsel for the presenting party satisfactory to Escrow Agent to the
effect that the order is final and non- appealable. Escrow Agent shall act on
such court order and legal opinion without further question.
(j)Buyer and Sellers shall pay Escrow Agent compensation (as payment in full)
for the services to be rendered by Escrow Agent hereunder in the amount of
$_________ at the time of execution of this Agreement and $_____________
annually thereafter (until this Agreement is terminated) and agree to reimburse
Escrow Agent for all reasonable expenses, disbursements and advances incurred
or made by Escrow Agent in performance of its duties hereunder (including
reasonable fees, expenses and disbursements of its counsel). Any such
compensation and reimbursement to which Escrow Agent is entitled shall be borne
50% by Buyer and 50% by Sellers. Any fees or expenses of Escrow Agent or its
counsel that are not paid as provided for herein may be taken from any property
held by Escrow Agent hereunder.
(k)No printed or other matter in any language (including, without limitation,
prospectuses, notices, reports and promotional material) that mentions Escrow
Agent's name or the rights, powers or duties of Escrow Agent shall be issued by
the other parties hereto or on such parties' behalf unless Escrow Agent shall
first have given its specific written consent thereto.
(l)The other parties hereto authorize Escrow Agent, for any securities held
hereunder, to use the services of any United States central securities
depository it reasonably deems appropriate, including, without limitation, The
Depositary Trust Company and the Federal Reserve Book Entry System.
6.LIMITED RESPONSIBILITY
This Agreement expressly sets forth all the duties of Escrow Agent with respect
to any and all matters pertinent hereto. No implied duties or obligations of
Escrow Agent shall be read into this Agreement. Escrow Agent shall not be bound
by the provisions of any agreement among the other parties hereto except this
Agreement.
7.OWNERSHIP FOR TAX PURPOSES
Sellers agree that, for purposes of federal and other taxes based on income,
the Sellers will be treated as the owner of the Escrow Fund, respectively, and
that the Sellers will report all income, if any, that
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is earned on, or derived from, the Escrow Fund as their income, in the
proportions set forth on Annex A hereto, in the taxable year or years in which
such income is properly includible and pay any taxes attributable thereto.
8.NOTICES
All notices, consents, waivers and other communications under this Agreement
must be in writing and will be deemed to have been duly given (a) when
delivered by hand (with written confirmation of receipt), (b) when sent by
telecopier (with written confirmation of receipt) provided that a copy is
mailed by registered mail, return receipt requested, (c) three business days
following mailing of such notice, consent, waiver or other communication by
registered mail, return receipt requested, or (d) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers:
Attention:
---------------
Facsimile No.:
---------------
with a copy to:
---------------
Attention:
---------------
Facsimile No.:
---------------
Buyer:
Attention:
---------------
Facsimile No.:
---------------
with a copy to:
---------------
Attention:
---------------
Facsimile No.:
---------------
Escrow Agent:
---------------
Attention:
---------------
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Facsimile No.:
---------------
with a copy to:
---------------
Attention:
---------------
Facsimile No.:
---------------
9. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties hereto in the courts of the State of Texas, County of Harris, or, if it
has or can acquire jurisdiction, in the United States District Court for the
Southern District of Texas, and each of the parties hereto consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may
be served on any party hereto anywhere in the world.
10. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original and all of which, when taken together,
will be deemed to constitute one and the same.
11. SECTION HEADINGS
The headings of sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation.
12. WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power
or privilege or the exercise of any other right, power or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out
of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other parties; (b) no waiver
that may be given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.
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13. EXCLUSIVE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the parties with
respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement among the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by Buyer,
Sellers and Escrow Agent.
14. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Texas,
without regard to conflicts of law principles.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer:
-----------------------------------
Sellers:
By:
--------------------------------
Escrow Agent:
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