UNITED STATES

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): February 22, 2018

 

 

EXCO RESOURCES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Texas   001-32743   74-1492779

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

12377 Merit Drive

Suite 1700

Dallas, Texas

  75251
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (214) 368-2084

Not Applicable.

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8 - K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d - 2(b) under the Exchange Act (17 CFR 240.14d - 2(b))

 

Pre-commencement communications pursuant to Rule 13e - 4(c) under the Exchange Act (17 CFR 240.13e - 4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Explanatory Note

As previously disclosed, on January 15, 2018, EXCO Resources, Inc. (the “ Company ”) and certain of its subsidiaries, including EXCO Services, Inc., EXCO Partners GP, LLC, EXCO GP Partners OLP, LP, EXCO Partners OLP GP, LLC, EXCO Operating Company, LP (“ EOC ”), EXCO Midcontinent MLP, LLC, EXCO Holding (PA), Inc. (“ EXCO Holding ”), EXCO Production Company (PA), LLC (“ EXCO PA ”), EXCO Resources (XA), LLC, EXCO Production (WV), LLC (“ EXCO WV ”), EXCO Land Company, LLC, EXCO Holding MLP, Inc., Raider Marketing, LP and Raider Marketing GP, LLC (collectively, the “ Filing Subsidiaries ” and, together with the Company, the “ Debtors ”), filed voluntary petitions (the “ Bankruptcy Petitions ”) for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “ Court ”). The Bankruptcy Petitions are jointly administered by the Court under the caption In re EXCO Resources, Inc., Case No.  18-30155 (MI) .

 

Item 1.01 Entry into a Material Definitive Agreement.

The Company, EXCO Holding, EXCO Resources (PA), LLC (“ ERPA ”), EXCO PA, EXCO WV, EOC and EXCO Appalachia Midstream, LLC (“ Midstream ” and, together with the Company, EXCO Holding, ERPA, EXCO PA, EXCO WV and EOC, the “ EXCO Parties ”) and BG US Production Company, LLC (“ BG ”), BG North America, LLC (“ BG NA ”), BG Production Company (PA), LLC (“ BG PA ”), BG Production Company (WV), LLC (“ BG WV ” and, together with SWEPI (defined below), BG, BG NA and BG PA, the “ BG Parties ”) formed a joint venture in June 2010 (the “ Joint Venture ”) with respect to the development of jointly-owned oil and gas assets (i) in Pennsylvania (the “ PA Assets ”) and (ii) in the rest of the Appalachia region, including West Virginia (the “ Non-PA Assets ” and, together with the PA Assets, the “ Joint Venture Upstream Assets ”).

Pursuant to the terms of the Joint Venture, each of BG PA and EXCO PA owned a 49.75% interest in the PA Assets, and each of BG WV and EXCO WV owned a 49.75% interest in the Non-PA Assets. ERPA was formed by EXCO Holding and BG to own a 0.5% interest in each of the Joint Venture Upstream Assets and to be the designated operator of substantially all of the Joint Venture Upstream Assets. Midstream was formed by EXCO Holding and BG to own, develop and operate midstream systems necessary to the development of the Joint Venture Upstream Assets. Pursuant to the terms of the Joint Venture, each of ERPA and Midstream was owned 50% by EXCO Holding and 50% by BG.

The Joint Venture was governed by a complex set of agreements (collectively, the “ Joint Venture Agreements ”), including that certain Joint Development Agreement, by and among BG PA, BG WV, EXCO PA, EXCO WV and ERPA (collectively the “ JDA Parties ”), dated as of June 1, 2010 (as amended, the “ JDA ”), which provided for, among other obligations, that (i) the JDA Parties and their affiliates would be subject to an area of mutual interest with respect to any upstream acreage acquired by a JDA Party in New York, Pennsylvania or West Virginia, (ii) the JDA Parties would be subject to various transfer restrictions on their interest in the Joint Venture Upstream Assets, including tag-along rights, certain consent requirements and a preferential purchase right, (iii) the Joint Venture would be subject to the oversight of a joint development committee, and (iv) the development of the Joint Venture Upstream Assets would be carried out in accordance with an annual development plan.


SWEPI LP (“ SWEPI ”) operates within the same geographic area as the Joint Venture Upstream Assets. During the course of the Joint Venture, an affiliate of SWEPI acquired the ultimate parent company of BG, thereby making SWEPI an affiliate of BG, BG PA and BG WV.

Certain claims arose among certain EXCO Parties, on the one hand, and certain BG Parties, on the other hand, with respect to the Joint Venture (the “ Joint Venture Claims ”), which led to an arbitration proceeding, a state court action and mediation proceedings. The EXCO Parties and the BG Parties (collectively, the “ Parties ”) desired to settle all outstanding claims amongst the Parties relating to the Joint Venture and to wind up and terminate the Joint Venture pursuant to the terms of the Settlement Agreement (defined below).

On January 26, 2018, the Debtors filed a motion with the Court under Bankruptcy Rule 9019 seeking entry of an order (the “ 9019 Order ”) approving the EXCO Parties’ entry into the Agreement Regarding Settlement (defined below) and the Settlement Agreement. On February 22, 2018, the 9019 Order was approved and entered by the Court.

Agreement Regarding Settlement

On January 29, 2018, the Parties entered into that certain Agreement Regarding Settlement (the “ Agreement Regarding Settlement ”) to be effective as of the entry of the 9019 Order. Pursuant to the terms of the Agreement Regarding Settlement, the Parties executed and held in escrow, pending entry of the 9019 Order, the Settlement Deliverables (defined below). As required by the terms of the Agreement Regarding Settlement, on February 27, 2018 (the “ Closing Date ”), (i) SWEPI delivered the EXCO Re-Assigned Leases Payment (defined below) to EXCO PA and (ii) the Settlement Deliverables were deemed released and delivered by the applicable Parties.

For purposes of this Form 8-K, the following terms shall have the following meanings:

BG PA MITA ” means that certain Membership Interest (BG PA) Transfer Agreement, dated as of the Closing Date, but effective as of 11:59 p.m. on the Effective Date, by and among BG, BG PA and EXCO PA.

BG WV MITA ” means that certain Membership Interest (BG WV) Transfer Agreement, dated as of the Closing Date, but effective as of 11:59 p.m. on the Effective Date, by and among BG, BG WV and EXCO WV.

Effective Date ” means November 30, 2017.

ERPA MITA ” means that certain Membership Interest (ERPA) Transfer Agreement, dated as of the Closing Date, but effective as of 11:57 p.m. on the Effective Date, by and among BG, ERPA and EXCO Holding.

 

2


Midstream MITA ” means that certain Membership Interest (Midstream) Transfer Agreement, dated as of the Closing Date, but effective as of 11:57 p.m. on the Effective Date, by and among BG, Midstream and EXCO Holding.

Settlement Deliverables ” means, collectively, the Settlement Agreement, BG PA MITA, BG WV MITA, ERPA MITA, Midstream MITA, Termination Agreement and EXCO Re-Assigned Leases Assignment (defined below).

Termination Agreement ” means that certain Termination and Release Agreement, dated as of the Closing Date but effective as of 11:58 p.m. on the Effective Date, by and among BG, BG NA, BG PA, BG WV, the Company, EXCO Holding, ERPA, EXCO PA, EXCO WV, EOC and Midstream.

Settlement Agreement and Mutual Release

That certain Settlement Agreement and Mutual Release (the “ Settlement Agreement ”), dated as of the Closing Date, but effective as of the Effective Date, by and among EXCO Holding, EXCO PA, EXCO WV, ERPA, BG PA, BG WV and SWEPI (collectively, the “ Settlement Parties ”), provides for the settlement of the Joint Venture Claims and the wind-up of the Joint Venture whereby the EXCO Parties acquired the 50% of the Joint Venture owned by BG by providing for:

(i) the release as of the Effective Date by the Settlement Parties of the Joint Venture Claims, including certain claims relating to the accounts receivable and capital of ERPA, and the agreement of the EXCO Parties to file motions causing both the arbitration proceeding and the state court action to be dismissed with prejudice;

(ii) the delivery on the Closing Date of the BG PA MITA, the BG WV MITA and the ERPA MITA, pursuant to which the EXCO Parties acquired all of the membership interests in BG PA and BG WV and the 50% membership interest in ERPA held by BG and, following the consummation of which, the EXCO Parties own all, and operate substantially all, of the Joint Venture Upstream Assets;

(iii) the delivery on the Closing Date of the Midstream MITA, pursuant to which the EXCO Parties acquired the 50% membership interest in Midstream held by BG and, following the consummation of which, the EXCO Parties own and operate all of the midstream systems relating to the Joint Venture Upstream Assets;

(iv) the delivery on the Closing Date of the Termination Agreement pursuant to which the parties thereto terminated all obligations and liabilities under the Joint Venture Agreements, including the JDA; and

(v) the delivery on the Closing Date of that certain reassignment from EXCO PA to SWEPI of certain leases in Tioga County, Pennsylvania that were conveyed to EXCO PA by SWEPI pursuant to the terms of the JDA, effective as of the date of such conveyance to EXCO PA by SWEPI (the “ EXCO Re-Assigned Leases Assignment ”) and the related reimbursement by SWEPI of the amount EXCO PA had paid to acquire such leases (the “ EXCO Re-Assigned Leases Payment ”).

 

3


Membership Interest Transfer Agreements

Each party to the BG PA MITA, the BG WV MITA, the ERPA MITA and the Midstream MITA makes customary representations and warranties and provides a customary release, on behalf of itself and its affiliates, of claims relating to (i) the period prior to the Effective Date, (ii) BG PA, BG WV, ERPA or Midstream, as applicable, and/or (iii) the transactions contemplated by such membership interest transfer agreement, other than claims related to (a) a breach of the Settlement Deliverables and/or (b) assets lying outside the AMI Area (as defined in the Settlement Agreement).

The foregoing descriptions of the Agreement Regarding Settlement, Settlement Agreement, BG PA MITA, BG WV MITA, ERPA MITA, Midstream MITA and Termination Agreement do not purport to be complete and are qualified in their entirety by reference to the Agreement Regarding Settlement, Settlement Agreement, BG PA MITA, BG WV MITA, ERPA MITA, Midstream MITA and Termination Agreement, copies of which are attached to this Current Report on Form 8-K as Exhibit 10.1, Exhibit 10.2, Exhibit 10.3, Exhibit 10.4, Exhibit 10.5, Exhibit 10.6 and Exhibit 10.7, respectively, and are incorporated herein by reference.

Forward Looking Statements

This Form 8-K may contain forward-looking statements relating to future financial results, business expectations and business transactions. Business plans may change as circumstances warrant. In addition, the anticipated benefits from the proposed transaction may not be fully realized. Actual results may differ materially from those predicted as a result of factors over which the Company has no control. Such factors include, but are not limited to: estimates of reserves, commodity price changes, regulatory changes and general economic conditions. These risk factors and additional information are included in the Company’s reports on file with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

 

4


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
Number
  

Description

10.1    Agreement Regarding Settlement, dated January  29, 2018, by and among EXCO Resources, Inc., EXCO Holding (PA), Inc., EXCO Resources (PA), LLC, EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, EXCO Operating Company, LP, EXCO Appalachia Midstream, LLC, BG US Production Company, LLC, BG North America, LLC, BG Production Company (PA), LLC, BG Production Company (WV), LLC and SWEPI LP.
10.2    Settlement Agreement and Mutual Release, dated February  27, 2018, by and among EXCO Holding (PA), Inc., EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, EXCO Resources (PA), LLC, BG Production Company (PA), LLC, BG Production Company (WV), LLC and SWEPI LP.
10.3    Membership Interest (BG PA) Transfer Agreement, dated February 27, 2018, by and among BG US Production Company, LLC, BG Production Company (PA), LLC and EXCO Production Company (PA), LLC.
10.4    Membership Interest (BG WV) Transfer Agreement, dated February 27, 2018, by and among BG US Production Company, LLC, BG Production Company (WV), LLC and EXCO Production Company (WV), LLC.
10.5    Membership Interest (ERPA) Transfer Agreement, dated February 27, 2018, by and among BG US Production Company, LLC, EXCO Resources (PA), LLC and EXCO Holding (PA), Inc.
10.6    Membership Interest (Midstream) Transfer Agreement, dated February 27, 2018, by and among BG US Production Company, LLC, EXCO Appalachia Midstream, LLC and EXCO Holding (PA), Inc.
10.7    Termination and Release Agreement, dated February  27, 2018, by and among BG US Production Company, LLC, BG North America, LLC, BG Production Company (PA), LLC, BG Production Company (WV), LLC, EXCO Resources, Inc., EXCO Holding (PA), Inc., EXCO Resources (PA), LLC, EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, EXCO Operating Company, LP and EXCO Appalachia Midstream, LLC.

 

5


SIGNATURES

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.

 

   

EXCO RESOURCES, INC.

Date: March 1, 2018

    By:  

/s/ Heather Summerfield

   

Name:

 

Heather Summerfield

   

Title:

 

Vice President, General Counsel and Secretary

 

6

Exhibit 10.1

Execution Version

AGREEMENT REGARDING SETTLEMENT

This AGREEMENT REGARDING SETTLEMENT (this “ Agreement ”) is made and entered into on January 29, 2018 (the “ Execution Date ”), by and among each of the signatories hereto (each, a “ Settlement Party ” and, collectively, the “ Settlement Parties ”).

RECITALS

WHEREAS , certain of the Settlement Parties are party to a joint venture regarding jointly-owned assets in the Appalachian area and desire to wind up such joint venture dealings and to settle certain claims relating thereto among certain of the Settlement Parties (the “ Settlement ”);

WHEREAS , the Settlement Parties have agreed to the terms and conditions of the Settlement as set forth in the Escrowed Transaction Documents (defined below); and

WHEREAS , on January 15, 2018, certain of the Settlement Parties, including EXCO Resources, Inc., a Texas corporation (“ EXCO Parent ”), and its applicable Affiliates (as defined in the Settlement Agreement, defined below) (collectively, the “ Bankruptcy Parties ”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “ Bankruptcy Court ”);

WHEREAS , the Settlement Parties have agreed that the Bankruptcy Parties shall file a motion (the “ 9019 Motion ”) under Bankruptcy Rule 9019 seeking entry of an order (the “ 9019 Order ”) approving the Settlement pursuant to the Escrowed Transaction Documents.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Settlement Parties hereby agree as follows:

1. Escrowed Transaction Documents . On the Execution Date, each Settlement Party has executed and acknowledged (where applicable) two counterparts (or, in the case of documents to be recorded, a sufficient number of counterparts to facilitate such recording) of each of the following documents to which such Settlement Party is a party (the “ Escrowed Transaction Documents ”), and has delivered such counterparts of the Escrowed Transaction Documents to the Houston office of Kirkland & Ellis LLP (“ KE ”) to be held in escrow:

(a) Settlement Agreement and Mutual Release, by and among EXCO Holding (PA), Inc., a Delaware corporation (“ EXCO ”), EXCO Production Company (PA), LLC, a Delaware limited liability company (“ EXCOPA ”), EXCO Production Company (WV), LLC, a Delaware limited liability company (“ EXCOWV ”), EXCO Resources (PA), LLC, a Delaware limited liability company (“ Operator ”), BG Production Company (PA), LLC, a Delaware limited liability company (“ BGPA ”), BG Production Company (WV), LLC, a Delaware limited liability company (“ BGWV ”) and SWEPI LP, a Delaware limited partnership (“ SWEPI ”), counterparts of which are attached hereto as Exhibit A (the “ Settlement Agreement ”);

(b) Membership Interest (ERPA) Transfer Agreement, by and among BG US Production Company, LLC, a Delaware limited liability company (“ BG ”), Operator and EXCO, counterparts of which are attached hereto as Exhibit B ;


(c) Membership Interest (Midstream) Transfer Agreement, by and among BG, EXCO Appalachia Midstream, LLC, a Delaware limited liability company (“ Midstream ”) and EXCO, counterparts of which are attached hereto as Exhibit C ;

(d) Membership Interest (BG PA) Transfer Agreement, by and between BG, BGPA and EXCOPA, counterparts of which are attached hereto as Exhibit D ;

(e) Membership Interest (BG WV) Transfer Agreement, by and between BG, BGWV and EXCOWV, counterparts of which are attached hereto as Exhibit E ;

(f) Assignment of EXCO Re-Assigned Leases, by and between EXCOPA and SWEPI, counterparts of which are attached hereto as Exhibit F (the “ Assignment ”); and

(g) Termination and Release Agreement, by and among BG, BG North America, LLC, a Delaware limited liability company, BGPA, BGWV, EXCO Parent, EXCO, Operator, EXCOPA, EXCOWV, EXCO Operating Company, LP, a Delaware limited partnership, and Midstream, counterparts of which are attached hereto as Exhibit G .

2. 9019 Order; Release of Escrowed Transaction Documents . Each of the Settlement Parties hereby instructs KE to hold the Escrowed Transaction Documents in escrow pending entry by the Bankruptcy Court of the 9019 Order. No later than three business days following entry of the 9019 Order, SWEPI shall cause the payment contemplated by paragraph B of the Settlement Agreement to be made. For the avoidance of doubt, SWEPI shall not be obligated to make such payment unless the 9019 Order explicitly releases any applicable liens, mortgages, security interests, or other encumbrances created by EXCO Parent or its Affiliates on the properties described in the Assignment. Upon confirmation of receipt of such payment (the date such payment is confirmed, the “ Closing Date ”), and with no further action required of any Settlement Party, (a) KE shall deliver (i) the Escrowed Transaction Documents to the applicable Settlement Parties and (ii) the 9019 Order to SWEPI for filing of record in the applicable counties to evidence the release any applicable mortgages and security interests created by EXCO Parent or its Affiliates on the properties described in the Assignment, and (b) the Escrowed Transaction Documents shall be deemed released and delivered by each applicable Settlement Party as of the Closing Date.

3. Termination; Effect of Termination. This Agreement shall automatically terminate, and no Settlement Party shall have any continuing obligation hereunder, in the event that (a) the Bankruptcy Parties have not filed the 9019 Motion, which motion shall in form and substance reasonably acceptable to the Settlement Parties, by January 31, 2018, or (b) the 9019 Order, which order shall be in form and substance unconditionally acceptable to the Settlement Parties, is not entered by the Bankruptcy Court on or before April 1, 2018. For the avoidance of doubt, any Settlement Party may terminate this Agreement if the 9019 Order entered by the Bankruptcy Code is not in a form and substance unconditionally acceptable to such Settlement Party. The Settlement Parties hereby direct KE, promptly following termination of this Agreement, to destroy all copies of executed signature pages to the Escrowed Transaction Documents.

 

2


4. Miscellaneous.

(a) This Agreement shall be binding upon and inure to the benefit of the Settlement Parties and their respective successors and permitted assigns. No Settlement Party may assign (by contract, operation of law or otherwise) either this Agreement or any of its rights, interests, or obligations hereunder without the express prior written consent of the other Settlement Parties, and any attempted assignment without such consent shall be null and void. The terms and provisions of this Agreement are intended solely for the benefit of the Settlement Parties and their respective successors or permitted assigns, and it is not the intention of the Settlement Parties to confer third-party beneficiary rights upon any other person.

(b) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any facsimile or other electronic copies hereof or signature hereon shall, for all purposes, be deemed originals.

(c) THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE SETTLEMENT PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

[ Signature pages follow. ]

 

3


IN WITNESS WHEREOF, each of the Settlement Parties has executed this Agreement as of the Execution Date.

 

BG US PRODUCTION COMPANY, LLC     BG PRODUCTION COMPANY (PA), LLC
By:   /s/ Michael Larimer     By:   /s/ Michael Larimer
Name:   Michael Larimer     Name:   Michael Larimer
Title:   VP Operations     Title:   VP Operations
BG NORTH AMERICA, LLC     BG PRODUCTION COMPANY (WV), LLC
By:   /s/ Deforester Jones     By:   /s/ Michael Larimer
Name:   Deforester Jones     Name:   Michael Larimer
Title:   Vice President & Controller     Title:   VP Operations
SWEPI LP      
By:   /s/ Gary D. Cameron      
Name:   Gary D. Cameron      
Title:   US Onshore Land Manager      

[ Signature Page to Agreement Regarding Settlement ]


EXCO RESOURCES, INC.     EXCO RESOURCES (PA), LLC
By:   /s/ Harold L. Hickey     By:   /s/ Harold L. Hickey
Name:   Harold L. Hickey     Name:   Harold L. Hickey
Title:   Chief Executive Officer & President     Title:   Chief Executive Officer & President
EXCO HOLDING (PA), INC.     EXCO APPALACHIA MIDSTREAM, LLC
By:   /s/ Harold L. Hickey     By:   /s/ Harold L. Hickey
Name:   Harold L. Hickey     Name:   Harold L. Hickey
Title:   Chief Executive Officer & President     Title:   Chief Executive Officer & President
EXCO OPERATING COMPANY, LP     EXCO PRODUCTION COMPANY (PA), LLC
By:   EXCO Partners OLP GP, LLC, its general partner      
By:   /s/ Harold L. Hickey     By:   /s/ Harold L. Hickey
Name:   Harold L. Hickey     Name:   Harold L. Hickey
Title:   Chief Executive Officer & President     Title:   Chief Executive Officer & President
      EXCO PRODUCTION COMPANY (WV), LLC
      By:   /s/ Harold L. Hickey
      Name:   Harold L. Hickey
      Title:   Chief Executive Officer & President

[ Signature Page to Agreement Regarding Settlement ]


Acknowledged (solely as to its responsibilities hereunder)

 

KIRKLAND & ELLIS LLP
By:   /s/ Alexandra Schwarzman
Name:   Alexandra Schwarzman
Title:   Associate

[ Signature Page to Agreement Regarding Settlement ]

Exhibit 10.2

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This Settlement Agreement and Mutual Release is made and entered into, as of the Closing Date (as defined below) but is effective as of the Effective Time, by and among (i) EXCO Holding (PA), Inc., EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, and EXCO Resources (PA), LLC (with EXCO Resources, Inc. and EXCO Appalachia Midstream, LLC being the beneficiary of the certain releases contained herein); (ii) BG Production Company (PA), LLC, and BG Production Company (WV), LLC; and (iii) SWEPI LP (with Royal Dutch Shell, PLC and Shell Oil Company being the beneficiaries of the certain releases contained herein).

DEFINITIONS

 

  a) Agreement means this Settlement Agreement and Mutual Release.

 

  b) Affiliate ” and “ Affiliates ” have the meaning given such terms in the ERPA MITA.

 

  c) Closing Date ” has the meaning set forth in that certain Agreement Regarding Settlement among the Parties and certain of their respective Affiliates.

 

  d) Effective Time means the effective time of this Agreement, which shall be as of 11:58 p.m. on November 30, 2017.

 

  e) Execution Date ” has the meaning set forth in the preamble.

 

  f) EXCO ” means EXCO Holding (PA), Inc., EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, and EXCO Resources (PA), LLC, the Plaintiffs in the Lawsuit and the Claimants in the Arbitration.

 

  g) BG Entities means BG Production Company (PA), LLC and BG Production Company (WV), LLC, the Respondents in the Arbitration.

 

  h) SWEPI ” means SWEPI LP, a Defendant in the Lawsuit and an objecting Respondent in the Arbitration.

 

  i) Royal Dutch Shell ” means Royal Dutch Shell, PLC, a Defendant in the Lawsuit and an objecting Respondent in the Arbitration.

 

  j) Shell Oil Company ” means Shell Oil Company, a Defendant in the Lawsuit.

 

  k) Parties ” means EXCO, the BG Entities, and SWEPI.


  l) Arbitration ” means the American Arbitration Association arbitration styled as EXCO Holding (PA), Inc., EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, and EXCO Resources (PA), LLC v. Royal Dutch Shell, PLC, SWEPI LP, BG Production Company (PA), LLC, and BG Production Company (WV), LLC, Case Number: 01-17-0001-5434.

 

  m) Lawsuit ” means the suit styled as EXCO Holding (PA), Inc., EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC and EXCO Resources (PA), LLC v. Royal Dutch Shell, PLC, Shell Oil Company, and SWEPI LP, Cause Number: 2017-53479, in the 164 th Judicial District Court of Harris County, Texas.

 

  n) JDA ” means the Joint Development Agreement by and among EXCO and the BG Entities, dated June 1, 2010, as the same may heretofore been amended.

 

  o) AMI ” means the Area of Mutual Interest provision located at Section 9 of the JDA.

 

  p) AMI Area ” has the meaning given such term in the JDA.

 

  q) Oil and Gas Assets ” has the meaning given such term in the JDA.

 

  r) Occurrence ” means the set of facts, transactions, acts, omissions, and events alleged, proven, and/or otherwise related to EXCO’s and the BG Entities’ joint development activities in the AMI Area, the JDA, the Arbitration, and/or the Lawsuit.

 

  s) Dispute ” means all actual and potential disputes, claims, controversies, and causes of action that arise out of or relate, directly or indirectly, to the Occurrence, to the Arbitration, and/or to the Lawsuit.

 

  t) ERPA MITA ” means the Membership Interest (ERPA) Transfer Agreement attached hereto as Exhibit A-1 .

 

  u) Appalachia Midstream MITA ” means the Membership Interest (Midstream) Transfer Agreement attached hereto as Exhibit A-2 .

 

  v) BGPA MITA ” means the Membership Interest (BG PA) Transfer Agreement attached hereto as Exhibit A-3 .

 

  w) BGWV MITA ” means the Membership Interest (BG WV) Transfer Agreement attached hereto as Exhibit A-4 .

 

  x)

Released Claims ” means all existing, future, known, and unknown claims, demands, and causes of action, for all existing, future, known, and unknown damages and remedies (1) that arise out of or relate, directly or indirectly, to EXCO’s and the BG Entities’ joint development activities in the AMI Area, the JDA, the Occurrence, the Dispute, the Arbitration, and/or the Lawsuit; or (2) that have been brought or that could have been brought by or on behalf of the Parties in the Arbitration or the Lawsuit, based on acts, omissions, or other conduct relating to the JDA, the Occurrence, the Dispute, the Arbitration, and/or the Lawsuit. Under this definition, “Released Claims” includes, but is

 

2


  not limited to, all claims, demands, lawsuits, debts, accounts, covenants, agreements, actions, cross-actions, liabilities, obligations, implied obligations, losses, costs, expenses, remedies, and causes of action of any nature, whether in contract, tort or any other legal theory, or based upon fraud or misrepresentation, breach of duty or common law, or arising under or by virtue of any judicial decision, statute, or regulation, for past, present, future, known, and unknown injuries, property or economic damage, and all other losses and damages of any kind, including but not limited to the following: all actual damages; all exemplary and punitive damages; all penalties of any kind; damage to business reputation; lost profits or good will; consequential damages; damages ensuing from loss of credit; and prejudgment and post-judgment interest, costs, and attorney’s fees. This definition further includes, but is not limited to, all elements of damages, all remedies, and all claims, demands, and causes of action that are now recognized by law or that may be created or recognized in the future by any manner, including, without limitation, by statute, regulation, or judicial decision. Without limiting the above definition, “Released Claims” further includes any future claims for indemnity whether the underlying claim requiring indemnity is known or unknown by the Parties as of the Effective Time. Notwithstanding anything herein to the contrary, “Released Claims” DO NOT INCLUDE (i) any breaches of this Agreement or any of the Operative Documents, (ii) any claims under the Operative Documents by any Party or its Affiliates and/or (iii) any claims by any Party or its Affiliates with respect to matters relating to assets lying outside the AMI Area. THE RELEASES AS SET FORTH HEREIN ARE SPECIFICALLY INTENDED TO OPERATE AND TO BE APPLICABLE EVEN IF IT IS ALLEGED, CHARGED, OR PROVED THAT ALL OR SOME OF THE CLAIMS OR DAMAGES RELEASED WERE CAUSED AS A WHOLE OR IN PART BY ANY ACT, OMISSION, NEGLIGENCE, GROSS NEGLIGENCE, BREACH OF CONTRACT, INTENTIONAL CONDUCT, VIOLATION OF STATUTE OR COMMON LAW, BREACH OF WARRANTY (EXPRESS OR IMPLIED), PRODUCT DEFECT, STRICT LIABILITY, OR ANY OTHER CONDUCT WHATSOEVER OF THE RELEASED PERSONS AND ENTITIES.

 

  y) EXCO Reassignment ” means the Assignment of EXCO Re-Assigned Leases attached hereto as Exhibit B .

 

  z) Termination Agreement ” means the Termination Agreement attached hereto as Exhibit C .

 

  aa) Operative Documents ” means the ERPA MITA, the Appalachia Midstream MITA, the BGPA MITA, the BGWV MITA, the EXCO Reassignment and the Termination Agreement.

 

  bb) Law ” has the meaning given such term in the ERPA MITA.

 

3


RECITALS

1. EXCO filed its Demand for Arbitration and Statement of Claim in the Arbitration, alleging breach of contract, tortious interference with existing contract, and unjust enrichment, as well as seeking an accounting and declaratory relief.

2. Royal Dutch Shell and SWEPI filed their Objection to Jurisdiction in the Arbitration, which prompted EXCO to initiate the Lawsuit by filing its Original Petition and Motion to Compel.

3. On Thursday, October 26, 2017, the Parties participated in a mediation. While a full settlement was not reached, the Parties did execute a Confidential Settlement Procedure Protocol.

4. The Parties now wish to wind-up all joint venture dealings among the Parties and their Affiliates in the Appalachian area, and to settle both the Lawsuit and the Arbitration, without further cost or expense. Accordingly, as set forth herein and subject to the terms hereof, the Parties (on their own behalf and on behalf of their respective Affiliates) have agreed to compromise and resolve the Lawsuit, the Arbitration, and all other current or potential disputes between them regarding the Oil and Gas Assets in the AMI Area, as those terms are defined in the JDA.

AGREEMENTS

NOW, THEREFORE, for and in consideration of the mutual promises, releases, and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby irrevocably acknowledged and confessed, the Parties agree as follows:

 

4


A. To effectuate the Parties’ agreement regarding the settlement of the Arbitration and the Lawsuit, the Parties agree, as of the Closing Date, to deliver (or cause to be delivered) executed counterparts of (i) the ERPA MITA, (ii) the Appalachia Midstream MITA, (iii) the BGPA MITA, (iv) the BGWV MITA (collectively, the “ Settlement MITAs” ), and (v) the Termination Agreement. The Parties will (or will cause their applicable respective Affiliates to) consummate the transactions contemplated by the Settlement MITAs.

B. EXCO (or its applicable Affiliate) shall reconvey to SWEPI any interest it owns in the 36 leases made the subject of SWEPI’s September 1, 2016, offer letter. Such leases shall be reconveyed to SWEPI free and clear of any liens, mortgages, interest, or other encumbrances under 11 U.S.C. § 363(f), or, in the alternative, EXCO will provide SWEPI with executed releases from EXCO’s creditors for all liens, mortgages, security interests, or other encumbrances that have been placed on such leases being reconveyed to SWEPI. To effectuate this reconveyance, EXCO (or its applicable Affiliate) and SWEPI shall deliver (or cause to be delivered) the EXCO Reassignment as of the Closing Date. As consideration for the EXCO Reassignment, on the Closing Date after the other conditions in this paragraph are met, SWEPI shall pay Six Hundred Fifty Seven Thousand Dollars and Zero Cents ($657,000.00) to EXCO Production Company (PA), LLC.

C. Within five (5) days of the Closing Date, EXCO will file the Motions to Dismiss and accompanying Orders attached hereto as Exhibit D-1 and Exhibit D-2 , which Motions request dismissal with prejudice of the Lawsuit and the Arbitration, respectively.

D. The Parties understand and agree that their agreement to resolve the Dispute, Arbitration, and Lawsuit as set forth herein is not an admission of liability, which is expressly denied, but is being done in order to avoid further time and costs referable to the Lawsuit and the Arbitration. Neither the execution of this Agreement or anything stated herein, nor any amount paid hereunder, is to be construed as or deemed an admission of liability, culpability, or wrongdoing by any Party.

 

5


SWEPI does not in any manner concede that: (1) it was or is bound by the terms of the JDA and/or the AMI; or (2) it agrees with EXCO’s position with respect to whether Royal Dutch Shell, Shell Oil Company, and/or SWEPI are bound by the JDA and/or the AMI.

E. Each of the Parties acknowledges that it or its Affiliates may hereafter discover facts different from, or in addition to, those that it now knows or believes to be true with respect to the disputes alleged in the Litigation and Arbitration, and agree that this Agreement and the releases contained herein shall be and remain effective in all respects, notwithstanding such different or additional facts and the subsequent discovery thereof.

F. Each of the Parties acknowledges its waiver (including its waiver on behalf of any of its Affiliates) of any consent to assignment, transfer restriction, or preferential rights that it or its Affiliates may hold that may otherwise be triggered by this Agreement or the Operative Documents.

G. The Parties understand and agree that all existing contracts and contractual obligations between EXCO and the BG Entities respecting the AMI Area, including, but not limited to, the JDA, the parent company guarantee attached to the JDA and executed by BG North America, LLC in favor of EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, EXCO Holding (PA), Inc., and EXCO Resources (PA), LLC, and all other related agreements corresponding to such upstream and midstream activities with respect to the AMI Area, will be terminated pursuant to the Termination Agreement. Incident to the termination of the contracts and contractual obligations as set forth herein, EXCO agrees to waive the BG Entities’ and their Affiliates’ accounts receivable in the amount of $2,569,899.00 that was owed to EXCO Resources (PA), LLC as of the Effective Time in return for the release by the BG Entities and their Affiliates of the right to their proportionate share of the capital in

 

6


said entity that existed as of the Effective Time, being an amount of $7,199,517.00, which such capital amount shall be retained by EXCO Resources (PA), LLC. In addition, the Parties accept and agree that, with the exception of (i) the asset reconveyance expressly referenced in this Agreement, and (ii) the $657,000.00 payment by SWEPI to EXCO Production Company (PA), LLC described in paragraph B above, and without waiving any rights of the Parties and their Affiliates under the Operative Documents (including for any breach thereof), no other compensation, accounting adjustments, or working capital adjustments, of any kind or nature, will be due or payable by either party to the other with regard to this settlement. For the avoidance of doubt, in the event of conflict between the terms and provisions of this Agreement and the Termination Agreement, the terms and provisions in the Termination Agreement will control.

H. Releases :

 

  (a) The Parties agree that each Party shall bear its own attorneys’ fees, costs of court, and other expenses that arise out of or relate to the Dispute, the Arbitration, the Lawsuit, and/or the negotiation, drafting, and execution of this Agreement.

 

  (b) EXCO’s Released Claims. EXCO hereby WAIVES, RELEASES, ACQUITS, AND FOREVER DISCHARGES the BG Entities, Royal Dutch Shell, Shell Oil Company, and SWEPI, all of their affiliated companies and entities, and each of their respective present and former administrators, agents, representatives, officers, directors, employees, owners, shareholders, members, parent entities, partners, subsidiaries, assigns, predecessors-in-business or interest, and other successor and related companies, of and from the Released Claims.

 

  (c) The BG Entities’ Released Claims. The BG Entities hereby WAIVE, RELEASE, ACQUIT, AND FOREVER DISCHARGE EXCO, EXCO Appalachia Midstream, LLC and EXCO Resources, Inc., all of EXCO’s affiliated companies and entities, and EXCO’s present and former administrators, agents, representatives, officers, directors, employees, owners, shareholders, members, parent entities, partners, subsidiaries, assigns, predecessors-in-business or interest, and other successor and related companies, of and from the Released Claims.

 

7


  (d) SWEPI’s Released Claims. SWEPI hereby WAIVES, RELEASES, ACQUITS, AND FOREVER DISCHARGES EXCO, EXCO Appalachia Midstream, LLC and EXCO Resources, Inc., all of EXCO’s affiliated companies and entities, and EXCO’s present and former administrators, agents, representatives, officers, directors, employees, owners, shareholders, members, parent entities, partners, subsidiaries, assigns, predecessors-in-business or interest, and other successor and related companies, of and from the Released Claims.

I. Representations and Warranties . In consideration for the agreements contained herein, each of the Parties expressly warrants and represents the following:

 

  (i) this Agreement constitutes a legal, valid, and binding obligation of each Party and is enforceable against each Party in accordance with its terms;

 

  (ii) it has not assigned, pledged, or otherwise transferred any Released Claim or any cause of action it has or may have against another Party with respect to the JDA, the Occurrence, the Dispute, the Arbitration, or the Lawsuit;

 

  (iii) it has the power and authority to enter into this Agreement and to perform its obligations;

 

  (iv) it has carefully read and fully understands all of the provisions and effects of this Agreement, and has thoroughly discussed all aspects of this Agreement with its attorneys of record;

 

  (v) it is voluntarily entering into this Agreement and has relied solely and completely upon its own judgment, the promises made herein, and the advice of its attorneys in deciding to enter into this Agreement;

 

  (vi) no other representations have been made concerning the terms or effects of this Agreement other than those expressly contained herein or in the Operative Documents;

 

  (vii) it is entering into this Agreement with full and complete knowledge of its contents and the effects thereof, solely motivated by its own free will and accord, and there are no inducements to enter into this Agreement except as expressly stated in this Agreement;

 

  (viii) the person signing this Agreement is fully authorized and legally competent to execute this Agreement on behalf of the Party for which he or she is signing, and has full authority to bind that Party to the terms and conditions set forth in this Agreement;

 

  (ix) it has executed all documents, or undertaken all actions necessary, to authorize it to enter into this Agreement, and the other Parties may rely upon any statements and representations made herein with respect to such authorizations;

 

8


  (x) the releases provided herein shall include any claims based on allegations of inaccurate representations or omissions of any type by any other person or entity (other than any representation contained herein or in the Operative Document made by a Party or any of its Affiliates), including claims of fraudulent inducement into this Agreement, to the full extent permitted by Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997) and Forest Oil Corp. v. McAllen, 268 S.W.3d 51 (Tex. 2008). Each of the Parties agree that: (A) it is knowledgeable in business matters; (B) each and every term of this Agreement was negotiated between highly skilled counsel for the Parties to this Agreement, who dealt with one another at arm’s length at all times; and (C) it has not relied on any representations by the other Party or its representatives in entering into this Agreement other than those contained herein or in the Operative Documents; and

 

  (xi) it will cooperate fully to execute any and all supplementary or additional documents required to effectuate the agreements set forth herein, and to take all additional actions that may be necessary or appropriate to give full effect to the terms and conditions of this Agreement.

J. No Oral Modification or Waiver . No provision of this Agreement may be changed, altered, modified or waived, except in writing signed by each of the Parties, and the Parties waive any common law, statutory, or other right they may otherwise have to modify or waive, by agreement or conduct, any part or all of this Agreement. No waiver of default of any term of this Agreement shall be deemed a waiver of any subsequent breach or default of any other provision.

K. Choice of Law . This Agreement shall be construed and enforced in accordance with the laws of the State of Texas, excluding any choice of law rules or conflicts of law principles that would refer the matter to the substantive laws of another jurisdiction.

L. Confidentiality. No Party shall (and each shall cause its Affiliates not to) issue any press release or make any statement to the general public relating to the subject matter of this Agreement unless such Party has first consulted with the other Parties and obtained the other

 

9


Parties’ prior written approval of the text thereof; provided, however , that nothing herein shall prevent a Party from publishing such press releases or other statement to the general public as is necessary to satisfy such Party’s obligations at Law or under the applicable rules of any stock or commodities exchange or any court after consultation with the other Parties and such other Parties’ reasonable review and comment. Any Party may otherwise disclose the fact that the Lawsuit has been settled and may file the Motion to Dismiss without violating this confidentiality provision. While any Party may disclose the fact that this dispute has been settled without violating this confidentiality provision, no Party shall state, suggest, or imply that this confidentiality provision, or any other provision of this Agreement, was requested by any other Party as a condition to settlement. Notwithstanding the foregoing, the Parties acknowledge that a form of this Agreement (either executed or unexecuted) may be filed in the Bankruptcy Court in connection with the Motion to Approve.

M. Forum Selection . The Parties agree that any legal action commenced by any of the Parties or any dispute that arises out of, relates to, or is in any way connected with this Agreement, including, but not limited to, any action to obtain implementation, interpretation, or enforcement of this Agreement, or any action challenging the existence, validity, or enforceability of this Agreement, shall be brought in the district courts of Houston, Harris County, Texas. The Parties hereby waive any objection on the grounds of jurisdiction, venue, forum non-conveniens, or any similar grounds and consent to the jurisdiction of the district courts located in Houston, Harris County, Texas. The prevailing party in said legal action shall be entitled to recover its reasonable attorneys’ fees, expert fees, and costs.

N. Joint Drafting . This Agreement has been prepared by the joint efforts of the respective attorneys for each of the Parties, and further, the Parties acknowledge that they have had this Agreement reviewed by lawyers of their own choosing and have relied upon their own counsels’ explanation and advice in entering into the same.

 

10


O. Severability . If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, unenforceable, or contrary to public policy or any law, the remaining provisions of this Agreement shall nevertheless survive and continue in full force and effect without being impaired or invalidated in any way. If any provision, term, or clause of this Agreement is so severed, there shall be added in its place a provision as similar in terms to such illegal or unenforceable provision as may be possible, legal, valid, and enforceable. The Parties agree that the court can and should enforce this Agreement to the maximum extent allowed by law.

P. Entire Agreement . This Agreement and its attached exhibits (including the Operative Documents) reflect the entire agreement between the Parties and their respective Affiliates with regard to the subject matter of the Agreement. There are no other agreements or understandings between the Parties (or their respective Affiliates), either written or oral, with regard to the subject matter hereof, and the execution of this Agreement supersedes and cancels any earlier representations, negotiations, understandings, or agreements between the Parties regarding the subject matter of this Agreement. This Agreement cannot be modified, amended, changed, or terminated orally. No waiver of any of the terms of this Agreement shall be valid unless in writing and signed by the waiving party.

Q. Multiple Originals . It is understood and agreed that this Agreement may be executed in counterparts, each of which shall be deemed an original for all purposes, and that the signature pages may be facsimiles or electronically-transmitted copies.

 

11


R. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, and assigns.

S. Headings . Headings used in this Agreement are only for convenience of reference and shall not be used to define the meaning of any provision.

[remainder of this page is intentionally blank]

 

12


AGREED TO BY:

 

EXCO Holding (PA), Inc.
By:   /s/ Harold L. Hickey

Name:

 

Harold L. Hickey

Title:

 

Chief Executive Officer & President

EXCO Production Company (PA), LLC
By:   /s/ Harold L. Hickey

Name:

 

Harold L. Hickey

Title:

 

Chief Executive Officer & President

EXCO Production Company (WV), LLC
By:   /s/ Harold L. Hickey

Name:

 

Harold L. Hickey

Title:

 

Chief Executive Officer & President

EXCO Resources (PA), LLC
By:   /s/ Harold L. Hickey

Name:

 

Harold L. Hickey

Title:

 

Chief Executive Officer & President

[ Signature Page to Settlement Agreement and Mutual Release ]


      Name: Harold L. Hickey
      Title: Chief Executive Officer & President
STATE OF TEXAS    §   
   §   
COUNTY OF DALLAS    §   

BEFORE ME, the undersigned authority, on this day personally appeared Harold L. Hickey of EXCO Holding (PA), Inc., known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE this 15th  day of December, 2017.

 

/s/ April K L’Hoste
Notary Public in and for the
STATE OF TEXAS

[NOTARY SEAL]

 

[ Acknowledgment Page to Settlement Agreement and Mutual Release ]


      Name: Harold L. Hickey
      Title: Chief Executive Officer & President
STATE OF TEXAS    §   
   §   
COUNTY OF DALLAS    §   

BEFORE ME, the undersigned authority, on this day personally appeared Harold L. Hickey of EXCO Production Company (PA), LLC, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE this 15th  day of December, 2017.

 

/s/ April K L’Hoste
Notary Public in and for the
STATE OF TEXAS

[NOTARY SEAL]

 

[ Acknowledgment Page to Settlement Agreement and Mutual Release ]


      Name: Harold L. Hickey
      Title: Chief Executive Officer & President
STATE OF TEXAS    §   
   §   
COUNTY OF DALLAS    §   

BEFORE ME, the undersigned authority, on this day personally appeared Harold L. Hickey of EXCO Production Company (WV), LLC, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE this 15th  day of December, 2017.

 

/s/ April K L’Hoste
Notary Public in and for the
STATE OF TEXAS

[NOTARY SEAL]

 

[ Acknowledgment Page to Settlement Agreement and Mutual Release ]


      Name: Harold L. Hickey
      Title: President & Chief Executive Officer
STATE OF TEXAS    §   
   §   
COUNTY OF DALLAS    §   

BEFORE ME, the undersigned authority, on this day personally appeared Harold L. Hickey of EXCO Resources (PA), LLC, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE this 15th  day of December, 2017.

 

/s/ April K L’Hoste
Notary Public in and for the
STATE OF TEXAS

[NOTARY SEAL]

 

[ Acknowledgment Page to Settlement Agreement and Mutual Release ]


BG Production Company (PA), LLC
By:   /s/ John Shimmel
Name:   John Shimmel
Title:   President
BG Production Company (WV), LLC
By:   /s/ John Shimmel
Name:   John Shimmel
Title:   President
SWEPI LP
By:   /s/ Greg Guidry
Name:   Greg Guidry
Title:   EVP Unconventionals

 

[ Signature Page to Settlement Agreement and Mutual Release ]


      Name:    John Shimmel
      Title:    President
STATE OF TEXAS    §      
   §      
COUNTY OF HARRIS    §      

BEFORE ME, the undersigned authority, on this day personally appeared John Shimmel of BG Production Company (PA) LLC, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE this 26 th day of January, 2018.

 

/s/ Patricia L Gunning
Notary Public in and for the
STATE OF TEXAS

[NOTARY SEAL]

 

[ Acknowledgment Page to Settlement Agreement and Mutual Release ]


      Name:    John Shimmel
      Title:    President
STATE OF TEXAS    §      
   §      
COUNTY OF HARRIS    §      

BEFORE ME, the undersigned authority, on this day personally appeared John Shimmel of BG Production Company (WV) LLC, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE this 26 th day of January, 2018.

 

/s/ Patricia L Gunning
Notary Public in and for the
STATE OF TEXAS

[NOTARY SEAL]

 

[ Acknowledgment Page to Settlement Agreement and Mutual Release ]


      Name:    Greg Guidry
      Title:    EVP Unconventionals
STATE OF TEXAS    §      
   §      
COUNTY OF HARRIS    §      

BEFORE ME, the undersigned authority, on this day personally appeared Greg Guidry of SWEPI LP, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE this 25 th day of January, 2018.

 

/s/ Patricia L Gunning
Notary Public in and for the
STATE OF TEXAS

[NOTARY SEAL]

 

[ Acknowledgment Page to Settlement Agreement and Mutual Release ]

Exhibit 10.3

Execution Version

MEMBERSHIP INTEREST (BG PA) TRANSFER AGREEMENT

THIS MEMBERSHIP INTEREST (BG PA) TRANSFER AGREEMENT (this “ Agreement ”) is entered into as of the Closing Date (as defined below), but is effective for all purposes as of 11:59 p.m. on November 30, 2017 (the “ Effective Time ”), by and among BG US Production Company, LLC, a Delaware limited liability company (“ Seller ”), BG Production Company (PA), LLC, a Delaware limited liability company (“ Company ”), and EXCO Production Company (PA), LLC, a Delaware limited liability company (the “ Purchaser ”). Each of Seller, Company and Purchaser may be referred to as a “ Party ” or together, as the “ Parties .” Capitalized terms not otherwise defined herein, including in Section  12 , shall have the meanings attributed to them in the Amended and Restated Operating Agreement of Company dated June 1, 2010 (as amended, the “ Operating Agreement ”).

RECITALS

WHEREAS , Seller is the sole member in Company;

WHEREAS , the business and affairs of Company are governed by the Operating Agreement;

WHEREAS , Seller owns 100% of the issued and outstanding membership interests in Company (the “ Membership Interests ”);

WHEREAS , Purchaser, certain Affiliates of Purchaser, Company, and certain Affiliates of Seller are entering or have entered into that certain Settlement Agreement and Mutual Release, dated as of the Closing Date (the “ Settlement Agreement ”); and

WHEREAS , in accordance with the Settlement Agreement, Seller will sell and Purchaser will purchase all of Seller’s right, title, and interest in and to all of the Membership Interests upon the terms and subject to the conditions set forth herein in return for the consideration specified herein.

NOW, THEREFORE , in consideration of the mutual representations, covenants and agreements contained herein and in the Settlement Agreement and other good and valuable consideration set forth herein and in the Settlement Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties to this Agreement hereby agree as follows:

1. Transfer and Assignment . Subject to all of the terms of this Agreement, Seller shall transfer the Membership Interests to Purchaser effective as of the Effective Time.

2. Assignment and Assumption; Agreement to be Bound; No Longer Member . For and in consideration of agreed value, the receipt and sufficiency of which is hereby acknowledged, Seller hereby sells, conveys, assigns, transfers and delivers to Purchaser, free and clear of all Encumbrances, all of its right, title and interest in and to the Membership Interests, and Purchaser hereby takes and accepts such assignment and transfer, in each case, effective as of the Effective Time (the “ Transfer ”). PURCHASER HEREBY AGREES TO ASSUME, ACCEPT AND TIMELY PERFORM AND DISCHARGE ANY AND ALL OF THE DUTIES,


COVENANTS, LIABILITIES AND OTHER OBLIGATIONS OF SELLER UNDER THE OPERATING AGREEMENT, WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME. SELLER AND ITS AFFILIATES SHALL BE RELEASED FROM ALL OF ITS RESPECTIVE OBLIGATIONS UNDER THE OPERATING AGREEMENT WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME, AND AS A RESULT OF SUCH RELEASE OF SELLER BY PURCHASER AND THE TRANSFER, IT IS UNDERSTOOD AND AGREED THAT AS OF THE EFFECTIVE TIME, SELLER SHALL NO LONGER BE A MEMBER OF, NOR HAVE ANY INTEREST OR RIGHTS TO PARTICIPATE IN, COMPANY. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING ASSUMPTION AND RELEASE SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

3. Recognition of Transfer by Company . Company hereby consents to and recognizes the Transfer. Purchaser shall file this Agreement with the records of Company following the Closing Date.

4. Representations and Warranties of Seller and Company . Seller and Company represents and warrants to Purchaser, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Each of Seller and Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation. Company is duly licensed, qualified or otherwise authorized to conduct business and is in good standing under the Laws of each jurisdiction in which it carries on business or owns assets and such qualification is required by Law.

 

  b. Authority . Each of Seller and Company has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by each of Seller and Company, and the performance of all obligations hereunder, have been duly authorized by all necessary action. Company has all requisite power and authority to own and operate its property and to carry on its business as presently conducted by it.

 

  c. Enforceability . This Agreement has been duly and validly executed and delivered by each of Seller and Company and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of each of Seller and Company enforceable against Seller and Company in accordance with its terms.

 

  d.

No Conflict . The execution, delivery, and performance of this Agreement by each of Seller and Company will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Seller, Company or any of their Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Seller or Company or any of their Affiliates is subject, (iii) conflict with, result in a breach or default under, or accelerate or permit the acceleration of the performance required by any term or

 

2


  condition of the applicable Organizational Documents of Seller or Company or any of their Affiliates or any material Contract to which Seller or Company or any of their Affiliates is subject, a party to or bound by, or (iv) result in the creation or imposition of any Encumbrance upon any property of Company or the Membership Interests. Except as provided in the Operating Agreement, no consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Seller or Company of this Agreement.

 

  e. Brokers’ Fees . Neither of Seller nor Company nor any of their Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Purchaser or any other Party; and Seller shall indemnify and hold harmless Purchaser from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Seller in connection with this Agreement.

 

  f. Operating Agreement . Prior to the date hereof, Seller has provided to Purchaser true, correct and complete copies of the Organizational Documents of Company, including the Operating Agreement, together with all amendments thereto.

 

  g. Title to Membership Interests . Seller owns beneficially and of record all of the issued and outstanding membership interests in Company. The Membership Interests constitute all of the issued and outstanding equity interests in Company that are owned by Seller or any of its Affiliates. The Membership Interests (i) are duly authorized, validly issued, fully paid and nonassessable; (ii) are free and clear of all Encumbrances (other than restrictions imposed on transfer under applicable federal and/or state securities Laws or regulations); (iii) are not subject to any agreements or understandings among any Persons with respect to the voting or transfer thereof; and (iv) other than this Agreement, are not subject to any outstanding subscriptions, options, convertible securities, warrants, calls or other securities granting rights to purchase or otherwise acquire any of such Membership Interests or any commitments or agreements of any character obligating Seller to transfer, redeem or exchange any of such Membership Interests or the beneficial interest thereto. Company does not have, or has never had, any subsidiaries or direct or indirect equity interest in any Person. Company has not made any distribution to any member from an after January 1, 2017.

 

  h. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither Seller, Company nor any of their Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

 

3


  i. Litigation . There are no Proceedings pending, threatened in writing, or, to Seller’s Knowledge, threatened orally by any Person against Seller or its Affiliates with respect to (i) the Membership Interests, and/or (ii) other than any Proceedings to which Purchaser or its Affiliates is a party thereto, Company or the assets held by Company.

 

  j. Contracts . To Seller’s Knowledge, except as set forth on Schedule 1 , Company is not a party to any Contract other than Contracts to which Purchaser or one of its Affiliates is a party thereto or has Knowledge thereof. Company is, and to Seller’s Knowledge, each counterparty thereto (other than Purchaser or its Affiliates) is, in material compliance with, and not in default in any material respect under, any Contract to which Company is a party.

 

  k. Taxes . (i) All Tax Returns required to be filed by Company have been timely filed and all such Tax Returns are true, correct and complete in all material respects; (ii) all Taxes due and payable by Company have been paid whether or not shown as due on such Tax Returns; (iii) there are no Encumbrances on any of the assets held by Company that arose in connection with the failure to pay any Tax by Company; (iv) there are no Proceedings, Claims or notices of deficiency pending against or threatened in writing against Company in connection with any unpaid Tax; (v) no Tax Returns of Company are under audit or examination by any Governmental Authority; (vi) there are no agreements or waivers currently in effect that provide for an extension of time with respect to the filing of any Tax Return by Company or the assessment or collection of any Tax from Company; (vii) no written claim has been made by any Governmental Authority in a jurisdiction where Company did not file a Tax Return or pay a Tax directly that it is or may be required to file such a Tax Return or pay such a Tax (as the case may be) in that jurisdiction; and (viii) other than the “EXCO-BG Appalachia Tax Partnership,” none of the assets of Company is subject to any tax partnership agreement or provisions requiring a partnership income tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state statute.

 

  l. Compliance with Laws . To Seller’s and Company’s Knowledge, Company is not, and during the past three years has not been, in material violation of any applicable Laws.

 

  m. Environmental Matters . To Seller’s Knowledge, with respect to any assets owned by Company other than Development Assets: (i) Company has, and for the past three years has had, all material Environmental Permits required for the ownership or operation of such assets; (ii) Company is not in default in any material respect under any material Environmental Permit; and (iii) Company is not subject to any pending Proceeding related to such assets, whether judicial or administrative, alleging any noncompliance in any material respect with, or potential material liability under, any Environmental Law or any release or any Hazardous Substance.

 

4


  n. Indebtedness . Company does not have any Indebtedness from or to any other Person, and/or has not made any guarantees for the benefit of any Person.

 

  o. Bank Accounts; Powers of Attorney . There are no bank accounts or investment accounts maintained by Company as of the Closing Date and there are no valid powers of attorney issued by Company that remain in effect following the Closing Date, other than powers of attorney for which Purchaser has consented in writing to remain outstanding.

 

  p. Scope of Activities . Except in connection with the assets associated with the Contracts set forth on Schedule 1 , Company (i) does not own any property or assets other than property and assets that are subject to that certain Joint Development Agreement, dated as of June 1, 2010, by and among Company, certain Affiliates of Seller, Purchaser and certain Affiliates of Purchaser (as amended from time to time, including pursuant to that certain Amendment to the Joint Development Agreement (Appalachia), dated October 14, 2014, the “ JDA ”) or (ii) has not conducted any business other than the business of owning and operating its assets that are subject thereto.

 

  q. Employees; Employee Benefits . Company does not currently have, and has never had, any employees, consultants or other individual service providers, and Company has not extended any offer of employment or service to any employee or other individual service provider that is outstanding as of the Closing Date. Company does not maintain or administer, or has never maintained or administered, or does not have any liability or obligation (whether contingent or otherwise) under, any Employee Benefit Plan, and Company does not have any commitment to create or adopt any Employee Benefit Plan.

5. Representations and Warranties of Purchaser . Purchaser represents and warrants to Seller, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Purchaser is a limited liability company duly formed, validly existing and in good standing under the Laws of the jurisdiction of its formation. Purchaser is duly licensed, qualified or otherwise authorized to conduct business and is in good standing under the Laws of each jurisdiction in which it carries on business or owns assets and such qualification is required by Law.

 

  b. Authority . Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by Purchaser, and the performance of all obligations hereunder, have been duly authorized by all necessary action. Purchaser has all requisite power and authority to own and operate its property and to carry on its business as presently conducted by it.

 

5


  c. Enforceability . This Agreement has been duly and validly executed and delivered by Purchaser and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.

 

  d. No Conflict . The execution, delivery, and performance by Purchaser of this Agreement will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Purchaser or its Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Purchaser or its Affiliates, or (iii) conflict with, result in a breach or default under, or accelerate or permit the acceleration of the performance required by any term or condition of its Organizational Documents or any material Contract to which Purchaser or its Affiliates is subject, a party to or bound by. No consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Purchaser of this Agreement.

 

  e. Brokers’ Fees . Neither Purchaser nor any of its Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Seller; and Purchaser shall indemnify and hold harmless Seller from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Purchaser in connection with this Agreement.

 

  f. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither the Purchaser nor any of its Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

6. Disclaimer.

 

  a. Except as and to the limited extent expressly set forth in this Agreement, (i) each of Seller, Purchaser and Company make no representations or warranties, express or implied, and (ii) each of Seller, Purchaser and Company expressly disclaim all liability and responsibility for any representation, warranty, statement or information made or communicated (orally or in writing) to the other Parties.

 

  b.

WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS AGREEMENT, SELLER MAKES NO AND EXPRESSLY DISCLAIMS ANY

 

6


  REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO THE MEMBERSHIP INTERESTS, OR (II) ANY ESTIMATES OF THE VALUE OF THE MEMBERSHIP INTERESTS OR FUTURE REVENUES GENERATED BY THE MEMBERSHIP INTERESTS, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER SHALL BE DEEMED TO BE OBTAINING THE MEMBERSHIP INTERESTS IN THEIR PRESENT CONDITION, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND DEFECTS. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING DISCLAIMER SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

7. Covenants .

 

  a. Releases . Effective as of the Effective Time, each Party, on behalf of itself and its Affiliates, hereby unconditionally and irrevocably and forever releases and discharges the other Parties and their respective Affiliates, and their respective successors and assigns, and any present or former directors, managers, officers, employees or agents of such Party (each, a “ Released Party ”), of and from, and hereby unconditionally and irrevocably waives, any and all Claims, debts and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract, direct or indirect, at Law or in equity that such Party (or any of its Affiliates) ever had, now has or ever may have or claim to have against any Released Party, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing whatsoever, in each instance, arising prior to the Effective Time and related to the Company, the Company’s assets or the transactions contemplated by this Agreement, other than Claims (if any) related to (i) a breach by any Party of either (A) its respective representations, warranties or covenants contained herein or (B) the terms of the Operative Documents (as defined in the Settlement Agreement) and/or (ii) any claims by any Party or its Affiliates with respect to matters relating to assets lying outside the AMI Area (as defined in the Settlement Agreement).

 

  b. Records . As soon as reasonably practicable (and in no event later than five days following the Closing Date), Seller shall provide to Purchaser electronic copies of the files (including lease files, land files, wells files, division order files, abstracts, title files, engineering and/or production files), records (including corporate minute books and records and Tax and accounting records), data and maps of Company (collectively, the “ Records ”) that are in the possession of Seller or any of its Affiliates and that were not provided to Seller or any of its Affiliates by Purchaser or its Affiliates. No later than 30 days following the Closing Date, Seller shall provide to Purchaser hard copies of the Records in the possession of Seller or any of its Affiliates and that were not provided to Seller or any of its Affiliates by Purchaser or its Affiliates.

 

7


  c. Rights of Ownership of Membership Interests . From and after the Closing Date, Purchaser shall be entitled to all of the rights of ownership attributable to the Membership Interests (including the right to all production, proceeds of production and other proceeds) prior to, on or after the Effective Time. If Seller (or any of its Affiliates) receives monies belonging to Company or the Purchaser, including proceeds of production, then such amount shall, within five Business Days after the end of the month in which such amounts were received, be paid over to the proper party.

 

  d. Change of Name . As promptly as practicable following the Closing Date, but in any event within 60 days following the Closing Date, Purchaser shall cause Company’s name to be changed to remove any reference to “BG”.

8. Limitation on Liability . In no event shall any Party be liable to the other Parties for punitive, exemplary, consequential, or special damages (except where such damages constitute part of a claim of a third person which is indemnified pursuant to the provisions of this Agreement).

9. Investment Intent of Purchaser . Purchaser acknowledges that the Membership Interests have not been, and will not be, registered under the Securities Act of 1933, as amended, or under any state securities laws, and is being sold in reliance upon federal and state exemptions for transactions not involving any public offering. Purchaser is a sophisticated investor with knowledge and experience in business and financial matters.

10. Post-Closing Obligations .

 

  a. Taxes Generally . Seller agrees to prepare or make the requisite filings to reflect the Transfer under the Code. Seller will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferor to the Transfer according to the Code and its corporate guidelines. Purchaser will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferee to the Transfer according to the Code and its corporate guidelines.

 

  b. Tax Returns . With respect to Tax Returns required to be filed with by Company, Seller shall prepare or cause to be prepared all such Tax Returns that are required to be filed prior to the Closing Date and shall pay all Taxes shown to be due on such Tax Returns. Purchaser shall prepare all Tax Returns that are required to be filed with respect to Company on or after the Closing Date and shall pay all Taxes shown to be due on such Tax Returns.

 

  c. Cooperation on Tax Matters . In connection with the preparation of any Company Tax Returns, payment of Taxes related to Company, audit examinations related to Company, and any administrative or judicial proceedings regarding Tax liabilities that are imposed on Seller or Purchaser and related to Company, Seller and Purchaser shall, and shall cause Company to, cooperate fully with each other, including with respect to the furnishing or making available during normal

 

8


  business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Company Tax Returns, the payment of such Taxes, the conduct of such audit examinations or the defense of Claims by Governmental Authorities as to the imposition of such Taxes.

 

  d. Tax Characterization . The Parties agree that for U.S. federal income tax purposes and for purposes of state income taxes that follow U.S. federal income tax principles, the transactions herein, taken together with the transactions contemplated by the Settlement Agreement shall be treated in a manner consistent with the principles of Revenue Ruling 99-6, 1999-1 C.B. 432. Accordingly, (i) Seller shall be treated as transferring the its interests in the “EXCO-BG Appalachia Tax Partnership” in satisfaction of the Claims, and (ii) Purchaser shall be treated as receiving a proportionate share of the assets of the “EXCO-BG Appalachia Tax Partnership.”

11. Resignation of Officers . Simultaneously with the execution and delivery of this Agreement, Seller shall deliver resignations, effective immediately following the Closing Date, of all of the officers, directors and managers of Company.

12. Miscellaneous .

 

  a. Effect of Waiver or Consent . Any failure by any Party or Parties to comply with any of its or their obligations, agreements or conditions herein contained may be waived by the Party or Parties to whom such compliance is owed by an instrument signed by any such Party or Parties and expressly identified as a waiver, but not in any other manner. No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in writing.

 

  b. Amendment . This Agreement may be amended or modified only by an agreement in writing executed by all Parties and expressly identified as an amendment or modification.

 

  c. Successors and Assigns . Neither this Agreement nor any rights, interest, obligations or other parts hereof shall be assignable by any Party without the prior written consent of the other Parties, which consent may be denied in such other Party’s sole discretion. Any assignment in violation of this provision shall be void. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and assigns.

 

  d. Governing Law . EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WILL GOVERN UNDER CONFLICT OF LAWS PRINCIPLES GOVERNING TRANSFERS OF ASSETS LOCATED IN SUCH OTHER JURISDICTION, THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

9


  e. Dispute Resolution . The sole and exclusive forum for any disputes arising out of or relating to this Agreement, including, but not limited to, any disputes involving questions of breach, termination, or validity of this Agreement, shall be finally resolved by arbitration in Houston, Texas. The arbitration shall be conducted in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration (“ CPR ”) Rules. The CPR is the appointing authority. The resulting arbitral award shall be final and binding without right of appeal, and judgment upon such award may be entered in any court having jurisdiction thereof.

 

  f. Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

  g. Further Assurances . In the event that at any time any further action is necessary to carry out the purposes of this Agreement, the Parties shall take such further action (including the execution and delivery of such further documents and instruments) as any Party may reasonably request.

 

  h. Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one agreement. The Parties agree that any document or signature delivered by facsimile transmission, by PDF through electronic mail, or other electronic means shall be deemed an original executed document for all purposes hereof.

 

  i. Press Releases . No Party shall (and each shall cause its Affiliates not to) issue any press release or make any statement to the general public relating to the subject matter of this Agreement unless such Party has first consulted with the other Parties and obtained the other Parties’ prior written approval of the text thereof; provided, however , that nothing herein shall prevent a Party from publishing such press releases or other statement to the general public as is necessary to satisfy such Party’s obligations at Law or under the applicable rules of any stock or commodities exchange or any court after consultation with the other Parties and such other Parties’ reasonable review and comment.

 

  j. Certain Definitions . The following terms, as used herein, have the meanings set forth below:

 

10


Affiliate ” or “ Affiliate ” mean, with respect to any Party, any corporation, partnership (including a limited partnership), limited liability company, or other legal entity that directly or indirectly controls, is controlled by or is under common control with such Party; where “control” means the ability to direct the management and policies of a Person through ownership of voting shares or other equity rights, pursuant to a written agreement, or otherwise. The terms “Controls” and “Controlled by” and other derivatives shall be construed accordingly.

Anti-Bribery and Money-Laundering Laws and Obligations ” means (a) the laws relating to combating bribery and corruption, and/or the principles described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in Paris on December 17, 1997, which entered into force on February 15, 1999, and the Convention’s Commentaries; (b) the laws relating to combating bribery, corruption and money laundering in the countries of the applicable Person’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities, and/or in the countries of the applicable Person’s ultimate parent company’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities; (c) the United States Foreign Corrupt Practices Act of 1977; (d) the United Kingdom Bribery Act 2010 (as amended from time to time); and (e) and all other applicable national, regional, provincial, state, municipal or local laws and regulations that prohibit the bribery of, or the providing of unlawful gratuities, facilitation payments or other benefits to, any Government Official or any other person.

Business Day ” means any day that is not a Saturday, Sunday or legal holiday in the State of Texas and that is not otherwise a federal holiday in the United States.

Claims ” means any and all claims, demands, loss, liability, liens, judgments, settlements, suits, causes of action, fines, penalties, compliances, costs, and any costs, expenses and fees associated with the investigation, defense and resolution of the foregoing, including without limitation, reasonable attorney’s fees, asserted or prosecuted by or on behalf of a third party. Claims may be based on any theory of tort, contract, strict liability, statutory liability (including, without limitation, fines, penalties, obligations or requirements) or any other basis for liability and shall include, without limitation, any Claims arising, occurring or resulting from, related to or based on the injury, disease, or death of any persons or damage to, loss or destruction of any property, real or personal.

Closing Date ” has the meaning set forth in that certain Agreement Regarding Settlement by and among Purchaser, certain Affiliates of Purchaser, Seller and certain Affiliates of Seller.

Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

Contract ” means any written or oral contract, agreement, purchase order, binding bid, commitment or any other legally binding arrangement, but excluding, however, any lease, deed, easement, Permit or other instrument (other than acquisition or similar sales or purchase agreements) creating, assigning or evidencing an interest in any real property related to or used in connection with the assets of any of Company.

Development Assets ” has the meaning set forth in the JDA.

 

11


Employee Benefit Plan ” means (a) any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any similar plan subject to laws of a jurisdiction outside of the United States), (b) any employment, consulting, advisor or other service agreement or arrangement, (c) any noncompetition, nondisclosure, nonsolicitation, severance, termination, pension, retirement, supplemental retirement, excess benefit, profit sharing, bonus, incentive, deferred compensation, retention, transaction, change in control and similar plan, program, arrangement, agreement, policy or commitment, (d) any compensatory option, restricted unit, performance unit, appreciation right, deferred unit or other equity or equity-based plan, program, arrangement, agreement, policy or commitment, and (e) any savings, life, health, disability, accident, medical, dental, vision, cafeteria, insurance, flex spending, adoption/dependent/employee assistance, tuition, vacation, paid-time-off, other welfare fringe benefit and any other employee benefit plan, program or arrangement.

Encumbrance ” means any liens, pledges, mortgages, deeds of trust, security interests, leases, licenses, charges, Claims, encroachments, easements or other encumbrances of any kind.

Environmental Law ” means any and all Laws in effect as of the Closing Date pertaining to or regulating pollution, environmental protection, natural resource damages, conservation of resources, wildlife, waste management, or the use, storage, generation, production, treatment, emission, discharge, release, remediation, removal, disposal, or transport of Hazardous Substances, including: the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Federal Water Pollution Control Act (which includes the Federal Clean Water Act), the Federal Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource Conservation and Recovery Act), the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Safe Drinking Water Act of 1974, the Emergency Planning and Community Right-to-Know Act of 1986, the Occupational Safety and Health Act of 1970, the Hazardous Liquid Pipeline Safety Act, the Oil Pollution Act of 1990, and the Pipeline Safety Improvement Act of 2002, and similar state laws, each as amended.

Environmental Permits ” means all Permits of Governmental Authorities issued pursuant to or required by Environmental Laws and necessary for or held in connection with the ownership and/or operation of the assets of Company (other than the Development Assets).

Facilitation Payments ” means payments to a Government Official to facilitate or expedite performance of a routine governmental action which is an action which is commonly performed by such Government Official.

Government Official ” means (a) any official or employee of any government, or any agency, ministry, department of a government (at any level), person acting in an official capacity for a government regardless of rank or position, official or employee of a company wholly or partially controlled by a government (for example, a state owned oil company), political party and any official of a political party; and (b) any candidate for political office, any officer or employee of a public international organization, such as the United Nations or the World Bank, or any immediate family member (meaning a spouse, dependent child or household member) of any of the foregoing.

 

12


Governmental Authority ” means any federal, state, county, municipal or local government or any regulatory or administrative agency, department, division, commission, court or arbitral body, or other similar recognized organization or body of any federal, state, tribal, municipal, or local governmental authority or of any foreign government or other similar recognized organization or body exercising similar powers or authority.

Hazardous Substances ” means any substance, waste, or material that is defined, designated, or listed as a “hazardous substance,” “hazardous waste,” or “toxic substance” under Environmental Laws.

Indebtedness ” of any Person means, without duplication, (a) the principal of and, accrued and unpaid interest, prepayment premiums or penalties and fees and expenses in respect of indebtedness of such Person for borrowed money; (b) all obligations (contingent or otherwise) of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable incurred in the ordinary and usual course of business of normal day-to-day operations of the business consistent with past practice); (c) all capitalized lease obligations; (d) all obligations of the type referred to in clauses (a) through (c) of any Persons the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise; and (e) all obligations of the type referred to in clauses (a) through (d) of other Persons secured by any Encumbrance on any property or asset of such Person (whether or not such obligation is assumed by such Person).

Known/Knowledge ” whenever a statement regarding the existence (or absence) of any fact in this Agreement is qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party,” “has Knowledge” or “had actual Knowledge” or any similar qualification, the Parties intend that the only information to be attributed to such Party is information actually known to (i) the person in the case of an individual or (ii) in the case of a corporation (or other business entity), the current officer and/or manager who devotes substantial attention to matters of such nature during the ordinary course of his or her employment after due inquiry to all Person reporting to such officer or manager. Except as provided in the preceding sentence and unless otherwise specifically provided elsewhere in this Agreement, no Party is represented or obligated to have undertaken a separate investigation in connection with the transaction contemplated in this Agreement to determine the existence (or absence) of any statement or representation qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party” or “had actual Knowledge” or similar qualification.

Law ” means any applicable statute, writ, law, common law, rule, regulation, ordinance, order, or determination of a Governmental Authority, or any requirement under the common law.

Organizational Documents ” means any charter, certificate of incorporation, articles of association, partnership agreements, limited liability company agreements, bylaws, operating agreements or similar formation or governing documents, instruments or certificates executed, adopted or filed in connection with the creation, formation or organization of a Person, including any amendments thereto.

 

13


Permit ” means any permit, license, registration, consent, order, approval, variance, exemption, waiver, franchise, right or other authorization required by or obtained from any Governmental Authority, including for the use, withdrawal, storage, discharge, treatment, injection or disposal of water.

Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

Proceeding ” means any action, arbitration, audit, cause, complaint, charge, hearing, inquiry, investigation, litigation, proceeding, review or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before any Governmental Authority or arbitrator.

Related Parties ” means in relation to a Party: (a) any of its Affiliates; (b) any person employed by that Party or its Affiliates; (c) any director or other officer of that Party or its Affiliates; and (d) any person or entity acting for or on behalf of that Party or its Affiliates.

Tax ” and “ Taxes ” means all taxes, assessments, charges, duties, fees, levies, imposts or other similar charges imposed by a Governmental Authority, including all income, franchise, profits, capital gains, capital stock, transfer, gross receipts, sales, use, transfer, service, occupation, ad valorem, property, excise, severance, windfall profits, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental, alternative minimum, add-on, value-added, withholding and other taxes, assessments, charges, duties, fees, levies, imposts or other similar charges of any kind, and all estimated taxes, deficiency assessments, additions to tax, penalties and interest, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the foregoing liabilities of any other Person by Law, by Contract or otherwise.

Tax Returns ” means any report, return, election, document, estimated tax filing, declaration or other filing provided to any Governmental Authority including any attachments thereto and amendments thereof.

[ Signature page follows .]

 

14


IN WITNESS WHEREOF each of the Parties has executed this Agreement to be effective as of the Effective Time.

SELLER :

BG US PRODUCTION COMPANY, LLC

 

/s/ Michael Larimer
Name: Michael Larimer
Title: VP Operations

COMPANY :

BG PRODUCTION COMPANY (PA), LLC

 

/s/ Michael Larimer
Name: Michael Larimer
Title: VP Operations

 

[ Signature Page to Membership Interest (BG PA) Transfer Agreement ]


PURCHASER :

EXCO PRODUCTION COMPANY (PA), LLC

 

/s/ Harold L. Hickey
Name: Harold L. Hickey
Title: Chief Executive Officer & President

 

[ Signature Page to Membership Interest (BG PA) Transfer Agreement ]

Exhibit 10.4

Execution Version

MEMBERSHIP INTEREST (BG WV) TRANSFER AGREEMENT

THIS MEMBERSHIP INTEREST (BG WV) TRANSFER AGREEMENT (this “ Agreement ”) is entered into as of the Closing Date (as defined below), but is effective for all purposes as of 11:59 p.m. on November 30, 2017 (the “ Effective Time ”), by and among BG US Production Company, LLC, a Delaware limited liability company (“ Seller ”), BG Production Company (WV), LLC, a Delaware limited liability company (“ Company ”), and EXCO Production Company (WV), LLC, a Delaware limited liability company (the “ Purchaser ”). Each of Seller, Company and Purchaser may be referred to as a “ Party ” or together, as the “ Parties .” Capitalized terms not otherwise defined herein, including in Section  12 , shall have the meanings attributed to them in the Amended and Restated Operating Agreement of Company dated June 1, 2010 (as amended, the “ Operating Agreement ”).

RECITALS

WHEREAS , Seller is the sole member in Company;

WHEREAS , the business and affairs of Company are governed by the Operating Agreement;

WHEREAS , Seller owns 100% of the issued and outstanding membership interests in Company (the “ Membership Interests ”);

WHEREAS , Purchaser, certain Affiliates of Purchaser, Company, and certain Affiliates of Seller are entering or have entered into that certain Settlement Agreement and Mutual Release, dated as of the Closing Date (the “ Settlement Agreement ”); and

WHEREAS , in accordance with the Settlement Agreement, Seller will sell and Purchaser will purchase all of Seller’s right, title, and interest in and to all of the Membership Interests upon the terms and subject to the conditions set forth herein in return for the consideration specified herein.

NOW, THEREFORE , in consideration of the mutual representations, covenants and agreements contained herein and in the Settlement Agreement and other good and valuable consideration set forth herein and in the Settlement Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties to this Agreement hereby agree as follows:

1. Transfer and Assignment . Subject to all of the terms of this Agreement, Seller shall transfer the Membership Interests to Purchaser effective as of the Effective Time.

2. Assignment and Assumption; Agreement to be Bound; No Longer Member . For and in consideration of agreed value, the receipt and sufficiency of which is hereby acknowledged, Seller hereby sells, conveys, assigns, transfers and delivers to Purchaser, free and clear of all Encumbrances, all of its right, title and interest in and to the Membership Interests, and Purchaser hereby takes and accepts such assignment and transfer, in each case, effective as of the Effective Time (the “ Transfer ”). PURCHASER HEREBY AGREES TO ASSUME, ACCEPT AND TIMELY PERFORM AND DISCHARGE ANY AND ALL OF THE DUTIES,


COVENANTS, LIABILITIES AND OTHER OBLIGATIONS OF SELLER UNDER THE OPERATING AGREEMENT, WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME. SELLER AND ITS AFFILIATES SHALL BE RELEASED FROM ALL OF ITS RESPECTIVE OBLIGATIONS UNDER THE OPERATING AGREEMENT WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME, AND AS A RESULT OF SUCH RELEASE OF SELLER BY PURCHASER AND THE TRANSFER, IT IS UNDERSTOOD AND AGREED THAT AS OF THE EFFECTIVE TIME, SELLER SHALL NO LONGER BE A MEMBER OF, NOR HAVE ANY INTEREST OR RIGHTS TO PARTICIPATE IN, COMPANY. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING ASSUMPTION AND RELEASE SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

3. Recognition of Transfer by Company . Company hereby consents to and recognizes the Transfer. Purchaser shall file this Agreement with the records of Company following the Closing Date.

4. Representations and Warranties of Seller and Company . Seller and Company represents and warrants to Purchaser, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Each of Seller and Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation. Company is duly licensed, qualified or otherwise authorized to conduct business and is in good standing under the Laws of each jurisdiction in which it carries on business or owns assets and such qualification is required by Law.

 

  b. Authority . Each of Seller and Company has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by each of Seller and Company, and the performance of all obligations hereunder, have been duly authorized by all necessary action. Company has all requisite power and authority to own and operate its property and to carry on its business as presently conducted by it.

 

  c. Enforceability . This Agreement has been duly and validly executed and delivered by each of Seller and Company and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of each of Seller and Company enforceable against Seller and Company in accordance with its terms.

 

  d.

No Conflict . The execution, delivery, and performance of this Agreement by each of Seller and Company will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Seller, Company or any of their Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Seller or Company or any of their Affiliates is subject, (iii) conflict with, result in a breach or default under, or accelerate or permit the acceleration of the performance required by any term or

 

2


  condition of the applicable Organizational Documents of Seller or Company or any of their Affiliates or any material Contract to which Seller or Company or any of their Affiliates is subject, a party to or bound by, or (iv) result in the creation or imposition of any Encumbrance upon any property of Company or the Membership Interests. Except as provided in the Operating Agreement, no consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Seller or Company of this Agreement.

 

  e. Brokers’ Fees . Neither of Seller nor Company nor any of their Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Purchaser or any other Party; and Seller shall indemnify and hold harmless Purchaser from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Seller in connection with this Agreement.

 

  f. Operating Agreement . Prior to the date hereof, Seller has provided to Purchaser true, correct and complete copies of the Organizational Documents of Company, including the Operating Agreement, together with all amendments thereto.

 

  g. Title to Membership Interests . Seller owns beneficially and of record all of the issued and outstanding membership interests in Company. The Membership Interests constitute all of the issued and outstanding equity interests in Company that are owned by Seller or any of its Affiliates. The Membership Interests (i) are duly authorized, validly issued, fully paid and nonassessable; (ii) are free and clear of all Encumbrances (other than restrictions imposed on transfer under applicable federal and/or state securities Laws or regulations); (iii) are not subject to any agreements or understandings among any Persons with respect to the voting or transfer thereof; and (iv) other than this Agreement, are not subject to any outstanding subscriptions, options, convertible securities, warrants, calls or other securities granting rights to purchase or otherwise acquire any of such Membership Interests or any commitments or agreements of any character obligating Seller to transfer, redeem or exchange any of such Membership Interests or the beneficial interest thereto. Company does not have, or has never had, any subsidiaries or direct or indirect equity interest in any Person. Company has not made any distribution to any member from an after January 1, 2017.

 

  h. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither Seller, Company nor any of their Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

 

3


  i. Litigation . There are no Proceedings pending, threatened in writing, or, to Seller’s Knowledge, threatened orally by any Person against Seller or its Affiliates with respect to (i) the Membership Interests, and/or (ii) other than any Proceedings to which Purchaser or its Affiliates is a party thereto, Company or the assets held by Company.

 

  j. Contracts . To Seller’s Knowledge, Company is not a party to any Contract other than Contracts to which Purchaser or one of its Affiliates is a party thereto or has Knowledge thereof. Company is, and to Seller’s Knowledge, each counterparty thereto (other than Purchaser or its Affiliates) is, in material compliance with, and not in default in any material respect under, any Contract to which Company is a party.

 

  k. Taxes . (i) All Tax Returns required to be filed by Company have been timely filed and all such Tax Returns are true, correct and complete in all material respects; (ii) all Taxes due and payable by Company have been paid whether or not shown as due on such Tax Returns; (iii) there are no Encumbrances on any of the assets held by Company that arose in connection with the failure to pay any Tax by Company; (iv) there are no Proceedings, Claims or notices of deficiency pending against or threatened in writing against Company in connection with any unpaid Tax; (v) no Tax Returns of Company are under audit or examination by any Governmental Authority; (vi) there are no agreements or waivers currently in effect that provide for an extension of time with respect to the filing of any Tax Return by Company or the assessment or collection of any Tax from Company; (vii) no written claim has been made by any Governmental Authority in a jurisdiction where Company did not file a Tax Return or pay a Tax directly that it is or may be required to file such a Tax Return or pay such a Tax (as the case may be) in that jurisdiction; and (viii) other than the “EXCO-BG Appalachia Tax Partnership,” none of the assets of Company is subject to any tax partnership agreement or provisions requiring a partnership income tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state statute.

 

  l. Compliance with Laws . To Seller’s and Company’s Knowledge, Company is not, and during the past three years has not been, in material violation of any applicable Laws.

 

  m. Indebtedness . Company does not have any Indebtedness from or to any other Person, and/or has not made any guarantees for the benefit of any Person.

 

  n. Bank Accounts; Powers of Attorney . There are no bank accounts or investment accounts maintained by Company as of the Closing Date and there are no valid powers of attorney issued by Company that remain in effect following the Closing Date, other than powers of attorney for which Purchaser has consented in writing to remain outstanding.

 

4


  o. Scope of Activities . Company (i) does not own any property or assets other than property and assets that are subject to that certain Joint Development Agreement, dated as of June 1, 2010, by and among Company, certain Affiliates of Seller, Purchaser and certain Affiliates of Purchaser (as amended from time to time, including pursuant to that certain Amendment to the Joint Development Agreement (Appalachia), dated October 14, 2014) or (ii) has not conducted any business other than the business of owning and operating its assets that are subject thereto.

 

  p. Employees; Employee Benefits . Company does not currently have, and has never had, any employees, consultants or other individual service providers, and Company has not extended any offer of employment or service to any employee or other individual service provider that is outstanding as of the Closing Date. Company does not maintain or administer, or has never maintained or administered, or does not have any liability or obligation (whether contingent or otherwise) under, any Employee Benefit Plan, and Company does not have any commitment to create or adopt any Employee Benefit Plan.

5. Representations and Warranties of Purchaser . Purchaser represents and warrants to Seller, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Purchaser is a limited liability company duly formed, validly existing and in good standing under the Laws of the jurisdiction of its formation. Purchaser is duly licensed, qualified or otherwise authorized to conduct business and is in good standing under the Laws of each jurisdiction in which it carries on business or owns assets and such qualification is required by Law.

 

  b. Authority . Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by Purchaser, and the performance of all obligations hereunder, have been duly authorized by all necessary action. Purchaser has all requisite power and authority to own and operate its property and to carry on its business as presently conducted by it.

 

  c. Enforceability . This Agreement has been duly and validly executed and delivered by Purchaser and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.

 

  d.

No Conflict . The execution, delivery, and performance by Purchaser of this Agreement will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Purchaser or its Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Purchaser or its Affiliates, or (iii) conflict with, result in a

 

5


  breach or default under, or accelerate or permit the acceleration of the performance required by any term or condition of its Organizational Documents or any material Contract to which Purchaser or its Affiliates is subject, a party to or bound by. No consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Purchaser of this Agreement.

 

  e. Brokers’ Fees . Neither Purchaser nor any of its Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Seller; and Purchaser shall indemnify and hold harmless Seller from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Purchaser in connection with this Agreement.

 

  f. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither the Purchaser nor any of its Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

6. Disclaimer.

 

  a. Except as and to the limited extent expressly set forth in this Agreement, (i) each of Seller, Purchaser and Company make no representations or warranties, express or implied, and (ii) each of Seller, Purchaser and Company expressly disclaim all liability and responsibility for any representation, warranty, statement or information made or communicated (orally or in writing) to the other Parties.

 

  b. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS AGREEMENT, SELLER MAKES NO AND EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO THE MEMBERSHIP INTERESTS, OR (II) ANY ESTIMATES OF THE VALUE OF THE MEMBERSHIP INTERESTS OR FUTURE REVENUES GENERATED BY THE MEMBERSHIP INTERESTS, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER SHALL BE DEEMED TO BE OBTAINING THE MEMBERSHIP INTERESTS IN THEIR PRESENT CONDITION, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND DEFECTS. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING DISCLAIMER SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

 

6


7. Covenants .

 

  a. Releases . Effective as of the Effective Time, each Party, on behalf of itself and its Affiliates, hereby unconditionally and irrevocably and forever releases and discharges the other Parties and their respective Affiliates, and their respective successors and assigns, and any present or former directors, managers, officers, employees or agents of such Party (each, a “ Released Party ”), of and from, and hereby unconditionally and irrevocably waives, any and all Claims, debts and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract, direct or indirect, at Law or in equity that such Party (or any of its Affiliates) ever had, now has or ever may have or claim to have against any Released Party, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing whatsoever, in each instance, arising prior to the Effective Time and related to the Company, the Company’s assets or the transactions contemplated by this Agreement, other than Claims (if any) related to (i) a breach by any Party of either (A) its respective representations, warranties or covenants contained herein or (B) the terms of the Operative Documents (as defined in the Settlement Agreement) and/or (ii) any claims by any Party or its Affiliates with respect to matters relating to assets lying outside the AMI Area (as defined in the Settlement Agreement).

 

  b. Records . As soon as reasonably practicable (and in no event later than five days following the Closing Date), Seller shall provide to Purchaser electronic copies of the files (including lease files, land files, wells files, division order files, abstracts, title files, engineering and/or production files), records (including corporate minute books and records and Tax and accounting records), data and maps of Company (collectively, the “ Records ”) that are in the possession of Seller or any of its Affiliates and that were not provided to Seller or any of its Affiliates by Purchaser or its Affiliates. No later than 30 days following the Closing Date, Seller shall provide to Purchaser hard copies of the Records in the possession of Seller or any of its Affiliates and that were not provided to Seller or any of its Affiliates by Purchaser or its Affiliates.

 

  c. Rights of Ownership of Membership Interests . From and after the Closing Date, Purchaser shall be entitled to all of the rights of ownership attributable to the Membership Interests (including the right to all production, proceeds of production and other proceeds) prior to, on or after the Effective Time. If Seller (or any of its Affiliates) receives monies belonging to Company or the Purchaser, including proceeds of production, then such amount shall, within five Business Days after the end of the month in which such amounts were received, be paid over to the proper party.

 

7


  d. Change of Name . As promptly as practicable following the Closing Date, but in any event within 60 days following the Closing Date, Purchaser shall cause Company’s name to be changed to remove any reference to “BG”.

8. Limitation on Liability . In no event shall any Party be liable to the other Parties for punitive, exemplary, consequential, or special damages (except where such damages constitute part of a claim of a third person which is indemnified pursuant to the provisions of this Agreement).

9. Investment Intent of Purchaser . Purchaser acknowledges that the Membership Interests have not been, and will not be, registered under the Securities Act of 1933, as amended, or under any state securities laws, and is being sold in reliance upon federal and state exemptions for transactions not involving any public offering. Purchaser is a sophisticated investor with knowledge and experience in business and financial matters.

10. Post-Closing Obligations .

 

  a. Taxes Generally . Seller agrees to prepare or make the requisite filings to reflect the Transfer under the Code. Seller will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferor to the Transfer according to the Code and its corporate guidelines. Purchaser will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferee to the Transfer according to the Code and its corporate guidelines.

 

  b. Tax Returns . With respect to Tax Returns required to be filed with by Company, Seller shall prepare or cause to be prepared all such Tax Returns that are required to be filed prior to the Closing Date and shall pay all Taxes shown to be due on such Tax Returns. Purchaser shall prepare all Tax Returns that are required to be filed with respect to Company on or after the Closing Date and shall pay all Taxes shown to be due on such Tax Returns.

 

  c. Cooperation on Tax Matters . In connection with the preparation of any Company Tax Returns, payment of Taxes related to Company, audit examinations related to Company, and any administrative or judicial proceedings regarding Tax liabilities that are imposed on Seller or Purchaser and related to Company, Seller and Purchaser shall, and shall cause Company to, cooperate fully with each other, including with respect to the furnishing or making available during normal business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Company Tax Returns, the payment of such Taxes, the conduct of such audit examinations or the defense of Claims by Governmental Authorities as to the imposition of such Taxes.

 

  d. Tax Characterization . The Parties agree that for U.S. federal income tax purposes and for purposes of state income taxes that follow U.S. federal income tax principles, the transactions herein, taken together with the transactions

 

8


  contemplated by the Settlement Agreement shall be treated in a manner consistent with the principles of Revenue Ruling 99-6, 1999-1 C.B. 432. Accordingly, (i) Seller shall be treated as transferring the its interests in the “EXCO-BG Appalachia Tax Partnership” in satisfaction of the Claims, and (ii) Purchaser shall be treated as receiving a proportionate share of the assets of the “EXCO-BG Appalachia Tax Partnership.”

11. Resignation of Officers . Simultaneously with the execution and delivery of this Agreement, Seller shall deliver resignations, effective immediately following the Closing Date, of all of the officers, directors and managers of Company.

12. Miscellaneous .

 

  a. Effect of Waiver or Consent . Any failure by any Party or Parties to comply with any of its or their obligations, agreements or conditions herein contained may be waived by the Party or Parties to whom such compliance is owed by an instrument signed by any such Party or Parties and expressly identified as a waiver, but not in any other manner. No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in writing.

 

  b. Amendment . This Agreement may be amended or modified only by an agreement in writing executed by all Parties and expressly identified as an amendment or modification.

 

  c. Successors and Assigns . Neither this Agreement nor any rights, interest, obligations or other parts hereof shall be assignable by any Party without the prior written consent of the other Parties, which consent may be denied in such other Party’s sole discretion. Any assignment in violation of this provision shall be void. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and assigns.

 

  d. Governing Law . EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WILL GOVERN UNDER CONFLICT OF LAWS PRINCIPLES GOVERNING TRANSFERS OF ASSETS LOCATED IN SUCH OTHER JURISDICTION, THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

  e.

Dispute Resolution . The sole and exclusive forum for any disputes arising out of or relating to this Agreement, including, but not limited to, any disputes involving questions of breach, termination, or validity of this Agreement, shall be finally resolved by arbitration in Houston, Texas. The arbitration shall be conducted in

 

9


  accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration (“ CPR ”) Rules. The CPR is the appointing authority. The resulting arbitral award shall be final and binding without right of appeal, and judgment upon such award may be entered in any court having jurisdiction thereof.

 

  f. Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

  g. Further Assurances . In the event that at any time any further action is necessary to carry out the purposes of this Agreement, the Parties shall take such further action (including the execution and delivery of such further documents and instruments) as any Party may reasonably request.

 

  h. Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one agreement. The Parties agree that any document or signature delivered by facsimile transmission, by PDF through electronic mail, or other electronic means shall be deemed an original executed document for all purposes hereof.

 

  i. Press Releases . No Party shall (and each shall cause its Affiliates not to) issue any press release or make any statement to the general public relating to the subject matter of this Agreement unless such Party has first consulted with the other Parties and obtained the other Parties’ prior written approval of the text thereof; provided, however , that nothing herein shall prevent a Party from publishing such press releases or other statement to the general public as is necessary to satisfy such Party’s obligations at Law or under the applicable rules of any stock or commodities exchange or any court after consultation with the other Parties and such other Parties’ reasonable review and comment.

 

  j. Certain Definitions . The following terms, as used herein, have the meanings set forth below:

Affiliate ” or “ Affiliates ” mean, with respect to any Party, any corporation, partnership (including a limited partnership), limited liability company, or other legal entity that directly or indirectly controls, is controlled by or is under common control with such Party; where “control” means the ability to direct the management and policies of a Person through ownership of voting shares or other equity rights, pursuant to a written agreement, or otherwise. The terms “Controls” and “Controlled by” and other derivatives shall be construed accordingly.

Anti-Bribery and Money-Laundering Laws and Obligations ” means (a) the laws relating to combating bribery and corruption, and/or the principles described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in

 

10


Paris on December 17, 1997, which entered into force on February 15, 1999, and the Convention’s Commentaries; (b) the laws relating to combating bribery, corruption and money laundering in the countries of the applicable Person’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities, and/or in the countries of the applicable Person’s ultimate parent company’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities; (c) the United States Foreign Corrupt Practices Act of 1977; (d) the United Kingdom Bribery Act 2010 (as amended from time to time); and (e) and all other applicable national, regional, provincial, state, municipal or local laws and regulations that prohibit the bribery of, or the providing of unlawful gratuities, facilitation payments or other benefits to, any Government Official or any other person.

Business Day ” means any day that is not a Saturday, Sunday or legal holiday in the State of Texas and that is not otherwise a federal holiday in the United States.

Claims ” means any and all claims, demands, loss, liability, liens, judgments, settlements, suits, causes of action, fines, penalties, compliances, costs, and any costs, expenses and fees associated with the investigation, defense and resolution of the foregoing, including without limitation, reasonable attorney’s fees, asserted or prosecuted by or on behalf of a third party. Claims may be based on any theory of tort, contract, strict liability, statutory liability (including, without limitation, fines, penalties, obligations or requirements) or any other basis for liability and shall include, without limitation, any Claims arising, occurring or resulting from, related to or based on the injury, disease, or death of any persons or damage to, loss or destruction of any property, real or personal.

Closing Date ” has the meaning set forth in that certain Agreement Regarding Settlement by and among Purchaser, certain Affiliates of Purchaser, Seller and certain Affiliates of Seller.

Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

Contract ” means any written or oral contract, agreement, purchase order, binding bid, commitment or any other legally binding arrangement, but excluding, however, any lease, deed, easement, Permit or other instrument (other than acquisition or similar sales or purchase agreements) creating, assigning or evidencing an interest in any real property related to or used in connection with the assets of any of Company.

Employee Benefit Plan ” means (a) any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any similar plan subject to laws of a jurisdiction outside of the United States), (b) any employment, consulting, advisor or other service agreement or arrangement, (c) any noncompetition, nondisclosure, nonsolicitation, severance, termination, pension, retirement, supplemental retirement, excess benefit, profit sharing, bonus, incentive, deferred compensation, retention, transaction, change in control and similar plan, program, arrangement, agreement, policy or commitment, (d) any compensatory option, restricted unit, performance unit, appreciation right, deferred unit or other equity or equity-based plan, program, arrangement, agreement, policy or commitment, and (e) any savings, life, health, disability, accident, medical, dental, vision, cafeteria, insurance, flex spending, adoption/dependent/employee assistance, tuition, vacation, paid-time-off, other welfare fringe benefit and any other employee benefit plan, program or arrangement.

 

11


Encumbrance ” means any liens, pledges, mortgages, deeds of trust, security interests, leases, licenses, charges, Claims, encroachments, easements or other encumbrances of any kind.

Facilitation Payments ” means payments to a Government Official to facilitate or expedite performance of a routine governmental action which is an action which is commonly performed by such Government Official.

Government Official ” means (a) any official or employee of any government, or any agency, ministry, department of a government (at any level), person acting in an official capacity for a government regardless of rank or position, official or employee of a company wholly or partially controlled by a government (for example, a state owned oil company), political party and any official of a political party; and (b) any candidate for political office, any officer or employee of a public international organization, such as the United Nations or the World Bank, or any immediate family member (meaning a spouse, dependent child or household member) of any of the foregoing.

Governmental Authority ” means any federal, state, county, municipal or local government or any regulatory or administrative agency, department, division, commission, court or arbitral body, or other similar recognized organization or body of any federal, state, tribal, municipal, or local governmental authority or of any foreign government or other similar recognized organization or body exercising similar powers or authority.

Indebtedness ” of any Person means, without duplication, (a) the principal of and, accrued and unpaid interest, prepayment premiums or penalties and fees and expenses in respect of indebtedness of such Person for borrowed money; (b) all obligations (contingent or otherwise) of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable incurred in the ordinary and usual course of business of normal day-to-day operations of the business consistent with past practice); (c) all capitalized lease obligations; (d) all obligations of the type referred to in clauses (a) through (c) of any Persons the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise; and (e) all obligations of the type referred to in clauses (a) through (d) of other Persons secured by any Encumbrance on any property or asset of such Person (whether or not such obligation is assumed by such Person).

Known/Knowledge ” whenever a statement regarding the existence (or absence) of any fact in this Agreement is qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party,” “has Knowledge” or “had actual Knowledge” or any similar qualification, the Parties intend that the only information to be attributed to such Party is information actually known to (i) the person in the case of an individual or (ii) in the case of a corporation (or other business entity), the current officer and/or manager who devotes substantial attention to matters of such nature during the ordinary course of his or her employment after due inquiry to all Person reporting to such officer or manager. Except as provided in the preceding sentence and unless otherwise specifically provided elsewhere in this Agreement, no Party is represented or

 

12


obligated to have undertaken a separate investigation in connection with the transaction contemplated in this Agreement to determine the existence (or absence) of any statement or representation qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party” or “had actual Knowledge” or similar qualification.

Law ” means any applicable statute, writ, law, common law, rule, regulation, ordinance, order, or determination of a Governmental Authority, or any requirement under the common law.

Organizational Documents ” means any charter, certificate of incorporation, articles of association, partnership agreements, limited liability company agreements, bylaws, operating agreements or similar formation or governing documents, instruments or certificates executed, adopted or filed in connection with the creation, formation or organization of a Person, including any amendments thereto.

Permit ” means any permit, license, registration, consent, order, approval, variance, exemption, waiver, franchise, right or other authorization required by or obtained from any Governmental Authority, including for the use, withdrawal, storage, discharge, treatment, injection or disposal of water.

Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

Proceeding ” means any action, arbitration, audit, cause, complaint, charge, hearing, inquiry, investigation, litigation, proceeding, review or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before any Governmental Authority or arbitrator.

Related Parties ” means in relation to a Party: (a) any of its Affiliates; (b) any person employed by that Party or its Affiliates; (c) any director or other officer of that Party or its Affiliates; and (d) any person or entity acting for or on behalf of that Party or its Affiliates.

Tax ” and “ Taxes ” means all taxes, assessments, charges, duties, fees, levies, imposts or other similar charges imposed by a Governmental Authority, including all income, franchise, profits, capital gains, capital stock, transfer, gross receipts, sales, use, transfer, service, occupation, ad valorem, property, excise, severance, windfall profits, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental, alternative minimum, add-on, value-added, withholding and other taxes, assessments, charges, duties, fees, levies, imposts or other similar charges of any kind, and all estimated taxes, deficiency assessments, additions to tax, penalties and interest, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the foregoing liabilities of any other Person by Law, by Contract or otherwise.

Tax Returns ” means any report, return, election, document, estimated tax filing, declaration or other filing provided to any Governmental Authority including any attachments thereto and amendments thereof.

[ Signature page follows .]

 

13


IN WITNESS WHEREOF each of the Parties has executed this Agreement to be effective as of the Effective Time.

SELLER:

BG US PRODUCTION COMPANY, LLC

 

/s/ Michael Larimer
Name: Michael Larimer
Title: VP Operations

COMPANY:

BG PRODUCTION COMPANY (WV), LLC

 

/s/ Michael Larimer
Name: Michael Larimer
Title: VP Operations

[ Signature Page to Membership Interest (BG WV) Transfer Agreement ]


PURCHASER:

EXCO PRODUCTION COMPANY (WV), LLC

 

/s/ Harold L. Hickey
Name:   Harold L. Hickey
Title:   Chief Executive Officer & President

[ Signature Page to Membership Interest (BG WV) Transfer Agreement ]

Exhibit 10.5

Execution Version

MEMBERSHIP INTEREST (ERPA) TRANSFER AGREEMENT

THIS MEMBERSHIP INTEREST (ERPA) TRANSFER AGREEMENT (this “ Agreement ”) is entered into as of the Closing Date (as defined below), but is effective for all purposes as of 11:57 p.m. on November 30, 2017 (the “ Effective Time ”), by and among BG US Production Company, LLC, a Delaware limited liability company (“ Seller ”), EXCO Resources (PA), LLC, a Delaware limited liability company (“ Company ”), and EXCO Holding (PA), Inc., a Delaware corporation (“ Purchaser ”). Each of Seller, Company and Purchaser may be referred to as a “ Party ” or together, as the “ Parties .” Capitalized terms not otherwise defined herein, including in Section  14 , shall have the meanings attributed to them in the Second Amended and Restated Limited Liability Company Agreement, dated June 1, 2010, of Company (as amended from time to time, including an amendment on October 14, 2014, the “ Operating Agreement ”).

RECITALS

WHEREAS , Seller is a member in Company;

WHEREAS , the business and affairs of Company are governed by the Operating Agreement;

WHEREAS , Seller owns 50% of the issued and outstanding membership interest in Company (the “ Membership Interests ”);

WHEREAS , Purchaser, certain Affiliates of Purchaser, Company, and certain Affiliates of Seller are entering or have entered into that certain Settlement Agreement and Mutual Release, dated as of the Closing Date (the “ Settlement Agreement ”); and

WHEREAS , in accordance with the Settlement Agreement, Seller will sell and Purchaser will purchase all of Seller’s right, title, and interest in and to all of the Membership Interests upon the terms and subject to the conditions set forth herein in return for the consideration specified herein.

NOW, THEREFORE , in consideration of the mutual representations, covenants and agreements contained herein and in the Settlement Agreement and other good and valuable consideration set forth herein and in the Settlement Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties to this Agreement hereby agree as follows:

1. Transfer and Assignment . Subject to all of the terms of this Agreement, Seller shall transfer the Membership Interests in Company to Purchaser effective as of the Effective Time.

2. Assignment and Assumption; Agreement to be Bound; No Longer Member . For and in consideration of agreed value, the receipt and sufficiency of which is hereby acknowledged, Seller hereby sells, conveys, assigns, transfers and delivers to Purchaser, free and clear of all Encumbrances, all of its right, title and interest in and to the Membership Interests, and Purchaser hereby takes and accepts such assignment and transfer, in each case, effective as of the Effective Time (the “ Transfer ”). PURCHASER HEREBY AGREES TO ASSUME, ACCEPT AND TIMELY PERFORM AND DISCHARGE ANY AND ALL OF THE DUTIES,


COVENANTS, LIABILITIES AND OTHER OBLIGATIONS OF SELLER UNDER THE OPERATING AGREEMENT, WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME. SELLER AND ITS AFFILIATES SHALL BE RELEASED FROM ALL OF ITS RESPECTIVE OBLIGATIONS UNDER THE OPERATING AGREEMENT WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME, AND AS A RESULT OF SUCH RELEASE OF SELLER BY PURCHASER AND THE TRANSFER, IT IS UNDERSTOOD AND AGREED THAT AS OF THE EFFECTIVE TIME, SELLER SHALL NO LONGER BE A MEMBER OF, NOR HAVE ANY INTEREST OR RIGHTS TO PARTICIPATE IN, COMPANY. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING ASSUMPTION AND RELEASE SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

3. Recognition of Transfer by Company . Company hereby consents to and recognizes the Transfer. Company shall file this Agreement with the records of Company following the Closing Date.

4. Representations and Warranties of Seller . Seller represents and warrants to Purchaser, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation.

 

  b. Authority . Seller has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by Seller, and the performance of all obligations hereunder, have been duly authorized by all necessary action.

 

  c. Enforceability . This Agreement has been duly and validly executed and delivered by Seller and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of Seller enforceable against Seller in accordance with its terms.

 

  d. No Conflict . The execution, delivery, and performance of this Agreement by Seller will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Seller or its Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Seller or its Affiliates is subject, (iii) conflict with, result in a breach or default under, or accelerate or permit the acceleration of the performance required by any term or condition of the applicable Organizational Documents of Seller or any material Contract to which Seller or its Affiliates is subject, a party to or bound by, or (iv) result in the creation or imposition of any Encumbrance upon any property of Company or the Membership Interests. Except as provided in the Operating Agreement, no consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Seller of this Agreement.

 

2


  e. Brokers’ Fees . Neither Seller nor any of its Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Purchaser or any other Party; and Seller shall indemnify and hold harmless Purchaser from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Seller in connection with this Agreement.

 

  f. Title to Membership Interests . Seller owns beneficially and of record 50% of the issued and outstanding membership interests in Company. The Membership Interests constitute all of the issued and outstanding equity interests in Company that are owned by Seller or any of its Affiliates. The Membership Interests (i) are duly authorized, validly issued, fully paid and nonassessable; (ii) are free and clear of all Encumbrances (other than restrictions imposed on transfer under applicable federal and/or state securities Laws or regulations); (iii) are not subject to any agreements or understandings among any Persons with respect to the voting or transfer thereof; and (iv) other than this Agreement, are not subject to any outstanding subscriptions, options, convertible securities, warrants, calls or other securities granting rights to purchase or otherwise acquire any of such Membership Interests or any commitments or agreements of any character obligating Seller to transfer, redeem or exchange any of such Membership Interests or the beneficial interest thereto.

 

  g. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither Seller nor any of its Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

 

  h. Litigation . There are no Proceedings pending, threatened in writing, or, to Seller’s Knowledge, threatened orally by any Person against Seller or its Affiliates with respect to the Membership Interests.

 

  i. Taxes . To Seller’s Knowledge, other than the “EXCO-BG Appalachia Tax Partnership,” none of the assets of Company is subject to any tax partnership agreement or provisions requiring a partnership income tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state statute.

 

3


5. Representations and Warranties of Purchaser . Purchaser represents and warrants to Seller, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Purchaser is a corporation duly incorporated, validly existing and in good standing under the Laws of the jurisdiction of its formation.

 

  b. Authority . Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by Purchaser, and the performance of all obligations hereunder, have been duly authorized by all necessary action.

 

  c. Enforceability . This Agreement has been duly and validly executed and delivered by Purchaser and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.

 

  d. No Conflict . The execution, delivery, and performance by Purchaser of this Agreement will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Purchaser or its Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Purchaser or its Affiliates, or (iii) conflict with, result in a breach or default under, or accelerate or permit the acceleration of the performance required by any term or condition of its Organizational Documents or any material Contract to which Purchaser or its Affiliates is subject, a party to or bound by. No consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Purchaser of this Agreement.

 

  e. Brokers’ Fees . Neither Purchaser nor any of its Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Seller; and Purchaser shall indemnify and hold harmless Seller from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Purchaser in connection with this Agreement.

 

  f. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither Purchaser nor any of its Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

6. Representations and Warranties of Company. Company represents and warrants to Seller that Exhibit A attached hereto sets forth the unaudited consolidated balance sheet of Company as of each of September 30, 2017, October 31, 2017, and November 30, 2017, and the unaudited statement of operations of Company for the three-month period ended November 30, 2017.

 

4


7. Disclaimer.

 

  a. Except as and to the limited extent expressly set forth in this Agreement, (i) each of Seller, Purchaser and Company makes no representations or warranties, express or implied, and (ii) each of Seller, Purchaser and Company expressly disclaims all liability and responsibility for any representation, warranty, statement or information made or communicated (orally or in writing) to the other Parties.

 

  b. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS AGREEMENT, SELLER MAKES NO AND EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO THE MEMBERSHIP INTERESTS, OR (II) ANY ESTIMATES OF THE VALUE OF THE MEMBERSHIP INTERESTS OR FUTURE REVENUES GENERATED BY THE MEMBERSHIP INTERESTS, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER SHALL BE DEEMED TO BE OBTAINING THE MEMBERSHIP INTERESTS IN THEIR PRESENT CONDITION, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND DEFECTS. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING DISCLAIMER SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

8. Covenants .

 

  a. Releases . Effective as of the Effective Time, each Party, on behalf of itself and its Affiliates, hereby unconditionally and irrevocably and forever releases and discharges the other Parties and their respective Affiliates, and their respective successors and assigns, and any present or former directors, managers, officers, employees or agents of such Party (each, a “ Released Party ”), of and from, and hereby unconditionally and irrevocably waives, any and all Claims, debts and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract, direct or indirect, at Law or in equity that such Party (or any of its Affiliates) ever had, now has or ever may have or claim to have against any Released Party, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing whatsoever, in each instance, arising prior to the Effective Time and related to the Company, the Company’s assets or the transactions contemplated by this Agreement, other than Claims (if any) related to (i) a breach by any Party of either (A) its respective representations, warranties or covenants contained herein or (B) the terms of the Operative Documents (as defined in the Settlement Agreement) and/or (ii) any claims by any Party or its Affiliates with respect to matters relating to assets lying outside the AMI Area (as defined in the Settlement Agreement).

 

5


  b. Records . As soon as reasonably practicable (and in no event later than five days following Closing), Seller shall provide to Purchaser electronic copies of the files (including lease files, land files, wells files, division order files, abstracts, title files, engineering and/or production files), records (including corporate minute books and records and Tax and accounting records), data and maps of Company (collectively, the “ Records ”) that are in the possession of Seller or any of its Affiliates and that were not provided to Seller or any of its Affiliates by Company or its Affiliates.

 

  c. Rights of Ownership of Membership Interests . From and after the Closing, Purchaser shall be entitled to all of the rights of ownership attributable to the Membership Interests (including the right to all production, proceeds of production and other proceeds) prior to, on or after the Effective Time. If Seller (or any of its Affiliates) receives monies belonging to Company, including proceeds of production, then such amount shall, within five Business Days after the end of the month in which such amounts were received, be paid over to the proper party.

9. Limitation on Liability . In no event shall any Party be liable to the other Parties for punitive, exemplary, consequential, or special damages (except where such damages constitute part of a claim of a third person which is indemnified pursuant to the provisions of this Agreement).

10. Investment Intent of Purchaser . Purchaser acknowledges that the Membership Interests have not been, and will not be, registered under the Securities Act of 1933, as amended, or under any state securities laws, and is being sold in reliance upon federal and state exemptions for transactions not involving any public offering. Purchaser is a sophisticated investor with knowledge and experience in business and financial matters.

11. Waiver of Transfer Restrictions . Article 9 of the Operating Agreement includes certain transfer restrictions, notice requirements and indemnification obligations in connection with certain Transfers (as defined therein) or proposed Transfers (as defined therein) of the Membership Interests. Purchaser and Company hereby waive any and all transfer restrictions, notice requirements and indemnification obligations set forth in Article 9 of the Operating Agreement in connection with the Transfer of the Membership Interests contemplated by this Agreement.

12. Taxes .

 

  a. Taxes Generally . Seller agrees to prepare or make the requisite filings to reflect the Transfer under the Code. Seller will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferor to the Transfer according to the Code and its corporate guidelines. Purchaser will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferee to the Transfer according to the Code and its corporate guidelines.

 

6


  b. Cooperation on Tax Matters . In connection with the preparation of any Company Tax Returns, payment of Taxes related to Company, audit examinations related to Company, and any administrative or judicial proceedings regarding Tax liabilities that are imposed on Seller or Purchaser and related to Company, Seller and Purchaser shall, and shall cause Company to, cooperate fully with each other, including with respect to the furnishing or making available during normal business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Company Tax Returns, the payment of such Taxes, the conduct of such audit examinations or the defense of Claims by Governmental Authorities as to the imposition of such Taxes.

 

  c. Tax Characterization . The Parties agree that for U.S. federal income tax purposes and for purposes of state income taxes that follow U.S. federal income tax principles, the transactions herein, taken together with the transactions contemplated by the Settlement Agreement shall be treated in a manner consistent with the principles of Revenue Ruling 99-6, 1999-1 C.B. 432. Accordingly, (i) Seller shall be treated as transferring the Membership Interests in Company in satisfaction of the Claims, and (ii) Purchaser shall be treated as receiving a proportionate share of the assets of Company.

13. Resignation of Board Members . The execution of this Agreement shall serve as Seller’s written notice, as required by the Operating Agreement, of the resignation of all the BG Board Members and alternate Board Members, effective as of the Closing Date.

14. Miscellaneous .

 

  a. Effect of Waiver or Consent . Any failure by any Party or Parties to comply with any of its or their obligations, agreements or conditions herein contained may be waived by the Party or Parties to whom such compliance is owed by an instrument signed by any such Party or Parties and expressly identified as a waiver, but not in any other manner. No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in writing.

 

  b. Amendment . This Agreement may be amended or modified only by an agreement in writing executed by all Parties and expressly identified as an amendment or modification.

 

  c.

Successors and Assigns . Neither this Agreement nor any rights, interest, obligations or other parts hereof shall be assignable by any Party without the prior written consent of the other Parties, which consent may be denied in such other

 

7


  Party’s sole discretion. Any assignment in violation of this provision shall be void. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and assigns.

 

  d. Governing Law . EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WILL GOVERN UNDER CONFLICT OF LAWS PRINCIPLES GOVERNING TRANSFERS OF ASSETS LOCATED IN SUCH OTHER JURISDICTION, THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

  e. Dispute Resolution . The sole and exclusive forum for any disputes arising out of or relating to this Agreement, including, but not limited to, any disputes involving questions of breach, termination, or validity of this Agreement, shall be finally resolved by arbitration in Houston, Texas. The arbitration shall be conducted in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration (“ CPR ”) Rules. The CPR is the appointing authority. The resulting arbitral award shall be final and binding without right of appeal, and judgment upon such award may be entered in any court having jurisdiction thereof.

 

  f. Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

  g. Further Assurances . In the event that at any time any further action is necessary to carry out the purposes of this Agreement, the Parties shall take such further action (including the execution and delivery of such further documents and instruments) as any Party may reasonably request.

 

  h. Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one agreement. The Parties agree that any document or signature delivered by facsimile transmission, by PDF through electronic mail, or other electronic means shall be deemed an original executed document for all purposes hereof.

 

  i. Press Releases . No Party shall (and each shall cause its Affiliates not to) issue any press release or make any statement to the general public relating to the subject matter of this Agreement unless such Party has first consulted with the other Parties and obtained the other Parties’ prior written approval of the text thereof; provided, however , that nothing herein shall prevent a Party from publishing such press releases or other statement to the general public as is necessary to satisfy such Party’s obligations at Law or under the applicable rules of any stock or commodities exchange or any court after consultation with the other Parties and such other Parties’ reasonable review and comment.

 

8


  j. Certain Definitions . The following terms, as used herein, have the meanings set forth below:

Affiliate ” or “ Affiliates ” mean, with respect to any Party, any corporation, partnership (including a limited partnership), limited liability company, or other legal entity that directly or indirectly controls, is controlled by or is under common control with such Party; where “control” means the ability to direct the management and policies of a Person through ownership of voting shares or other equity rights, pursuant to a written agreement, or otherwise. The terms “Controls” and “Controlled by” and other derivatives shall be construed accordingly.

Anti-Bribery and Money-Laundering Laws and Obligations ” means (a) the laws relating to combating bribery and corruption, and/or the principles described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in Paris on December 17, 1997, which entered into force on February 15, 1999, and the Convention’s Commentaries; (b) the laws relating to combating bribery, corruption and money laundering in the countries of the applicable Person’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities, and/or in the countries of the applicable Person’s ultimate parent company’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities; (c) the United States Foreign Corrupt Practices Act of 1977; (d) the United Kingdom Bribery Act 2010 (as amended from time to time); and (e) and all other applicable national, regional, provincial, state, municipal or local laws and regulations that prohibit the bribery of, or the providing of unlawful gratuities, facilitation payments or other benefits to, any Government Official or any other person.

Business Day ” means any day that is not a Saturday, Sunday or legal holiday in the State of Texas and that is not otherwise a federal holiday in the United States.

Claims ” means any and all claims, demands, loss, liability, liens, judgments, settlements, suits, causes of action, fines, penalties, compliances, costs, and any costs, expenses and fees associated with the investigation, defense and resolution of the foregoing, including without limitation, reasonable attorney’s fees, asserted or prosecuted by or on behalf of a third party. Claims may be based on any theory of tort, contract, strict liability, statutory liability (including, without limitation, fines, penalties, obligations or requirements) or any other basis for liability and shall include, without limitation, any Claims arising, occurring or resulting from, related to or based on the injury, disease, or death of any persons or damage to, loss or destruction of any property, real or personal.

Closing ” means the closing of the transactions contemplated by this Agreement.

Closing Date ” has the meaning set forth in that certain Agreement Regarding Settlement by and among Purchaser, certain Affiliates of Purchaser, Seller and certain Affiliates of Seller.

Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

9


Contract ” means any written or oral contract, agreement, purchase order, binding bid, commitment or any other legally binding arrangement, but excluding, however, any lease, deed, easement, permit or other instrument (other than acquisition or similar sales or purchase agreements) creating, assigning or evidencing an interest in any real property related to or used in connection with the assets of any of Company.

Encumbrance ” means any liens, pledges, mortgages, deeds of trust, security interests, leases, licenses, charges, Claims, encroachments, easements or other encumbrances of any kind.

Facilitation Payments ” means payments to a Government Official to facilitate or expedite performance of a routine governmental action which is an action which is commonly performed by such Government Official.

Government Official ” means (a) any official or employee of any government, or any agency, ministry, department of a government (at any level), person acting in an official capacity for a government regardless of rank or position, official or employee of a company wholly or partially controlled by a government (for example, a state owned oil company), political party and any official of a political party; and (b) any candidate for political office, any officer or employee of a public international organization, such as the United Nations or the World Bank, or any immediate family member (meaning a spouse, dependent child or household member) of any of the foregoing.

Governmental Authority ” means any federal, state, county, municipal or local government or any regulatory or administrative agency, department, division, commission, court or arbitral body, or other similar recognized organization or body of any federal, state, tribal, municipal, or local governmental authority or of any foreign government or other similar recognized organization or body exercising similar powers or authority.

Known/Knowledge ” whenever a statement regarding the existence (or absence) of any fact in this Agreement is qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party,” “has Knowledge” or “had actual Knowledge” or any similar qualification, the Parties intend that the only information to be attributed to such Party is information actually known to (i) the person in the case of an individual or (ii) in the case of a corporation (or other business entity), the current officer and/or manager who devotes substantial attention to matters of such nature during the ordinary course of his or her employment after due inquiry to all Person reporting to such officer or manager. Except as provided in the preceding sentence and unless otherwise specifically provided elsewhere in this Agreement, no Party is represented or obligated to have undertaken a separate investigation in connection with the transaction contemplated in this Agreement to determine the existence (or absence) of any statement or representation qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party” or “had actual Knowledge” or similar qualification.

Law ” means any applicable statute, writ, law, common law, rule, regulation, ordinance, order, or determination of a Governmental Authority, or any requirement under the common law.

 

10


Organizational Documents ” means any charter, certificate of incorporation, articles of association, partnership agreements, limited liability company agreements, bylaws, operating agreements or similar formation or governing documents, instruments or certificates executed, adopted or filed in connection with the creation, formation or organization of a Person, including any amendments thereto.

Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

Proceeding ” means any action, arbitration, audit, cause, complaint, charge, hearing, inquiry, investigation, litigation, proceeding, review or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before any Governmental Authority or arbitrator.

Related Parties ” means in relation to a Party: (a) any of its Affiliates; (b) any person employed by that Party or its Affiliates; (c) any director or other officer of that Party or its Affiliates; and (d) any person or entity acting for or on behalf of that Party or its Affiliates.

Tax ” and “ Taxes ” means all taxes, assessments, charges, duties, fees, levies, imposts or other similar charges imposed by a Governmental Authority, including all income, franchise, profits, capital gains, capital stock, transfer, gross receipts, sales, use, transfer, service, occupation, ad valorem, property, excise, severance, windfall profits, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental, alternative minimum, add-on, value-added, withholding and other taxes, assessments, charges, duties, fees, levies, imposts or other similar charges of any kind, and all estimated taxes, deficiency assessments, additions to tax, penalties and interest, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the foregoing liabilities of any other Person by Law, by Contract or otherwise.

Tax Returns ” means any report, return, election, document, estimated tax filing, declaration or other filing provided to any Governmental Authority including any attachments thereto and amendments thereof.

[ Signature page follows. ]

 

11


IN WITNESS WHEREOF each of the Parties has executed this Agreement to be effective as of the Effective Time.

SELLER:

BG US PRODUCTION COMPANY, LLC

 

/s/ Michael Larimer
Name: Michael Larimer
Title: VP Operations

[ Signature Page to Membership Interest (ERPA) Transfer Agreement ]


PURCHASER :

EXCO HOLDING (PA), INC.

 

/s/ Harold L. Hickey
Name: Harold L. Hickey
Title: Chief Executive Officer & President

COMPANY :

 

EXCO RESOURCES (PA), LLC
/s/ Harold L. Hickey
Name: Harold L. Hickey
Title: President & Chief Executive Officer

[ Signature Page to Membership Interest (ERPA) Transfer Agreement ]

Exhibit 10.6

Execution Version

MEMBERSHIP INTEREST (MIDSTREAM) TRANSFER AGREEMENT

THIS MEMBERSHIP INTEREST (MIDSTREAM) TRANSFER AGREEMENT (this “ Agreement ”) is entered into as of the Closing Date (as defined below), but is effective for all purposes as of 11:57 p.m. on November 30, 2017 (the “ Effective Time ”), by and among BG US Production Company, LLC, a Delaware limited liability company (“ Seller ”), EXCO Appalachia Midstream, LLC, a Delaware limited liability company (“ Company ”), and EXCO Holding (PA), Inc., a Delaware corporation (“ Purchaser ”). Each of Seller, Company and Purchaser may be referred to as a “ Party ” or together, as the “ Parties .” Capitalized terms not otherwise defined herein, including in Section  14 , shall have the meanings attributed to them in the Second Amended and Restated Limited Liability Company Agreement, dated June 1, 2010, of Company (as amended from time to time, including an amendment on October 14, 2014, the “ Operating Agreement ”).

RECITALS

WHEREAS , Seller is a member in Company;

WHEREAS , the business and affairs of Company are governed by the Operating Agreement;

WHEREAS , Seller owns 50% of the issued and outstanding membership interest in Company (the “ Membership Interests ”);

WHEREAS , Purchaser, certain Affiliates of Purchaser, Company, and certain Affiliates of Seller are entering or have entered into that certain Settlement Agreement and Mutual Release, dated as of the Closing Date (the “ Settlement Agreement ”); and

WHEREAS , in accordance with the Settlement Agreement, Seller will sell and Purchaser will purchase all of Seller’s right, title, and interest in and to all of the Membership Interests upon the terms and subject to the conditions set forth herein in return for the consideration specified herein.

NOW, THEREFORE , in consideration of the mutual representations, covenants and agreements contained herein and in the Settlement Agreement and other good and valuable consideration set forth herein and in the Settlement Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties to this Agreement hereby agree as follows:

1. Transfer and Assignment . Subject to all of the terms of this Agreement, Seller shall transfer the Membership Interests in Company to Purchaser effective as of the Effective Time.

2. Assignment and Assumption; Agreement to be Bound; No Longer Member . For and in consideration of agreed value, the receipt and sufficiency of which is hereby acknowledged, Seller hereby sells, conveys, assigns, transfers and delivers to Purchaser, free and clear of all Encumbrances, all of its right, title and interest in and to the Membership Interests, and Purchaser hereby takes and accepts such assignment and transfer, in each case, effective as of the Effective Time (the “ Transfer ”). PURCHASER HEREBY AGREES TO ASSUME, ACCEPT


AND TIMELY PERFORM AND DISCHARGE ANY AND ALL OF THE DUTIES, COVENANTS, LIABILITIES AND OTHER OBLIGATIONS OF SELLER UNDER THE OPERATING AGREEMENT, WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME. SELLER AND ITS AFFILIATES SHALL BE RELEASED FROM ALL OF ITS RESPECTIVE OBLIGATIONS UNDER THE OPERATING AGREEMENT WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME, AND AS A RESULT OF SUCH RELEASE OF Seller BY PURCHASER AND THE TRANSFER, IT IS UNDERSTOOD AND AGREED THAT AS OF THE EFFECTIVE TIME, SELLER SHALL NO LONGER BE A MEMBER OF, NOR HAVE ANY INTEREST OR RIGHTS TO PARTICIPATE IN, COMPANY. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING ASSUMPTION AND RELEASE SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

3. Recognition of Transfer by Company . Company hereby consents to and recognizes the Transfer. Company shall file this Agreement with the records of Company following the Closing Date.

4. Representations and Warranties of Seller . Seller represents and warrants to Purchaser, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation.

 

  b. Authority . Seller has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by Seller, and the performance of all obligations hereunder, have been duly authorized by all necessary action.

 

  c. Enforceability . This Agreement has been duly and validly executed and delivered by Seller and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of Seller enforceable against Seller in accordance with its terms.

 

  d. No Conflict . The execution, delivery, and performance of this Agreement by Seller will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Seller or its Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Seller or its Affiliates is subject, (iii) conflict with, result in a breach or default under, or accelerate or permit the acceleration of the performance required by any term or condition of the applicable Organizational Documents of Seller or any material Contract to which Seller or its Affiliates is subject, a party to or bound by, or (iv) result in the creation or imposition of any Encumbrance upon any property of Company or the Membership Interests. Except as provided in the Operating Agreement, no consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Seller of this Agreement.

 

2


  e. Brokers’ Fees . Neither Seller nor any of its Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Purchaser or any other Party; and Seller shall indemnify and hold harmless Purchaser from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Seller in connection with this Agreement.

 

  f. Title to Membership Interests . Seller owns beneficially and of record 50% of the issued and outstanding membership interests in Company. The Membership Interests constitute all of the issued and outstanding equity interests in Company that are owned by Seller or any of its Affiliates. The Membership Interests (i) are duly authorized, validly issued, fully paid and nonassessable; (ii) are free and clear of all Encumbrances (other than restrictions imposed on transfer under applicable federal and/or state securities Laws or regulations); (iii) are not subject to any agreements or understandings among any Persons with respect to the voting or transfer thereof; and (iv) other than this Agreement, are not subject to any outstanding subscriptions, options, convertible securities, warrants, calls or other securities granting rights to purchase or otherwise acquire any of such Membership Interests or any commitments or agreements of any character obligating Seller to transfer, redeem or exchange any of such Membership Interests or the beneficial interest thereto.

 

  g. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither Seller nor any of its Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

 

  h. Litigation . There are no Proceedings pending, threatened in writing, or, to Seller’s Knowledge, threatened orally by any Person against Seller or its Affiliates with respect to the Membership Interests.

 

  i. Taxes . To Seller’s Knowledge, other than the “EXCO-BG Appalachia Tax Partnership,” none of the assets of Company is subject to any tax partnership agreement or provisions requiring a partnership income tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state statute.

 

3


5. Representations and Warranties of Purchaser . Purchaser represents and warrants to Seller, as of the Effective Time and the Closing Date, that:

 

  a. Organization . Purchaser is a corporation duly incorporated, validly existing and in good standing under the Laws of the jurisdiction of its formation.

 

  b. Authority . Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by Purchaser, and the performance of all obligations hereunder, have been duly authorized by all necessary action.

 

  c. Enforceability . This Agreement has been duly and validly executed and delivered by Purchaser and, assuming due execution and delivery of this Agreement by the other Parties, constitutes the binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.

 

  d. No Conflict . The execution, delivery, and performance by Purchaser of this Agreement will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law to which Purchaser or its Affiliates is subject, (ii) violate any arbitration or mediation protocol, order, judgment, or decree applicable to Purchaser or its Affiliates, or (iii) conflict with, result in a breach or default under, or accelerate or permit the acceleration of the performance required by any term or condition of its Organizational Documents or any material Contract to which Purchaser or its Affiliates is subject, a party to or bound by. No consent, approval, authorization or order of any court or Governmental Authority or of any third party is required in connection with the execution, delivery and performance by Purchaser of this Agreement.

 

  e. Brokers’ Fees . Neither Purchaser nor any of its Affiliates has employed or retained any broker, agent or finder in connection with this Agreement or the transactions contemplated herein, or paid or agreed to pay any brokerage fee, finder’s fee, commission or similar payment to any person on account of this Agreement or the transactions provided for herein, which fee, commission or payment will constitute an obligation payable by Seller; and Purchaser shall indemnify and hold harmless Seller from any costs, including attorneys’ fees, and liability arising from the claim of any broker, agent or finder employed or retained by Purchaser in connection with this Agreement.

 

  f. Anti-Bribery . In relation to the transactions the subject of this Agreement, neither Purchaser nor any of its Related Parties has made, offered or authorized or will make, offer or authorize any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any entity or other person where such payment, gift, promise or other advantage would (i) comprise a Facilitation Payment; or (ii) violate the Anti-Bribery and Money-Laundering Laws and Obligations or any other applicable Law.

 

4


6. Representations and Warranties of Company. Company represents and warrants to Seller that Exhibit A attached hereto sets forth the unaudited consolidated balance sheet of Company as of each of September 30, 2017, October 31, 2017, and November 30, 2017, and the unaudited statement of operations of Company for the three-month period ended November 30, 2017.

7. Disclaimer.

 

  a. Except as and to the limited extent expressly set forth in this Agreement, (i) each of Seller, Purchaser and Company makes no representations or warranties, express or implied, and (ii) each of Seller, Purchaser and Company expressly disclaims all liability and responsibility for any representation, warranty, statement or information made or communicated (orally or in writing) to the other Parties.

 

  b. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS AGREEMENT, SELLER MAKES NO AND EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO THE MEMBERSHIP INTERESTS, OR (II) ANY ESTIMATES OF THE VALUE OF THE MEMBERSHIP INTERESTS OR FUTURE REVENUES GENERATED BY THE MEMBERSHIP INTERESTS, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER SHALL BE DEEMED TO BE OBTAINING THE MEMBERSHIP INTERESTS IN THEIR PRESENT CONDITION, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND DEFECTS. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING DISCLAIMER SHALL NOT PRECLUDE PURCHASER FROM HAVING THE RIGHT TO SUE FOR ANY BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED HEREIN.

8. Covenants .

 

  a. Releases . Effective as of the Effective Time, each Party, on behalf of itself and its Affiliates, hereby unconditionally and irrevocably and forever releases and discharges the other Parties and their respective Affiliates, and their respective successors and assigns, and any present or former directors, managers, officers, employees or agents of such Party (each, a “ Released Party ”), of and from, and hereby unconditionally and irrevocably waives, any and all Claims, debts and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract, direct or indirect, at Law or in equity that such Party (or any of its Affiliates) ever had, now has or ever may have or claim to have against any Released Party, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing whatsoever, in each instance, arising prior to the Effective Time and related to the Company, the Company’s assets or the transactions contemplated by this Agreement, other than Claims (if any) related to (i) a breach by any Party of either (A) its respective representations, warranties or covenants contained herein or (B) the terms of the Operative Documents (as defined in the Settlement Agreement) and/or (ii) any claims by any Party or its Affiliates with respect to matters relating to assets lying outside the AMI Area (as defined in the Settlement Agreement).

 

5


  b. Records . As soon as reasonably practicable (and in no event later than five days following Closing), Seller shall provide to Purchaser electronic copies of the files (including lease files, land files, wells files, division order files, abstracts, title files, engineering and/or production files), records (including corporate minute books and records and Tax and accounting records), data and maps of Company (collectively, the “ Records ”) that are in the possession of Seller or any of its Affiliates and that were not provided to Seller or any of its Affiliates by Company or its Affiliates.

 

  c. Rights of Ownership of Membership Interests . From and after the Closing, Purchaser shall be entitled to all of the rights of ownership attributable to the Membership Interests (including the right to all production, proceeds of production and other proceeds) prior to, on or after the Effective Time. If Seller (or any of its Affiliates) receives monies belonging to Company, including proceeds of production, then such amount shall, within five Business Days after the end of the month in which such amounts were received, be paid over to the proper party.

9. Limitation on Liability . In no event shall any Party be liable to the other Parties for punitive, exemplary, consequential, or special damages (except where such damages constitute part of a claim of a third person which is indemnified pursuant to the provisions of this Agreement).

10. Investment Intent of Purchaser . Purchaser acknowledges that the Membership Interests have not been, and will not be, registered under the Securities Act of 1933, as amended, or under any state securities laws, and is being sold in reliance upon federal and state exemptions for transactions not involving any public offering. Purchaser is a sophisticated investor with knowledge and experience in business and financial matters.

11. Waiver of Transfer Restrictions . Article 10 of the Operating Agreement includes certain transfer restrictions, notice requirements and indemnification obligations in connection with certain Transfers (as defined therein) or proposed Transfers (as defined therein) of the Membership Interests. Purchaser and Company hereby waive any and all transfer restrictions, notice requirements and indemnification obligations set forth in Article 10 of the Operating Agreement in connection with the Transfer of the Membership Interests contemplated by this Agreement.

12. Taxes .

 

  a. Taxes Generally . Seller agrees to prepare or make the requisite filings to reflect the Transfer under the Code. Seller will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferor to the Transfer according to the Code and its corporate guidelines. Purchaser will pay the Taxes incurred by it, if any, associated with the Transfer based on the tax effects as the transferee to the Transfer according to the Code and its corporate guidelines.

 

6


  b. Cooperation on Tax Matters . In connection with the preparation of any Company Tax Returns, payment of Taxes related to Company, audit examinations related to Company, and any administrative or judicial proceedings regarding Tax liabilities that are imposed on Seller or Purchaser and related to Company, Seller and Purchaser shall, and shall cause Company to, cooperate fully with each other, including with respect to the furnishing or making available during normal business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Company Tax Returns, the payment of such Taxes, the conduct of such audit examinations or the defense of Claims by Governmental Authorities as to the imposition of such Taxes.

 

  c. Tax Characterization . The Parties agree that for U.S. federal income tax purposes and for purposes of state income taxes that follow U.S. federal income tax principles, the transactions herein, taken together with the transactions contemplated by the Settlement Agreement shall be treated in a manner consistent with the principles of Revenue Ruling 99-6, 1999-1 C.B. 432. Accordingly, (i) Seller shall be treated as transferring the Membership Interests in Company in satisfaction of the Claims, and (ii) Purchaser shall be treated as receiving a proportionate share of the assets of Company.

13. Resignation of Board Members . The execution of this Agreement shall serve as Seller’s written notice, as required by the Operating Agreement, of the resignation of all the BG Board Members and alternate Board Members, effective as of the Closing Date.

14. Miscellaneous .

 

  a. Effect of Waiver or Consent . Any failure by any Party or Parties to comply with any of its or their obligations, agreements or conditions herein contained may be waived by the Party or Parties to whom such compliance is owed by an instrument signed by any such Party or Parties and expressly identified as a waiver, but not in any other manner. No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in writing.

 

  b. Amendment . This Agreement may be amended or modified only by an agreement in writing executed by all Parties and expressly identified as an amendment or modification.

 

  c.

Successors and Assigns . Neither this Agreement nor any rights, interest, obligations or other parts hereof shall be assignable by any Party without the prior written consent of the other Parties, which consent may be denied in such other

 

7


  Party’s sole discretion. Any assignment in violation of this provision shall be void. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and assigns.

 

  d. Governing Law . EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WILL GOVERN UNDER CONFLICT OF LAWS PRINCIPLES GOVERNING TRANSFERS OF ASSETS LOCATED IN SUCH OTHER JURISDICTION, THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

  e. Dispute Resolution . The sole and exclusive forum for any disputes arising out of or relating to this Agreement, including, but not limited to, any disputes involving questions of breach, termination, or validity of this Agreement, shall be finally resolved by arbitration in Houston, Texas. The arbitration shall be conducted in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration (“ CPR ”) Rules. The CPR is the appointing authority. The resulting arbitral award shall be final and binding without right of appeal, and judgment upon such award may be entered in any court having jurisdiction thereof.

 

  f. Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

  g. Further Assurances . In the event that at any time any further action is necessary to carry out the purposes of this Agreement, the Parties shall take such further action (including the execution and delivery of such further documents and instruments) as any Party may reasonably request.

 

  h. Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one agreement. The Parties agree that any document or signature delivered by facsimile transmission, by PDF through electronic mail, or other electronic means shall be deemed an original executed document for all purposes hereof.

 

  i. Press Releases . No Party shall (and each shall cause its Affiliates not to) issue any press release or make any statement to the general public relating to the subject matter of this Agreement unless such Party has first consulted with the other Parties and obtained the other Parties’ prior written approval of the text thereof; provided, however , that nothing herein shall prevent a Party from publishing such press releases or other statement to the general public as is necessary to satisfy such Party’s obligations at Law or under the applicable rules of any stock or commodities exchange or any court after consultation with the other Parties and such other Parties’ reasonable review and comment.

 

8


  j. Certain Definitions . The following terms, as used herein, have the meanings set forth below:

Affiliate ” or “ Affiliates ” mean, with respect to any Party, any corporation, partnership (including a limited partnership), limited liability company, or other legal entity that directly or indirectly controls, is controlled by or is under common control with such Party; where “control” means the ability to direct the management and policies of a Person through ownership of voting shares or other equity rights, pursuant to a written agreement, or otherwise. The terms “Controls” and “Controlled by” and other derivatives shall be construed accordingly.

Anti-Bribery and Money-Laundering Laws and Obligations ” means (a) the laws relating to combating bribery and corruption, and/or the principles described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in Paris on December 17, 1997, which entered into force on February 15, 1999, and the Convention’s Commentaries; (b) the laws relating to combating bribery, corruption and money laundering in the countries of the applicable Person’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities, and/or in the countries of the applicable Person’s ultimate parent company’s place of incorporation, principal place of business, and/or place of registration as an issuer of securities; (c) the United States Foreign Corrupt Practices Act of 1977; (d) the United Kingdom Bribery Act 2010 (as amended from time to time); and (e) and all other applicable national, regional, provincial, state, municipal or local laws and regulations that prohibit the bribery of, or the providing of unlawful gratuities, facilitation payments or other benefits to, any Government Official or any other person.

Business Day ” means any day that is not a Saturday, Sunday or legal holiday in the State of Texas and that is not otherwise a federal holiday in the United States.

Claims ” means any and all claims, demands, loss, liability, liens, judgments, settlements, suits, causes of action, fines, penalties, compliances, costs, and any costs, expenses and fees associated with the investigation, defense and resolution of the foregoing, including without limitation, reasonable attorney’s fees, asserted or prosecuted by or on behalf of a third party. Claims may be based on any theory of tort, contract, strict liability, statutory liability (including, without limitation, fines, penalties, obligations or requirements) or any other basis for liability and shall include, without limitation, any Claims arising, occurring or resulting from, related to or based on the injury, disease, or death of any persons or damage to, loss or destruction of any property, real or personal.

Closing ” means the closing of the transactions contemplated by this Agreement.

Closing Date ” has the meaning set forth in that certain Agreement Regarding Settlement by and among Purchaser, certain Affiliates of Purchaser, Seller and certain Affiliates of Seller.

Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

9


Contract ” means any written or oral contract, agreement, purchase order, binding bid, commitment or any other legally binding arrangement, but excluding, however, any lease, deed, easement, permit or other instrument (other than acquisition or similar sales or purchase agreements) creating, assigning or evidencing an interest in any real property related to or used in connection with the assets of any of Company.

Encumbrance ” means any liens, pledges, mortgages, deeds of trust, security interests, leases, licenses, charges, Claims, encroachments, easements or other encumbrances of any kind.

Facilitation Payments ” means payments to a Government Official to facilitate or expedite performance of a routine governmental action which is an action which is commonly performed by such Government Official.

Government Official ” means (a) any official or employee of any government, or any agency, ministry, department of a government (at any level), person acting in an official capacity for a government regardless of rank or position, official or employee of a company wholly or partially controlled by a government (for example, a state owned oil company), political party and any official of a political party; and (b) any candidate for political office, any officer or employee of a public international organization, such as the United Nations or the World Bank, or any immediate family member (meaning a spouse, dependent child or household member) of any of the foregoing.

Governmental Authority ” means any federal, state, county, municipal or local government or any regulatory or administrative agency, department, division, commission, court or arbitral body, or other similar recognized organization or body of any federal, state, tribal, municipal, or local governmental authority or of any foreign government or other similar recognized organization or body exercising similar powers or authority.

Known/Knowledge ” whenever a statement regarding the existence (or absence) of any fact in this Agreement is qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party,” “has Knowledge” or “had actual Knowledge” or any similar qualification, the Parties intend that the only information to be attributed to such Party is information actually known to (i) the person in the case of an individual or (ii) in the case of a corporation (or other business entity), the current officer and/or manager who devotes substantial attention to matters of such nature during the ordinary course of his or her employment after due inquiry to all Person reporting to such officer or manager. Except as provided in the preceding sentence and unless otherwise specifically provided elsewhere in this Agreement, no Party is represented or obligated to have undertaken a separate investigation in connection with the transaction contemplated in this Agreement to determine the existence (or absence) of any statement or representation qualified by a phrase such as “to such Party’s Knowledge”, “Known to such Party” or “had actual Knowledge” or similar qualification.

Law ” means any applicable statute, writ, law, common law, rule, regulation, ordinance, order, or determination of a Governmental Authority, or any requirement under the common law.

 

10


Organizational Documents ” means any charter, certificate of incorporation, articles of association, partnership agreements, limited liability company agreements, bylaws, operating agreements or similar formation or governing documents, instruments or certificates executed, adopted or filed in connection with the creation, formation or organization of a Person, including any amendments thereto.

Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

Proceeding ” means any action, arbitration, audit, cause, complaint, charge, hearing, inquiry, investigation, litigation, proceeding, review or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before any Governmental Authority or arbitrator.

Related Parties ” means in relation to a Party: (a) any of its Affiliates; (b) any person employed by that Party or its Affiliates; (c) any director or other officer of that Party or its Affiliates; and (d) any person or entity acting for or on behalf of that Party or its Affiliates.

Tax ” and “ Taxes ” means all taxes, assessments, charges, duties, fees, levies, imposts or other similar charges imposed by a Governmental Authority, including all income, franchise, profits, capital gains, capital stock, transfer, gross receipts, sales, use, transfer, service, occupation, ad valorem, property, excise, severance, windfall profits, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental, alternative minimum, add-on, value-added, withholding and other taxes, assessments, charges, duties, fees, levies, imposts or other similar charges of any kind, and all estimated taxes, deficiency assessments, additions to tax, penalties and interest, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the foregoing liabilities of any other Person by Law, by Contract or otherwise.

Tax Returns ” means any report, return, election, document, estimated tax filing, declaration or other filing provided to any Governmental Authority including any attachments thereto and amendments thereof.

[ Signature page follows .]

 

11


IN WITNESS WHEREOF each of the Parties has executed this Agreement to be effective as of the Effective Time.

SELLER :

BG US PRODUCTION COMPANY, LLC

 

/s/ Michael Larimer

Name:

 

Michael Larimer

Title:

 

VP Operations

[ Signature Page to Membership Interest (Midstream) Transfer Agreement ]


PURCHASER:

EXCO HOLDING (PA), INC.

 

/s/ Harold L. Hickey

Name:

 

Harold L. Hickey

Title:

 

Chief Executive Officer & President

COMPANY :

EXCO APPALACHIA MIDSTREAM, LLC

 

/s/ Harold L. Hickey

Name:

 

Harold L. Hickey

Title:

 

President & Chief Executive Officer

[ Signature Page to Membership Interest (Midstream) Transfer Agreement ]

Exhibit 10.7

Execution Version

TERMINATION AND RELEASE AGREEMENT

This TERMINATION AND RELEASE AGREEMENT (this “ Agreement ”), is made and entered into as of the Closing Date (as defined below), but is effective as of 11:58 p.m. on November 30, 2017 (the “ Effective Time ”), by and among BG US PRODUCTION COMPANY, LLC, a Delaware limited liability company (“ BG ”), BG NORTH AMERICA, LLC, a Delaware limited liability company (“ BGNA ”), BG PRODUCTION COMPANY (PA), LLC, a Delaware limited liability company (“ BGPA ”), BG PRODUCTION COMPANY (WV), LLC, a Delaware limited liability company (“ BGWV ”), EXCO RESOURCES, INC., a Texas corporation (“ EXCO Parent ”), EXCO HOLDING (PA), INC., a Delaware corporation (“ EXCO ”), EXCO RESOURCES (PA), LLC, a Delaware limited liability company (“ Operator ”), EXCO PRODUCTION COMPANY (PA), LLC, a Delaware limited liability company (“ EXCOPA ”), EXCO PRODUCTION COMPANY (WV), LLC, a Delaware limited liability company (“ EXCOWV ”), EXCO OPERATING COMPANY, LP, a Delaware limited partnership (“ EOC ”), and EXCO APPALACHIA MIDSTREAM, LLC, f/k/a Appalachia Midstream, LLC, a Delaware limited liability company (“ Midstream ”). Each of BG, BGNA, BGPA, BGWV, EXCO Parent, EXCO, Operator, EXCOPA, EXCOWV, EOC and Midstream is sometimes referred to herein individually as a “ Terminating Party ” and collectively as the “ Terminating Parties .”

RECITALS

WHEREAS , SWEPI LP, a Delaware limited partnership (“ SWEPI ”), and certain of the Terminating Parties have entered into that certain Settlement Agreement and Mutual Release, dated as of the Closing Date (the “ Settlement Agreement ”); and

WHEREAS , pursuant to the terms of the Settlement Agreement, each Terminating Party desires to terminate, and considers fulfilled any and all obligations and liabilities under, each of its Applicable Terminated Agreements (as defined below), effective as of the Effective Time, by entering into this Agreement.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Terminating Parties hereby agree as follows:

1. Definitions. The following capitalized terms shall have the following meanings:

Affiliate ” or “ Affiliates ” mean, with respect to any Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with, such specified Person through one or more intermediaries or otherwise.

Applicable Terminated Agreements ” means, with respect to any Terminating Party, the Terminated Agreements to which such Terminating Party is a party.

BG-Midstream Secondment Agreement ” means that certain Secondment Agreement, dated as of June 1, 2010, by and between BG and Midstream, as amended from time to time.

BG-Midstream Services Agreement ” means that certain Services Agreement, dated as of June 1, 2010, by and between BG and Midstream, as amended from time to time.


BG-Operator Secondment Agreement ” means that certain Amended and Restated Secondment Agreement, dated as of October 14, 2014, by and among BG, EOC and Operator, as amended from time to time.

BG-Operator Services Agreement ” means that certain Services Agreement, dated as of June 1, 2010, by and between BGNA and Operator, as amended from time to time.

BGNA Guaranty ” means that certain guaranty of BGNA in favor of EXCOPA, EXCOWV, Operator and EXCO pursuant to that certain Guaranty, dated as of June 1, 2010, as amended from time to time.

Closing Date ” has the meaning set forth in that certain Agreement Regarding Settlement by and among SWEPI and certain of the Terminating Parties and/or their Affiliates.

Control ” means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the term “ Controlled ” has a correlative meaning.

EXCO Parent Guaranty ” means that certain guaranty of EXCO Parent in favor of BGPA, BGWV, Operator and BG pursuant to that certain Guaranty, dated as of June 1, 2010, as amended from time to time.

EXCO Performance Guaranty ” means that certain guaranty of EXCO Parent in favor of BG pursuant to that certain Performance Guaranty, dated as of May 9, 2010, as amended from time to time.

Governmental Authority ” means any federal, state, county, municipal or local government or any regulatory or administrative agency, department, division, commission, court or arbitral body, or other similar recognized organization or body of any federal, state, tribal, municipal, or local governmental authority or of any foreign government or other similar recognized organization or body exercising similar powers or authority.

JDA ” means that certain Joint Development Agreement, dated as of June 1, 2010, by and among BGPA, BGWV, EXCOPA, EXCOWV and Operator, as amended from time to time, including pursuant to that certain Amendment to the Joint Development Agreement (Appalachia), dated as of October 14, 2014.

Law ” means any applicable statute, writ, law, common law, rule, regulation, ordinance, Order, or determination of a Governmental Authority, or any requirement under the common law.

Letter Agreement ” means that certain JV Letter Agreement, dated as of October 14, 2014, by and among BG, Operator and EOC, as amended from time to time.

Order ” means any order, writ, injunction, decree, award, judgment, ruling, compliance or consent order or decree, settlement agreement, or similar binding legal agreement issued by or entered into with a Governmental Authority.

 

2


Original MITA ” means that certain Membership Interest Transfer Agreement, dated as of May 9, 2010, by and between EXCO and BG, as amended from time to time, including pursuant to that certain First Amendment to Purchase and Sale Agreement, dated as of June 1, 2010.

Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

Terminated Agreements ” means, collectively, the BG-Midstream Secondment Agreement, the BG-Operator Secondment Agreement, the BG-Midstream Services Agreement, the BG-Operator Services Agreement, the BGNA Guaranty, the EXCO Parent Guaranty, the EXCO Performance Guaranty, the JDA, the Letter Agreement and the Original MITA.

2. Termination. Each Terminating Party hereby terminates, effective as of the Effective Time, its Applicable Terminated Agreements. Each Terminating Party hereby acknowledges and agrees that from and after such termination of such Applicable Terminated Agreement contemplated by this Section  2 , each of such Applicable Terminated Agreements shall be of no further force or effect and, notwithstanding anything to the contrary in any Applicable Terminated Agreement, no provisions of such Applicable Terminated Agreement shall survive the termination of such Applicable Terminated Agreement contemplated by this Section  2 ; provided that (a) the BG-Operator Secondment Agreement shall be terminated only to the extent that such agreement applies to the Appalachian Area (as defined in the BG-Operator Secondment Agreement) and shall remain in full force and effect as such agreement applies to the East Texas/North Louisiana Area (as defined in the BG-Operator Secondment Agreement), (b) any Joint Development Operating Agreement (as defined in the JDA) entered into pursuant to the terms of the JDA by any Terminating Party or any joint operating agreements entered into by any Terminating Party and any third party shall, for the avoidance of doubt, not be deemed to be a “Terminated Agreement” and shall not be terminated pursuant to this Section  2 and (c) the Joint Development Operating Agreement (as defined in the JDA) shall survive and apply to the Subject Oil and Gas Assets (as defined in the JDA) of BGPA, BGWV, EXCOPA, EXCOWV and Operator to the extent a Joint Development Operating Agreement or another joint operating agreement does not burden such Subject Oil and Gas Assets (as defined in the JDA). Each Terminating Party hereby waives any and all requirements contained in its Applicable Terminated Agreements that may restrict or limit the rights of such Terminating Party to terminate such Applicable Terminated Agreements to the extent contemplated by this Section  2 .

3. Release . Subject to, and without limiting, Section  2 , each Terminating Party, on behalf of itself and its Affiliates, agrees that all obligations and liabilities of the other Terminating Parties (and their Affiliates) under such Terminating Party’s Applicable Terminated Agreements shall be deemed satisfied, and that any and all claims, liabilities, causes of action and/or obligations relating thereto, regardless of when such claims, liabilities, causes of action and/or obligations arose, shall be released effective as of the Effective Time.

4. Release of BG Parent Guaranty. Subject to, and without limiting, Section  2 , each of EXCO, EXCOPA and EXCOWV, as beneficiaries, hereby releases BG Energy Holdings Limited, as guarantor of any and all of its payment obligation under the Guaranty, dated as of May 9, 2010 (as amended).

 

3


5. Termination of Tax Partnership. BG, BGNA, BGPA and BGWV acknowledge and agree, on their own behalf and on behalf of their Affiliates, that, pursuant to Section 2.3 of the Tax Partnership Agreement, dated as of June 1, 2010 (as amended), by and among BGPA, BGWV, EXCOPA, EXCOWV, BG, EXCO, Operator and BG LNG Services, LLC, as a result of the transactions contemplated herein, the partnership for U.S. federal income tax purposes formed in connection with entry into the JDA shall cease to exist effective as of the Effective Time.

6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any facsimile or other electronic copies hereof or signature hereon shall, for all purposes, be deemed originals.

7. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Terminating Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Terminating Parties to the greatest extent legally permissible in order that the transactions contemplated herein are consummated as originally contemplated to the fullest extent possible.

8. Governing Law; Dispute Resolution.

a. THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

b. The sole and exclusive forum for any disputes arising out of or relating to this Agreement, including, but not limited to, any disputes involving questions of breach, termination, or validity of this Agreement, shall be finally resolved by arbitration in Houston, Texas. The arbitration shall be conducted in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration (“ CPR ”) Rules. The CPR is the appointing authority. The resulting arbitral award shall be final and binding without right of appeal, and judgment upon such award may be entered in any court having jurisdiction thereof.

[ Signature pages follow. ]

 

4


IN WITNESS WHEREOF, each of the Terminating Parties has executed this Agreement to be effective for all purposes as of the Effective Time.

 

BG:     BGPA:
BG US PRODUCTION COMPANY, LLC     BG PRODUCTION COMPANY (PA), LLC
By:   /s/ Michael Larimer     By:   /s/ Michael Larimer
Name:   Michael Larimer     Name:   Michael Larimer
Title:   VP Operations     Title:   VP Operations

 

BGNA:     BGWV :
BG NORTH AMERICA, LLC     BG PRODUCTION COMPANY (WV), LLC
By:   /s/ Deforester Jones     By:   /s/ Michael Larimer
Name:   Deforester Jones     Name:   Michael Larimer
Title:   Vice President & Controller     Title:   VP Operations

[ Signature Page to Termination and Release Agreement ]


EXCO PARENT:     OPERATOR :
EXCO RESOURCES, INC.     EXCO RESOURCES (PA), LLC
By:   /s/ Harold L. Hickey     By:   /s/ Harold L. Hickey
Name:   Harold L. Hickey     Name:   Harold L. Hickey
Title:   Chief Executive Officer & President     Title:   President & Chief Executive Officer

 

EXCO:     MIDSTREAM :
EXCO HOLDING (PA), INC.     EXCO APPALACHIA MIDSTREAM, LLC
By:   /s/ Harold L. Hickey     By:   /s/ Harold L. Hickey
Name:   Harold L. Hickey     Name:   Harold L. Hickey
Title:   Chief Executive Officer & President     Title:   President & Chief Executive Officer
EOC :     EXCOPA :
EXCO OPERATING COMPANY, LP     EXCO PRODUCTION COMPANY (PA), LLC

 

By:   EXCO Partners OLP GP, LLC, its general partner      
By:   /s/ Harold L. Hickey     By:   /s/ Harold L. Hickey
Name:   Harold L. Hickey     Name:   Harold L. Hickey
Title:   Chief Executive Officer & President     Title:   Chief Executive Officer & President
    EXCOWV :
    EXCO PRODUCTION COMPANY (WV), LLC
      By:   /s/ Harold L. Hickey
      Name:   Harold L. Hickey
      Title:   Chief Executive Officer & President

[ Signature Page to Termination and Release Agreement ]