EXHIBIT 10.1
ASSET PURCHASE AND SALE AGREEMENT
This Asset Purchase and Sale Agreement (hereinafter
"Agreement") is effective as of the 1st day of July, 1995,
("Effective Date") between INLAND RESOURCES INC., a Washington
corporation, hereinafter referred to as "Inland"), and PETROGLYPH
GAS PARTNERS, L. P., a Delaware limited partnership (hereinafter
referred to as "PGP").
WHEREAS, Inland and PGP each own an undivided 50% interest in
and to certain oil and gas properties known as the "Duchesne Field"
and the "Antelope Creek Field", as more particularly set forth in
Exhibit "A" attached hereto, together with like interests in and to
all related oil and gas sales contracts, dedicated acreage,
easements, rights-of-way, attendant equipment, operating rights,
and all other incidents associated therewith, and other assets;
WHEREAS, Inland and PGP each own an undivided 50% interest in
and to that certain gas gathering system consisting of the
rights-of-way and easements set forth in Exhibit "B" attached
hereto, together with like interests in and to all related
contracts, easements, rights-of-way, attendant equipment, operating
rights, and all other incidents associated therewith, and other
assets (hereinafter referred to as the "Gathering System");
WHEREAS, Inland and PGP each own undivided interests in and to
certain oil and gas properties known as the "Ashley Federal Unit",
as more particularly set forth in Exhibit "E" attached hereto,
together with like interests in and to all related oil and gas
sales contracts, dedicated acreage, easements, rights-of-way,
attendant equipment, operating rights, and all other incidents
associated therewith, and other assets;
WHEREAS, Inland and PGP desire to sell and to purchase from
each other certain interests in the Duchesne Field, Antelope Creek
Field, Ashley Federal Unit, Gas Gathering System, and related
assets; and
WHEREAS, the parties wish to effectuate the sale on the terms
and conditions more fully set forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants and promises
contained herein, the parties hereby agree as follows:
I
SALE OF ASSETS BY INLAND
I.1 Purchase and Sale. PGP agrees to purchase and Inland
agrees to sell all its right, title and interest in and to (a) the
oil and gas leases and other assets described on Exhibit "A"
attached hereto, in not less than the percentage working interest
and net revenue interest as specified in Exhibit "A", and (b) the
rights-of-way, easements, and other assets described on Exhibit
"B", together with all right, title, and interest in and to the
Cooperative Plan of Development of the Antelope Creek Field, all
oil and gas sales contracts, dedicated acreage, easements,
rights-of-way, pipelines, gathering systems, processing plants,
compressors, wells, pipeline and other yard inventory, water
trucks, furniture, fixtures, attendant equipment, machinery,
operating rights, permits, franchises, licenses, servitudes,
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surface leases, files, data, information, intellectual property,
seismic information, logs, core samples, and other personal
property, agreements and incidents associated therewith insofar,
and only insofar as such items are attendant or relate solely to
the Exhibit "A" and Exhibit "B" properties, including without
limitation the particular items described on Exhibit "C" attached
hereto (all of which shall hereinafter be referred to as the
"Duchesne/Antelope Creek Assets"). At Closing, Inland shall
execute and deliver in sufficient and recordable form any and all
assignments, conveyances, bills of sale, titles, and other
documents necessary to transfer title in the Duchesne/Antelope
Creek Assets to PGP.
I.2 Purchase Price. PGP agrees to pay to Inland the total
sum of Three Million Dollars ($3,000,000) in readily available
funds by wire transfer to an account to be designated by Inland, at
Closing for the Duchesne/Antelope Creek Assets, based on the
working interest and net revenue interest in the oil and gas
leases, more fully described on Exhibit "A". The allocation of the
purchase price among the various leases and other Duchesne/Antelope
Creek Assets is set forth on Exhibit "D" attached hereto. In the
event Inland's interest is less than the interest stated in
Exhibit "A", the purchase price shall be adjusted accordingly. The
purchase price set forth in this paragraph shall be subject to the
adjustments set forth in paragraph 1.3 below.
I.3 Adjustments to Purchase Price. The purchase price set
forth in paragraph 1.2 above shall be adjusted at Closing, as
follows:
a) Any amounts due and owing from Inland to PGP
or its subsidiary, Petroglyph Operating
Company, Inc. ("POCI"), as of the Effective
Date, resulting from capital costs, operating
expenses, or unpaid revenue, if any, from the
sale of production related to the acquisition,
development, or operation of the Duchesne
Field, Antelope Creek Field, or Ashley Federal
Unit shall be deducted from the purchase
price. In addition, there shall also be
deducted from the purchase price the value of
all oil in storage above the pipeline
connection and all gas that has passed through
the meter at or before the Effective Date that
is credited to PGP's interest in the Ashley
Federal Unit and that is attributable to June,
1995 production. The total of these amounts
is estimated to be approximately $323,552.40
as of June 30, 1995.
b) Any amounts due and owing from PGP or POCI to
Inland as of the Effective Date shall be added
to the purchase price. These amounts shall
include any monies owing due to capital costs,
operating expenses, or unpaid revenues, if
any, from sale of production related to the
acquisition, development, or operation of the
Duchesne Filed, Antelope Creek Field, or
Ashley Federal Unit. In addition, there shall
also be added to the purchase price the value
of all oil in storage above the pipeline
connection and all gas that has passed through
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the meter at or before the Effective Date that
is credited to Inland's interest in both the
Duchesne Field and the Antelope Creek Field
and that is attributable to June, 1995
production. The total of these amounts is
estimated to be approximately $77,525.00 as of
June 30, 1995.
c) Inland's pro rata share of ad valorem taxes
assessed against the Duchesne/Antelope Creek
Assets for the tax year 1995, prorated as of
the Effective Date, shall be deducted from the
purchase price.
d) PGP's pro rata share of ad valorem taxes
assessed against the Ashley Federal Unit for
the tax year 1995, prorated as of the
Effective Date, shall be added to the purchase
price.
(e) The positive or negative value of the Price
Protection Agreement (described in paragraph
1.5 below), as of the day before Closing,
shall be added to or deducted from the
purchase price; provided, however, that in no
event shall the adjustment to the purchase
price, resulting from the Price Protection
Agreement whether positive or negative, be
more than $100,000. The value of the Price
Protection Agreement shall be determined by
Enron Risk Management Services Corp.
A final accounting of the foregoing adjustments shall be had within
sixty (60) days after Closing of this Agreement. Any and all
amounts due from one party to another in accordance with such final
accounting shall be paid within ten (10) days after receipt of such
final accounting.
I.4 Additional Consideration. As additional consideration
for the transfer of the Duchesne/Antelope Creek Assets, PGP shall
sell, assign, and transfer to Inland or, if Inland shall so
request, to Inland Production Company, at Closing all of PGP's
right, title, and interest in and to the following:
a) The Ashley Federal Unit oil and gas leases,
more particularly described on Exhibit "E"
attached hereto, together with all equipment,
leases, easements and rights of way,
contracts, farmout agreement, and other
agreements, and other assets related thereto,
including without limitation the particular
items described on Exhibit "F" attached
hereto;
b) All warrants for the purchase of the common
stock of Inland held by PGP, which are more
particularly described on Exhibit "F"; and
c) That certain water truck previously owned by
Evertson Oil Company, as more particularly
described on Exhibit "F".
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The foregoing assets are hereinafter referred to as the "Ashley
Unit Assets".
I.5 Assumption of Debt. PGP shall assume all obligations,
liabilities, and rights of Inland under that certain Loan Agreement
dated August 24, 1994 between Joint Energy Development Investments
Limited Partnership ("JEDI") as lender and Inland as borrower
(hereinafter referred to as the "JEDI Loan"), and all documents
related thereto, including without limitation, the Production Note,
Development Note, Assignment of Overriding Royalty Interests, Deed
of Trust, Mortgage, Security Agreement, Assignment of Production of
Proceeds, Financing Statement and Fixture Filing, and ISDA Master
Agreement and confirmations thereunder ("Price Protection
Agreement") related to production of oil or gas from the
Duchesne/Antelope Creek Assets, to the extent and only to the
extent that said agreements relate to the Duchesne/Antelope Creek
Assets. Except as set forth in this paragraph, PGP assumes no
debts, obligations, or liabilities of Inland.
I.6 Gas Transportation Contract. The parties agree to enter
into a standard gas transportation contract, in substantially the
form of Exhibit "G" attached hereto, which will provide Inland
access to the high pressure natural gas pipeline currently owned by
the parties that crosses the Ashley Federal Unit and interconnects
with Questar's pipeline at the Monument Butte interconnection.
Said gas transportation contract shall provide, among other things,
that Inland shall have access up to but not exceeding 50% of the
maximum operating capacity of the pipeline, but in any case not to
exceed 3,500 Mcf per day. The price to be charged Inland for
transporting gas shall be not more than the amount that PGP charges
itself for the transportation of gas through said pipeline which in
no event shall exceed $.50/MCF. The term of this agreement shall
be for five (5) years from Closing.
I.7 Water Agreement. PGP shall cause POCI to enter into an
agreement with Inland, in substantially the form of Exhibit "H"
attached hereto, providing for the allocation to Inland for use in
developing the Ashley Federal Unit the following volumes of water
available to POCI pursuant to that certain agreement, as may be
amended from time to time, dated October 1, 1994 by and between
East Duchesne Culinary Water Improvement District and POCI
concerning the purchase of water for use in oil and gas operations
(the "Water Agreement"):
Year One - not to exceed 4,000 barrels per day
Year Two - not to exceed 3,000 barrels per day
Year Three - not to exceed 2,000 barrels per day
Year Four - not to exceed 1,000 barrels per day
Year Five and
beyond - 0 barrels per day
The agreement shall provide further that Inland's use of water
shall at all times be totally subject to and subordinate to the
needs of PGP, POCI, and/or their affiliates; that in the event PGP,
POCI, and/or their affiliates shall require the use of all or a
portion of the amount allocated to Inland, Inland shall have no
recourse against PGP, POCI, and/or their affiliates for such
shortfall; that PGP, POCI, and/or their affiliates shall not be
obligated or liable for the water district's failure to perform
under the Water Agreement; that Inland shall pay for the use of
water the amount set forth in the Water Agreement; and that Inland
shall further pay all costs and expenses caused by, or necessary
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to, Inland's use of such water, including without limitation the
cost for the purchase or construction of any equipment or
facilities.
I.8 Letters-in-Lieu. Inland shall prepare and the parties
shall execute letters-in-lieu of transfer and division orders at
the time of closing, which shall be sent to each purchaser of
production, instructing said purchasers to distribute proceeds of
the Duchesne/Antelope Creek Assets to PGP as of the Effective Date,
with respect to production from the Duchesne/Antelope Creek Assets
which occurs on and after the Effective Date. PGP shall prepare
and the parties shall execute letters-in-lieu of transfer and
division orders at the time of closing, which shall be sent to each
purchaser of production, instructing said purchasers to distribute
proceeds of the Ashley Federal Unit leases to Inland as of the
Effective Date, with respect to production from the Ashley Federal
Unit leases which occurs on and after the Effective Date.
I.9 Right to Terminate Agreement. Prior to Closing, if PGP
or Inland have not performed all those acts necessary for all of
the conditions precedent to have occurred prior to Closing, then
PGP or Inland, respectively, shall have the unconditional right to
terminate this Agreement, in which case it shall be of no force and
effect as among the undersigned parties. Provided, however, that
in the event that a title defect is discovered as to any of the
assets being transferred pursuant to this Agreement then, at the
option of the party receiving such assets, it may elect to
terminate this Agreement or, as the parties can agree, then the
parties may adjust the purchase price by deleting the asset from
this Agreement and closing on the balance of the assets according
to the terms hereof.
I.10 Conditions Precedent. The party's obligations hereunder
are subject to the following:
a) Confirmation of clear and marketable
title in Inland to the Duchesne/Antelope
Creek Assets (the cost of such title
confirmation to be paid
by PGP);
b) Confirmation of clear and marketable
title in PGP to the Ashley Unit Assets
(the cost of such title confirmation to
be paid by Inland);
c) Receipt of any and all required consents,
waivers, and approvals from third parties
including any governmental, regulatory, or
tribal entities, if any, to the transfers,
conveyances, and assignments necessary to
complete the transactions contemplated under
this Agreement, except for approvals required
to be obtained from governmental entities who
are lessors under leases affected by this
Agreement, or who administer such leases on
behalf of such lessors, which are customarily
obtained post-closing and which the parties
hereto have no reason to believe cannot be
obtained in the ordinary course of business;
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d) Consent and approval of JEDI to PGP's
assumption of debt as provided for in
paragraph 1.5 above, and acceptance of the
substitution of PGP for Inland under the
agreements described in that paragraph to the
extent that said agreements relate to the
Duchesne/Antelope Creek Assets;
e) Absence of the existence of any default or
event of default under the agreements
described in paragraph 1.5 above;
f) Approval of the transactions contemplated by
this Agreement by all parties whose approval
is necessary under PGP's partnership
agreement; and
g) Approval of the transactions contemplated by
this Agreement by Inland's board of directors.
h) At Closing, Inland and PGP shall each deliver
to the other appropriate opinion of counsel
letters evidencing the authority of such party
to enter into this Agreement and comply with
the terms thereof.
The approvals contemplated by paragraphs f) and g) shall be
obtained by the respective party at or before the time it executes
this Agreement. All other Conditions Precedent shall be satisfied
prior to Closing; provided, however, that PGP in its discretion may
waive the conditions set forth in paragraphs a), c), and f),
insofar as such conditions pertain to the transfer of the
Duchesne/Antelope Creek Assets, and that Inland in its discretion
may waive the conditions set forth in paragraphs b) and c) insofar
as such conditions pertain to the transfer of the Ashley Unit
Assets.
I.11 Conditions Subsequent. The party's obligations hereunder
are subject to receipt of any and all required consents, waivers,
and approvals to the transfers, conveyances, and assignments
necessary to complete the transactions contemplated under this
Agreement, and all other acts contemplated by this Agreement, from
governmental entities who are lessors under leases affected by this
Agreement, or who administer such leases on behalf of such lessors,
which are customarily obtained post-closing and which the parties
hereto have no reason to believe cannot be obtained in the ordinary
course of business. The parties have agreed to close this
Agreement without first obtaining all such consents, waivers, and
approvals; provided, however, that in the event any requests for
required consents, waivers, and approvals from such governmental
entities are denied, then PGP and Inland agree to negotiate in good
faith to attempt to determine the value of the assets affected by
such denial. If these parties mutually agree as to the value of
the affected asset(s), the recipient of this asset shall reconvey
such asset to its assignor, and shall further return the agreed
value to such assigning party. However, if no mutual agreement as
to value can be reached, or the value of such affected assets
exceeds 20% of the purchase price, then either Inland or PGP shall
have the right, but not the obligation, to declare this Agreement
null and void, and the parties shall take such actions as are
necessary to return the parties to the same position they had prior
to the execution of this Agreement, including without limitation,
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the reconveyance of all properties conveyed at Closing, and the
return of all funds paid hereunder.
I.12 Mutual Release. Each party hereby releases the other
party and the other party's affiliated entities, and the officers,
employees, shareholders, partners, representatives, and agents of
the other party and the other party's affiliated entities, from any
and all claims of every kind whatsoever, whether contingent or
liquidated, direct or indirect, related or unrelated to the assets
that are the subject of this Agreement, arising before Closing,
except claims arising from or under the provisions of this
Agreement or the transactions contemplated hereby.
I.13 Closing. Closing shall occur as soon as all conditions
precedent have been met, at a time and place mutually agreed on by
the parties. The parties shall reasonably endeavor to take all
actions necessary for Closing to occur on or before September 1,
1995, or as soon thereafter as is practicable, but in no event
later than the close of business on September 20, 1995. If Closing
does not occur by this later date, either party shall have the
right, but not the obligation, to cancel this Agreement without
penalty.
AI
REPRESENTATIONS AND WARRANTIES OF INLAND
AI.1 Power and Authority to Enter Into Agreement; Further
Assurances. Inland is fully authorized to enter into and perform
this Agreement and to convey or cause to be conveyed all of its
rights, title and interest in the Duchesne/Antelope Creek Assets.
The consummation of this Agreement will not violate or conflict
with any governmental order, judgment or decree applicable to
Inland. This Agreement has been duly executed and delivered on
behalf of Inland, and at the Closing, all documents and instruments
required hereunder to be executed and delivered by Inland will be
duly authorized, executed and delivered. Inland shall furnish at
Closing a resolution of its Board of Directors authorizing the
execution of this Agreement and all documents and instruments
required hereunder, together with a certificate of Inland's
Secretary identifying Inland's officers.
AI.2 Ownership. Inland owns the working interests and net
revenue interests in and to the oil and gas leases more fully
described on Exhibit "A", together with like interests in the other
Duchesne/Antelope Creek Assets, and warrants and represents that at
Closing it shall sell and transfer marketable title to PGP in not
less than the percentage working interest and net revenue interest
as specified in Exhibit "A" in and to the oil and gas leases and
other Duchesne/Antelope Creek Assets; and that Inland has not
caused by its acts or omissions the filing of any liens, mortgages
or financing statements against the Duchesne/Antelope Creek Assets
being sold hereunder, except the JEDI Loan; nor has Inland assigned
to any other party any of the Duchesne/Antelope Creek Assets being
sold hereunder, since acquisition of said Duchesne/Antelope Creek
Assets by Inland; and that Inland will warrant and forever defend
title to the Duchesne/Antelope Creek Assets, including the
percentage working and net revenue interests shown to be owned by
such Inland on Exhibit "A", against all persons whomsoever lawfully
claiming or to claim the same by, through, or under Inland, but not
otherwise.
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AI.3 Conditions of Property. PGP hereby acknowledges and
accepts that on the Closing date the equipment to be sold and
transferred by Inland to PGP will be sold in its then "as is, where
is" condition without any warranties, written or verbal, expressed
or implied, as to the condition of such equipment sold. Inland
makes no warranty as to the condition, safety, or operating
condition of the equipment sold to PGP which will survive the date
of Closing.
AI.4 Consents. Inland has obtained, as of Closing, all
necessary consents and authorizations to the transfer of the
Duchesne/Antelope Creek Assets and attendant rights to PGP, except
for approvals required to be obtained from governmental entities
who are lessors under leases affected by this Agreement, or who
administer such leases on behalf of such lessors, which are
customarily obtained post-closing and which the parties hereto have
no reason to believe cannot be obtained in the ordinary course of
business.
AI.5 Judgments. Inland represents, covenants and warrants to
PGP, its successors and assigns, that on the Closing date there
will be no judgment, injunction, court order, or adverse
administrative ruling in existence against Inland; and that PGP
will be indemnified by Inland against any and all judgments,
lawsuits, court orders and/or administrative rulings existing,
pending or threatened against Inland arising out of Inland's
actions prior to the Closing Date.
AI.6 Preferential Rights. There is no preferential right of
any third party to purchase any of the Duchesne/Antelope Creek
Assets, other than preferential rights which have expired or been
waived as of the time of Closing.
AI
REPRESENTATIONS OF PGP
AI.1 Power and Authority to Enter Into Agreement; Further
Assurances. PGP is fully authorized to enter into and perform this
Agreement and to convey or cause to be conveyed all of its rights,
title and interest in the Ashley Unit Assets. The consummation of
this Agreement will not violate or conflict with any governmental
order, judgment or decree applicable to PGP. This Agreement has
been duly executed and delivered on behalf of PGP, and at the
Closing, all documents and instruments required hereunder to be
executed and delivered by PGP will be duly authorized, executed and
delivered. PGP shall furnish at Closing the consents of all
parties whose consents are required under PGP's partnership
agreement; a resolution of Petroglyph Energy, Inc.'s Board of
Directors authorizing the execution of this Agreement and all
documents and instruments required hereunder, and a certificate of
Petroglyph Energy, Inc.'s Secretary identifying Petroglyph Energy,
Inc.'s officers.
AI.2 Ownership. PGP owns the working interests and net
revenue interests in and to the oil and gas leases more fully
described on Exhibit "E", together with like interests in the other
Ashley Unit Assets, and warrants and represents that at Closing it
shall sell and transfer marketable title to Inland in not less than
the percentage working interest and net revenue interest as
specified in Exhibit "E" in and to the oil and gas leases and other
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Ashley Unit Assets; and that PGP has not caused by its acts or
omissions the filing of any liens, mortgages or financing
statements against the Ashley Unit Assets being sold hereunder; nor
has PGP assigned to any other party any of the Ashley Unit Assets
being sold hereunder, since acquisition of said Ashley Unit Assets
by PGP; and that PGP will warrant and forever defend title to the
Ashley Unit Assets, including the percentage working and net
revenue interests shown to be owned by such PGP on Exhibit "E",
against all persons whomsoever lawfully claiming or to claim the
same by, through, and under PGP, but not otherwise.
AI.3 Conditions of Property. Inland hereby acknowledges and
accepts that on the Closing date the equipment to be sold and
transferred by PGP to Inland will be sold in its then "as is, where
is" condition without any warranties, written or verbal, expressed
or implied, as to the condition of such equipment sold. Inland
makes no warranty as to the condition, safety, or operating
condition of the equipment sold to Inland which will survive the
date of Closing.
AI.4 Consents. PGP has obtained, as of Closing, all necessary
consents and authorizations to the transfer of the Ashley Unit
Assets and attendant rights to Inland, except for approvals
required to be obtained from governmental entities who are lessors
under leases affected by this Agreement, or who administer such
leases on behalf of such lessors, which are customarily obtained
post-closing and which the parties hereto have no reason to believe
cannot be obtained in the ordinary course of business.
AI.5 Judgments. PGP represents, covenants and warrants to
Inland, its successors and assigns, that on the Closing date there
will be no judgment, injunction, court order, or adverse
administrative ruling in existence against PGP; and that Inland
will be indemnified by PGP against any and all judgments, lawsuits,
court orders and/or administrative rulings existing, pending or
threatened against PGP arising out of PGP's actions prior to the
Closing Date.
AI.6 Preferential Rights. There is no preferential right of
any third party to purchase any of the Ashley Unit Assets, other
than preferential rights which have expired or been waived as of
the time of Closing.
AI
INDEMNIFICATION
AI.1 By Inland Production Company. Upon consummation of the
Closing, and to the extent permissible under applicable law, Inland
Production Company agrees to indemnify and hold harmless PGP, its
employees, partners, and agents from and against any and all liens,
judgments, costs, reasonable attorney's fees, and claims of any
kind or character relating to periods during which Inland
Production Company is or was the operator of the Ashley Unit
insofar as and to the extent such claims become a final non-appealable
order(s) or judgment(s) determining that Inland
Production Company's actions or failure to act caused the damages
or injuries which are the subject of such claims, including, but
not limited to claims for damages to land, stock, crops, fences,
buildings, structures, claims for personal injury to, and death of
persons, and alleged violations of any environmental laws.
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AI.2 By POCI. Upon consummation of the Closing, and to the
extent permissible under applicable law, POCI agrees to indemnify
and hold harmless Inland, its employees, officers, directors, and
agents from and against any and all liens, judgments, costs,
reasonable attorney's fees, and claims of any kind or character
relating to periods during which POCI is or was the operator of the
Duchesne Field and/or Antelope Creek Field insofar as and to the
extent such claims become a final non-appealable order(s) or
judgment(s) determining that POCI's actions or failure to act
caused the damages or injuries which are the subject of such
claims, including, but not limited to claims for damages to land,
stock, crops, fences, buildings, structures, claims for personal
injury to, and death of persons, and alleged violations of any
environmental laws.
AI
MISCELLANEOUS PROVISIONS
AI.1 Modifications and Amendments. Any changes in the
provisions of this Agreement made subsequent to this execution
shall be made by formal written and executed amendments. It is
stipulated that oral modifications and amendments hereto shall not
be binding, and that no evidence of oral amendments or modifica-
tions shall be admissible during arbitration or adjudication.
AI.2 Governing Laws. The laws of the State of Kansas shall
govern this Agreement in proceedings in court (law and/or equity)
and proceedings in arbitration.
AI.3 Waiver. Any party's failure or delay in protesting,
taking legal action, or demanding arbitration upon the other
party's breach is no waiver of that cause of action; unless that
party's delay to take action exceeds a reasonable time under the
circumstances, exceeds a time-frame limitation set forth elsewhere
herein, or exceeds the statute of limitation. Any party's failure
or delay in protesting or taking legal and/or equitable action, or
demanding arbitration upon the other party's breach is not to be
considered as being a waiver of that party's cause of action for
any subsequent breach.
AI.4 Titles of Articles, Sections and Subsections. The titles
and subtitles of Articles, Section and Subsections of this
Agreement are for convenience only; are not part of the terms of
this Agreement; are without legal or contractual significance; and,
as such, shall not govern the terms of this Agreement or in any way
influence the interpretation of this Agreement.
AI.5 Notices. Any and all written notices hereunder shall be
delivered in person or via registered mail, return receipt
requested, postage prepaid, to the following individuals at the
following address:
PGP: PETROGLYPH ENERGY, INC.
Attn: Robert C. Murdock
6209 North Highway 61
P. O. Box 1839
Hutchinson, KS 67504-1839
FAX: 316-665-8577
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Inland: INLAND RESOURCES INC.
Attn: Kyle R. Miller
475 17th Street, Suite 1500
Denver, CO 80202
FAX: 303-296-4070
Such agents and/or addresses may be unilaterally altered by either
party upon providing written notice thereof to the other party.
AI.6 Duplicate Originals. This Agreement shall be executed in
duplicate originals, with Inland and PGP each receiving an
original.
AI.7 Further Assurances. The parties hereby agree to execute
and to cause third parties to execute any and all documents,
leases, affidavits, releases, mortgage releases, transfers, change
of operator forms, letters in lieu of transfer orders, assignments,
bills of sale, titles, notes or the like in fulfillment of
obligations set forth herein or in furtherance of the intent hereof
or as may be necessary to assign and convey marketable title to the
Duchesne/Antelope Creek Assets to PGP or to assign and convey
marketable title to the Ashley Unit Assets to Inland.
AI.8 Agreement Subject to Laws. If any provision of this
Agreement, or the application thereof to any party or any
circumstance, shall be found to be contrary to or inconsistent with
or unenforceable under any applicable law, rule, regulation or
order, such applicable law, rule, regulation or order shall control
and this Agreement shall be deemed modified accordingly; but the
remainder of this Agreement, and the application of such provisions
to the other parties or circumstances, shall not be affected
thereby; and in all other respects, the Agreement shall continue in
full force and effect.
AI.9 Assignment. This Agreement may not be assigned by the
parties, except to affiliated entities, without the written consent
of the other party. This Agreement shall be binding the parties
hereto and their respective successors and assigns.
AI.10 Incidental Costs. Each party to this Agreement
shall bear its respective expenses incurred in connection with the
Closing of this transaction, including its own consultant's and
broker's fee, attorneys' fees, accountants' fees and other similar
costs and expenses.
AI.11 Required Financial Information. Inland agrees that,
until January 1, 1999, at PGP's cost and expense, Inland will
provide PGP and its representatives with such financial and other
information, and such access to its books and records, insofar as
such financial and other information and books and records pertains
to the Duchesne/Antelope Creek Assets, as may be necessary for PGP
to comply with any laws or governmental rules or regulations
applicable to it, in such form as is necessary to comply with any
such law, rule or regulation, including without limitation rules
and regulations of the Securities and Exchange Commission or any
successor body. Such information shall be provided to PGP or its
representatives as promptly as is reasonably practicable.
PGP agrees that, until January 1, 1999, at Inland's cost and
expense, PGP will provide Inland and its representatives with such
financial and other information, and such access to its books and
records, insofar as such financial and other information and books
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and records pertains to the Ashley Unit Assets, as may be necessary
for Inland to comply with any laws or governmental rules or
regulations applicable to it, in such form as is necessary to
comply with any such law, rule or regulation, including without
limitation rules and regulations of the Securities and Exchange
Commission or any successor body. Such information shall be
provided to Inland or its representatives as promptly as is
reasonably practicable.
AI.12 Survival. Except as otherwise noted herein, the
representations and warranties of the parties herein and all
agreements herein shall survive the Closing and delivery of any
assignment, conveyance, or bill of sale, or other instrument
delivered at Closing. Nothing herein shall be construed as
obligating PGP to accept title to or purchase of any Asset which
does not comply with the representations and warranties contained
herein.
AI.13 Final Agreement. This Agreement constitutes the final
agreement of the parties, and supersedes any and all prior
agreements among the parties. Upon Closing of this Agreement, all
prior agreements among the parties, including without limitation
those agreements listed on Exhibit "I" attached hereto, shall
become null and void as between PGP and Inland. The unit agreement
and unit operating agreement for the Ashley Unit shall remain in
full force and effect as between Inland and the other parties to
these Ashley agreements; however, at and after Closing, these
agreements shall be of no further force and effect whatsoever with
regard to PGP, and the leasehold interests assigned by PGP within
the Ashley Unit shall be made specifically subject to the Ashley
unit agreement and the unit operating agreement for this unit, and
Inland shall assume all of PGP's responsibilities, rights,
liabilities, and obligations created by these agreements which
arise after the Effective Date. Any other agreements, contracts,
letter arrangements, or other formal or informal contracts, whether
written, oral, or existing in quantum meruit, shall be deemed
terminated, and extinguished at and as of Closing between Inland
and PGP.
AI.14 Arbitration. All claims, counterclaims, disputes,
and other matters in question arising out of or relating to this
Agreement or the breach hereof, or any transactions contemplated
hereby, will be decided by arbitration in accordance with the Rules
of the American Arbitration Association then in effect. This
agreement to arbitrate will be specifically enforceable under the
prevailing laws of any court having jurisdiction.
Notice of Demand for Arbitration must be filed in writing with
the other party to this Agreement and with the American Arbitration
Association within a reasonable time after the claim, dispute, or
other matter in question has arisen. In no event may the Demand
for Arbitration be made after the time when institution of legal or
equitable proceedings based on such claim, dispute, or other matter
in question would be barred by the applicable statute of
limitations.
Within thirty (30) days of the filing of Notice of Demand for
Arbitration, the parties shall jointly select a single arbitrator
to hear any dispute arising under this Agreement.
All arbitration proceedings shall be had in the city of Salt
Lake City, Utah. In all proceedings under this Agreement, the
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arbitrator shall be bound by the Federal Rules of Evidence in
effect at the time of arbitration. Any award of the arbitrator
shall be in writing and shall state the findings of fact, the
conclusions of law, and the reasons for the award. A decision of
the arbitrator shall be binding.
The costs of any proceeding shall be shared equally by the
parties. Each party shall otherwise bear its own costs, including
without limitation any attorneys' fees.
IN WITNESS WHEREOF, the parties have executed this Agreement
this 25th day of August, 1995, but effective as of the 1st day of
July, 1995.
Inland: INLAND RESOURCES INC.
By: /s/ Kyle R. Miller
Name: Kyle R. Miller
Title: President
INLAND PRODUCTION COMPANY
By: /s/ Kyle R. Miller
Name: Kyle R. Miller
Title: President
PGP: PETROGLYPH GAS PARTNERS, L. P.
By: PETROGLYPH ENERGY, INC.
its general partner
By: /s/ Robert C. Murdock
Name: Robert C. Murdock
Title: President
POCI: PETROGLYPH OPERATING COMPANY, INC.
By: /s/ Robert C. Murdock
Name: Robert C. Murdock
Title: President
S:\CLIENT-I\09004\30\ASC\ASSET4.AGR
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