Exhibit 4.3
PURCHASE AND SALE AGREEMENT
between
PIONEER NATURAL RESOURCES USA, INC.,
RELIANCE EAGLEFORD UPSTREAM HOLDING LP,
and
NEWPEK, LLC
as Sellers
and
Sundance Energy, Inc.
as Buyer
dated
March 9, 2018
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INTERPRETATION |
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1.1 | Defined Terms |
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1.2 | References and Rules of Construction |
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ARTICLE II PURCHASE AND SALE |
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2.1 | Purchase and Sale |
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2.2 | Excluded Assets |
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2.3 | Revenues and Expenses |
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ARTICLE III PURCHASE PRICE |
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3.1 | Purchase Price; Deposit |
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3.2 | Adjustments to Purchase Price |
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3.3 | Preliminary Settlement Statement |
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3.4 | Final Settlement Statement |
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3.5 | Disputes |
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3.6 | Allocated Values |
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3.7 | Purchase Price Allocation |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF EACH SELLER |
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4.1 | Organization, Existence and Qualification |
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4.2 | Authority, Approval and Enforceability |
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4.3 | No Conflicts |
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4.4 | Consents |
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4.5 | Bankruptcy |
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4.6 | Litigation |
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4.7 | Material Contracts |
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4.8 | No Violation of Laws |
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4.9 | Preferential Purchase Rights |
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4.10 | Royalties and Payments |
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4.11 | Imbalances |
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4.12 | Current Commitments; Wells in Progress |
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4.13 | Asset Taxes |
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4.14 | Brokers’ Fees |
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4.15 | Environmental Laws |
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4.16 | Payments for Production |
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4.17 | Payout Status |
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4.18 | Bonds and Credit Support |
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4.19 | Suspense Funds |
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4.20 | Plugging and Abandonment; Decommissioning Obligations |
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4.21 | Governmental Authorizations |
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4.22 | Foreign Person |
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4.23 | Absence of Changes and Events |
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4.24 | Wells |
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4.25 | Leases |
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER |
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5.1 | Organization, Existence and Qualification |
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5.2 | Authority, Approval and Enforceability |
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5.3 | No Conflicts |
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5.4 | Consents |
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5.5 | Bankruptcy |
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5.6 | Litigation |
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5.7 | Financing |
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5.8 | Regulatory |
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5.9 | Independent Evaluation |
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5.10 | Brokers’ Fees |
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5.11 | Accredited Investor |
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ARTICLE VI CERTAIN AGREEMENTS |
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6.1 | Conduct of Business |
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6.2 | Successor Operator |
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6.3 | Asset Credit Support |
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6.4 | Record Retention |
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6.5 | Access to Information and Use of Information |
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6.6 | Knowledge of Breach; Right to Cure |
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6.7 | Exclusivity |
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6.8 | Amendment of Schedules |
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6.9 | Affiliate Services |
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6.10 | JDA Agreements |
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6.11 | Meeks and Wye Ranch Agreements. |
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6.12 | Transition Services |
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ARTICLE VII BUYER’S CONDITIONS TO CLOSING |
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7.1 | Representations and Warranties |
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7.2 | Performance |
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7.3 | No Injunctions |
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7.4 | Closing Deliverables |
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7.5 | Enterprise Closing Agreement |
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ARTICLE VIII SELLERS’ CONDITIONS TO CLOSING |
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8.1 | Representations and Warranties |
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8.2 | Performance |
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8.3 | No Injunctions |
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8.4 | Closing Deliverables |
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8.5 | Enterprise Closing Agreement |
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ARTICLE IX CLOSING |
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9.1 | Date of Closing |
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9.2 | Place of Closing |
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9.3 | Closing Obligations |
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9.4 | Records |
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ARTICLE X ACCESS; DISCLAIMERS |
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10.1 | Access |
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10.2 | Confidentiality |
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10.3 | Disclaimers |
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ARTICLE XI TITLE MATTERS; CASUALTY; TRANSFER RESTRICTIONS |
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11.1 | Sellers’ Title |
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11.2 | Casualty Loss. |
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11.3 | Consents to Assign |
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ARTICLE XII ENVIRONMENTAL MATTERS |
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12.1 | NORM, Asbestos, Wastes and Other Substances |
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ARTICLE XIII ASSUMPTION; INDEMNIFICATION; SURVIVAL |
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13.1 | Assumed Obligations; Retained Obligations |
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13.2 | Indemnities of each Seller |
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13.3 | Indemnities of Buyer |
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13.4 | Limitation on Liability |
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13.5 | Express Negligence |
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13.6 | Exclusive Remedy |
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13.7 | Indemnification Procedures |
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13.8 | Survival |
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13.9 | Waiver of Right to Rescission |
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13.10 | Insurance, Taxes |
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13.11 | NON-COMPENSATORY DAMAGES |
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13.12 | Disclaimer of Application of Anti-Indemnity Statutes |
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13.13 | Treatment of Payments |
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13.14 | No Materiality Qualifier |
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ARTICLE XIV TERMINATION; DEFAULT AND REMEDIES |
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14.1 | Right of Termination |
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14.2 | Effect of Termination; Other Remedies |
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14.3 | Return of Documentation and Confidentiality |
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ARTICLE XV MISCELLANEOUS |
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15.1 | Appendices, Exhibits and Schedules |
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15.2 | Expenses and Taxes |
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15.3 | Assignment |
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15.4 | Preparation of Agreement |
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15.5 | Publicity |
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15.6 | Notices |
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15.7 | Further Cooperation |
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15.8 | Filings, Notices and Certain Governmental Approvals |
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15.9 | Entire Agreement; Conflicts |
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15.10 | Parties in Interest |
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15.11 | Amendment |
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15.12 | Waiver; Rights Cumulative |
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15.13 | Governing Law; Jurisdiction |
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15.14 | Severability |
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15.15 | Removal of Name |
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15.16 | Counterparts |
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15.17 | [Reserved] |
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15.18 | Like-Kind Exchange |
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15.19 | Several Liability |
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LIST OF EXHIBITS AND SCHEDULES
Annex I | ― | Defined Terms
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Exhibit A | ― | Leases |
― | Area Plat | |
Exhibit B | ― | Wells |
Exhibit C | ― | Surface Rights |
Exhibit D | ― | CGP11 |
Exhibit E | ― | Form of Assignment and Bill of Sale |
Exhibit F | ― | Excluded Assets |
Exhibit G | ― | [Reserved] |
Exhibit H | ― | Eagle Ford Shale and Austin Chalk Formation Definitions |
Exhibit I | ― | Form of Transaction Support Agreement |
Exhibit J | ― | [Reserved] |
Exhibit K | ― | Form of Buyer PSA Guaranty |
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Schedule 3.7 | ― | Purchase Price Allocation |
Schedule 4.4 | ― | Consents |
Schedule 4.6 | ― | Litigation |
Schedule 4.7 | ― | Material Contracts |
Schedule 4.8 | ― | Violation of Laws |
Schedule 4.9 | ― | Preferential Purchase Rights |
Schedule 4.11 | ― | Imbalances |
Schedule 4.12 | ― | Current Commitments; Wells in Progress |
Schedule 4.17 | ― | Payout Balance |
Schedule 4.18 | ― | Asset Credit Support |
Schedule 4.19 | ― | Suspense Funds |
Schedule 4.20 | ― | Wells To Be Plugged |
Schedule 4.25 | ― | Leases |
Schedule 6.1 | ― | Conduct of Business |
Schedule 6.12 | ― | Transition Services |
Schedule I-1 | ― | Sellers’ Knowledge Persons |
Schedule I-2 | ― | Buyer’s Knowledge Persons |
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PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this “Agreement”) is executed as of this 9th day of March, 2018 (the “Execution Date”), and is by and between Pioneer Natural Resources USA, Inc., a Delaware corporation (“Pioneer”), Reliance Eagleford Upstream Holding LP, a Texas limited partnership (“Reliance”), and Newpek, LLC, a Delaware limited liability company (“Newpek” and collectively with Pioneer and Reliance, “Sellers” and individually a “Seller”), and Sundance Energy, Inc., a Colorado corporation (“Buyer”). Sellers and Buyer may be referred to herein each as a “Party” and together as the “Parties.”
RECITALS
WHEREAS, subject to the terms and conditions of this Agreement, Sellers desire to sell and assign, and Buyer desires to purchase and pay for, all of Sellers’ right, title and interest in and to the Assets (as defined hereinafter) effective as of the Effective Time (as defined hereinafter).
NOW, THEREFORE, for and in consideration of the mutual promises, representations, warranties, covenants and agreements contained herein, the benefits to be derived by each Party hereunder, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sellers and Buyer agree as follows:
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agreement, instrument or Law means such agreement, instrument or Law as from time to time amended, modified or supplemented, including, in the case of agreements or instruments, by waiver or consent and, in the case of Laws, by succession of comparable successor Laws. If any period of days referred to in this Agreement shall end on a day that is not a Business Day, then the expiration of such period shall be automatically extended until the end of the first succeeding Business Day. References to a Person are also to its permitted successors and permitted assigns. If one or more, but not all, Sellers have an interest in one or more Assets subject to or affected by a dispute, agreement, decision or approval that is otherwise required to be resolved, made or given by all of the Sellers under this Agreement, then notwithstanding anything in this Agreement to the contrary, only those Sellers having an interest in the affected Asset or Assets shall have a right to participate in such dispute or make such agreement or decision or give such approval. For purposes of determining the Initial Deposit Deadline, the Second Deposit Deadline and the Target Closing Date, if this Agreement is executed and delivered at a time that is not during an Australian Business Day, then the time period for such calculations shall begin on the first Australian Business Day that immediately follows the time at which this Agreement is executed and delivered by the Parties. Additionally, if the deadline for the occurrence of the Target Closing Date is at a time that is not a Business Day, then the Target Closing Date shall occur on the first Business Day that immediately follows such time. |
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(e) all Applicable Contracts and all rights thereunder; |
(g) [Reserved] |
(k) all audit rights, rights to receive refunds or payments of any nature, accounts receivable, and all amounts of money relating thereto, in each case from Third Parties to the extent arising from or relating to (x) the ownership, operation, sale or other disposition of the Assets from and after the Effective Time or (y) any costs and expenses that are chargeable to other joint interest owners with respect to the Assets that are attributable to the Interim Period; |
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(l) all claims, rights, demands, causes of action, suits, actions, judgments, damages, awards, recoveries, settlements, indemnities, duties, obligations and liabilities in favor of or owed to Sellers, in each case by or against Third Parties and to the extent relating to any Assumed Obligations or arising from acts, omissions or events, or damage to or destruction of Assets occurring from and after the Effective Time (excluding any such items to the extent the same relate to matters for which such Sellers are required to provide indemnification to Buyer hereunder or otherwise retain responsibility pursuant to the terms of this Agreement); |
(m) all (x) Pipeline Imbalances and (y) all Wellhead Imbalances; and |
2.2 Excluded Assets. Each Seller shall reserve and retain all of its right, title and interest in and to the Excluded Assets. |
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attributable to the Interim Period. Notwithstanding any of the foregoing, the term “Property Expenses” shall not include any marketing fees with respect to the Assets payable to any Seller or its Affiliates, and shall not include any overhead charges with respect to the Assets payable to any Seller or its Affiliates (but shall, for clarity, include marketing fees and expenses paid to Third Parties). After the Closing, each Party shall be entitled to participate in all joint interest audits and other audits of Property Expenses for which such Party is entirely or in part responsible under the terms of this Section 2.3. |
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at Closing in accordance with Section 9.3(d). If Buyer does not pay the full Initial Deposit to Sellers by the Initial Deposit Deadline, then at any time after the Initial Deposit Deadline until the full Initial Deposit is paid to Sellers, any Party may give written notice to the other Parties of the termination of this Agreement, and upon the delivery of such notice of termination, this Agreement shall automatically terminate without further action of any Party, and in such event no Party shall have any Liability to any other Party hereunder; provided that the Surviving Provisions shall, in each case, survive such termination and the Parties shall not be relieved of any Liabilities with respect to the Surviving Provisions. Termination of this Agreement (and obligations with respect to the Surviving Provisions) shall be the only consequence of Buyer’s failure to pay the full Initial Deposit to Sellers, and Buyer shall have no other Liability to Sellers as a result of such failure. |
(e) If Buyer pays the full Initial Deposit to Sellers before any Party has delivered notice of termination of this Agreement as provided in Section 3.1(d), then no later than seven (7) Australian Business Days following the day on which Buyer pays the full Initial Deposit to Sellers (as calculated in accordance with Section 1.2) (the “Second Deposit Deadline”), Buyer has the right, but not the obligation, to pay to each Seller such Seller’s Seller Share of an amount equal to $25,000,000.00 (the “Second Deposit”) by wire transfer in immediately available funds to the bank account(s) designated by each such Seller. If Closing occurs, the Second Deposit (without interest) shall be applied towards the Adjusted Purchase Price at Closing in accordance with Section 9.3(d). If Buyer does not pay the full Second Deposit to Sellers by the Second Deposit Deadline, then at any time after the Second Deposit Deadline until the full Second Deposit is paid to Sellers, any Party may give written notice to the other Parties of the termination of this Agreement, and upon the delivery of such notice of termination, this Agreement shall automatically terminate without further action of any Party, and in such event no Party shall have any Liability to any other Party hereunder; provided that the Surviving Provisions shall, in each case, survive such termination and the Parties shall not be relieved of any Liabilities with respect to the Surviving Provisions. If such termination occurs as a result of a non-payment of the Second Deposit, Sellers shall be entitled to retain the Initial Deposit or shall be obligated to return the Initial Deposit (without interest) to Buyer as provided in Section 14.2. Termination of this Agreement (and Sellers’ retention or refund of the Initial Deposit pursuant to such termination and obligations with respect to the Surviving Provisions) shall be the only consequence of Buyer’s failure to pay the full Second Deposit to Sellers, and Buyer shall have no other Liability to Sellers as a result of such failure. |
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(iii) a monthly amount (for the period commencing from the Effective Time through the Closing Date) equal to such Seller’s Seller Share of $136,000 per month (which amounts cover such Seller’s overhead and any overhead paid under the joint operating agreements and unit agreements); |
(v) to the extent that any Seller has underdelivered Hydrocarbons for any pipeline or CGP as of the Effective Time with respect to the Pipeline Imbalances (and such Pipeline Imbalances are not cash settled by Sellers to their benefit prior to Closing), the sum of (A) the dollar amount per MMBtu set forth on Schedule 4.11 for such pipeline or CGP times (B) the amount of the underdelivered volumes attributable to such Well at the Effective Time; |
(vi) the amount of all Asset Taxes allocated to Buyer in accordance with Section 15.2 but only to the extent they are paid or otherwise economically borne by any Seller; and |
(vii) any other amount provided for elsewhere in this Agreement or otherwise agreed upon in writing by any Seller or Sellers and Buyer. |
(i) an amount equal to, to the extent that such amount has been received by a Seller and not remitted or paid to Buyer, all proceeds actually received by such Seller attributable to the ownership or operation of the Assets, including the sale of Hydrocarbons produced therefrom or allocable thereto during the period following the Effective Time, net of any royalties, similar burdens and Property Expenses that are paid or otherwise borne by the Sellers and are directly incurred in connection with or are chargeable to such proceeds in accordance with Sellers’ customary practice; |
(ii) [Reserved]; |
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(iii) the amount of all Asset Taxes allocated to a Seller in accordance with Section 15.2 but only to the extent they are paid or otherwise economically borne by Buyer; |
(v) to the extent that a Seller is overproduced for any Well as of the Effective Time with respect to the Wellhead Imbalances, the sum of (A) the dollar amount per MCF set for on Schedule 4.11 for such Well times (B) the amount of overproduced volumes attributable to such Well at the Effective Time; |
(vi) to the extent that any Seller has overdelivered Hydrocarbons for any pipeline or CGP as of the Effective Time with respect to the Pipeline Imbalances (and such Pipeline Imbalances are not cash settled by Sellers to their benefit prior to Closing), the sum of (A) the dollar amount per MMBtu set forth on Schedule 4.11 for such pipeline or CGP times (B) the amount of the overdelivered volumes attributable to such pipeline or CGP at the Effective Time; and |
(vii) any other amount provided for elsewhere in this Agreement or otherwise agreed upon in writing by any Seller or Sellers and Buyer. |
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based on actual income and expenses (if known) during the Interim Period and which takes into account all final adjustments made to the Pioneer Purchase Price, the Reliance Purchase Price and the Newpek Purchase Price, as applicable, and shows the resulting final Pioneer Purchase Price, Reliance Purchase Price and Newpek Purchase Price, as applicable (the “Final Price”). The Final Settlement Statement shall set forth the actual proration of the amounts required by this Agreement. As soon as practicable, and in any event within thirty (30) days after receipt of the Final Settlement Statement, Buyer shall return to Sellers a written report containing any proposed changes to the Final Settlement Statement and an explanation of any such changes and the reasons therefor (the “Dispute Notice”). Any changes not so specified in the Dispute Notice shall be deemed waived, and Sellers’ determinations with respect to all such elements of the Final Settlement Statement that are not addressed specifically in the Dispute Notice shall prevail. If Buyer fails to timely deliver a Dispute Notice to Sellers containing changes Buyer proposes to be made to the Final Settlement Statement, the Final Settlement Statement as delivered by Sellers will be deemed to be correct and will be final and binding on the Parties and not subject to further audit or arbitration. If the Final Price set forth in the Final Settlement Statement is mutually agreed upon in writing by Sellers and Buyer, the Final Settlement Statement and the Final Price, shall be final and binding on the Parties and not subject to further audit or arbitration. Any difference in the Adjusted Purchase Price as paid at Closing pursuant to the Preliminary Settlement Statement and the Final Price shall be paid by the owing Party within ten (10) Business Days of final determination of such owed amounts in accordance herewith to the owed Party. All amounts paid pursuant to this Section 3.4 shall be delivered in United States currency by wire transfer of immediately available funds to the account specified in writing by the relevant Party. |
(b) If, after the delivery of the Final Settlement Statement pursuant to the provisions of Section 3.4(a), any Party receives monies (including proceeds of production) belonging to another Party pursuant to Section 2.3 or otherwise, then such monies shall, within five (5) Business Days after the end of the month in which they were received, be paid over by the receiving Party to the owed Party. Additionally, if after delivery of the Final Settlement Statement, any Party pays monies relating to the Assets that are the obligation of any other Party hereunder, or receives an invoice or other request for payment of any amount which is the obligation of any other Party hereunder, then the Party responsible for such obligation shall, within five (5) Business Days after the end of the month in which the applicable invoice and/or proof of payment of such invoice are received by it, reimburse such the Party making such payment or receiving such invoice or request therefor. Each Party shall be permitted to offset any monies owed by it to any other Party under any provision of this Agreement against amounts owing by it to such other Party pursuant to this Section 3.4. |
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Settlement Statement and any other documentation such Party may desire to submit. If the Parties cannot agree on an Accounting Arbitrator within ten (10) Business Days after a Party’s election to submit such matters to arbitration under this Section 3.5, then either Party may request the Dallas, Texas office of the American Arbitration Association (the “AAA”) (or, if there is no such office, the office of the AAA serving Dallas, Texas) to select the Accounting Arbitrator. Within ten (10) Business Days after receiving the Parties’ respective submissions, the Accounting Arbitrator shall render a decision choosing either Sellers’ position or Buyer’s position with respect to each matter addressed in any Dispute Notice, based on the materials described above. Any decision rendered by the Accounting Arbitrator pursuant hereto shall be final, conclusive and binding on Sellers and Buyer and enforceable against any of the Parties in any court of competent jurisdiction. The costs of the Accounting Arbitrator shall be borne equally between the Parties. |
Each Seller severally and not jointly represents and warrants to Buyer, solely with respect to itself and its Seller Share of the Assets (it being understood that representations below with respect to the Assets or other properties included therein shall be understood to refer only to its Seller Share of the Assets or such properties), the following:
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ability to consummate the transactions contemplated by this Agreement or perform its obligations hereunder. |
4.5 Bankruptcy. There are no bankruptcy, reorganization or receivership proceedings pending, being contemplated by or, to such Seller’s Knowledge, threatened in writing against such Seller. |
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any thereof), of which such Seller has received service or written notice or, to such Seller’s Knowledge, threatened in writing against such Seller (with respect to the Assets). |
(a) Schedule 4.7 sets forth, as of the Execution Date, all Applicable Contracts of such Seller of the type described below (collectively, the “Material Contracts”): |
(i) any Applicable Contract that can reasonably be expected to result in aggregate payments by such Seller of more than $100,000 (net to the aggregate interest of Sellers in the Assets) during the remainder of the current or any subsequent calendar year (based solely on the terms thereof and current volumes, without regard to any expected increase in volumes or revenues); |
(ii) any Applicable Contract that can reasonably be expected to result in aggregate revenues to such Seller of more than $100,000 (net to the aggregate interest of Sellers in the Assets) during the remainder of the current or any subsequent calendar year (based solely on the terms thereof and current volumes, without regard to any expected increase in volumes or revenues); |
(iii) any Hydrocarbon purchase, sale, exchange, transportation, gathering, handling, stabilizing, separation, compression, dehydrating, treating, distilling, conditioning, blending, processing, fractionation, volume or throughput commitments dedications, supply, disposal or similar Applicable Contract that is not terminable without penalty, cost or detriment upon ninety (90) days’ or less notice; |
(iv) any water purchase, gathering, transportation, handling, disposal or similar Applicable Contract that is not terminable without penalty, cost or detriment upon ninety (90) days’ or less notice; |
(v) any indenture, mortgage, loan, credit or sale-leaseback or similar Applicable Contract that is secured with mortgages or liens on the Assets; |
(vi) any Applicable Contract that constitutes a lease under which such Seller is the lessor or the lessee of real or Personal Property which lease (A) cannot be terminated by such Seller without penalty, cost or detriment upon ninety (90) days’ or less notice and (B) involves an annual base rental of more than $100,000 (net to the aggregate interest of Sellers in the Assets and without regard to any increase in price); |
(vii) any farmout agreement, exchange agreement, participation agreement, exploration agreement, development agreement, joint venture agreement, joint operating agreement, unit agreement, drilling or completion commitment agreements or any similar Applicable Contract, in each case, that will continue to apply to the Assets following the Closing and where any material obligation thereunder has not been fully performed; |
(viii) any Applicable Contract between such Seller and any Affiliate of such Seller or between such Seller and any other Seller or their respective Affiliates that will not be terminated prior to or as of the Closing; |
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(ix) any Applicable Contract that provides for an area of mutual interest; |
(x) any Applicable Contract that contains a non-compete agreement or otherwise purports to restrict, limit or prohibit the manner in which, or the locations in which, such Seller may conduct its business; |
(xi) all net profits interests or production payments burdening such Seller’s interest in any of the Assets; |
(xii) all Applicable Contracts for the construction and installation or rental of equipment, fixtures, or facilities with guaranteed production throughput requirements or demand charges which cannot be terminated by Buyer without penalty, cost or consent on ninety (90) days’ or less notice and which could reasonably be expected to result in aggregate payments by the Buyer of more than $100,000 (net to the aggregate interest of Sellers in the Assets) during the current or any subsequent calendar year; |
(xiii) any Applicable Contract between such Seller and any employee or consultant that would be binding on Buyer as a successor in interest of the Assets; |
(xiv) G&G Data licensing agreements or other agreements governing ownership and/or the right to transfer or disclose G&G Data; |
(xv) any Applicable Contract that is a purchase and sale agreement with material obligations that have not been completely performed; and |
(xvi) any Applicable Contract containing a Tax partnership agreement. |
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(a) To such Seller’s Knowledge, such Seller’s ownership and operation of its respective interests in the Assets is in compliance in all material respects with applicable Environmental Laws, and such Seller or any Third Party operator possesses and is in material compliance with all Governmental Authorizations required under Environmental Laws for the operation of the Assets and all such Governmental Authorizations are in full force and effect in all material respects; |
(b) As of the Execution Date, such Seller (i) has not received from any Governmental Authority any written notice of material violation of, alleged violation of, non-compliance with any Environmental Law or Governmental Authorization issued under Environmental Laws involving its operation of its respective interests in the Assets other than notices with respect to matters that have been resolved to the satisfaction of any relevant Governmental Authority, (ii) is not subject to any outstanding “administrative order,” “consent order” or other agreement or Proceeding with respect to the ownership or operation of its respective interests in the Assets, with a Governmental Authority imposing or seeking to impose material ongoing obligations, damages, fines or penalties pursuant to Environmental Laws, and (iii) has not received from any Person any written demand or notice regarding any discharge, spill, release or other occurrence on or emanating from the Assets involving Hazardous Substances that could result in material Liabilities arising out of ownership of the Assets; and |
(c) Copies of all final written reports of environmental site assessments and/or compliance audits that have been prepared by a Third Party or by or on behalf of such Seller or the Assets since April 1, 2014, that are in such Seller’s possession or control, and that identify or address any material Environmental Defect affecting such Seller’s interests in the Assets have been made available for inspection by Buyer. |
4.18 Bonds and Credit Support. Schedule 4.18 lists all Asset Credit Support as of the Execution Date posted by such Seller. |
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4.19 Suspense Funds. To such Seller’s Knowledge, except as set forth on Schedule 4.19, as of the date set forth on such Schedule, such Seller does not hold any material Third Party suspense funds. |
(a) To such Seller’s Knowledge, no Well or Other Well located on the Leases or on land pooled therewith, or otherwise included in, the Assets has been plugged and abandoned other than in compliance in all material respects with applicable Law, Applicable Contracts and the Leases. To such Seller’s Knowledge, (i) such Seller’s or the applicable Third Party operator is not currently obligated by any Laws or Applicable Contract or Lease to currently plug, dismantle or plug any Well or Other Well, and (ii) except as listed on Schedule 4.20, as of the Execution Date there are no Wells or Other Wells located on the Lands for which such Seller received a written order from a Governmental Authority requiring that such Well be plugged, abandoned, and reclaimed and which have not been plugged, abandoned, and reclaimed. Exhibit B notes all Wells that are shut-in or temporarily abandoned as of the Execution Date. |
(b) To such Seller’s Knowledge, no Assets (other than the Wells) have been closed, removed, purged, abandoned, capped, remediated and restored or otherwise Decommissioned, as applicable, other than in compliance in all material respects with applicable Law. To such Seller’s Knowledge, except as listed on Schedule 4.20, as of the Execution Date there are no Assets (other than the Wells) for which such Seller or the applicable Third Party operator has received a written notice from a Governmental Authority that such Seller or applicable Third Party operator is obligated by any Laws to currently close, remove, purge, abandon, cap, remediate or restore or otherwise Decommission any Assets. |
4.22 Foreign Person. Such Seller is not a “foreign person” within the meaning of Section 1445 of the Code. |
(a) except as permitted by this Agreement or disclosed to Buyer, such Seller has not waived, compromised or settled any rights or claims against any Third Party, to, under or involving an Asset with a value in excess of $100,000 individually, or $250,000 in the aggregate; |
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(b) such Seller has not made a loan to, or entered into any other transaction with, any of the members, partners, directors, officers, or employees of such Seller that is not in the ordinary course of business of such Seller and that would be binding upon the Assets after Closing; |
(c) such Seller has not transferred, sold or disposed of any material portion of the Assets, other than (i) the sale or disposal of Hydrocarbons in the ordinary course of business, (ii) the sale of equipment that is no longer necessary in the operation of the Assets or for which replacement equipment has been obtained, or (iii) items constituting Permitted Encumbrances; and |
(d) such Seller has not committed to do any of the foregoing. |
Buyer represents and warrants to Sellers the following:
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reorganization, moratorium and similar Laws, as well as to principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law). |
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(a) Except (w) as set forth on Schedule 6.1, (x) for the operations covered by the AFEs, the Wells in Progress, and other capital commitments described on Schedule 4.12, (y) for actions taken in connection with emergency situations or to maintain a lease or as required by Law or a Governmental Authority and (z) as expressly contemplated by this Agreement or as expressly consented to in writing by Buyer (which consent shall not be unreasonably delayed, withheld or conditioned), each Seller shall, from and after the Execution Date until Closing: |
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(ii) use Commercially Reasonable Efforts to give written notice to Buyer as soon as practicable, but in any event within three (3) Business Days of such Seller acquiring Knowledge, of the receipt by such Seller of (A) any written claims, demands, suits or actions made by a Third Party or Governmental Authority against such Seller which materially affects the Assets, (B) any written notice to or from any Third Party or Governmental Authority of material default or violation by such Third Party or such Seller under any Material Contract, Lease, or Government Authorization, (C) the occurrence of any event that such Seller reasonably believes will have an adverse impact on the Assets in excess of $100,000 or (D) any written proposal from a Third Party to engage in a farmout transaction or establishment of a new unit with respect to the Assets; |
(iii) not propose any operation reasonably expected to cost Sellers in excess of $100,000 (net to the aggregate interest of Sellers in the Assets); |
(vii) not voluntarily relinquish its position as operator to anyone other than Buyer with respect to any of the Wells or voluntarily abandon any of the Wells other than as required pursuant to the terms of a Lease or by Law; |
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(ix) not commit to do any of the foregoing in clauses (iii) through (viii). |
Buyer acknowledges each Seller owns undivided interests in certain of the properties comprising the Assets, and Buyer agrees that the acts or omissions of the other Working Interest owners or operators (including other Sellers) shall not constitute a breach of the provisions of this Section 6.1, and no action required by a vote of Working Interest owners shall constitute such a breach by a Seller so long as such Seller has voted its interest in a manner that complies with the provisions of this Section 6.1.
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(b) From and after the Closing Date until two-year anniversary of the Closing Date, upon written certification by Buyer that it is required by the United States Securities and Exchange Commission (the “SEC”) or the Australian Stock Exchange (“ASX”) to provide financial statements solely related to the ownership and operation of the Assets prior to Closing that will be included in an SEC or ASX filing (the “Buyer Required Financial Statements”), Sellers shall, and shall cause their Affiliates to, use commercially reasonable efforts to cooperate with Buyer in Buyer’s preparation of such Buyer Required Financial Statements (“Buyer Financial Statement Efforts” and together with the Buyer Parent Financing Efforts, the “Financing Efforts”). |
(c) Notwithstanding anything in Section 6.5(a) or Section 6.5(b) to the contrary, (1) none of Sellers any of their respective Affiliates shall be required to participate in any selling effort, participate in any road show, or incur any Liability or obligation or bear any cost or expense, pay any commitment or other fee or agree to provide any guaranty or indemnity in connection with the Financing Efforts, (2) none of Sellers or any of their Affiliates shall be required to execute or enter into or perform any agreement, document or instrument, deliver any certificate or opinion or take any corporate or other organizational action (including the adoption of any resolutions) to authorize the execution, entering into or performance of any such agreement, document or instrument, in either case, with respect to the Financing Efforts, (3) the Financing Efforts shall not include any actions that would cause any representation, warranty, covenant or other obligation in this Agreement of any Seller to be breached or any condition to the Closing hereunder to fail to be satisfied, (4) the Financing Efforts shall not require the giving of representations or warranties to any third parties by Sellers or the indemnification thereof by Sellers, (5) the Financing Efforts shall not require the waiver or amendment of any terms of this Agreement by Sellers, (6) the Financing Efforts shall not require delivery of accountants’ cold comfort letters, (7) the Financing Efforts shall not require the taking of any action that materially and adversely interferes with Sellers’ operations and/or the Assets or require Sellers to provide any information in a format that is materially different than currently exists and (8) the Financing Efforts shall not require Sellers to provide any data or information that is subject to attorney-client privilege or work product or is subject to a confidentiality obligation with a third party. Without limiting Buyer’s rights to indemnity under Article XIII, in no event will Sellers, or their respective Affiliates, have any Liability or obligation of any kind or nature to Buyer, Buyer Parent or any |
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other Person arising or resulting from the Financing Efforts (including the use of any information provided in connection therewith), and Buyer shall indemnify and hold harmless the Sellers’ Indemnified Parties from and against any and all damages suffered or incurred by any of them in connection with the Financing Efforts (including the use of any information provided in connection therewith). Buyer shall reimburse Sellers and their Affiliates for out of pocket costs and expenses incurred in connection with the Financing Efforts. |
(d) Notwithstanding anything to the contrary in this Agreement, the Confidentiality Agreement or in any other agreement among Sellers and Buyer (or its Affiliates), Sellers consent to the use of any materials and/or information (solely to the extent such materials and information pertain to the Assets) provided pursuant to Section 6.5(a) by Buyer and Buyer Parent in the Buyer Parent Shareholder Materials. |
(b) If any of Sellers’ or Buyer’s representations or warranties is untrue or shall become untrue in any material respect between the Execution Date and the Closing, or if any of Sellers’ or Buyer’s covenants or agreements to be performed or observed prior to or on the Closing Date shall not have been so performed or observed in any material respect, but if such breach of representation, warranty, covenant or agreement is cured by the Closing (or, if the Closing does not occur, cured prior to the termination of this Agreement), then such breach shall be considered not to have occurred for all purposes of this Agreement. |
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each of their Affiliates, and shall direct each of their officers, directors, employees, representatives, agents and investment bankers to, immediately cease and cause to be terminated any and all contacts, discussions and negotiations with any Person other than the Buyer and its Affiliates and representatives regarding any Acquisition Proposal or potential Acquisition Proposal. |
(a) The Parties acknowledge that Pioneer currently holds that certain 5.180 Acre POD Agreement and Easement, effective March 1, 2011, by and between Jack Edward Meeks and Pioneer Natural Resources USA, Inc. and that certain 2.066 Acre POD Agreement, effective July 1, 2012, by and between Wye Ranch, Ltd. and Pioneer Natural Resources USA, Inc. (collectively, the “Meeks and Wye Ranch Agreements”) for the benefit of the Sellers. |
(b) The Parties acknowledge that under the terms of the Meeks and Wye Ranch Agreements, in order to effectuate the assignment of the Meeks and Wye Ranch Agreements from Seller to Buyer, Buyer must meet the insurance and/or bonding requirements set forth respectively in Section 18 of each of the Meeks and Wye Ranch Agreements (the “Required Insurance”). Buyer shall use commercially reasonable efforts to obtain by Closing the Required Insurance. As long as Buyer (or its successors or assigns) is required to obtain all or any part of the Required Insurance (or any other insurance or security provided by Buyer in lieu thereof) under the Meeks and Wye Ranch Agreements, Buyer shall, or shall cause, (a) Sellers to be named as additional insureds with respect to such Required Insurance (or other insurance or security), (b) such insurers to waive all rights of subrogation against Sellers and (c) such insurers to provide prior notice of |
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cancellation of such Required Insurance to Sellers, in each case, in the same manner as set forth in Sections 18.4.1 through 18.4.3 of each of the Meeks and Wye Ranch Agreements. |
6.12 Transition Services. Buyer and Pioneer each agree to perform and comply with the covenants and agreements set forth on Schedule 6.12. |
The obligations of Buyer to consummate the transactions provided for herein are subject, at the option of Buyer, to the fulfillment by each Seller or waiver in writing by Buyer, on or prior to Closing of each of the following conditions:
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For the avoidance of doubt, Buyer’s or Buyer Parent’s ability to obtain financing or any board or stockholder approval shall not be a condition precedent to Buyer’s obligation to consummate the Closing.
The obligations of each Seller to consummate the transactions provided for herein are subject, at the option of such Seller, to the fulfillment by Buyer or waiver in writing by such Seller on or prior to Closing of each of the following conditions:
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9.2 Place of Closing. The Closing shall be held at the office of Vinson & Elkins L.L.P., 2001 Ross Avenue, Suite 3700, Dallas, Texas 75201, or such other place as mutually agreed upon by the Parties. |
(a) Each Seller and Buyer shall execute, acknowledge and deliver the Assignment in sufficient counterparts to facilitate recording in the applicable counties covering the Assets. |
(b) Each Seller and Buyer shall execute and deliver assignments, in appropriate forms, of federal Leases and state Leases included in the Assets (if any) in sufficient counterparts to facilitate filing with the applicable Governmental Authority. |
(c) Each Seller and Buyer shall execute and deliver the Preliminary Settlement Statement. |
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(e) Each Seller shall deliver, on forms reasonably acceptable to Buyer, transfer orders or letters in lieu thereof directing all purchasers of production to make payment to Buyer of proceeds attributable to production from the Assets from and after the Effective Time, for delivery by Buyer to the purchasers of production. |
(f) Each Seller shall deliver an executed certificate of non-foreign status that meets the requirements set forth in Treasury Regulation § 1.1445-2(b)(2). |
(g) To the extent required under any Law or by any Governmental Authority for any federal or state Lease, Pioneer and Buyer shall deliver state change of operator forms designating Buyer as the operator of the Units, Wells, Other Wells and the Leases currently operated by Pioneer. |
(j) Buyer shall deliver evidence of the posting of Asset Credit Support with all applicable Governmental Authorities or other Persons as required by Section 6.3. |
(k) Each Seller shall deliver releases in form reasonably satisfactory to Buyer of all Encumbrances on the Assets securing such Seller’s Indebtedness. |
(l) Each Seller and Buyer shall execute and deliver any other agreements, instruments and documents which are required by other terms of this Agreement to be executed or delivered at Closing. |
(m) Each Seller and Buyer shall execute and deliver the Transaction Support Agreement attached hereto as Exhibit I (the “Transaction Support Agreement”). |
(n) Buyer shall deliver to each Seller the Security Instruments (as defined in the Transaction Support Agreement) and the Buyer Parent Guaranty (as defined in the Transaction Support Agreement) required by the Transaction Support Agreement to be delivered to such Seller at Closing. |
(o) Each Seller shall deliver to Buyer and the Enterprise Entities its respective Seller Guaranty (as defined in the Transaction Support Agreement). |
(p) Each Seller and Buyer shall execute and deliver to the Enterprise Entities and each other Party, all documents, instruments and agreements contemplated to be delivered by such Person under the Enterprise Closing Agreement at or concurrently with the Closing. |
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(q) Buyer shall deliver to each Seller a Buyer PSA Guaranty. |
(r) Buyer shall provide to Seller evidence that it has obtained the Required Insurance contemplated by Section 6.11. |
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INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO BUYER BY ANY AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF ANY SELLER OR ANY OF ITS AFFILIATES). BUYER ACKNOWLEDGES AND AGREES THAT NONE OF THE SELLERS’ INDEMNIFIED PARTIES SHALL HAVE ANY LIABILITY OR RESPONSIBILITY FOR FAILING OR OMITTING TO DISCLOSE ANY CONDITION, AGREEMENT, DOCUMENT, DATA, INFORMATION OR OTHER MATERIALS RELATING TO THE ASSETS THAT IS NOT EXPRESSLY COVERED BY THE REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT. |
(b) EXCEPT AS AND TO THE LIMITED EXTENT EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE IV, SECTION 11.1(b) OR THE SELLERS’ CERTIFICATES, EXCEPT FOR THE SPECIAL WARRANTY OF TITLE IN THE ASSIGNMENT, AND WITHOUT LIMITING THE GENERALITY OF SECTION 10.3(a), EACH SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY ENGINEERING, GEOLOGICAL, GEOPHYSICAL OR SEISMIC DATA OR INTERPRETATION OR ANALYSIS RELATING TO THE ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR FUTURE REVENUES TO BE GENERATED BY THE ASSETS, (V) THE PRODUCTION OF OR ABILITY TO PRODUCE HYDROCARBONS FROM THE ASSETS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ANY SELLER OR THIRD PARTIES WITH RESPECT TO THE ASSETS (INCLUDING THE ACCURACY OR COMPLETENESS THEREOF), (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO BUYER OR ITS AFFILIATES, OR ITS OR THEIR RESPECTIVE EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING THE ACCURACY OR COMPLETENESS THEREOF) OR ANY DISCUSSION OR PRESENTATION RELATING THERETO (INCLUDING THE ACCURACY OR COMPLETENESS THEREOF) AND (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT. EXCEPT AS AND TO THE LIMITED EXTENT EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE IV, SECTION 11.1(b) OR THE SELLERS’ CERTIFICATES, EXCEPT FOR THE SPECIAL WARRANTY OF TITLE IN THE ASSIGNMENT, BUYER ACKNOWLEDGES AND AGREES THAT (X) NONE OF THE SELLERS’ INDEMNIFIED PARTIES ARE MAKING (AND NONE OF THE SELLERS’ INDEMNIFIED PARTIES SHALL HAVE ANY LIABILITY OR RESPONSIBILITY FOR) AND (Y) NO BUYER INDEMNIFIED PARTY IS RELYING UPON ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY OF THE ASSETS, RIGHTS OF A |
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PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES THAT BUYER SHALL BE DEEMED TO BE OBTAINING THE ASSETS IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT AT CLOSING BUYER WILL HAVE MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE. |
(c) OTHER THAN AS AND TO THE LIMITED EXTENT EXPRESSLY REPRESENTED OTHERWISE IN SECTION 4.15, BUYER ACKNOWLEDGES AND AGREES THAT (I) NONE OF THE SELLERS’ INDEMNIFIED PARTIES ARE MAKING (AND NONE OF THE SELLERS’ INDEMNIFIED PARTIES SHALL HAVE ANY LIABILITY OR RESPONSIBILITY FOR) AND (II) NO BUYER INDEMNIFIED PARTY IS RELYING UPON ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSETS, AND NOTHING IN THIS AGREEMENT OR OTHERWISE SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND, BUYER SHALL BE DEEMED TO BE TAKING THE ASSETS “AS IS” AND “WHERE IS” WITH ALL FAULTS FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT AT CLOSING BUYER WILL HAVE MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS BUYER DEEMS APPROPRIATE. |
(d) SellerS and Buyer agree that, to the extent required by law to be effective, the disclaimers of certain representations and warranties contained in this Section 10.3 are “conspicuous” disclaimers for the purpose of any law. |
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(ii) Recovery on a Seller’s Special Warranty of Title set forth in Section 11.1(b) or in the Assignment shall not exceed the Allocated Value of the affected Asset and the amount of such recovery shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the affected Asset affected by the defect of title, the legal effect of the defect of title, the potential economic effect of the defect of title over the life of the affected Asset, the values placed upon the defect of title by Buyer and Sellers and such other reasonable factors as are necessary to make a proper evaluation. For purposes of this Section 11.1(c)(ii), the Allocated Value of CGP 11 will be the amount shown on Exhibit D. For the avoidance of doubt, Buyer’s recovery for a breach of the Special Warranty of Title set forth in Section 11.1(b) or in the Assignment shall not be duplicative. |
(a) Notwithstanding anything herein to the contrary, from and after the Effective Time, if Closing occurs, Buyer shall assume all risk of loss with respect to production of Hydrocarbons through normal depletion (including watering out of any well, collapsed casing or sand infiltration of any well) and the depreciation of Personal Property due to ordinary wear and tear, in each case, with respect to the Assets, and Buyer shall not assert, and shall not be entitled to assert, such matters as Casualty Losses or breaches of this Agreement. |
(i) If the reasonable estimated losses to the Assets as a result of all Casualty Losses that occur between the Execution Date and the Closing is less than $250,000 then at Closing (x) Buyer shall assume all risk and loss associated with such Casualty Losses as an Assumed Obligation (and Sellers and their Affiliates shall have no Liability for such Casualty Losses), (y) the Pioneer Purchase Price, the Reliance Purchase Price and the Newpek Purchase Price shall not be adjusted as a result of such Casualty Losses and (z) Sellers shall pay to Buyer |
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all sums paid to Sellers by Third Parties by reason of any Casualty Losses insofar as with respect to the Assets and shall assign, transfer and set over to Buyer or subrogate Buyer to all of Sellers’ right, title and interest (if any) in insurance claims, unpaid awards and other rights, in each case, against Third Parties arising out of such Casualty Losses insofar as with respect to the Assets. |
(c) If Section 11.2(b)(ii)(x) is applicable, the Sellers shall use Commercially Reasonable Efforts to cure the applicable Casualty Losses, shall do so without unreasonably interfering with or damaging Buyer’s or any Third Party operator’s operations on the affected Assets, and shall coordinate their access rights and any invasive work with Buyer and any Third Party operator to minimize inconvenience to or interruption of the conduct of business by the Buyer or such Third Party operators or any damage to the Buyer’s or Third Party operator’s operations or properties to the extent practicable. Additionally, Buyer shall have the right to split, at its option and expense, any samples collected from the Assets by the Sellers. The Sellers shall give Buyer and any Third Party operator reasonable prior written notice before gaining physical access to any of the Assets, and Buyer or its designee shall have the right, but not the obligation, to accompany the Sellers and the Sellers’ representatives whenever the Sellers or the Sellers’ representatives gain physical access to any Assets. The Sellers shall abide by Buyer’s or any Third Party operator’s posted safety rules, regulations and operating policies provided to Sellers in writing while conducting its cure work on the Assets. The Sellers shall promptly provide Buyer (but in any case no later than the end of the restoration work) copies of all reports, results and other documentation and data prepared or compiled by the Sellers and/or any of their representatives or agents in connection with the restoration work. The Sellers shall hold all information or data obtained by the Sellers as part of the cure work confidential, except to the extent disclosure is required by Law or a Governmental Authority, and shall not use any of the same except in connection with the transactions set forth in this Agreement. Buyer shall provide the Sellers and their representatives access to the Assets, including the Records, and shall use Commercially Reasonable Efforts to obtain consent from any Third Party operator of the Assets for Sellers’ access to the Assets, after the Closing Date in connection with the Seller’s efforts to restore any |
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Casualty Loss. To the extent the Sellers exercise their restoration rights under the preceding paragraph, any such access and efforts to restore any such Casualty Loss shall be at the Sellers’ sole cost, risk, and expense, and each Seller shall indemnify, defend, and hold harmless the Buyer Indemnified Parties to the extent of such Seller’s Seller Share from and against any costs, obligations, losses, Liabilities, or damages arising from or relating to such access or such restoration efforts, EVEN IF CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF ANY INDEMNIFIED PERSON, AND WHETHER OR NOT CAUSED BY A PRE-EXISTING CONDITION, BUT EXCLUDING THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PERSON. |
(b) If a Seller fails to obtain a Consent set forth on Schedule 4.4 covering its interest in the Assets prior to Closing that is not a Hard Consent, then the Asset (or portion thereof) subject to such un-obtained Consent shall nevertheless be assigned by each Seller to Buyer at Closing as part of the Pioneer Assets, Reliance Assets and/or Newpek Assets, as |
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applicable, and Buyer shall have no claim against, and such Seller shall have no Liability to Buyer for, the failure to obtain such Consent. |
(c) Prior to Closing, each Seller and Buyer shall use their Commercially Reasonable Efforts to obtain all Consents listed on Schedule 4.4; provided, however, that no Party shall be required to incur any Liability, pay any money or provide any other consideration to the holders of any Consent in order to obtain any such Consent. Subject to the foregoing, Buyer agrees to provide each Seller with any information or documentation in Buyer’s possession (that is not privileged or subject to confidentiality restrictions) that may be reasonably requested by such Seller or the Third Party holder(s) of such Consents in order to facilitate the process of obtaining such Consents. |
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Governmental Authority any amounts subject to escheat obligations pursuant to applicable Law, (iv) to Decommission the Assets, (v) to clean up and Remediate the Assets in accordance with Applicable Contracts and Laws, (vi) to perform all obligations applicable to or imposed on the lessee, owner or operator under the Leases and the Applicable Contracts, or as required by Laws, (vii) to pay all Property Expenses, (viii) under the New Enterprise Agreements, and (ix) of Reliance and Newpek arising out of or in connection with the operation of the Assets by a Person other than Pioneer unless such Parties would be liable for such liabilities as a Retained Obligation (all of said obligations and Liabilities being referred to as the “Assumed Obligations”); provided that Buyer does not assume any obligations and Liabilities to the extent that they are attributable to or arise out of the ownership, use or operation of any of (x) such Seller’s Excluded Assets or (y) the Retained Obligations (A) described in Sections 13.1(b)(i) through and including Section 13.1(b)(v) for the applicable 12-month, 18-month and three-year periods described in Section 13.8(c) or (B) described in Sections 13.1(b)(vi) through and including Section 13.1(b)(xiii). |
(i) except as set forth in the Access Agreement, obligations and Liabilities arising out of or related to personal injury or wrongful death resulting from events occurring prior to the Closing and during such Seller’s or any of its Affiliates’ ownership or operation of its Assets; |
(ii) any Liabilities arising from any off-site disposal of Hazardous Substances by any Seller or any of its Affiliates prior to the Effective Time and during such Seller’s or such Affiliate’s ownership or operation of its Assets; |
(iii) all Liabilities of any Seller or any of its Affiliates for the failure (directly or indirectly) to pay or timely pay or account for proceeds relating to Hydrocarbon sales attributable to the Wells (including in compliance with the Leases and Law) for all periods prior to and through the Effective Time, including royalties or Burdens attributable to such sales relating thereto and claims alleging undervaluation or underpayment thereof or wrongdoing, fault or strict liability relating thereto and including any liability arising out or related to the letter described in paragraph 4 of Schedule 4.6 to the extent attributable to the ownership or operation of the Assets for the period prior to and through the Effective Time; |
(iv) all fines and penalties imposed by any Governmental Authority arising out of such Seller’s or any of its Affiliates’ ownership or operation of the Assets prior to the Closing Date; |
(v) all Property Expenses attributable to ownership or operation of the Assets for the period of time prior to the Effective Time; |
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(vii) all liabilities and obligations attributable to or arising out of its Excluded Assets, including those arising out of the Enterprise Agreements (except to the extent expressly provided in the New Enterprise Agreements); |
(viii) all liabilities and obligations attributable to or arising out of any Hedge Contract put in place by such Seller prior to Closing; |
(ix) the payment of settlement amounts specified in the settlement agreements referenced in paragraphs 1 and 2 of Schedule 4.6 and the performance of any other obligations necessary to consummate the settlements described in such paragraphs. ; |
(xi) all intercompany notes and accounts payable by such Seller to any of its Affiliates; |
(xii) all Liabilities arising under the JDA Agreements (other than Liabilities for costs and expenses attributable to the Assets that are allocated to the Sellers as working interest owners under the COPAS exhibit to the Sellers JOA under Section 2.3); and |
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(a) any breach by Buyer of any of its representations or warranties contained in Article V and/or the Buyer’s Certificate; |
(d) with respect to Pioneer and its Seller Indemnified Parties, the provision of the Services in accordance with the provisions of Schedule 6.12. |
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(including Liability under Section 15.2 or for any payments to be made by such Seller under Section 3.4 and Section 3.5) and (iii) such Seller’s Liability under Section 13.2(c) for its Retained Obligations, in each case, shall not be limited by this Section 13.4(b). |
(c) Notwithstanding anything to the contrary contained in this Agreement, a Seller’s aggregate Liabilities under this Agreement or otherwise shall not exceed, in the case of Pioneer, the Pioneer Purchase Price, in the case of Reliance, the Reliance Purchase Price and, in the case of Newpek, the Newpek Purchase Price. |
(d) The obligations set forth in Section 13.2 and Section 13.3 shall not apply to (i) any amount that was taken into account as an adjustment to the Purchase Price pursuant to the provisions hereof, (ii) except as otherwise provided in this Agreement, any Party’s costs and expenses with respect to the negotiation and consummation of this Agreement and the purchase and sale of the Assets and (iii) any amount that would result in a double recovery (whether as a result of the adjustments to the Purchase Price or otherwise). |
(e) Each Party shall have a duty to use Commercially Reasonable Efforts to mitigate any claim that such Party has or may bring for indemnification in connection with this Agreement or the transactions contemplated hereby. |
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operation of any of the Assets prior to, on or after Closing or the condition, quality, status or nature of any of the Assets prior to, on or after Closing, including rights to contribution under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, any similar Environmental Laws, breaches of statutory or implied warranties, nuisance or other tort actions, rights to punitive damages, common law rights of contribution and rights under insurance maintained by Sellers or any of their Affiliates. |
13.7 Indemnification Procedures. All claims for indemnification under Section 13.2 and Section 13.3 shall be asserted and resolved as follows: |
(c) Third Party Claims. |
(i) In the case of a claim for indemnification based upon a Third Party Claim, the Indemnifying Party shall have thirty (30) days from its receipt of the Claim Notice relating thereto to notify the Indemnified Party whether it admits or denies its Liability to defend the Indemnified Party against such Third Party Claim at the sole cost and expense of the Indemnifying Party. The Indemnified Party is authorized, prior to and during such thirty (30) day period (or, if earlier, until the Indemnifying Party admits its Liability to defend the Indemnified |
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Party against such Third Party Claim) to file any motion, answer or other pleading that it shall deem necessary or appropriate to protect its interests or those of the Indemnifying Party and that is not prejudicial to the Indemnifying Party. |
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Agreement with respect to such claim for indemnification or (y) provide the Indemnifying Party with prompt written waiver of such indemnification claim. |
(i) Except as set forth in Section 13.8(a)(ii) or Section 13.8(c), each Seller’s representations and warranties in Article IV, the corresponding representations and warranties in its Seller’s Certificate and the corresponding indemnity obligations of such Seller under Section 13.2(a) with respect to all such representations and warranties, shall expire and terminate at 5:00 p.m. Central Time on the date that is twelve (12) months after the Closing Date. |
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at 5:00 p.m. Central Time on the date that is twelve (12) months after the Closing Date. The covenants and performance obligations of Buyer in this Agreement that are to be complied with or performed by Buyer at or prior to Closing, and the corresponding indemnity obligations of Buyer under Section 13.3(b) with respect to such covenants and obligations, shall expire and terminate at 5:00 p.m. Central Time on the date that is twelve (12) months after the Closing Date. All other covenants of Buyer and other indemnities set forth in Section 13.3 shall survive the Closing and remain in full force and effect indefinitely. |
(e) Survival After Claim. Notwithstanding Section 13.8(a), Section 13.8(b), Section 13.8(c), and Section 13.8(d), if a Claim Notice has been properly delivered under Section 13.7(b) before the date any representation, warranty, covenant, indemnity or performance obligation would otherwise expire under such Sections alleging a right to indemnification or defense for Liabilities arising out of, relating to or attributable to the breach of such representation, warranty, covenant, indemnity or performance obligation, such representation, warranty, covenant, indemnity or performance obligation shall continue to survive until the claims asserted in such Claim Notice that are based on the breach of such representation, warranty, covenant, indemnity or performance obligation have been fully and finally resolved under Section 13.7. |
(f) Remainder of the Agreement. Subject to Sections 13.8(a), (b), (c), (d) and (e), the remainder of this Agreement shall survive without time limit. |
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AGAINST SUCH DAMAGES) SHALL NOT BE EXCLUDED BY THIS PROVISION AS TO RECOVERY HEREUNDER. SUBJECT TO THE PRECEDING SENTENCE, BUYER, ON BEHALF OF EACH OF THE BUYER INDEMNIFIED PARTIES, AND EACH SELLER, ON BEHALF OF EACH OF ITS SELLER INDEMNIFIED PARTIES, EACH WAIVES ANY RIGHT TO RECOVER ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, REMOTE OR SPECULATIVE DAMAGES ARISING IN CONNECTION WITH OR WITH RESPECT TO THIS AGREEMENT, THE SELLERS’ CERTIFICATES, THE BUYER’S CERTIFICATE OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THIS SECTION 13.11 SHALL NOT RESTRICT ANY PARTY’S RIGHT TO SEEK SPECIFIC PERFORMANCE OR ANY INJUNCTION IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT. |
14.1 Right of Termination. This Agreement and the transactions contemplated herein may be terminated at any time prior to Closing (by written notice from the terminating Party to the other Parties): |
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(c) by any Seller or Buyer if Closing shall not have occurred on or before the date that is five (5) days after the Target Closing Date (the “Outside Date”); |
(d) by any Seller or Buyer if consummation of the transactions contemplated hereby is enjoined, restrained or otherwise prohibited or otherwise made illegal by the terms of a final, non-appealable order; |
(e) by any Seller or Buyer if Buyer has not paid to Sellers the full Initial Deposit by the Initial Deposit Deadline as provided in Section 3.1(d) or if Buyer has not paid to Sellers the full Second Deposit by the Second Deposit Deadline as provided in Section 3.1(e); or |
(f) by the mutual prior written consent of Sellers and Buyer. |
provided, however, that no Party shall have the right to terminate this Agreement pursuant to Section 14.1(a), Section 14.1(b), or Section 14.1(c) if such Party is a Breaching Party at the time this Agreement would otherwise be terminated by such Breaching Party. Notwithstanding anything to the contrary in the foregoing proviso, any Seller may, even if it is a Breaching Party, terminate this Agreement prior to Closing at any time following the 120th day after the Outside Date unless, prior to such Seller so terminating this Agreement, Buyer has commenced appropriate proceedings to enforce its rights of specific performance hereunder and, thereafter, use Commercially Reasonable Efforts to prosecute such proceeding or proceedings(s). Any such termination by a Seller pursuant to the preceding sentence shall be without prejudice to Buyer’s and the other Sellers’ rights and remedies under Section 14.2.
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damages are reasonable considering all of the circumstances existing as of the Execution Date, shall not serve as a penalty and constitute the Parties’ good faith estimate of the actual damages reasonably expected to result from such termination of this Agreement by Sellers. For clarity, if Buyer is a Breaching Party as to one Seller at the time this Agreement is terminated pursuant to Section 14.1, then Buyer shall be a Breaching Party as to all Sellers as of such time. |
(e) In the event that this Agreement is terminated pursuant to Section 14.1 and Sellers are not entitled to retain the Initial Deposit and Second Deposit under Section 14.2(b) or Section 14.2(c), then each Seller shall promptly return to Buyer such Seller’s Seller Share of the Initial Deposit and Second Deposit, as applicable, without interest. |
(f) Nothing herein shall be construed to prohibit Buyer from first seeking specific performance in lieu of termination of this Agreement in accordance with Section 14.2(g), and thereafter terminating this Agreement and seeking the return of the Initial Deposit and Second Deposit and actual, direct damages in accordance with this Section 14.2. |
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(a) Except as otherwise specifically provided, all fees, costs and expenses incurred by Buyer or any Seller in negotiating this Agreement and the Transaction Documents or in consummating the transactions contemplated by this Agreement shall be paid by the Party incurring the same, including, legal and accounting fees, costs and expenses. |
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the date on which the Effective Time occurs by prorating each such Asset Tax based on the number of days in the applicable Straddle Period that occur before the date on which the Effective Time occurs, on the one hand, and the number of days in such Straddle Period that occur on or after the date on which the Effective Time occurs, on the other hand. For purposes of clause (iii) of the preceding sentence, the period for such Asset Taxes shall begin on the date on which ownership of the applicable Assets gives rise to Liability for the particular Asset Tax and shall end on the day before the next such date. |
(e) Buyer shall be responsible for payment to the applicable Taxing Authorities of all Asset Taxes that become due and payable on or after the Closing Date, and Buyer shall indemnify and hold Sellers harmless for any failure to make such payments. |
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transferred. Upon any permitted assignment, the references in this Agreement to the Sellers or the Buyer shall also apply to any such assignee unless the context requires otherwise. |
If to Pioneer:
Pioneer Natural Resources USA, Inc.
5205 North O’Connor Blvd., Suite 200
Irving, Texas 75039
Attention: General Counsel
Fax: (972) 969-3577
Email: mark.kleinman@pxd.com
With a copy to its counsel:
Vinson and Elkins, LLP
2001 Ross Ave., Suite 3700
Dallas, Texas 75201
Attention: John Grand
Fax: (214) 999-7866
Email: jgrand@velaw.com
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If to Reliance:
Reliance Eagleford Upstream Holding LP
2000 W. Sam Houston Parkway South, Suite 700
Houston, TX 77042
Attention: General Counsel
Fax: (713) 430-8727
Email: masoud.javadi@ril.com
With a copy to its counsel:
Haynes and Boone, LLP
1221 McKinney Street, Suite 2100
Houston, Texas 77010
Attention: Austin Elam
Fax: (713) 236-5430
Email: austin.elam@haynesboone.com
If to Newpek:
Newpek, LLC
3221 North O’Connor Blvd., Suite 830
Irving, TX 75039
Attention: Rodolfo Gamboa
Fax: (972) 556-3628
Email: rgamboa@alfa.com.mx
With a copy to its counsel:
King & Spalding LLP
1100 Louisiana, Suite 4000
Houston, Texas 77002
Attention: Archie Fallon
Fax: (713) 751-3290
Email: afallon@kslaw.com
If to Buyer:
Sundance Energy, Inc.
633 17th Street, Suite 1950
Denver, Colorado 80202
Attention: Eric McCrady, CEO
Fax: (303) 543-5701
Email: emccrady@sundanceenergy.net
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With a copy to its counsel:
Boigon Law Ltd.
633 17th Street, Suite 1950
Denver, Colorado 80202
Attention: Howard Boigon
Email: Howard@boigonlaw.com
Any notice given in accordance herewith shall be deemed to have been given only when delivered to the addressee in person, or by courier, or transmitted by facsimile or email transmission during normal business hours on a Business Day (or if delivered or transmitted after normal business hours on a Business Day or on a day other than a Business Day, then on the next Business Day), or upon actual receipt by the addressee during normal business hours on a Business Day after such notice has either been delivered to an overnight courier or deposited in the United States Mail, as the case may be (or if delivered after normal business hours on a Business Day or on a day other than a Business Day, then on the next Business Day). The Parties may change the address and the email address to which such communications are to be addressed by giving written notice to the other Parties in the manner provided in this Section 15.6.
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AGREEMENT, THE SELLERS’ CERTIFICATES OR THE BUYER’S CERTIFICATE, AND NEITHER SELLERS NOR BUYER SHALL BE BOUND BY OR LIABLE FOR ANY ALLEGED REPRESENTATION, PROMISE, INDUCEMENT OR STATEMENTS OF INTENTION NOT SO SET FORTH. IN THE EVENT OF A CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THIS AGREEMENT AND THE TERMS AND PROVISIONS OF ANY SCHEDULE OR EXHIBIT HERETO, THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL GOVERN AND CONTROL; PROVIDED, HOWEVER, THAT THE INCLUSION IN ANY OF THE SCHEDULES AND EXHIBITS HERETO OF TERMS AND PROVISIONS NOT ADDRESSED IN THIS AGREEMENT SHALL NOT BE DEEMED A CONFLICT, AND ALL SUCH ADDITIONAL PROVISIONS SHALL BE GIVEN FULL FORCE AND EFFECT, SUBJECT TO THE PROVISIONS OF THIS SECTION 15.9. |
15.11 Amendment. This Agreement may be amended only by an instrument in writing executed by both Parties. |
(a) This Agreement and any claim, controversy or dispute arising under or related to this Agreement or the transactions contemplated hereby or the rights, duties and relationship of the parties hereto and thereto, shall be governed by and construed and enforced in accordance with the Laws of the State of Texas, excluding any conflicts of Law, rule or principle that might refer construction of provisions to the Laws of another jurisdiction. |
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(c) To the extent that any Party or any of its Affiliates has acquired, or hereafter may acquire, any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such Party (on its own behalf and on behalf of its Affiliates) hereby irrevocably (i) waives such immunity in respect of its obligations with respect to this Agreement and (ii) submits to the personal jurisdiction of any court described in Section 15.13(b). |
(d) THE PARTIES AGREE THAT THEY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. |
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of any claim that Sellers have joint and several liability to Buyer for breach of any representation, warranty, covenant or agreement by any other Seller under this Agreement or any Transaction Document or for any payment or indemnification obligation of any other Seller under this Agreement or any Transaction Document; provided, however, that nothing in this Section 15.19 shall be deemed to release Sellers from their respective Liabilities for Retained Obligations. |
[Signature Pages Follow]
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IN WITNESS WHEREOF, Sellers and Buyer have executed this Agreement as of the date first written above.
SELLERS:
PIONEER NATURAL RESOURCES USA, INC.
By: __________________________________
Name: Mark H. Kleinman
Title: Senior Vice President and General Counsel
Signature Page to Purchase and Sale Agreement
IN WITNESS WHEREOF, Sellers and Buyer have executed this Agreement as of the date first written above.
SELLERS:
RELIANCE EAGLEFORD UPSTREAM HOLDING LP, a Texas limited partnership
By: Reliance Eagleford Upstream GP LLC, its general partner
By: __________________________________
Name: Walter Van De Vijver
Title: President and Director
Signature Page to Purchase and Sale Agreement
IN WITNESS WHEREOF, Sellers and Buyer have executed this Agreement as of the date first written above.
SELLERS:
NEWPEK, LLC
By: __________________________________
Name: Rodolfo Gamboa
Title: Vice President
Signature Page to Purchase and Sale Agreement
IN WITNESS WHEREOF, Sellers and Buyer have executed this Agreement as of the date first written above.
BUYER:
SUNDANCE ENERGY, INC.
By: __________________________________
Name:
Title:
Signature Page to Purchase and Sale Agreement
“AAA” shall have the meaning set forth in Section 3.5.
“Access Agreement” shall have the meaning set forth in Section 10.1.
“Accounting Arbitrator” shall have the meaning set forth in Section 3.5.
“Acquisition Proposal” shall have the meaning set forth in Section 6.7.
“Adjusted Purchase Price” shall have the meaning set forth in Section 3.1(c).
“AFEs” shall have the meaning set forth in Section 4.12.
“Affiliate” shall mean any Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, another Person. The term “control” and its derivatives with respect to any Person mean either (a) 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 or (b) the right to exercise fifty percent (50%) or more of the voting rights in the appointment of the directors (or other managers having duties similar to those of directors) of such Person. For clarity, no Seller is an Affiliate of any other Seller.
“Agreement” shall have the meaning set forth in the introductory paragraph herein.
“Allocated Values” shall have the meaning set forth in Section 3.6.
“Allocation” shall have the meaning set forth in Section 3.7.
“Amended Enterprise Agreements” means (a) with respect to Pioneer, those certain amendments to Pioneer’s Enterprise Agreements as are contemplated by and attached to the Enterprise Closing Agreement, (b) with respect to Reliance, those certain amendments to Reliance’s Enterprise Agreements as are contemplated by and attached to the Enterprise Closing Agreement, and (c) with respect to Newpek, those certain amendments to Newpek’s Enterprise Agreements as are contemplated by and attached to the Enterprise Closing Agreement.
“Ancillary Rights” shall mean all overriding royalty interests, net profits interests, and other similar interests owned by a Seller in and to the Land, or in or attributable to production therefrom, and all corollary rights, properties and interests of Sellers relating to such interests, including without limitation the overriding royalty interests, net profits interests and other similar interests included on Exhibit A.
“Applicable Contracts” shall mean all Contracts to which a Seller is a party or is bound relating to any of the Assets and (in each case) that will be binding on Buyer after Closing, including: communitization agreements; net profits agreements; production payment agreements; joint venture agreements; confidentiality agreements; farmin and farmout agreements; throughput,
volume, dedication, and other commitments; bottom hole agreements; crude oil, condensate and natural gas purchase and sale, gathering, transportation, stabilization, processing, treating, blending, compression, and marketing agreements; hydrocarbon storage agreements; acreage contribution agreements; operating agreements; balancing agreements; pooling declarations or agreements; unitization agreements; processing agreements; saltwater handling and disposal agreements; facilities or equipment leases; procurement and construction agreements; facility operating; binding portions of letters of intent and other preliminary agreements; the ETC Gas Processing and Transport Agreement; and other similar contracts and agreements, but exclusive of any master service agreements and Contracts relating to the Excluded Assets.
“Area” or “Areas” shall mean the area or areas, as applicable, within the Area Boundaries depicted on the Area Plat.
“Area Boundaries” shall mean the boundaries of the Areas depicted on the Area Plat attached as Exhibit A-1.
“Area Plat” shall mean the plat attached to this Agreement as Exhibit A-1 depicting the Area Boundaries.
“Asset Credit Support” shall mean any bonds, letters of credit and guarantees, if any, posted or reasonably anticipated by Sellers or any of their respective Affiliates with Governmental Authorities or other Third Parties and relating to the Assets.
“Asset Taxes” shall mean ad valorem, property, severance, production, sales, use and similar Taxes (excluding, for the avoidance of doubt, any Income Taxes and Transfer Taxes) based upon or measured by the ownership or operation of the Assets or the production of Hydrocarbons therefrom or the receipt of proceeds therefrom.
“Assets” shall have the meaning set forth in Section 2.1.
“Assignment” shall mean the Assignment, Assumption and Bill of Sale from Sellers to Buyer, pertaining to the Assets, in the form attached to this Agreement as Exhibit E.
“Assumed Obligations” shall have the meaning set forth in Section 13.1(a).
“ASX” shall have the meaning set forth in Section 6.5(b).
“Australian Business Day” shall mean a day (other than a Saturday or Sunday) on which commercial banks in Australia are generally open for business.
“Breaching Party” means a Party (a “Subject Party”) who, at the time in question, is in Willful Breach, if (but only if), at such time in question, all conditions precedent to the obligations of the Subject Party to close as set forth in Article VII or Article VIII, as applicable, (a) have been satisfied (or waived in writing by the Subject Party) other than those conditions that can only be satisfied at the Closing, but subject to the Buyer (in the case where any Seller is the Subject Party) or the Sellers (in the case where Buyer is the Subject Party) being ready, willing and able to satisfy such conditions at such time in question or (b) would have been fulfilled or satisfied except solely due to the Willful Breach by the Subject Party.
“Burden” shall mean any and all royalties (including lessor’s royalty), overriding royalties, production payments, net profits interests and other burdens upon, measured by or payable out of production (excluding, for the avoidance of doubt, any Taxes).
“Business Day” shall mean a day (other than a Saturday or Sunday) on which commercial banks in the State of New York and the State of Texas are generally open for business.
“Buyer” shall have the meaning set forth in the introductory paragraph herein.
“Buyer Financial Statement Efforts” shall have the meaning set forth in Section 6.5(b).
“Buyer Indemnified Parties” shall have the meaning set forth in Section 13.2.
“Buyer Parent” shall have the meaning set forth in Section 6.5(a).
“Buyer Parent Financing Efforts” shall have the meaning set forth in Section 6.5(a).
“Buyer Parent Shareholder Materials” shall have the meaning set forth in Section 6.5(a).
“Buyer PSA Guaranty” shall mean a guaranty by Buyer Parent in favor of each Seller guarantying the payment and performance of Buyer’s post-Closing obligations under this Agreement in the form attached hereto as Exhibit K.
“Buyer Required Financial Statements” shall have the meaning set forth in Section 6.5(b).
“Buyer’s Certificate” shall have the meaning set forth in Section 9.3(i).
“Buyer’s Fundamental Representations” shall mean the representations and warranties in Section 5.1, Section 5.2, Section 5.3(a), Section 5.4, Section 5.9 and Section 5.10.
“Casualty Loss” shall have the meaning set forth in Section 11.2(b).
“CGP11” shall mean the central gathering plant located at 28°20’59.07”N 98°54’04.05” W in La Salle County, Texas and consisting of approximately 1.5 miles of 4” diameter, 0.36 miles of 8” diameter, 2.9 miles of 12” diameter, and 3 miles of 16” diameter pipelines for the purpose of transporting combined streams of gas, oil, and water from wells to CGP11, related meters, risers, valves, pig launchers/receivers, cathodic protection, marker signs, and other appurtenances, together with oil stabilization and gas treating facilities all as more particularly described on Exhibit D, and including title to or the right to occupy the surface on which such facilities are located pursuant to Applicable Contracts or title documents of record.
“Claim Notice” shall have the meaning set forth in Section 13.7(b).
“Closing” shall have the meaning set forth in Section 9.1.
“Closing Date” shall have the meaning set forth in Section 9.1.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Commercially Reasonable Efforts” shall mean, with respect to a given obligation, commercially reasonable efforts that a prudent Person that desires to achieve a result would use in similar circumstances to cause the result to be achieved in an expeditious manner; provided, however, that a Person required to use its Commercially Reasonable Efforts shall not be required to take actions that would result in a material adverse change in the benefits to such Person under this Agreement, to commence any Proceeding or to offer or grant any material accommodation (financial or otherwise) to any Person.
“Confidentiality Agreement” shall mean that certain Confidentiality Agreement dated December 31, 2016 by and between Sellers and Buyer (as amended).
“Consent” shall have the meaning set forth in Section 4.4.
“Contract” shall mean any written contract, agreement or any other legally binding arrangement that relate to Assets, but excluding, however, any Lease, easement, right-of-way, permit or other instrument creating or evidencing an interest in the Assets or any real or immovable property related to or used in connection with the operations of any Assets; provided, however, that Contract shall specifically exclude any expired or terminated Contract.
“Copano” means Copano Processing LLC.
“Copano Agreements” means (a) with respect to Pioneer, that certain Gas Services Agreement, dated effective January 1, 2016, between Pioneer and Copano (as amended), (b) with respect to Reliance, that certain Gas Services Agreement, dated effective January 1, 2016, between Reliance and Copano (as amended), and (c) with respect to Newpek, that certain Gas Services Agreement, dated effective January 1, 2016, between Newpek and Copano (as amended), and the term “Copano Agreements” means all such agreements.
“Customary Post-Closing Consents” shall mean the consents and approvals from Governmental Authorities for the assignment of the Assets to Buyer that are customarily obtained after the assignment of properties similar to the Assets.
“DCP” means DCP Midstream, LP.
“DCP Gas Processing and Transport Agreement” means (a) with respect to Pioneer, that certain Gas Gathering and Processing Contract, dated January 17, 2011, between Pioneer and DCP (as amended), (b) with respect to Reliance, that certain Gas Gathering and Processing Contract, dated December 21, 2010, between Reliance and DCP (as amended), and (c) with respect to Newpek, that certain Gas Gathering and Processing Contract, dated December 21, 2010, between Newpek and DCP (as amended), and the term “DCP Gas Processing and Transport Agreements” means all such agreements.
“De Minimis Threshold” shall have the meaning set forth in Section 13.4(a).
“Decommission” shall mean all dismantling and decommissioning activities and obligations as are required by Law, any Governmental Authority, Lease or other agreement including all well plugging, replugging and abandonment, facility dismantlement and removal, pipeline and flowline removal, closed, removed, purged, abandoned, capped, remediated and
restored dismantlement, closure, purging, capping, remediating, restoring or removal of all other property of any kind related to or associated with operations or activities and associated site clearance, site restoration and site remediation.
“Defensible Title” shall mean, with respect to each Seller, such title of record of such Seller as of the Effective Time and the Closing Date and subject to Permitted Encumbrances:
(a) with respect to each Well described on Exhibit B, entitles such Seller to receive not less than the Net Revenue Interest set forth on Exhibit B for such Seller for such Well from the Subject Depths, except for (i) decreases in connection with those operations in which such Seller or its successors or assigns may from and after the Execution Date elect to be a non-consenting co-owner in accordance with the Agreement, (ii) decreases resulting from the establishment or amendment from and after the Execution Date of pools or units, (iii) decreases required to allow other Working Interest owners to make up past underproduction or pipelines to make up past under deliveries for post-Effective Time Imbalances shown on Schedule 4.11, and (iv) as otherwise set forth on Exhibit B; |
(b) with respect to each Well described on Exhibit B, obligates such Seller to bear not more than the Working Interest set forth on Exhibit B for such Seller such Well from the Subject Depths, except (i) increases resulting from contribution requirements arising after the Execution Date with respect to defaulting co-owners under existing applicable agreements, (ii) increases to the extent that such increases are accompanied by a proportionate or greater increase in such Seller’s Net Revenue Interest, and (iii) as otherwise set forth on Exhibit B; |
(c) with respect to each Lease described on Exhibit A, entitles such Seller to receive (during the entirety of the productive life of such property) not less than the Net Revenue Interest set forth on Exhibit A for such Seller and such Lease (proportionately reduced to the Working Interests of such Seller attributable to such Lease) as to the Subject Depths, except for (i) decreases in connection with those operations in which such Seller or its successors or assigns may from and after the Execution Date elect to be a non-consenting co-owner, (ii) decreases resulting from the establishment or amendment from and after the Execution Date of pools or units, (iii) decreases required to allow other Working Interest owners to make up past underproduction or pipelines to make up past under deliveries for post-Effective Time Imbalances shown on Schedule 4.11, and (iv) as otherwise specifically set forth on Exhibit A; |
(d) with respect to each Lease described on Exhibit A, entitles such Seller to no less than the number of Net Acres set forth under the heading “Net Acres” on Exhibit A for such Seller for such Lease as to the Subject Depths; and |
(e) is free and clear of all Encumbrances and defects of title. |
“Dispute Notice” shall have the meaning set forth in Section 3.4(a).
“Effective Time” shall mean 7:00 a.m. Central Time on October 1, 2017.
“email” shall have the meaning set forth in Section 15.6.
“Encumbrance” shall mean any lien, mortgage, security interest, pledge, charge, or other encumbrance that encumbers or burdens any of the Assets.
“Enterprise Agreements” means the following agreements, in each case, effective as of July 1, 2015: (a) First Amended and Restated Hydrocarbon Gathering and Handling Agreement between Pioneer and EFS Midstream; (b) First Amended and Restated Hydrocarbon Gathering and Handling Agreement between Reliance and EFS Midstream; (c) First Amended and Restated Hydrocarbon Gathering and Handling Agreement between Newpek and EFS Midstream; (d) Processed Condensate Purchase Agreement between Pioneer and Enterprise Crude; (e) Processed Condensate Purchase Agreement between Reliance and Enterprise Crude; (f) Processed Condensate Purchase Agreement between Newpek and Enterprise Crude; (g) Crude Oil and Unprocessed Condensate Purchase Agreement between Pioneer and Enterprise Crude; (h) Crude Oil and Unprocessed Condensate Purchase Agreement between Reliance and Enterprise Crude; (i) Crude Oil and Unprocessed Condensate Purchase Agreement between Newpek and Enterprise Crude; (j) First Amended and Restated Gas Processing Agreement between Pioneer and Enterprise Hydrocarbons; (k) First Amended and Restated Gas Processing Agreement between Reliance and Enterprise Hydrocarbons; (l) First Amended and Restated Gas Processing Agreement between Newpek and Enterprise Hydrocarbons; (m) First Amended and Restated Firm Gas Transportation Agreement for Intrastate Service between Pioneer and Enterprise Texas Pipeline; (n) First Amended and Restated Firm Gas Transportation Agreement for Intrastate Service between Reliance and Enterprise Texas Pipeline; (o) First Amended and Restated Firm Gas Transportation Agreement for Intrastate Service between Newpek and Enterprise Texas Pipeline; (p) First Amended and Restated Firm Gas Transportation Agreement for NGPA Section 311 Service between Pioneer and Enterprise Texas Pipeline; (q) First Amended and Restated Firm Gas Transportation Agreement for NGPA Section 311 Service between Reliance and Enterprise Texas Pipeline; (r) First Amended and Restated Firm Gas Transportation Agreement for NGPA Section 311 Service between Newpek and Enterprise Texas Pipeline; (s) First Amended and Restated Interruptible Gas Transportation Agreement for NGPA Section 311 Service between Pioneer and Enterprise Texas Pipeline; (t) First Amended and Restated Interruptible Gas Transportation Agreement for NGPA Section 311 Service between Reliance and Enterprise Texas Pipeline; (u) First Amended and Restated Interruptible Gas Transportation Agreement for NGPA Section 311 Service between Newpek and Enterprise Texas Pipeline; (v) First Amended and Restated Interruptible Gas Transportation Agreement for Intrastate Service between Pioneer and Enterprise Texas Pipeline; (w) First Amended and Restated Interruptible Gas Transportation Agreement for Intrastate Service between Reliance and Enterprise Texas Pipeline; and (x) First Amended and Restated Interruptible Gas Transportation Agreement for Intrastate Service between Newpek and Enterprise Texas Pipeline.
“Enterprise Entities” means EFS Midstream LLC (“EFS Midstream”), Enterprise Crude Oil LLC (“Enterprise Crude”), Enterprise Hydrocarbons L.P. (“Enterprise Hydrocarbons”) and Enterprise Texas Pipeline LLC (“Enterprise Texas Pipeline”).
“Enterprise Closing Agreement” means that certain agreement as of the date hereof between the Enterprise Entities, Sellers and Buyer.
“Environmental Defect” shall mean, with respect to each Seller, (a) a condition existing on the Execution Date with respect to the air, soil, subsurface, surface waters, ground waters and
sediments that causes such Seller’s interest in the Asset (or such Seller with respect to such interest in the Asset) not to be in compliance with Environmental Laws or (b) the existence as of the Execution Date with respect to such Seller’s interest in the Assets or its operation thereof of any environmental pollution, contamination or degradation or Hazardous Substances where Remediation or corrective action is presently required (or if known, would be presently required) under Environmental Laws.
“Environmental Laws” shall mean all Laws in effect as of the Execution Date relating to the prevention of pollution, protection of the environment (including natural resources and wildlife), remediation of contamination or restoration of environmental quality, including those Laws relating to the use, generation, processing, treatment, migration, storage, transportation, disposal, discharge, release, or other management of chemicals and other Hazardous Substances, or the reporting thereof, and including the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1471 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the Rivers and Harbors Act of 1899, 33 U.S.C. § 401 et seq.; and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and any state Law that encompasses equivalent, additional, or more stringent requirements to any of the foregoing. The term “Environmental Laws” does not include good or desirable operating practices or standards that may be employed or adopted by other oil and gas well operators or recommended by a Governmental Authority that are not mandatory under Environmental Laws.
“ETC” means ETC Texas Pipeline, Ltd.
“ETC Gas Processing and Transport Agreement” means (a) with respect to Pioneer, that certain Gathering and Processing Agreement, dated October 1, 2012, Pioneer and ETC, as amended, (b) with respect to Reliance, that certain Gathering and Processing Agreement, dated October 1, 2012, Reliance and ETC, as amended, and (c) with respect to Newpek, that certain Gathering and Processing Agreement, dated October 1, 2012, Newpek and ETC, as amended, and the term “ETC Gas Processing and Transport Agreements” means all such agreements.
“Exchange” shall have the meaning set forth in Section 15.18.
“Excluded Assets” shall mean, with respect to a Seller, (a) all of such Seller’s minute books, financial records and other business records that relate to such Seller’s business generally (including the ownership and operation of the Assets); (b) except to the extent relating to any Assumed Obligation, all trade credits, all accounts, all receivables and all other proceeds, income or revenues directly attributable to such Seller’s interest in the Assets and attributable to any period of time prior to the Effective Time and, subject to the adjustments to the Pioneer Purchase Price, the Reliance Purchase Price and the Newpek Purchase Price set forth in Section 3.2, all funds held in suspense; (c) to the extent that they do not relate to the Assumed Obligations for which Buyer is providing indemnification hereunder, all claims and causes of action of such Seller arising under or with respect to any Contracts that are attributable to periods of time prior to the Effective Time
(including claims for adjustments or refunds); (d) subject to Section 11.2, all rights and interests of such Seller (i) under any policy or agreement of insurance, (ii) under any bond or (iii) to any insurance or condemnation proceeds or awards arising, in each case, from acts, omissions or events or damage to or destruction of property; (e) all Hydrocarbons produced and sold from such Seller’s interest in the Assets with respect to all periods prior to the Effective Time, excluding all Hydrocarbons in storage or existing in pipelines, plants and tanks (including inventory and line fill) and upstream of the sales meter as of the Effective Time for which Sellers receive an upward adjustment to the Purchase Price; (f) all claims of such Seller or its Affiliates for refunds of, credits attributable to, loss carry forwards with respect to, or similar Tax assets relating to (i) Asset Taxes attributable to any period (or portion thereof) prior to the Effective Time, (ii) such Seller’s Income Taxes or (iii) any Taxes attributable to such Seller’s Excluded Assets; (g) all personal computers and associated peripherals and all radio and telephone equipment of such Seller, including any software or programs used in connection with the SCADA Equipment; (h) all of such Seller’s proprietary computer software, patents, trade secrets, copyrights, names, trademarks, logos and other intellectual property except for G&G Data; (i) all documents and instruments of such Seller that may be protected by an attorney-client privilege or any attorney work product doctrine (other than title opinions); (j) all data, information and agreements of such Seller that cannot be disclosed to Buyer as a result of confidentiality arrangements under agreements with Third Parties that remain in effect as of the Effective Time; (k) to the extent that they do not relate to the Assumed Obligations for which Buyer is providing indemnification hereunder, all audit rights of such Seller arising under any of the Applicable Contracts or otherwise with respect to any period prior to the Effective Time or to any of the Excluded Assets, except for any Imbalances assumed by Buyer; (l) (x) all G&G Data and third party seismic licenses relating to the Assets which such Seller may not disclose, assign or transfer under its existing agreements and licenses without making any additional payments, or incurring any Liabilities and (y) any interpretations or analyses of any G&G Data or third party seismic licenses; (m) documents prepared or received by such Seller or its Affiliates with respect to (i) lists of prospective purchasers for such transactions compiled by such Seller, (ii) bids submitted by other prospective purchasers of the Assets, (iii) analyses by such Seller or its Affiliates of any bids submitted by any prospective purchaser, (iv) correspondence between or among Sellers or any of their representatives, and any prospective purchaser other than Buyer and (v) correspondence between Sellers or any of their representatives with respect to any of the bids, the prospective purchasers or the transactions contemplated by this Agreement; (n) any offices, office leases and any personal property located in or on such offices or office leases of such Seller; (o) any inventory of such Seller, unless such inventory is located on Leases, Lands or surface equipment and is specifically set aside and designated as inventory for use with the Assets; (p) any other assets, properties or items of such Seller specifically listed on Exhibit F; (q) any Hedge Contracts of such Seller; (r) any debt instruments of such Seller; (s) any master services agreements or similar Contracts of such Seller or its Affiliates; and (t) the DCP Gas Processing and Transport Agreement, Copano Agreements, and Enterprise Agreements.
“Execution Date” shall have the meaning set for in the introductory paragraph herein.
“Final Price” shall have the meaning set forth in Section 3.4(a).
“Final Settlement Statement” shall have the meaning set forth in Section 3.4(a).
“Financing Efforts” shall have the meaning set forth in Section 6.5(b).
“First Seller” shall have the meaning set forth in Section 8.4.
“G&G Data” shall have the meaning set forth in Section 2.1(i).
“GAAP” shall mean United States generally accepted accounting principles as in effect on the Execution Date.
“Governmental Authority” shall mean any federal, state, local, municipal, tribal or other government; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, regulatory or taxing authority or power, and any court or governmental tribunal, including any tribal authority having or asserting jurisdiction.
“Governmental Authorizations” shall have the meaning set forth in Section 2.1(j).
“Hard Consent” shall have the meaning set forth in Section 11.3(a).
“Hazardous Substances” shall mean any pollutants, contaminants, toxins or hazardous or extremely hazardous substances, materials, wastes, constituents, radiation, compounds or chemicals that are regulated by or included in the definition of “hazardous substance,” “hazardous material,” “hazardous waste,” “restricted hazardous waste,” “extremely hazardous waste,” “solid waste,” “toxic substance,” “extremely hazardous substance,” “chemical substance,” “toxic pollutant,” “contaminant” or “pollutant,” or may form the basis of Liability under, any Environmental Laws including (i) NORM, (ii) oil and gas exploration and production wastes, including produced and flow back waters; and (iii) asbestos containing materials, mercury, polychlorinated biphenyls, mold, radioactive materials, urea formaldehyde foam insulation, or radon gas.
“Hedge Contract” shall mean any Contract to which a Seller is a party with respect to any swap, forward, future or derivative transaction or option or similar agreement, whether exchange traded, “over-the-counter” or otherwise, involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions.
“Hydrocarbons” shall mean oil and gas and other hydrocarbons produced or processed in association therewith.
“Imbalances” shall mean all Well Imbalances and Pipeline Imbalances.
“Income Taxes” shall mean any income, franchise and similar Taxes.
“Indebtedness” shall have the meaning set forth in Section 13.1(b)(x).
“Indemnified Party” shall have the meaning set forth in Section 13.7(a).
“Indemnifying Party” shall have the meaning set forth in Section 13.7(a).
“Indemnity Deductible” shall mean, (i) with respect to Pioneer, one and one-half percent (1.5%) of the Pioneer Purchase Price, (ii) with respect to Reliance, one and one-half percent (1.5%) of the Reliance Purchase Price, and (iii) with respect to Newpek, one and one-half percent (1.5%) of the Newpek Purchase Price.
“Information” shall have the meaning set forth in Section 15.13(b).
“Initial Deposit” shall have the meaning set forth in Section 3.1(d).
“Initial Deposit Deadline” shall have the meaning set forth in Section 3.1(d).
“Interim Period” shall mean that period of time commencing with the Effective Time and ending at 7:00 a.m. Central Time on the Closing Date.
“JDA Agreements” shall mean that certain Joint Development Agreement, dated June 29, 2010 among the Sellers, that certain Joint Operating Agreement, dated June 29, 2010, among the Sellers (the “Sellers JOA”), that certain Tax Partnership Agreement, dated June 29, 2010, among the Sellers and all ancillary instruments, documents and agreements entered into by the Sellers and their Affiliates in connection therewith (including any amendments, supplements and/or modifications to such agreements).
“Knowledge” shall mean (a) with respect to each Seller, the actual knowledge of the individuals listed on Schedule I-1 for such Seller, and (b) with respect to Buyer, the actual knowledge of the individuals listed on Schedule I-2.
“Land” shall have the meaning set forth in Section 2.1(a).
“Law” shall mean any applicable statute, law, rule, regulation, ordinance, order, code, ruling, writ, injunction, decree or other official act of or by any Governmental Authority, and the applicable common law of a Governmental Authority having jurisdiction over the Parties or the Assets.
“Leases” shall have the meaning set forth in Section 2.1(a).
“Liabilities” shall mean any and all costs, expenses, claims, obligations, causes of action, payments, charges, demands, judgments, assessments, liabilities, losses, damages, penalties, fines and costs and expenses, and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), including any amounts paid in permitted settlements and any reasonable attorneys’ fees, legal or other expenses incurred in connection therewith.
“Material Adverse Effect” shall mean an event or circumstance that, individually or in the aggregate, results in a material adverse effect on the ownership, operation or value of the Assets taken as a whole and as currently operated as of the Execution Date that would reasonably be expected to cause a diminution in the aggregate value of the Assets in an amount equal to or in excess of ten percent (10%) of the Purchase Price, or a material adverse effect on the ability of a Seller to consummate the transactions contemplated by this Agreement and perform its obligations hereunder; provided, however, that a Material Adverse Effect shall not include any material
adverse effects resulting from: (a) entering into this Agreement or the announcement of the transactions contemplated by this Agreement; (b) any action or omission of a Seller taken in accordance with the terms of this Agreement without the violation thereof or with the prior written consent of Buyer (other than any unanticipated event or result relating thereto); (c) changes in general market, economic, financial or political conditions (including changes in commodity prices, fuel supply or transportation markets, interest or rates) in the area in which the Assets are located, the United States or worldwide; (d) changes in conditions or developments generally applicable to the oil and gas industry in the area where the Assets are located; (e) acts of God, including hurricanes, storms or other naturally occurring events; (f) acts or failures to act of Governmental Authorities other than in response to default or claimed default of any Seller with respect to any Governmental Authorization or Law; (g) civil unrest, any outbreak of disease or hostilities, terrorist activities or war or any similar disorder; (h) matters that are cured or no longer exist by the earlier of Closing and the termination of this Agreement; (i) a change in Laws and any interpretations thereof from and after the Execution Date; (j) any reclassification or recalculation of reserves in the ordinary course of business; (k) changes in the prices of Hydrocarbons; and (l) natural declines in well performance.
“Material Contracts” shall have the meaning set forth in Section 4.7(a).
“Meeks and Wye Ranch Agreements” shall have the meaning set forth in Section 6.11(a).
“Net Acres” shall mean, as computed separately with respect to each Seller’s Working Interest in a Lease (a) the number of gross acres in the lands covered by such Lease times (b) the mineral interest in Hydrocarbons covered by such Lease in such lands times (c) such Seller’s Working Interest for such Lease.
“Net Revenue Interest” shall mean, with respect to a Seller’s Working Interest in a Well (or a specific depth or formation in such Well, as may be applicable) or a Lease (or a specific depth or formation in such Lease, as applicable), such Seller’s interest in and to all Hydrocarbons produced, saved and sold from or allocated to such Well or Lease (or such specific depth or formation, as applicable), after giving effect to all Burdens of such Seller; provided that if a Seller’s Working Interest in any Lease differs as to any part or depth of such Lease, then a separate calculation shall be made as to each such part or depth.
“New Enterprise Agreements” means those certain agreements to be entered into at Closing between Buyer and the Enterprise Entities relating to the Assets that are contemplated by and attached to the Enterprise Closing Agreement.
“Newpek” shall have the meaning set forth in the introductory paragraph herein.
“Newpek Adjusted Purchase Price” shall have the meaning set forth in Section 3.1(c).
“Newpek Assets” means all of Newpek’s right, title and interest in and to the Assets.
“Newpek Purchase Price” shall have the meaning set forth in Section 3.1(c).
“NORM” shall mean naturally occurring radioactive material, including technically enhanced NORM or “TENORM.”
“Other Wells” shall have the meaning set forth in Section 2.1(b).
“Outside Date” shall have the meaning set forth in Section 14.1(c).
“Party” and “Parties” shall have the meaning set forth in the introductory paragraph herein.
“Permitted Encumbrances” shall mean, with respect to each Seller:
(a) the terms and conditions of all Leases, Material Contracts and all Burdens if the net cumulative effect of such Leases, Material Contracts and Burdens does not operate to (i) reduce the Net Acres of such Seller in any Lease to an amount less than the number of Net Acres set forth on Exhibit A for such Seller as to the Subject Depths, (ii) increase the Burdens on any Lease in excess of the Burdens set forth on Exhibit A for such Seller for such Lease (proportionately reduced to the Working Interest of such Seller attributable to such Lease) as to the Subject Depths, (iii) increase the Working Interest such Seller is obligated to bear with respect to any Well in an amount greater than the Working Interest set forth on Exhibit B for such Seller for such Well (unless the Net Revenue Interest for such Seller for such Well as set forth on Exhibit B is increased in the same or greater proportion as any such increase in Working Interest), or (iv) decrease the Net Revenue Interest such Seller is entitled to with respect to any Well in an amount below the Net Revenue Interest set forth on Exhibit B for such Seller for such Well; |
(b) preferential rights to purchase (including the Preferential Purchase Rights) or Consents (including Customary Post-Closing Consents) or similar agreements listed on Schedules 4.4 or 4.9, as applicable; |
(c) liens for Taxes that are not yet due and payable; |
(d) conventional rights of reassignment upon final intention to abandon or release any of the Assets (that have not been transferred); |
(e) all Laws and all rights reserved to or vested in any Governmental Authority, including required notices to and filings with any Governmental Authority in connection with the consummation of the transactions contemplated by this Agreement; |
(f) rights of a common owner of any interest in rights-of-way, permits, easements or other Assets held by such Seller and such common owner as tenants in common or through common ownership, which, in each case, do not materially impair the operation or use of any of the Assets as currently operated and used; |
(g) easements, conditions, covenants, restrictions, servitudes, permits, rights-of-way, surface leases and other rights in the Assets for the purpose of operations, facilities, roads, alleys, highways, railways, pipelines, transmission lines, transportation lines, distribution lines, power lines, telephone lines, removal of timber, grazing, logging operations, canals, ditches, reservoirs and other like purposes, or for the joint or common use of real estate, rights-of-way, facilities and equipment, which, in each case, do not materially impair the operation or use of any of the Assets as currently operated and used; |
(h) vendors, carriers, warehousemen’s, repairmen’s, mechanics’, workmen’s, materialmen’s, construction or other like liens arising by operation of Law in the ordinary course of business or incident to the construction or improvement of any property in respect of obligations which are not yet due; |
(i) liens created under the Assets or operating agreements or by operation of Law in respect of obligations that are not yet due; |
(j) any Encumbrance affecting the Assets that is discharged by such Seller at or prior to Closing; |
(k) any matters referenced and set forth on Exhibit A or Exhibit B and all litigation set forth on Schedule 4.6; |
(l) mortgage liens burdening a lessor’s interest in the Assets; and |
(m) all other Encumbrances, Contracts (including the Applicable Contracts), instruments, obligations, defects and irregularities affecting the Assets that individually or in the aggregate (i) are not such as to materially interfere with the operation or use of any of the Assets, (ii) reduce the Net Acres of such Seller in any Lease to an amount less than the number of Net Acres set forth on Exhibit A for such Seller as to the Subject Depths, (iii) increase the Burdens on any Lease in excess of the Burdens set forth on Exhibit A for such Seller for such Lease (proportionately reduced to the Working Interest of such Seller attributable to such Lease) as to the Subject Depths, (iv) increase the Working Interest such Seller is obligated to bear with respect to any Well in an amount greater than the Working Interest set forth on Exhibit B for such Seller for such Well (unless the Net Revenue Interest for such Seller for such Well as set forth on Exhibit B is increased in the same or greater proportion as any such increase in Working Interest), or (v) decrease the Net Revenue Interest such Seller is entitled to with respect to any Well in an amount below the Net Revenue Interest set forth on Exhibit B for such Seller for such Well. |
“Person” shall mean any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority or any other entity.
“Personal Property” shall have the meaning set forth in Section 2.1(h).
“Pioneer” shall have the meaning set forth in the introductory paragraph herein.
“Pioneer Adjusted Purchase Price” shall have the meaning set forth in Section 3.1(a).
“Pioneer Assets” means all of Pioneer’s right, title and interest in and to the Assets.
“Pioneer Purchase Price” shall have the meaning set forth in Section 3.1(a).
“Pipeline Imbalance” shall mean any imbalance in volume or hydrocarbon value between the Hydrocarbons attributable to the Assets required to be delivered by a Seller or its designee under any Contract relating to Hydrocarbons and the Hydrocarbons attributable to the Assets actually delivered by such Seller or its designee pursuant to the relevant Contract, together with
any appurtenant rights and obligations concerning production balancing at the delivery point into the relevant sale, transportation, storage or processing facility.
“Preferential Purchase Right” shall have the meaning set forth in Section 4.9.
“Preliminary Settlement Statement” shall have the meaning set forth in Section 3.3.
“Proceeding” shall mean any proceeding, action, arbitration, litigation, subpoena, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.
“Property Expenses” shall have the meaning set forth in Section 2.3.
“Purchase Price” shall have the meaning set forth in Section 3.1(c).
“Records” shall have the meaning set forth in Section 2.1(n).
“Release” means any presence, releasing, depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing on, into, or through the environment.
“Reliance” shall have the meaning set forth in the introductory paragraph herein.
“Reliance Adjusted Purchase Price” shall have the meaning set forth in Section 3.1(b).
“Reliance Assets” means all of Reliance’s right, title and interest in and to the Assets.
“Reliance Purchase Price” shall have the meaning set forth in Section 3.1(b).
“Remediation” shall mean, with respect to an Environmental Defect, the implementation and completion of any remedial, removal, response, construction, closure, disposal or other corrective actions to the extent required under Environmental Laws to correct or remove such Environmental Defect. “Remediate,” “Remediates” and “Remediated” shall have corollary meanings.
“Required Insurance” shall have the meaning set forth in Section 6.11(b).
“Retained Obligations” shall have the meaning set forth in Section 13.1(b).
“SCADA Equipment” shall mean all SCADA equipment, fixtures and personal property to the extent located on the Leases, Wells or Surface Rights, provided that the “SCADA Equipment” shall not include any software or programs used in connection therewith.
“SEC” shall have the meaning set forth in Section 6.5(b).
“Second Deposit” shall have the meaning set forth in Section 3.1(e).
“Second Deposit Deadline” shall have the meaning set forth in Section 3.1(e).
“Seller” and “Sellers” shall have the meanings set forth in the introductory paragraph of this Agreement.
“Seller Indemnified Parties” shall mean, with respect to each Seller, such Seller, its Affiliates and all of its and its Affiliate’s respective equity holders, partners, members, directors, officers, managers, employees, agents and representatives and “Sellers’ Indemnified Parties” shall mean, collectively, the Seller Indemnified Parties of all of the Sellers.
“Seller Share” means 46.4190% with respect to Pioneer, 44.9455% with respect to Reliance, and 8.6355% with respect to Newpek; provided that with respect to any individual Asset, a Seller’s “Seller Share” shall be a percentage determined by calculating ratio by which the Working Interest that such Seller owns in such Asset bears to the total Working Interests that all Sellers own in such Asset.
“Seller Taxes” shall mean, with respect to a Seller, (a) Income Taxes imposed by any applicable Laws on such Seller, (b) Asset Taxes allocable to such Seller pursuant to Section 15.2 (taking into account, and without duplication of, (i) such Asset Taxes effectively borne by such Seller as a result of Purchase Price adjustments made pursuant to Sections 3.2, 3.3 or 3.4, as applicable, and (ii) any payments made from one Party to the other in respect of Asset Taxes pursuant to Section 15.2(d)), and (c) any Taxes imposed on or with respect to the ownership or operation of such Seller’s Excluded Assets.
“Seller’s Certificate” and “Sellers’ Certificates” shall have the meanings set forth in Section 9.3(h).
“Seller’s Fundamental Representations” shall mean the representations and warranties in Section 4.1, Section 4.2, Section 4.3(a), Section 4.4 and Section 4.14.
“Sellers JOA” shall have the meaning set forth in the definition of “JDA Agreements.”
“Services” shall have the meaning set forth in Schedule 6.12.
“Special Warranty of Title” shall have the meaning set forth in Section 11.1(b).
“Straddle Period” shall mean any Tax period beginning before and ending after the Effective Time.
“Subject Depths” shall mean, (a) with respect to any Lease and unless otherwise set forth on Exhibit A, the “Eagle Ford Shale Formation” and “Austin Chalk Formation,” each as defined on Exhibit H, and (b) with respect to any Well, the formation from which such Well is currently producing.
“Surface Rights” shall have the meaning set forth in Section 2.1(f).
“Surviving Provisions” shall have the meaning set forth in Section 14.2(a).
“SWT Survival Period” shall mean the period of time commencing as of the Closing and ending at 5:00 p.m. Central Time on the 24-month anniversary of the Closing Date.
“Target Closing Date” shall have the meaning set forth in Section 9.1.
“Tax Returns” shall have the meaning set forth in Section 4.13.
“Taxes” shall mean any taxes, assessments and other governmental charges imposed by any Governmental Authority, including income, profits, gross receipts, employment, stamp, occupation, premium, alternative or add-on minimum, ad valorem, real property, personal property, transfer, real property transfer, value added, sales, use, customs, duties, capital stock, franchise, excise, withholding, social security (or similar), unemployment, disability, payroll, windfall profit, severance, production, estimated or other tax, including any interest, penalty or addition thereto, whether disputed or not.
“Third Party” shall mean any Person other than a Party to this Agreement or an Affiliate of a Party to this Agreement.
“Third Party Claim” shall have the meaning set forth in Section 13.7(b).
“Transaction Documents” shall mean the Assignment, Buyer’s Certificate, Seller’s Certificates, the Transaction Support Agreement and any other documents executed pursuant to or in connection with this Agreement or the Transaction Support Agreement.
“Transaction Support Agreement” shall have the meaning set forth in Section 9.3(m).
“Transfer Taxes” shall have the meaning set forth in Section 15.2(f).
“Treasury Regulations” shall mean the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code. All references herein to sections of the Treasury Regulations shall include any corresponding provision or provisions of succeeding, similar, substitute, proposed or final Treasury Regulations.
“Units” shall have the meaning set forth in Section 2.1(c).
“Well Imbalance” shall mean any imbalance at the wellhead between the Hydrocarbons produced from a Well and allocable to the interests of a Seller therein and the shares of production from the relevant Well to which such Seller are entitled, together with any appurtenant rights and obligations concerning future in kind or cash balancing at the wellhead.
“Wells” shall have the meaning set forth in Section 2.1(b).
“Wells in Progress” shall have the meaning set forth in Section 4.12.
“Willful Breach” shall mean, with respect to a Party, (a) such Party’s willful or deliberate act or a willful or deliberate failure to act by such Party, which act or failure to act (i) constitutes in and of itself a material breach of any covenant set forth in this Agreement and (ii) which was undertaken with the actual knowledge of such Party that such act or failure to act would be, or would reasonably be expected to cause, a material breach of this Agreement or (b) the failure by such Party to consummate the transactions contemplated by this Agreement after all conditions to such Party’s obligations in Article VII or Article VIII, as applicable, have been satisfied or waived
in accordance with the terms of this Agreement (other than those conditions which by their terms can only be satisfied simultaneously with the Closing but which would be capable of being satisfied at Closing if the Closing were to occur).
“Working Interest” shall mean, with respect to a Well (or a specific depth or formation in such Well, as applicable) or a Lease (or a specific depth or formation in such Lease, as applicable), the interest in such Well or Lease (or the applicable depth or formation) that is burdened with the obligation to bear and pay costs and expenses of maintenance, development and operations on or in connection with such Well or Lease, but without regard to the effect of any Burdens.