PURCHASE AND SALE AGREEMENT - NON-CPU OUTSIDE HUERFANO
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
INDEX
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Article 1. DEFINITIONS 1
Article 2. TRANSFER OF THE PROPERTIES
2.1 Sale and Purchase 5
Article 3. PURCHASE PRICE
3.1 Purchase Price 5
Article 4. TITLE REVIEW
4.1 Buyer's Waiver of Title Defects 5
Article 5. INSPECTION OF PREMISES
5.1 Buyer's Waiver of Environmental Defects 6
Article 6. ACCOUNTING
6.1 Revenues, Expenses and Capital Expenditures 6
6.2 Taxes 6
6.3 Obligations and Credits 7
6.4 Miscellaneous Accounting 7
6.5 Final Accounting Settlement 7
6.6 Post-Final Accounting Settlement 8
Article 7. CASUALTY AND CONDEMNATION
7.1 Casualty and Condemnation 8
Article 8. INDEMNITIES
8.1 Opportunity for Review 8
8.2 Seller's Indemnity Obligation 8
8.3 Buyer's Indemnity Obligation 9
8.4 Asbestos and NORM 9
8.5 Notice and Cooperation 10
8.6 Defense of Claims 10
8.7 Waiver of Certain Damages 11
8.8 Limitation on Indemnities 11
Article 9. WARRANTIES AND DISCLAIMERS
9.1 Special Warranty of Title 11
9.2 Disclaimer - Representations and Warranties 11
9.3 Disclaimer - Statements and Information 12
Article 10. SELLER'S REPRESENTATIONS AND WARRANTIES
10.1 Organization and Good Standing 12
10.2 Corporate Authority; Authorization of Agreement 12
10.3 No Violations 13
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10.4 Absence of Certain Changes 13
10.5 Operating Costs 14
10.6 Litigation 14
10.7 Bankruptcy 14
10.8 Royalties 14
10.9 No Demands 14
10.10 Information 14
10.11 Government Licenses 14
Article 11. BUYER'S REPRESENTATIONS AND WARRANTIES
11.1 Organization and Good Standing 15
11.2 Corporate Authority; Authorization of Agreement 15
11.3 No Violations. 15
11.4 SEC Disclosure 16
11.5 Independent Evaluation 16
11.6 Buyer's Reliance 16
Article 12. ADDITIONAL AGREEMENTS
12.1 Covenants of Seller 16
12.2 Notice of Loss 16
12.3 Subsequent Operations 16
12.4 Buyer's Assumption of Obligations 17
12.5 Records 17
12.6 License Agreement 17
12.7 Litigation Agreement 17
Article 13. ANTITRUST NOTIFICATION
13.1 Antitrust Notification 18
Article 14. SPECIAL USE PERMIT
14.1 SPU 94-013 18
Article 15. CONFIDENTIALITY AGREEMENT
15.1 Confidentiality Agreement. 18
Article 16. THE CLOSING
16.1 Closing 19
16.2 Obligations of Seller at Closing 19
16.3 Obligations of Buyer at Closing 20
Article 17. MISCELLANEOUS
17.1 Notices 20
17.2 Conveyance Costs 21
17.3 Brokers' Fees 22
17.4 Further Assurances 22
17.5 Survival of Representations and Warranties 22
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17.6 Amendments and Severability 22
17.7 Successors and Assigns 23
17.8 Headings 23
17.9 Governing Law 23
17.10 No Partnership Created 23
17.11 Public Announcements 23
17.12 No Third Party Beneficiaries 23
17.13 Deceptive Trade Practices 23
17.14 Tax Deferred Exchange Election 24
17.15 Not to be Construed Against Drafter 24
17.16 Conspicuousness of Provisions 24
17.17 Arbitration 24
17.18 Execution in Counterparts 25
17.19 Entire Agreement 25
EXHIBITS
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EXHIBIT "A" - PROPERTIES
EXHIBIT "B" - EXCLUDED PROPERTIES
EXHIBIT "C" - LITIGATION
EXHIBIT "D" - ASSIGNMENT AND BILL OF SALE
EXHIBIT "E" - CERTIFICATE
EXHIBIT "F" - LETTERS-IN-LIEU
EXHIBIT "G" - OPINION OF COUNSEL
EXHIBIT "H" - NON-FOREIGN AFFIDAVIT
EXHIBIT "I" - LICENSE AGREEMENT
EXHIBIT "J" - LITIGATION AGREEMENT
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PURCHASE AND SALE AGREEMENT - NON-CPU OUTSIDE HUERFANO
THIS PURCHASE AND SALE AGREEMENT - NON-CPU OUTSIDE HUERFANO (this
"Agreement") is dated the 1st day of July, 1998, by and between AMOCO
PRODUCTION COMPANY, a Delaware corporation, with an office at 501 WestLake Park
Boulevard, Houston, Texas 77079 (hereinafter referred to as "Seller") and
EVERGREEN RESOURCES, INC., a Colorado corporation, with an office at 1401 17th
Street, Suite 1200, Denver, Colorado 80202 (hereinafter referred to as
"Buyer"), and is based on the following premises:
WHEREAS, Seller desires to sell, assign and convey to Buyer and Buyer
desires to purchase and accept certain oil and gas properties and related
interests; and
WHEREAS, the parties have reached agreement regarding such sale and
purchase.
NOW, THEREFORE, for valuable consideration and the mutual covenants and
agreements herein contained, Seller and Buyer agree as follows:
ARTICLE 1. DEFINITIONS
1. DEFINITIONS: In this Agreement, capitalized terms have the meanings
provided in this Article, unless expressly provided otherwise in other
Articles. All defined terms include both the singular and the plural. All
references to Articles refer to Articles in this Agreement, and all references
to Exhibits refer to Exhibits attached to and made a part of this Agreement.
1.1 "AAA" has the meaning set forth in Article 17.17.
1.2 "ACCOUNTING REFEREE" has the meaning set forth in Article 6.5.
1.3 "AFFILIATE" means any entity that, directly or indirectly, through one
or more intermediaries, controls or is controlled by or is under common control
with the entity specified. Control means ownership of at least forty-nine
percent (49%) of the voting stock of such entity.
1.4 "ARBITRABLE DISPUTE" has the meaning set forth in Article 17.17.
1.5 "ASSIGNMENT AND BILL OF SALE" means a document in the form of Exhibit
"D".
1.6 "BUSINESS DAY" means a Day excluding Saturdays, Sundays and U.S. legal
holidays.
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1.7 "CERTIFICATE" means a document in the form of Exhibit "E".
1.8 "CLAIM" OR "CLAIMS" means any and all claims, demands, suits, causes
of action, losses, damages, liabilities, fines, penalties and costs (including
attorneys' fees and costs of litigation) which are brought by or owed to a
Third Party.
1.9 "CLAIM NOTICE" has the meaning set forth in Article 8.5.
1.10 "CLAIMANT" has the meaning set forth in Article 17.17.
1.11 "CLOSE" OR "CLOSING" means the consummation of the transfer of title
to the Properties to Buyer, including execution and delivery of all documents
provided herein.
1.12 "CLOSING DATE" means July, 1 1998, or such other date as may be
mutually agreed upon by the parties.
1.13 "DAY" means a calendar day consisting of twenty-four (24) hours from
midnight to midnight.
1.14 "EFFECTIVE TIME" means July 1, 1998, at 7:00 a.m., local time where
the Properties are located.
1.15 "ENVIRONMENTAL CLAIMS" means all Claims for pollution or environmental
damages of any kind, including without limitation, those relating to: (a)
remediation or clean-up thereof; (b) damages to or loss of any property or
resources, and/or (c) injury or death of any person(s) whomesoever; including
without limitation, Claims relating to: (i) breach or violation of
Environmental Laws, common law causes of action such as negligence, gross
negligence, strict liability, nuisance or trespass, or fault imposed by
statute, rule, regulation or otherwise, (ii) costs associated with remediation
or clean-up, and/or (iii) fines or penalties associated with any of the
foregoing.
1.16 "ENVIRONMENTAL LAWS" means all laws, statutes, ordinances, permits,
orders, judgments, rules or regulations which are promulgated, issued or
enacted by a governmental entity or tribal authority having appropriate
jurisdiction that: (a) relate to the prevention of pollution or environmental
damage, (b) the remediation of pollution or environmental damage, and/or (c)
the protection of the environment generally; including without limitation, the
Clean Air Act, as amended, the Clean Water Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Federal Water Pollution Control Act, as amended, the Resource Conservation and
Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the
Toxic Substance and Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the
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Hazardous and the Solid Waste Amendments Act of 1984, as amended, and the Oil
Pollution Act of 1990, as amended.
1.17 "FINAL ACCOUNTING SETTLEMENT" has the meaning set forth in Article
6.5.
1.18 "FINAL SETTLEMENT DATE" has the meaning set forth in Article 6.5.
1.19 "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
1.20 "LAWS" means laws, statutes, ordinances, permits, decrees, orders,
judgments, rules or regulations (including without limitation Environmental
Laws) which are promulgated, issued or enacted by a governmental entity or
tribal authority having appropriate jurisdiction.
1.21 "LETTERS-IN-LIEU" means a document in the form of Exhibit "F".
1.22 "LICENSE AGREEMENT" means a document in the form of Exhibit "I"
1.23 "LITIGATION AGREEMENT" means a document in the form of Exhibit "J".
1.24 "NON-FOREIGN AFFIDAVIT" means a document in the form of Exhibit "H".
1.25 "NORM" means naturally occurring radioactive materials.
1.26 "OPINION OF COUNSEL" means a document in the form of Exhibit "G".
1.27 "PROPERTIES" means Seller's ownership interest in and to the following
properties (real, personal or mixed) and rights (contractual or otherwise):
1.27.1 All of Seller's undivided oil and gas leasehold interests,
working interests, net revenue interests, fee interests, mineral interests,
royalty interests, production payments, overriding royalty interests,
easements, rights-of-way, servitudes and surface leases to the extent they
relate to any of the interests which are expressly described in Exhibit "A",
including any and all right, title and interest in and to the oil, gas and
other hydrocarbons in, on or under the lands described in Exhibit "A" and
other hydrocarbons and products, whether liquid or gaseous, produced in
association therewith;
1.27.2 All of Seller's right, title and interests in, to and under,
or derived from, all of the presently existing and valid unitization,
communization and pooling declarations, orders and agreements and units
(including all units formed by voluntary agreement and those formed under
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the rules, regulations, orders or other official acts of any governmental
entity having appropriate jurisdiction) to the extent they relate to any of
the interests which are expressly described in Exhibit "A" or the production
of oil, gas or other hydrocarbon substances attributable thereto;
1.27.3 All of Seller's right, title and interests in, to and under, or
derived from, all of the presently existing and valid oil sales contracts,
casinghead gas sales contracts, gas sales contracts, processing contracts,
gathering contracts, transportation contracts (including that certain Letter
Agreement dated the 21st day of March, 1994, that certain Letter Agreement
dated the 21st day of October, 1997 and that certain Firm Transportation
Service Agreement dated the 1st day of November, 1997, each by and between
Amoco Energy Trading Company and Colorado Interstate Gas Company, as the
same may have been amended from time to time), operating agreements,
balancing agreements, joint venture agreements, partnership agreements,
farmout agreements, and other contracts, agreements and other written
instruments to the extent they relate to any of the interests which are
expressly described in Exhibit "A"; and
1.27.4 All of Seller's right, title and interests in and to all
personal property, fixtures, improvements, seismic data and information,
permits (excluding the Special Use Permit), licenses, approvals, servitudes,
rights-of-way, easements, surface leases and other surface rights, including
without limitation, wells (whether producing, plugged and abandoned,
shut-in, injection or water supply), tanks, boilers, buildings, fixtures,
machinery, equipment, pipelines, utility lines, power lines, telephone
lines, telegraph lines, roads and other appurtenances, to the extent the
same are situated upon and/or used or held for use by Seller solely in
connection with the ownership, operation, maintenance and repair of the
interests which are expressly described in Exhibit "A" or relate to the
production of oil, gas or other hydrocarbons therefrom.
SELLER EXCEPTS, RESERVES AND RETAINS, unto itself, its successors and
assigns from the Properties the following properties (real, personal or mixed)
and rights (contractual or otherwise):
(a) Any and all interpretive seismic or geophysical information and data
or any and all seismic or geophysical information and data covered by a non-
disclosure obligation;
(b) A concurrent interest in and to all contracts, agreements, easements,
rights-of-way and any other rights to the extent that they relate to or affect
the interests reserved herein;
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(c) Any and all pipelines, equipment, facilities, contracts, agreements,
easements and rights-of-way owned by an Affiliate(s) of Seller; and
(d) The properties (real, personal and mixed) and rights (contractual or
otherwise) expressly described in Exhibit "B".
1.28 "PURCHASE PRICE" has the meaning set forth in Article 3.1.
1.29 "RECORDS" means all of Seller's books, records and files related to
the Properties, excluding previous offers and economic analyses associated with
the purchase, sale or exchange of the Properties, proprietary information,
interpretive information, internal communications, personnel information, tax
information, information covered by a non-disclosure obligation and information
covered by a legal privilege.
1.30 "RESPONDENT" has the meaning set forth in Article 17.17.
1.31 "SPECIAL USE PERMIT" has the meaning set forth in Article 14.1.
1.32 "THIRD PARTY" means any person or entity, governmental or otherwise,
other than Seller and Buyer.
ARTICLE 2. TRANSFER OF THE PROPERTIES
2.1 SALE AND PURCHASE. On the Closing Date, effective as of the Effective
Time and upon the terms and conditions herein set forth, Seller agrees to sell
and assign the Properties to Buyer and Buyer agrees to buy and accept the
Properties.
ARTICLE 3. PURCHASE PRICE
3.1 PURCHASE PRICE. The total purchase price, subject to adjustments as
set forth herein, paid to Seller by Buyer for the Properties shall be Four
Hundred Thousand and No/100 United States Dollars (US $400,000) ("Purchase
Price"), payable in full at Closing in immediately available funds.
ARTICLE 4. TITLE REVIEW
4.1 BUYER'S WAIVER OF TITLE DEFECTS. EXCEPT FOR CLAIMS BUYER ASSERTS
UNDER SELLER'S SPECIAL WARRANTY OF TITLE CONTAINED ARTICLE 9.1, ALL TITLE
OBJECTIONS SHALL BE WAIVED BY BUYER FOR ALL PURPOSES; PROVIDED HOWEVER, THIS
PROVISION SHALL NOT DIMINISH OR AFFECT IN ANY WAY THE PARTIES' RIGHTS AND
OBLIGATIONS UNDER ANY INDEMNITIES PROVIDED FOR IN THIS AGREEMENT.
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ARTICLE 5. INSPECTION OF PREMISES
5.1 BUYER'S WAIVER OF ENVIRONMENTAL DEFECTS. ALL ENVIRONMENTAL CONDITIONS
SHALL BE WAIVED BY BUYER FOR ALL PURPOSES; PROVIDED HOWEVER, THIS PROVISION
SHALL NOT DIMINISH OR AFFECT IN ANY WAY THE PARTIES' RIGHTS AND OBLIGATIONS
UNDER ANY INDEMNITIES PROVIDED FOR IN THIS AGREEMENT.
ARTICLE 6. ACCOUNTING
6.1 REVENUES, EXPENSES AND CAPITAL EXPENDITURES. All merchantable oil and
natural gas liquid hydrocarbons stored in tanks and vessels on the Properties
will be gauged to the bottom of the flange by Seller or the operator of the
Properties as of the Effective Time, and Seller shall be entitled to the
proceeds of such oil and natural gas liquid hydrocarbons so gauged when sold.
Seller shall notify Buyer in advance of gauging the tanks and Buyer shall be
entitled to witness said tank gauging. Oil and other liquid hydrocarbons in
treating equipment, separation equipment and tanks below pipeline connections
as of the Effective Time shall not be considered to be merchantable and shall
become the property of Buyer. All revenues attributable to the operation of
the Properties prior to the Effective Time shall be owned by and for the
account of Seller. Seller shall be entitled to all operating revenues and
related accounts receivable arising in the ordinary course of business
attributable to the Properties and shall be responsible for all operating
expenses and related accounts payable arising in the ordinary course of
business attributable to the Properties, in each case to the extent they relate
to the time prior to the Effective Time. Buyer shall be entitled to all
operating revenues and related accounts receivable arising in the ordinary
course of business attributable to the Properties and responsible for the
payment of all operating expenses and related accounts payable arising in the
ordinary course of business attributable to the Properties, in each case to the
extent they relate to time after the Effective Time. The actual amounts or
values associated with the above shall be accounted for in the Final Accounting
Settlement. Buyer shall assume Seller's suspense funds associated with the
acquired Properties as of the Effective Time to the extent identified by Seller
and to the extent such suspense funds are transferred to Buyer. Such suspense
funds shall be accounted for in the Final Accounting Settlement.
6.2 TAXES. All taxes and assessments, including without limitation,
excise taxes, ad valorem taxes and any other federal, state, local or tribal
taxes or assessments attributable to the ownership or operation of the
Properties prior to the Effective Time shall remain Seller's responsibility,
and all deductions, credits or refunds pertaining to the aforementioned taxes
and assessments, no matter when received, shall belong to Seller. All taxes
and assessments, including without limitation, excise taxes, ad valorem taxes
and any other federal, state, local or tribal taxes and assessments
attributable to the ownership or operation of the Properties after the
Effective Time (excluding income taxes from the Effective Time through the
Closing) shall be Buyer's responsibility, and all
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deductions, credits or refunds pertaining to the aforementioned taxes and
assessments, no matter when received, shall belong to Buyer. The actual
amounts or values associated with the above, if any, shall be accounted for
in the Final Accounting Settlement. The parties agree that the transaction
contemplated herein is an occasional sale of assets by Seller in which Seller
does not trade in the ordinary course of its business. Accordingly, the
parties will take commercially reasonable actions to establish the occasional
sale exemption from any sales tax associated with the transaction
contemplated herein. Notwithstanding the foregoing, Buyer shall be solely
responsible for all transfer, sales, use or similar taxes resulting from or
associated with the transaction contemplated under this Agreement.
6.3 OBLIGATIONS AND CREDITS. All prepaid insurance premiums, utility
charges, taxes, rentals and any other prepaids applicable to periods of time
after the Effective Time, if any, and attributable to the Properties shall be
reimbursed to Seller by Buyer, and accrued payables applicable to periods of
time prior to the Effective Time, if any, and attributable to the Properties
shall be the responsibility of Seller. The actual amounts or values associated
with the above shall be accounted for in the Final Accounting Settlement.
6.4 MISCELLANEOUS ACCOUNTING. In addition to the items set forth in
Articles 6.1 through 6.3, any other amounts due between Buyer and Seller
related to the ownership or operation of the Properties shall be accounted for
in the Final Accounting Settlement.
6.5 FINAL ACCOUNTING SETTLEMENT. As soon as reasonably practicable, but
in no event later than ninety (90) Days after Closing, Seller shall deliver to
Buyer a post-closing statement setting forth a detailed final calculation of
all post-closing adjustments applicable to the period between the Effective
Time and the Closing ("Final Accounting Settlement"). As soon as reasonably
practicable, but in no event later than thirty (30) Days after Buyer receives
the post-closing statement, Buyer shall deliver to Seller a written report
containing any changes Buyer proposes to be made to such statement. If Buyer
fails to deliver a report to Seller containing changes Buyer proposes to be
made to the post-closing statement, the post-closing statement delivered by
Seller shall be deemed to be true and correct and binding on and non-appealable
by the parties. As soon as reasonably practicable, but in no event later than
fifteen (15) Days after Seller receives Buyer's proposed changes to the post-
closing statement, the parties shall meet and undertake to agree on the final
post-closing adjustments. If the parties fail to agree on the final post-
closing adjustments within such fifteen (15) Day period, the disputed items
shall be resolved by submitting the same to a firm of independent nationally
recognized accountants mutually acceptable to the parties (the "Accounting
Referee"). The Accounting Referee shall resolve the dispute(s) regarding the
Final Accounting Settlement within thirty (30) Days after having the relevant
materials submitted for review. The decision of the Accounting Referee shall
be binding and non-appealable by the parties. The
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fees and expenses associated with the Accounting Referee shall be borne
equally by Buyer and Seller. The date upon which all amounts associated with
the Final Accounting Settlement are agreed to by the parties, whether by
decision of the Accounting Referee or otherwise, shall be herein called the
"Final Settlement Date". Any amounts owed by either party to the other as a
result of such final post-closing adjustments shall be paid within five (5)
Business Days after the Final Settlement Date.
6.6 POST-FINAL ACCOUNTING SETTLEMENT. Any revenues received or costs and
expenses paid by Buyer after the Final Accounting Settlement which are
attributable to the ownership or operation of the Properties prior to the
Effective Time shall be billed or reimbursed to Seller, as appropriate. Any
revenues received or costs and expenses paid by Seller after the Final
Accounting Settlement which are attributable to the ownership or operation of
the Properties after the Effective Time, and not expressly reserved by Seller,
shall be billed or reimbursed to Buyer, as appropriate.
ARTICLE 7. CASUALTY AND CONDEMNATION
7.1 CASUALTY AND CONDEMNATION. If, prior to Closing, a substantial part
of the Properties shall: (a) be destroyed by a casualty loss, or (b) be taken
in condemnation or if proceedings for such purposes shall be pending; then
Seller and Buyer shall attempt to mutually agree on a reduction in the Purchase
Price reflecting the reduction in the value of the Properties affected by the
casualty loss or taking. If Seller and Buyer are unable to mutually agree on
such reduction, either party shall have the right, exercisable within ninety
(90) Days after Closing, to initiate binding arbitration in accordance with
Article 17.17 to determine the value of the Properties affected by the casualty
loss or taking. Seller shall retain any and all sums paid to Seller, unpaid
awards, insurance proceeds or other payments associated with or attributable
to such Casualty Loss or taking.
ARTICLE 8. INDEMNITIES
8.1 OPPORTUNITY FOR REVIEW. EACH PARTY REPRESENTS THAT IT HAS HAD AN
ADEQUATE OPPORTUNITY TO REVIEW THE FOLLOWING INDEMNITY AND RELEASE PROVISIONS,
INCLUDING THE OPPORTUNITY TO SUBMIT THE SAME TO LEGAL COUNSEL FOR REVIEW AND
COMMENT. BASED UPON THE FOREGOING REPRESENTATION, THE PARTIES AGREE TO THE
PROVISIONS SET FORTH BELOW.
8.2 SELLER'S INDEMNITY OBLIGATION. SELLER SHALL, SUBJECT TO THE
LIMITATION SET FORTH BELOW, RELEASE BUYER FROM AND SHALL FULLY PROTECT,
INDEMNIFY AND DEFEND BUYER, ITS OFFICERS, AGENTS, EMPLOYEES AND AFFILIATES AND
HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS RELATING TO, ARISING OUT
OF, OR CONNECTED, DIRECTLY OR INDIRECTLY, WITH THE OWNERSHIP OR OPERATION OF
THE PROPERTIES, OR ANY PART THEREOF, PERTAINING TO THE PERIOD OF
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TIME PRIOR TO THE CLOSING, INCLUDING WITHOUT LIMITATION, CLAIMS RELATING TO:
(a) INJURY OR DEATH OF ANY PERSON OR PERSONS WHOMSOEVER, (b) DAMAGES TO OR
LOSS OF ANY PROPERTY OR RESOURCES, (c) COMMON LAW CAUSES OF ACTION SUCH AS
NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY, NUISANCE OR TRESPASS, (d)
FAULT IMPOSED BY STATUTE, RULE, REGULATION OR OTHERWISE AND/OR (e)
ENVIRONMENTAL CLAIMS. THE INDEMNITY OBLIGATION AND RELEASE PROVIDED HEREIN
SHALL APPLY REGARDLESS OF CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS OF
BUYER, ITS OFFICERS, AGENTS, EMPLOYEES OR AFFILIATES. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, SELLER SHALL HAVE NO OBLIGATION
UNDER THIS AGREEMENT OR OTHERWISE TO PROTECT, INDEMNIFY, DEFEND AND HOLD
HARMLESS BUYER, ITS OFFICERS, AGENTS, EMPLOYEES AND AFFILIATES FROM AND
AGAINST: (a) CLAIMS FOR WHICH BUYER HAS NOT PROVIDED SELLER WITH NOTICE OF
SAID CLAIMS WITHIN TWO (2) YEARS AFTER THE CLOSING (IT BEING ACKNOWLEDGED AND
AGREED THAT BUYER SHALL BE SOLELY RESPONSIBLE FOR ANY AND ALL CLAIMS NOT
RAISED WITHIN SUCH TWO YEAR PERIOD), OR (b) CLAIMS IN AGGREGATE UP TO TWO
PERCENT (2%) OF THE UNADJUSTED PURCHASE PRICE (IT BEING ACKNOWLEDGED AND
AGREED THAT BUYER SHALL BE SOLELY RESPONSIBLE FOR ANY AND ALL CLAIMS UP TO
TWO PERCENT (2%) OF THE UNADJUSTED PURCHASE PRICE).
8.3 BUYER'S INDEMNITY OBLIGATION. BUYER SHALL RELEASE SELLER FROM AND
SHALL FULLY PROTECT, INDEMNIFY AND DEFEND SELLER, ITS OFFICERS, AGENTS,
EMPLOYEES AND AFFILIATES AND HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS RELATING TO, ARISING OUT OF, OR CONNECTED, DIRECTLY OR INDIRECTLY, WITH
THE OWNERSHIP OR OPERATION OF THE PROPERTIES, OR ANY PART THEREOF, PERTAINING
TO THE PERIOD OF TIME PRIOR TO THE CLOSING, NO MATTER WHEN ASSERTED, IN WHICH
SELLER'S INDEMNITY OBLIGATION HAS CEASED, TERMINATED OR DID NOT EXIST, AND FROM
AND AGAINST ANY AND ALL CLAIMS RELATING TO, ARISING OUT OF, OR CONNECTED,
DIRECTLY OR INDIRECTLY, WITH THE OWNERSHIP OR OPERATION OF THE PROPERTIES, OR
ANY PART THEREOF, PERTAINING TO THE PERIOD OF TIME AT AND AFTER THE CLOSING, NO
MATTER WHEN ASSERTED; INCLUDING WITHOUT LIMITATION, CLAIMS RELATING TO: (a)
INJURY OR DEATH OF ANY PERSON OR PERSONS WHOMSOEVER, (b) DAMAGES TO OR LOSS OF
ANY PROPERTY OR RESOURCES, (c) COMMON LAW CAUSES OF ACTION SUCH AS NEGLIGENCE,
GROSS NEGLIGENCE, STRICT LIABILITY, NUISANCE OR TRESPASS, (d) FAULT IMPOSED BY
STATUTE, RULE, REGULATION OR OTHERWISE AND/OR (e) ENVIRONMENTAL CLAIMS. THE
INDEMNITY OBLIGATION AND RELEASE PROVIDED HEREIN SHALL APPLY REGARDLESS OF
CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS OF SELLER, ITS OFFICERS, AGENTS,
EMPLOYEES OR AFFILIATES.
8.4 ASBESTOS AND NORM. The parties acknowledge that the Properties may
contain asbestos or NORM, and that special procedures may be required for the
assessment, remediation, removal, transportation or disposal of said asbestos
or NORM. Notwithstanding anything contained herein to the contrary, Buyer
agrees to assume any and all liability associated with or attributable to the
assessment, remediation, removal, transportation or disposal of the asbestos or
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NORM associated with or attributable to the Properties and will conduct said
activities in accordance with all applicable Laws. NOTWITHSTANDING ANYTHING
CONTAINED IN THIS AGREEMENT TO THE CONTRARY, BUYER SHALL RELEASE SELLER FROM
AND SHALL FULLY PROTECT, DEFEND AND INDEMNIFY SELLER, ITS OFFICERS, AGENTS,
EMPLOYEES AND AFFILIATES AND HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS RELATING TO, ARISING OUT OF, OR CONNECTED, DIRECTLY OR INDIRECTLY, WITH
THE ASSESSMENT, REMEDIATION, REMOVAL, TRANSPORTATION OR DISPOSAL OF ASBESTOS OR
NORM ASSOCIATED WITH OR ATTRIBUTABLE TO THE PROPERTIES, NO MATTER WHEN
ASSERTED, INCLUDING WITHOUT LIMITATION, CLAIMS RELATING TO: (a) INJURY OR DEATH
TO ANY PERSON OR PERSONS WHOMSOEVER, (b) DAMAGE TO OR LOSS OF PROPERTY OR
RESOURCE, (c) COMMON LAW CAUSES OF ACTION SUCH AS NEGLIGENCE, GROSS NEGLIGENCE,
STRICT LIABILITY, NUISANCE OR TRESPASS, (d) FAULT IMPOSED BY STATUTE, RULE,
REGULATION OR OTHERWISE AND/OR (e) ENVIRONMENTAL CLAIMS. THE INDEMNITY
OBLIGATION AND RELEASE PROVIDED HEREIN SHALL APPLY REGARDLESS OF CAUSE OR OF
ANY NEGLIGENT ACTS OR OMISSIONS OF SELLER, ITS OFFICERS, AGENTS, EMPLOYEES OR
AFFILIATES.
8.5 NOTICE AND COOPERATION. If a Claim is asserted against a party for
which the other party may be liable under the provisions of this Article, it is
a condition precedent to the indemnifying party's obligations hereunder that
the indemnified party gives the indemnifying party written notice of such Claim
setting forth full particulars of the Claim, as known by the indemnified party,
including a copy of the Claim (if the Claim is in writing). The indemnified
party shall make a good faith effort to notify the indemnifying party within
three (3) months of receipt of a Claim and shall in all events effect such
notice within such time as will allow the indemnifying party to defend against
such Claim. The notice of a Claim given hereunder is referred to as a "Claim
Notice."
8.6 DEFENSE OF CLAIMS.
8.6.1 COUNSEL. Upon receipt of a Claim Notice, the indemnifying party
may assume the defense thereof with counsel selected by the indemnifying
party and reasonably satisfactory to the indemnified party. The indemnified
party shall cooperate in all reasonable respects in such defense. If any
Claim involves Claims with respect to which Buyer indemnifies Seller and
also Claims for which Seller indemnifies Buyer, each party shall have the
right to assume the defense of and hire counsel for that portion of the
Claim for which it may have liability. The indemnified party shall have the
right to employ separate counsel in any Claim and to participate in the
defense thereof; provided however, the fees and expenses of counsel employed
by the indemnified party shall be at the expense of the indemnified party,
unless otherwise agreed between the parties.
8.6.2 SETTLEMENT. If the indemnifying party does not notify the
indemnified party within the earlier to occur of: (a) five (5) Business
Days
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before the time a party response is due in any litigation matter, or (b)
three (3) calendar months after receipt of the Claim Notice, that the
indemnifying party elects to undertake the defense thereof, the indemnified
party shall have the right to defend, at the expense of the indemnifying
party, the Claim with counsel of its own choosing, subject to the right of
the indemnifying party to assume the defense of any Claim at any time prior
to settlement or final determination thereof. In such event, the
indemnified party shall send a written notice to the indemnifying party of
any proposed settlement of any Claim, which settlement the indemnifying
party may accept or reject, in its reasonable judgment, within thirty (30)
days of receipt of such notice, unless the settlement offer is limited to a
shorter period of time in which case the indemnifying party shall have such
shorter period of time in which to accept or reject the proposed settlement.
Failure of the indemnifying party to accept or reject such settlement within
the applicable time period shall be deemed to be its rejection of such
settlement. The indemnified party may settle any matter over the objection
of the indemnifying party but shall in so doing be deemed to have waived any
right to indemnity therefor as to (and only as to) liabilities with respect
to which the indemnifying party has recognized its liability.
8.7 WAIVER OF CERTAIN DAMAGES. EACH OF THE PARTIES HEREBY WAIVES AND
AGREES NOT TO SEEK CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES OF ANY KIND WITH
RESPECT TO ANY CLAIM OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
BREACH HEREOF. THIS PROVISION DOES NOT DIMINISH OR AFFECT IN ANY WAY THE
PARTIES' RIGHTS AND OBLIGATIONS UNDER ANY INDEMNITIES PROVIDED FOR IN THIS
AGREEMENT.
8.8 LIMITATION ON INDEMNITIES. IN NO EVENT SHALL AN INDEMNIFYING PARTY
HAVE ANY OBLIGATION OF INDEMNIFICATION TO THE OTHER PARTY, IF THE CLAIM FOR
WHICH INDEMNITY IS SOUGHT WAS CAUSED BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
ON THE PART OF THE INDEMNIFIED PARTY OR ITS OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, AFFILIATES, CONTRACTORS OR SUBCONTRACTORS, NOR SHALL ANY INDEMNITY
PROVISIONS IN THIS AGREEMENT APPLY OR BE DEEMED TO APPLY TO MATTERS AFFECTING
LANDS OR INTERESTS OTHER THAN THOSE WHICH ARE INCLUDED IN THE PROPERTIES.
ARTICLE 9. WARRANTIES AND DISCLAIMERS
9.1 SPECIAL WARRANTY OF TITLE. SELLER SHALL WARRANT AND DEFEND THE TITLE
TO THE PROPERTIES CONVEYED TO BUYER AGAINST EVERY PERSON WHOMSOEVER LAWFULLY
CLAIMING THE PROPERTIES OR ANY PART THEREOF BY, THROUGH AND UNDER SELLER, BUT
NOT OTHERWISE.
9.2 DISCLAIMER - REPRESENTATIONS AND WARRANTIES. BUYER ACKNOWLEDGES AND
AGREES THAT THE PROPERTIES ARE BEING TRANSFERRED, ASSIGNED AND CONVEYED FROM
SELLER TO BUYER "AS-IS, WHERE-IS", AND WITH
11
ALL FAULTS IN THEIR PRESENT CONDITION AND STATE OF REPAIR, WITHOUT RECOURSE.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HEREBY DISCLAIMS ANY
AND ALL REPRESENTATIONS AND WARRANTIES CONCERNING THE PROPERTIES, EXPRESS,
STATUTORY, IMPLIED OR OTHERWISE, INCLUDING WITHOUT LIMITATION, ANY WARRANTY
OF TITLE (EXCEPT AS SET FORTH IN ARTICLE 9.1), THE QUALITY OF HYDROCARBON
RESERVES, THE QUANTITY OF HYDROCARBON RESERVES, THE AMOUNT OF REVENUES, THE
AMOUNT OF OPERATING COSTS, THE CONDITION OF THE PROPERTIES (PHYSICAL OR
ENVIRONMENTAL), COMPLIANCE WITH APPLICABLE LAWS, ABSENCE OF DEFECTS (LATENT
OR PATENT), SAFETY, STATE OF REPAIR, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND BUYER EXPRESSLY RELEASES SELLER FROM THE SAME;
PROVIDED HOWEVER, THIS PROVISION SHALL NOT DIMINISH OR AFFECT IN ANY WAY THE
PARTIES' RIGHTS AND OBLIGATIONS UNDER ANY INDEMNITIES PROVIDED FOR IN THIS
AGREEMENT.
9.3 DISCLAIMER - STATEMENTS AND INFORMATION. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, SELLER DISCLAIMS ANY AND ALL LIABILITY AND
RESPONSIBILITY FOR AND ASSOCIATED WITH THE QUALITY, ACCURACY, COMPLETENESS OR
MATERIALITY OF THE DATA, INFORMATION AND MATERIALS FURNISHED (ORALLY OR IN
WRITING) AT ANY TIME TO BUYER, ITS OFFICERS, AGENTS, EMPLOYEES OR AFFILIATES IN
CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREIN, INCLUDING WITHOUT
LIMITATION, THE QUALITY OF HYDROCARBON RESERVES, THE QUANTITY OF HYDROCARBON
RESERVES, THE AMOUNT OF REVENUES, THE AMOUNT OF OPERATING COSTS, THE FINANCIAL
DATA, THE CONTRACT DATA, THE ENVIRONMENTAL CONDITION OF THE PROPERTIES, THE
PHYSICAL CONDITION OF THE PROPERTIES AND THE CONTINUED FINANCIAL VIABILITY OF
THE PROPERTIES, AND BUYER EXPRESSLY RELEASES SELLER FROM THE SAME; PROVIDED
HOWEVER, THIS PROVISION SHALL NOT DIMINISH OR AFFECT IN ANY WAY THE PARTIES'
RIGHTS AND OBLIGATIONS UNDER ANY INDEMNITIES PROVIDED FOR IN THIS AGREEMENT.
ARTICLE 10. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer that on the date hereof and as of
the Closing:
10.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, and has all requisite corporate power and authority to own and lease
the Properties. Seller is duly licensed or qualified to do business as a
foreign corporation and is in good standing in all jurisdictions in which the
Properties are located.
10.2 CORPORATE AUTHORITY; AUTHORIZATION OF AGREEMENT. Seller has all
requisite corporate power and authority to execute and deliver this Agreement,
to consummate the transactions contemplated herein and to perform all of the
terms and conditions to be performed by it as provided for in this Agreement.
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The execution and delivery of this Agreement by Seller, the performance by
Seller of all of the terms and conditions to be performed by it and the
consummation of the transactions contemplated herein have been duly authorized
and approved by all necessary corporate action. This Agreement has been duly
executed and delivered by Seller and constitutes the valid and binding
obligation of Seller, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency or other
Laws relating to or affecting the enforcement of creditors' rights and general
principles of equity (regardless of whether such enforceability is considered
in a proceeding at law or in equity).
10.3 NO VIOLATIONS. Assuming expiration or termination of the
applicable waiting period under the HSR Act, if applicable, to the best of
Seller's knowledge, the execution and delivery of this Agreement by Seller
does not, and the fulfillment and compliance with the terms and conditions
hereof and the consummation of the transactions contemplated herein, will
not:
10.3.1 Conflict with or require the consent of any person or entity
under any of the terms, conditions or provisions of the certificate of
incorporation or bylaws of Seller;
10.3.2 Violate any provision of, or require any filing, consent or
approval under any Law applicable to or binding upon Seller (assuming
receipt of all consents and approvals of governmental entities or tribal
authorities customarily obtained subsequent to the transfers of title);
10.3.3 Conflict with, result in a breach of, constitute a default
under or constitute an event that with notice or lapse of time, or both,
would constitute a default under, accelerate or permit the acceleration
of the performance required by, or require any consent, authorization or
approval under: (a) any mortgage, indenture, loan, credit agreement or
other agreement, evidencing indebtedness for borrowed money to which
Seller is a party or by which Seller is bound, and\or (b) any order,
judgment or decree of any governmental entity or tribal authority; or
10.3.4 Result in the creation or imposition of any lien or
encumbrance upon the Properties.
10.4 ABSENCE OF CERTAIN CHANGES. Between the date of execution of this
Agreement and the Closing there has not been without Buyer's prior written
consent:
10.4.1 A sale, lease or other disposition of the Properties, other
than in the ordinary course of business;
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10.4.2 A mortgage, pledge or grant of a lien or security interest
in any of the Properties; or
10.4.3 A contract or commitment to do any of the foregoing.
10.5 OPERATING COSTS. All costs incurred in connection with the
operation of the Properties have been fully paid and discharged by Seller,
except normal expenses incurred in operating the Properties within the previous
sixty (60) Days or as to which Seller has not yet been billed.
10.6 LITIGATION. Except as disclosed on Exhibit "C" attached hereto and
incorporated herein by reference, there is no action, suit or proceeding
pending against Seller which could have a material adverse effect on the value
or operation of the Properties or that could prevent the consummation of the
transaction contemplated by this Agreement.
10.7 BANKRUPTCY. There are no bankruptcy, reorganization or receivership
proceedings pending, being contemplated by or threatened against Seller.
10.8 ROYALTIES. All royalties, overriding royalties and other payments
from or based upon production due with respect to the Properties for the
period prior to the Effective Time have been properly and correctly paid except
for those for which Seller has a valid right to suspend.
10.9 NO DEMANDS. Seller has not received notice of any pending claims of
defaults, offsets or cancellations from any lessors with respect to any leases
included in the Properties.
10.10 INFORMATION. To the best of Seller's knowledge, there has been no
intentional misrepresentation or omission of information provided by Seller
associated with the Properties that would have a material effect on the value
or operation of the Properties.
10.11 GOVERNMENT LICENSES. It currently possesses of all governmental
licenses, permits, certificates, orders, approvals and authorizations necessary
for operation of the Properties, and is currently in compliance therewith,
except where such failure to possess or the failure to be in compliance would
not, singularly or in the aggregate, have a material adverse effect on the
operation of the Properties. Notwithstanding the foregoing, it shall not be
considered to be a breach or violation of this Article if the alleged non-
compliance is at issue in the litigation disclosed in accordance with Article
10.6.
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ARTICLE 11. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Seller that to the best of Buyer's
knowledge on the date hereof and as of the Closing:
11.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Colorado and has all requisite corporate power and authority to own and lease
the Properties. Buyer is duly licensed or qualified to do business as a
foreign corporation and is in good standing in all jurisdictions in which the
Properties are located.
11.2 CORPORATE AUTHORITY; AUTHORIZATION OF AGREEMENT. Buyer has all
requisite corporate power and authority to execute and deliver this Agreement,
to consummate the transactions contemplated herein and to perform all the terms
and conditions to be performed by it as provided for in this Agreement. The
execution and delivery of this Agreement by Buyer, the performance by Buyer of
all the terms and conditions to be performed by it and the consummation of the
transactions contemplated herein have been duly authorized and approved by all
necessary corporate action. This Agreement has been duly executed and
delivered by Buyer and constitutes the valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other Laws relating
to or affecting the enforcement of creditors' rights and general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity).
11.3 NO VIOLATIONS. Assuming expiration or termination of the applicable
waiting period under the HSR Act, if applicable, the execution and delivery of
this Agreement by Buyer does not, and the fulfillment and compliance with the
terms and conditions hereof and the consummation of the transactions
contemplated herein, will not:
11.3.1 Conflict with or require the consent of any person or entity
under any of the terms, conditions or provisions of the certificate of
incorporation or bylaws of Buyer;
11.3.2 Violate any provision of, or require any filing, consent or
approval under any Law applicable to or binding upon Buyer; or
11.3.3 Conflict with, result in a breach of, constitute a default
under or constitute an event that with notice or lapse of time, or both,
would constitute a default under, accelerate or permit the acceleration
of the performance required by, or require any consent, authorization or
approval under: (a) any mortgage, indenture, loan, credit agreement or
other agreement evidencing indebtedness for borrowed money to which
15
Buyer is a party or by which Buyer is bound, and\or (b) any order,
judgment or decree of any governmental entity or tribal authority.
11.4 SEC DISCLOSURE. Buyer is acquiring the Properties for its own account
for use in its trade or business, and not with a view toward or for sale in
connection with any distribution thereof, nor with any present intention of
making a distribution thereof within the meaning of the Securities Act of 1933,
as amended.
11.5 INDEPENDENT EVALUATION. BUYER REPRESENTS THAT IT IS SOPHISTICATED IN
THE EVALUATION, PURCHASE, OPERATION AND OWNERSHIP OF OIL AND GAS PROPERTIES.
IN MAKING ITS DECISION TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE
TRANSACTION CONTEMPLATED HEREIN (SUBJECT TO THE CONTINGENCIES PROVIDED HEREIN),
BUYER REPRESENTS THAT IT HAS RELIED SOLELY ON ITS OWN INDEPENDENT INVESTIGATION
AND EVALUATION OF THE PROPERTIES AND THAT BUYER HAS SATISFIED ITSELF AS TO THE
PHYSICAL CONDITION AND THE ENVIRONMENTAL CONDITION OF THE PROPERTIES.
11.6 BUYER'S RELIANCE. BUYER ACKNOWLEDGES AND AGREES THAT IT IS ENTITLED
TO RELY ONLY ON THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
AGREEMENT.
ARTICLE 12. ADDITIONAL AGREEMENTS
12.1 COVENANTS OF SELLER. From the date hereof until Closing, without
first obtaining the consent of Buyer, Seller will not:
12.1.1 Waive any right of material value relating to the Properties;
12.1.2 Convey, encumber, mortgage, pledge or dispose of any of the
Properties;
12.1.3 Enter into, modify or terminate any contracts, other than in
the ordinary course of business; or
12.1.4 Contract or commit itself to do any of the foregoing.
12.2 NOTICE OF LOSS. From the date hereof until Closing, Seller shall
promptly notify Buyer of any loss or damage to the Properties, or any part
thereof, known to Seller and in the aggregate exceeding Twenty-Five Thousand
and No/100 United States Dollars (US $25,000) net to Seller's interest.
12.3 SUBSEQUENT OPERATIONS. Seller and Buyer shall cooperate with each
other to accomplish the transfer the right to operate the Properties to
Evergreen Resources, Inc., and to promptly notify purchasers, vendors, joint
interest owners, non-participating interest owners and other appropriate
parties of such
16
proposed change. Notwithstanding the foregoing, Seller makes no
representations or warranties to Buyer as to the transferability or
assignability of operatorship of the Properties. Buyer acknowledges that the
rights and obligations associated with operatorship of the Properties are
governed by the applicable agreement(s) and that operatorship of the
Properties will be decided in accordance with the terms of said agreement(s).
12.4 BUYER'S ASSUMPTION OF OBLIGATIONS. Except as otherwise provided in
this Agreement, Buyer agrees to assume and shall timely perform and discharge
all duties and obligations of the owner of the Properties relating to the
period of time after the Closing, including without limitation, duties and
obligations of Seller under all of the contracts associated with the Properties
relating to the period of time after the Closing and Seller shall incur no
liability for Buyer's failure to properly perform or discharge such duties and
obligations unless such failure is attributable to the delay or omission of
Seller in the transfer of such duties and obligations, or the Records or other
appropriate information relating thereto, to Buyer. Buyer agrees to accept
full responsibility for Seller's proportionate share of the costs and expenses
associated with or attributable to the plugging and abandonment of all wells,
equipment and facilities conveyed to Buyer under this Agreement and the
remediation, restoration and clean up of the Properties, except to the extent
of any wells for which Seller has received a demand to plug, restore and/or
reclaim prior to Closing. In conducting the duties and obligations contained
in this Article 12.4, Buyer shall comply with the applicable Laws of any
governmental entity or tribal authority having appropriate jurisdiction.
12.5 RECORDS. Within fifteen (15) Days after Closing (except as provided
below), Seller shall furnish to Buyer all Records which are maintained by
Seller; provided however, Seller shall be entitled to retain copies of any and
all such Records and to retain as long as reasonably needed: (a) the originals
of any Records required in connection with litigation or other proceedings
pending or threatened against Seller or the Properties as of the Closing,
and/or (b) the originals of any Records required in connection with the Final
Accounting Settlement. Any and all Records retained by Seller shall be
furnished to Buyer within thirty (30) Days after Seller's reasonable need for
said Records ceases. Buyer agrees to maintain the Records received from Seller
in accordance herewith for a period of seven (7) years after the Closing and to
afford Seller reasonable access to the Records as requested by Seller.
12.6 LICENSE AGREEMENT. At Closing, Seller and Buyer shall execute the
License Agreement.
12.7 LITIGATION AGREEMENT. At Closing, Seller and Buyer shall execute the
Litigation Agreement.
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ARTICLE 13. ANTITRUST NOTIFICATION
13.1 ANTITRUST NOTIFICATION. The parties acknowledge that compliance with
the HSR Act is not required as a result of execution of this Agreement.
Notwithstanding the foregoing, if compliance with the HSR Act is required in
connection with the transaction contemplated under this Agreement, as promptly
as practicable and in any event not more than fifteen (15) Business Days
following the date on which the parties have executed this Agreement, both
parties will file with the Federal Trade Commission and the Department of
Justice, as applicable, the notification and report forms required for the
transactions contemplated herein and will as promptly as practicable furnish
any supplemental information which may be reasonably requested in connection
therewith. Each party shall request expedited treatment of such filing. If
failure by either party to obtain timely authorization from the Federal Trade
Commission or the Department of Justice results in the inability of the parties
to Close on the Closing Date, the time for Closing shall automatically be
extended until such date as Closing can occur in compliance with the HSR Act.
ARTICLE 14. SPECIAL USE PERMIT
14.1 SPU 94-013. Seller herein designates (for the term of the Special
Use Permit) Buyer as its agent with respect to the use and administration of
Special Use Permit 94-013 approved on the 19th day of April, 1994, as the same
may have been amended from time to time ("Special Use Permit").
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, BUYER
SHALL RELEASE SELLER FROM AND SHALL FULLY PROTECT, DEFEND AND INDEMNIFY SELLER,
ITS OFFICERS, AGENTS, EMPLOYEES AND AFFILIATES AND HOLD THEM HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS RELATING TO, ARISING OUT OF, OR CONNECTED, DIRECTLY
OR INDIRECTLY, WITH THE USE AND/OR ADMINISTRATION OF THE SPECIAL USE PERMIT AT
AND AFTER CLOSING, INCLUDING WITHOUT LIMITATION, CLAIMS RELATING TO: (a) INJURY
OR DEATH TO ANY PERSON OR PERSONS WHOMSOEVER, (b) DAMAGE TO OR LOSS OF PROPERTY
OR RESOURCE, (c) COMMON LAW CAUSES OF ACTION SUCH AS NEGLIGENCE, GROSS
NEGLIGENCE, STRICT LIABILITY, NUISANCE OR TRESPASS, (d) FAULT IMPOSED BY
STATUTE, RULE, REGULATION OR OTHERWISE AND/OR (e) ENVIRONMENTAL CLAIMS. THE
INDEMNITY OBLIGATION AND RELEASE PROVIDED HEREIN SHALL APPLY REGARDLESS OF
CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS OF SELLER, ITS OFFICERS, AGENTS,
EMPLOYEES OR AFFILIATES. Notwithstanding the foregoing, nothing contained in
this Article 12.8 shall modify the parties rights or obligations under the
terms of the Litigation Agreement.
ARTICLE 15. CONFIDENTIALITY AGREEMENT
15.1 CONFIDENTIALITY AGREEMENT. At Closing, the Confidentiality Agreement
between Seller and Buyer dated the 13th day of March, 1997 shall terminate.
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ARTICLE 16. THE CLOSING
16.1 CLOSING. Seller shall provide Buyer with a Closing statement
setting forth the adjusted Purchase Price. Seller shall additionally provide
Buyer with wiring instructions designating the account or accounts to which the
Closing funds are to be delivered in accordance with Article 16.3.2.
16.2 OBLIGATIONS OF SELLER AT CLOSING. At the Closing, Seller shall
deliver to Buyer, unless waived by Buyer, the following:
16.2.1 A document conveying all of Seller's right, title and interests
in and to the Properties substantially in the form of the Assignment and
Bill of Sale attached hereto as Exhibit "D". The Assignment and Bill of
Sale shall be executed and acknowledged in four (4) multiple originals or
such greater number as agreed between the parties;
16.2.2 Executed and acknowledged assignments of all of Seller's right,
title and interest in federal, state or tribal lands on approved forms for
such purpose. Additionally, executed and acknowledged mineral deed(s) and
special warranty deed(s);
16.2.3 Evidence that all consents and approvals prerequisite to the
sale and conveyance of the Properties (except for consents and approvals of
governmental entities or tribal authorities customarily obtained subsequent
to the transfer of title) have been obtained, as well as evidence of waiver
or lapse of any unexercised preferential purchase rights applicable to the
Properties;
16.2.4 A Certificate executed by an Attorney-in-Fact of Seller
substantially in the form of Exhibit "E";
16.2.5 Letters-in-Lieu of division orders or transfer orders executed
by an Attorney-in-Fact of Seller substantially in the form of Exhibit "F";
16.2.6 An Opinion of Counsel executed by an attorney for Seller
substantially in the form of Exhibit "G";
16.2.7 A Non-Foreign Affidavit executed by an Attorney-in-Fact of
Seller substantially in the form of Exhibit "H";
16.2.8 The License Agreement executed by an Attorney-in-Fact of Seller
in the form of Exhibit "I";
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16.2.9 The Litigation Agreement executed by an Attorney-in-Fact of
Seller in the form of Exhibit "J"; and
16.2.10 Such other instruments as necessary to carry out Seller's
obligations under this Agreement.
16.3 OBLIGATIONS OF BUYER AT CLOSING. At the Closing, Buyer shall deliver
to Seller, unless waived by Seller, the following:
16.3.1 The Assignment and Bill of Sale, federal, state and tribal
assignments, mineral deed(s) and special warranty deed(s), executed and
properly acknowledged, referred to in Articles 16.2.1 and 16.2.2;
16.3.2 The adjusted Purchase Price by wire transfer in accordance with
Article 3 hereof;
16.3.3 A Certificate executed by an authorized officer or Attorney-in-
Fact of Buyer substantially in the form of Exhibit "E";
16.3.4 Letters-in-Lieu of division orders or transfer orders executed
by an authorized officer or Attorney-in-Fact of Buyer substantially in the
form of Exhibit "F";
16.3.5 An Opinion of Counsel executed by an attorney for Buyer
substantially in the form of Exhibit "G";
16.3.6 Evidence of compliance with all requirements, if any, of the
states in which the Properties are located for the posting of plugging or
other applicable bonds relating to the ownership or operation of the
Properties;
16.3.7 The License Agreement executed by an authorized officer or
Attorney-in-Fact of Buyer in the form of Exhibit "I";
16.3.8 The Litigation Agreement executed by an authorized officer or
Attorney-in-Fact of Buyer in the form of Exhibit "J"; and
16.3.9 Such other instruments as necessary to carry out Buyer's
obligations under this Agreement.
ARTICLE 17. MISCELLANEOUS
17.1 NOTICES. All notices and other communications required, permitted or
desired to be given hereunder must be in writing and sent by U.S. mail,
properly addressed as shown below, and with all postage and other charges fully
prepaid or by hand delivery or by facsimile transmission. Date of service by
mail
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and hand delivery is the date on which such notice is received by the
addressee and by facsimile is the date sent (as evidenced by fax machine
confirmation of receipt), or if such date is not on a Business Day, then on
the next date which is a Business Day. Each party may change its address by
notifying the other party in writing.
If to Seller Amoco Production Company
by mail: P.O. Box 3092
Houston, Texas 77253-3092
Attn: General Manager of Business Development
AEGNA Acquisitions and Divestments
If to Seller by Amoco Production Company
hand delivery: 550 WestLake Park Boulevard, 4th floor
Houston, Texas 77079
Attn: General Manager of Business Development
AEGNA Acquisitions and Divestments
If to Seller Amoco Production Company
by facsimile: Number: 281-366-7544
Attn: General Manager of Business Development
AEGNA Acquisitions and Divestments
If to Buyer Evergreen Resources, Inc.
by mail: 1401 17th Street, Suite 1200
Denver, Colorado 80202
Attn: Mark S. Sexton
President & CEO
If to Buyer by Evergreen Resources, Inc.
hand delivery: 1401 17th Street, Suite 1200
Denver, Colorado 80202
Attn: Mark S. Sexton
President & CEO
If to Buyer Evergreen Resources, Inc.
by facsimile: Number: 303-295-7895
Attn: Mark S. Sexton
President & CEO
17.2 CONVEYANCE COSTS. Buyer shall be solely responsible for filing and
recording documents related to the transfer of the Properties from Seller to
Buyer and for all costs and fees associated therewith, including filing the
assignment of the Properties with appropriate federal, state, local and tribal
authorities as
21
required by applicable Law. As soon as practicable after recording or
filing, Buyer shall furnish Seller with all recording data and evidence of
all required filings.
17.3 BROKERS' FEES. Neither party has retained any brokers, agents or
finders and none are affiliated with either party or authorized to act on
behalf of either party in this matter. EACH PARTY AGREES TO RELEASE, PROTECT,
INDEMNIFY, DEFEND AND HOLD THE OTHER HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS WITH RESPECT TO ANY COMMISSIONS, FINDERS' FEES OR OTHER REMUNERATION DUE
TO ANY BROKER, AGENT OR FINDER CLAIMING BY, THROUGH OR UNDER SUCH PARTY.
17.4 FURTHER ASSURANCES. From and after Closing, at the request of Seller
but without further consideration, Buyer will execute and deliver or use
reasonable efforts to cause to be executed and delivered such other instruments
of conveyance and take such other actions as Seller reasonably may request to
more effectively put Seller in possession of any property which was not
intended by the parties to be conveyed by Buyer. From and after Closing, at
the request of Buyer but without further consideration, Seller shall execute
and deliver or use reasonable efforts to cause to be executed and delivered
such other instruments of conveyance and take such other actions as Buyer
reasonably may request to more effectively put Buyer in possession of the
Properties. If any of the Properties are incorrectly described, the
description shall be corrected upon proof of the proper description. From and
after Closing, Buyer and Seller shall each execute, acknowledge and deliver to
the other such further instruments and take such further action as may be
reasonably requested in order to more effectively assure to the other the use
and enjoyment of the Properties and otherwise to accomplish the purposes of the
transaction contemplated by this Agreement.
17.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN ARTICLE 10 AND ARTICLE 11 (EXCEPT ARTICLES 11.4, 11.5
AND 11.6) OF THIS AGREEMENT SHALL TERMINATE ONE (1) YEAR AFTER CLOSING. ALL
OTHER REPRESENTATIONS, WARRANTIES, INDEMNITIES, COVENANTS AND AGREEMENTS
CONTAINED IN THIS AGREEMENT (INCLUDING THOSE CONTAINED IN ARTICLES 11.4, 11.5
AND 11.6) SHALL SURVIVE THE CLOSING INDEFINITELY. THE PARTIES HAVE MADE NO
REPRESENTATIONS OR WARRANTIES, EXCEPT THOSE EXPRESSLY SET FORTH IN THIS
AGREEMENT.
17.6 AMENDMENTS AND SEVERABILITY. No amendments or other changes to this
Agreement shall be effective or binding on either of the parties unless the
same shall be in writing and signed by both Seller and Buyer. The invalidity
of any one or more provisions of this Agreement shall not affect the validity
of this Agreement as a whole, and in case of any such invalidity, this
Agreement shall be construed as if the invalid provision had not been included
herein.
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17.7 SUCCESSORS AND ASSIGNS. This Agreement shall not be assigned, either
in whole or in part, without the express written consent of the non-assigning
party. The terms, covenants and conditions contained in this Agreement shall
be binding upon and shall inure to the benefit of Seller and Buyer and their
respective successors and assigns, and such terms, covenants and conditions
shall be covenants running with the land and with each subsequent transfer or
assignment of the Properties.
17.8 HEADINGS. The titles and headings set forth in this Agreement have
been included solely for ease of reference and shall not be considered in the
interpretation or construction of this Agreement.
17.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE OF COLORADO, EXCLUDING ANY CHOICE OF LAW RULES
WHICH MAY DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
17.10 NO PARTNERSHIP CREATED. It is not the purpose or intention of
this Agreement to create (and it shall not be construed as creating) a joint
venture, partnership or any type of association, and the parties are not
authorized to act as agent or principal for each other with respect to any
matter related hereto.
17.11 PUBLIC ANNOUNCEMENTS. Neither Seller nor Buyer (including any of
its Affiliates in either case) shall issue a public statement or press release
with respect to the transaction contemplated herein (including the price and
other terms) without the prior written consent of the other party (which
consent shall not be unreasonably withheld), except as required by Law or
listing agreement with a national security exchange and then only after prior
consultation with the other party.
17.12 NO THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement
shall entitle anyone other than Seller or Buyer or their authorized successors
and assigns to any claim, cause of action, remedy or right of any kind
whatsoever.
17.13 DECEPTIVE TRADE PRACTICES. AS PARTIAL CONSIDERATION FOR THE
PARTIES AGREEING TO ENTER INTO THIS AGREEMENT, THE PARTIES EACH CAN AND DO
EXPRESSLY WAIVE THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES CONSUMER
PROTECTION ACT, ARTICLE 17.41 THROUGH 17.63, TEXAS BUSINESS AND CONSUMER CODE,
OTHER THAN ARTICLE 17.555, WHICH IS NOT WAIVED, AND ALL OTHER CONSUMER
PROTECTION LAWS OF THE STATE OF TEXAS, OR ANY OTHER STATE, APPLICABLE TO THIS
TRANSACTION THAT MAY BE WAIVED BY THE PARTIES. IT IS NOT THE INTENT OF THE
PARTIES TO WAIVE AND THE PARTIES SHALL NOT WAIVE ANY APPLICABLE LAW OR
PROVISION THEREOF WHICH IS PROHIBITED BY LAW FROM BEING WAIVED. EACH PARTY
REPRESENTS TO THE OTHER THAT SUCH PARTY HAS HAD AN ADEQUATE OPPORTUNITY TO
REVIEW THE PRECEDING WAIVER PROVISION, INCLUDING
23
THE OPPORTUNITY TO SUBMIT THE SAME TO LEGAL COUNSEL FOR REVIEW AND COMMENT,
AND UNDERSTAND THE RIGHTS BEING WAIVED HEREIN.
17.14 TAX DEFERRED EXCHANGE ELECTION. Either party may elect to
structure the conveyance of the Properties as part of an exchange under Article
1031 of the Internal Revenue Code of 1986, as amended. The parties agree to
execute all documents, conveyances or other instruments necessary to effectuate
an exchange.
17.15 NOT TO BE CONSTRUED AGAINST DRAFTER. THE PARTIES ACKNOWLEDGE THAT
THEY HAVE HAD AN ADEQUATE OPPORTUNITY TO REVIEW EACH AND EVERY PROVISION
CONTAINED IN THIS AGREEMENT AND TO SUBMIT THE SAME TO LEGAL COUNSEL FOR REVIEW
AND COMMENT, INCLUDING EXPRESSLY BUT WITHOUT LIMITATION THE WAIVERS AND
INDEMNITIES IN ARTICLES 4.1, 5.1, 8, 9, 17.3 AND 17.5. BASED ON SAID REVIEW
AND CONSULTATION, THE PARTIES AGREE WITH EACH AND EVERY TERM CONTAINED IN THIS
AGREEMENT. BASED ON THE FOREGOING, THE PARTIES AGREE THAT THE RULE OF
CONSTRUCTION THAT A CONTRACT BE CONSTRUED AGAINST THE DRAFTER, IF ANY, SHALL
NOT BE APPLIED IN THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT.
17.16 CONSPICUOUSNESS OF PROVISIONS. THE PARTIES ACKNOWLEDGE THAT THE
PROVISIONS CONTAINED IN THIS AGREEMENT THAT ARE SET OUT IN "BOLD" SATISFY THE
REQUIREMENT OF THE EXPRESS NEGLIGENCE RULE AND ANY OTHER REQUIREMENT AT LAW OR
IN EQUITY THAT PROVISIONS CONTAINED IN A CONTRACT BE CONSPICUOUSLY MARKED OR
HIGHLIGHTED.
17.17 ARBITRATION. ANY DISPUTE ARISING UNDER THIS AGREEMENT ("ARBITRABLE
DISPUTE") SHALL BE REFERRED TO AND RESOLVED BY BINDING ARBITRATION IN DENVER,
COLORADO BY THREE (3) ARBITRATORS, IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION (AAA); AND, TO THE
MAXIMUM EXTENT APPLICABLE, THE FEDERAL ARBITRATION ACT (TITLE 9 OF THE UNITED
STATES CODE). IF THERE IS ANY INCONSISTENCY BETWEEN THIS ARTICLE AND ANY
STATUTE OR RULES, THIS ARTICLE SHALL CONTROL. ARBITRATION SHALL BE INITIATED
WITHIN THE APPLICABLE TIME LIMITS SET FORTH IN THIS AGREEMENT AND NOT
THEREAFTER OR IF NO TIME LIMIT IS GIVEN, WITHIN THE TIME PERIOD ALLOWED BY THE
APPLICABLE STATUTE OF LIMITATIONS, BY ONE PARTY ("CLAIMANT") GIVING WRITTEN
NOTICE TO THE OTHER PARTY ("RESPONDENT") THAT THE CLAIMANT ELECTS TO REFER THE
ARBITRABLE DISPUTE TO ARBITRATION, AND THAT THE CLAIMANT HAS APPOINTED AN
ARBITRATOR, WHO SHALL BE IDENTIFIED IN SUCH NOTICE. THE RESPONDENT SHALL
NOTIFY THE CLAIMANT WITHIN THIRTY (30) DAYS AFTER RECEIPT OF CLAIMANT'S
NOTICE, IDENTIFYING THE ARBITRATOR THE RESPONDENT HAS APPOINTED. THE TWO (2)
ARBITRATORS SO CHOSEN SHALL SELECT A THIRD ARBITRATOR WITHIN THIRTY (30) DAYS
AFTER THE SECOND ARBITRATOR HAS BEEN APPOINTED (UPON FAILURE OF A PARTY TO ACT
WITHIN THE TIME SPECIFIED FOR NAMING AN ARBITRATOR, SUCH ARBITRATOR SHALL BE
APPOINTED BY THE ADMINISTRATOR'S DESIGNEE). SELLER SHALL PAY THE COMPENSATION
AND
24
EXPENSES OF THE ARBITRATOR NAMED BY OR FOR IT, BUYER SHALL PAY THE
COMPENSATION AND EXPENSES OF THE ARBITRATOR NAMED BY OR FOR IT, AND SELLER
AND BUYER SHALL EACH PAY ONE-HALF OF THE COMPENSATION AND EXPENSES OF THE
THIRD ARBITRATOR. EXCEPT AS PROVIDED IN ARTICLE 4.2, ALL ARBITRATORS MUST BE
NEUTRAL PARTIES WHO HAVE NEVER BEEN OFFICERS, DIRECTORS OR EMPLOYEES OF THE
PARTIES OR ANY OF THEIR AFFILIATES, MUST HAVE NOT LESS THAN TEN (10) YEARS
EXPERIENCE IN THE OIL AND GAS INDUSTRY, AND MUST HAVE A FORMAL
FINANCIAL/ACCOUNTING, ENGINEERING OR LEGAL EDUCATION. THE HEARING SHALL BE
COMMENCED WITHIN THIRTY (30) DAYS AFTER THE SELECTION OF THE THIRD
ARBITRATOR. THE PARTIES AND THE ARBITRATORS SHALL PROCEED DILIGENTLY AND IN
GOOD FAITH IN ORDER THAT THE ARBITRAL AWARD SHALL BE MADE AS PROMPTLY AS
POSSIBLE. THE INTERPRETATION, CONSTRUCTION AND EFFECT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF COLORADO, AND TO THE MAXIMUM EXTENT ALLOWED
BY LAW, IN ALL ARBITRATION PROCEEDINGS THE LAWS OF COLORADO SHALL BE APPLIED,
WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES. ALL STATUTES OF
LIMITATION AND OF REPOSE THAT WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO
ANY ARBITRATION PROCEEDING. THE TRIBUNAL SHALL NOT HAVE THE AUTHORITY TO
GRANT OR AWARD INDIRECT OR CONSEQUENTIAL DAMAGES, PUNITIVE DAMAGES OR
EXEMPLARY DAMAGES.
17.18 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, which shall when taken together constitute one (1) valid and
binding agreement.
17.19 ENTIRE AGREEMENT. This Agreement supersedes all prior and
contemporaneous negotiations, understandings, letters of intent and agreements
(whether oral or written) between the parties relating to the Properties and
constitutes the entire understanding and agreement between the parties with
respect to the sale and purchase of the Properties.
25
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first set forth above.
AMOCO PRODUCTION COMPANY
By:
--------------------------------
Name: R. D. Howard
Title: Attorney - in - Fact
EVERGREEN RESOURCES, INC.
By:
--------------------------------
Name: Mark S. Sexton
Title: President & CEO
26
EXHIBIT "A"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
PROPERTIES
EXHIBIT "B"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
EXCLUDED PROPERTIES
1. Special Use Permit 94-013 approved on the 19th day of April, 1994, as the
same may have been amended from time to time.
2. The following equipment:
- 2.875' tubing 158 jts. 5.13.70'
- 5000' .875" rods
- 2 - 5.5" tubing heads
- 2 - 6 x 2.875" tubing hangers
- 2 - 2.875" gate valves
- 4 - casing valves
- 2 - Barton recorders
- 2 - Leveling saddles for Barton recorders
- 4 - 1/2" ball valves
- 2 - 24" pipe stands for recorders
3. The interest conveyed to Evergreen Resources, Inc. in accordance with that
certain Preferential Right Agreement executed contemporaneously herewith
covering any and all interest in the Cottontail Pass Unit, except for the
29 Cottontail Pass Unit wells (and associated 160 acre leasehold).
4. The interest conveyed to Evergreen Resources, Inc. in accordance with that
certain Purchase and Sale Agreement - CPU PDP'S executed contemporaneously
herewith covering any and all interest in the 29 Cottontail Pass Unit wells
(and associated 160 acre leasehold).
5. A tract of land located in the SE 1/4 NW 1/4 Section 33, T32S, R66W, Las
Animas County, Colorado.
EXHIBIT "C"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
LITIGATION
The following is a summary of the four outstanding litigation matters
associated with the Properties:
1. CANYON COMMUNITIES FOR A QUIET ENVIRONMENT, INC. VS. BOARD OF COUNTY
COMMISSIONERS AND AMOCO PRODUCTION COMPANY, Civil Action No. 96-CV-17 (filed in
March, 1996 in Las Animas County District Court). The plaintiffs in this case
are objecting to the validity of the special use permit issued by the Board of
County Commissioners and associated noise levels as the same pertain to Amoco's
compressors located at the central gathering facility.
2. THOMAS WALSH VS. AMOCO PRODUCTION COMPANY (filed in November, 1996 in
Las Animas County District Court). The plaintiff in this case is objecting to
the noise levels as the same pertain to Amoco's compressors located at the
central gathering facility.
3. CLAUDINE BLINKEY VS. AMOCO PRODUCTION COMPANY, Civil Action No. 97CV14
(filed in February, 1997 in Las Animas County District Court). The plaintiff
in this case is objecting to the surface operations conducted by Amoco as
lessee under the oil and gas lease.
4. CLAUDINE BLINKEY VS. AMOCO PRODUCTION COMPANY, Civil Action No.
98 B 778 (removed to The United States District Court For the District Of
Colorado).
1
EXHIBIT "D"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
ASSIGNMENT AND BILL OF SALE
STATE OF COLORADO )
)
COUNTY OF LAS ANIMAS )
This ASSIGNMENT AND BILL OF SALE ("Assignment") dated the 1st day of July,
1998, but effective as of the 1st day of July, 1998 ("Effective Time"), is from
Amoco Production Company, a Delaware corporation, with an office at 501
WestLake Park Boulevard, Houston, Texas 77079 (hereinafter referred to as
"Assignor") to Evergreen Resources, Inc., a Colorado corporation, with an
office at 1401 17th Street, Suite 1200, Denver, Colorado 80202 (hereinafter
referred to as "Assignee").
FOR Ten Dollars and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby GRANTS, CONVEYS,
SELLS and ASSIGNS to Assignee the following properties (real, personal or
mixed) and rights (contractual or otherwise):
1. All of Assignor's undivided oil and gas leasehold interests, working
interests, net revenue interests, fee interests, mineral interests, royalty
interests, production payments, overriding royalty interests, easements,
rights-of-way, servitudes and surface leases to the extent they relate to
any of the interests which are expressly described in Exhibit "A",
including any and all right, title and interest in and to the oil, gas and
other hydrocarbons in, on or under the lands described in Exhibit "A" and
other hydrocarbons and products, whether liquid or gaseous, produced in
association therewith;
2. All of Assignor's right, title and interests in, to and under, or
derived from, all of the presently existing and valid unitization,
communization and pooling declarations, orders and agreements and units
(including all units formed by voluntary agreement and those formed under
the rules, regulations, orders or other official acts of any governmental
entity having appropriate jurisdiction) to the extent they relate to any of
the interests
1
which are expressly described in Exhibit "A" or the production of oil,
gas or other hydrocarbon substances attributable thereto;
3. All of Assignor's right, title and interests in, to and under, or
derived from, all of the presently existing and valid oil sales contracts,
casinghead gas sales contracts, gas sales contracts, processing contracts,
gathering contracts, transportation contracts (including that certain
Letter Agreement dated the 21st day of March, 1994, that certain Letter
Agreement dated the 21st day of October, 1997 and that certain Firm
Transportation Service Agreement dated the 1st day of November, 1997, each
by and between Amoco Energy Trading Company and Colorado Interstate Gas
Company, as the same may have been amended from time to time), operating
agreements, balancing agreements, joint venture agreements, partnership
agreements, farmout agreements, and other contracts, agreements and other
written instruments to the extent they relate to any of the interests which
are expressly described in Exhibit "A"; and
4. All of Assignor's right, title and interests in and to all personal
property, fixtures, improvements, seismic data and information, permits
(excluding the Special Use Permit), licenses, approvals, servitudes, rights-
of-way, easements, surface leases and other surface rights, including
without limitation, wells (whether producing, plugged and abandoned, shut-
in, injection or water supply), tanks, boilers, buildings, fixtures,
machinery, equipment, pipelines, utility lines, power lines, telephone
lines, telegraph lines, roads and other appurtenances, to the extent the
same are situated upon and/or used or held for use by Assignor solely in
connection with the ownership, operation, maintenance and repair of the
interests which are expressly described in Exhibit "A" or relate to the
production of oil, gas or other hydrocarbons therefrom.
ASSIGNOR EXCEPTS, RESERVES AND RETAINS, unto itself, its successors
and assigns from the Properties the following properties (real, personal or
mixed) and rights (contractual or otherwise):
(a) Any and all interpretive seismic or geophysical information and data
or any and all seismic or geophysical information and data covered by a non-
disclosure obligation;
(b) A concurrent interest in and to all contracts, agreements, easements,
rights-of-way and any other rights to the extent that they relate to or affect
the interests reserved herein;
(c) Any and all pipelines, equipment, facilities, contracts, agreements,
easements and rights-of-way owned by an affiliate(s) of Assignor; and
2
(d) The properties (real, personal and mixed) and rights (contractual or
otherwise) expressly described in Exhibit "B".
All of the properties (real, personal and mixed) and rights (contractual or
otherwise) described hereinabove are referred to as "Properties".
TO HAVE AND TO HOLD the Properties subject to the following terms and
conditions:
1. SPECIAL WARRANTY OF TITLE. ASSIGNOR WARRANTS AND SHALL DEFEND TITLE
TO THE PROPERTIES CONVEYED TO ASSIGNEE AGAINST EVERY PERSON WHOMSOEVER LAWFULLY
CLAIMING THE PROPERTIES OR ANY PART THEREOF BY, THROUGH AND UNDER ASSIGNOR, BUT
NOT OTHERWISE.
2. AGREEMENTS. This Assignment is made subject to and shall be burdened
by the terms, covenants and conditions contained in any contracts, agreements
and instruments affecting the Properties; and at and after the Effective Time,
Assignee shall be bound by and shall perform all of the terms, covenants and
conditions contained therein.
3. COMPLIANCE WITH LAWS: This Assignment is made subject to all
applicable laws, statutes, ordinances, permits, decrees, orders, judgments,
rules and regulations which are promulgated, issued or enacted by a
governmental entity or tribal authority having appropriate jurisdiction, and
Assignee shall comply with the same at and after the Effective Time.
4. SUCCESSORS AND ASSIGNS. The terms, covenants and conditions contained
in this Assignment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, and such terms,
covenants and conditions shall be covenants running with the land and with each
subsequent transfer or assignment of the Properties, or any part thereof.
5. PURCHASE AND SALE AGREEMENT. This Assignment is made in accordance
with and is subject to the terms, covenants and conditions contained in that
certain PURCHASE AND SALE AGREEMENT - NON-CPU OUTSIDE HUERFANO dated the 1st
day of July, 1998, by and between Amoco Production Company and Evergreen
Resources, Inc. ("Purchase and Sale Agreement"), and the terms, covenants and
conditions contained in the Purchase and Sale Agreement are incorporated herein
by reference as though said terms, covenants and conditions were fully set
forth verbatim herein. If there is a conflict between the provisions of the
Purchase and Sale Agreement and this Assignment, the provisions of the Purchase
and Sale Agreement shall control the rights and obligations of the parties.
3
EXECUTED on the day and year first referenced above, but effective as of
the Effective Time.
Assignor
AMOCO PRODUCTION COMPANY
By:
-------------------------------
Name: R. D. Howard
Title: Attorney-in-Fact
Assignee
EVERGREEN RESOURCES, INC.
By:
-------------------------------
Name: Mark S. Sexton
Title: President & CEO
4
STATE OF COLORADO )
)
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 1st day of July,
1998, by R. D. Howard, Attorney-in-Fact on behalf of AMOCO PRODUCTION COMPANY,
a Delaware corporation.
My commission expires:
----------------------------------
Signature
----------------------------------
Name (Printed, Typed or Stamped)
Notary Public in and for the
State of Colorado
STATE OF COLORADO )
)
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 1st day of July,
1998, by Mark S. Sexton, President & CEO on behalf of EVERGREEN RESOURCES,
INC., a Colorado corporation.
My commission expires:
----------------------------------
Signature
----------------------------------
Name (Printed, Typed or Stamped)
Notary Public in and for the
State of Colorado
5
EXHIBIT "E"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
CERTIFICATE
I, _____________________, _________________________ of ________________, a
_______________ corporation ("_________"), do on this __ day of ______ hereby
certify pursuant to Article __________ of the Purchase and Sale Agreement -
Non-CPU Outside Huerfano by and between Amoco Production Company and Evergreen
Resources, Inc., dated the 1st day of July, 1998 (the "Agreement"), that the
representations and warranties contained in the Agreement are true and correct
on and as of the date hereof, except for inaccuracies which in the aggregate
are not material when considering the transaction as a whole.
--------------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
-------------------------------
EXHIBIT "F"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
LETTERS-IN-LIEU
July 1, 1998
[Product Purchaser's Name]
[Product Purchaser's Address]
Gentlemen:
Enclosed is a copy of an unrecorded Assignment and Bill of Sale dated the
1st day of July, 1998, from Amoco Production Company ("Seller") to Evergreen
Resources, Inc. ("Buyer") conveying all of Seller's right, title and interests
in and to the properties described in Exhibit "A" attached hereto
("Properties").
You are currently disbursing proceeds from the oil or gas produced from
the Properties pursuant to certain division orders, transfer orders or other
agreements. This letter is provided by Seller and Buyer as an agreement in
lieu of having separate division orders or transfer orders prepared and
executed for the Properties.
PAYMENT INSTRUCTIONS - Effective as of the next distribution date, and
until further notice, Seller and Buyer hereby authorize and instruct you to pay
to Buyer all amounts which become due to the interests formerly owned by Seller
for any products produced or sold from the Properties. Payments should be made
to Buyer at the following address:
Evergreen Resources, Inc.
1401 17th Street, Suite 1200
Denver, Colorado 80202
It is the intent of Seller and Buyer that there be no suspension of or
interruption in payments made by you with respect to the Properties.
INDEMNITY - Buyer hereby agrees to indemnify you against any and all
claims, demands, suits, causes of action, losses, damages and costs (including
attorneys' fees and costs of litigation) occurring as a result of your making
remittances in the manner specified herein.
FURTHER INFORMATION - Upon request, Buyer will furnish you a copy of the
recorded Assignment and Bill of Sale, when available. If you have any
questions regarding the Properties or other matters set forth herein, or if for
any reason you are unable to comply with the request set forth in this letter,
you are requested to contact:
Evergreen Resources, Inc.
1401 17th Street, Suite 1200
Denver, Colorado 80202
Number: 303-298-8100
Attn: Mark S. Sexton
In order that Buyer may have a record evidencing your acceptance of this
letter, we request that you sign two (2) copies of this letter in the space
provided below and return one (1) fully executed copy to Buyer to the above
address.
BUYER SELLER
- ----- ------
EVERGREEN RESOURCE., INC. AMOCO PRODUCTION COMPANY
By: By:
--------------------------- -------------------------------
Name: Mark S. Sexton Name: R. D. Howard
Title: President & CEO Title: Attorney-in-Fact
RECEIPT IS ACKNOWLEDGED THIS __ DAY OF ____, 1998.
- ----------------------------
By:
-------------------------
Title:
----------------------
Name:
----------------------
2
EXHIBIT "G"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
OPINION OF COUNSEL
Date:
To:
Gentlemen:
This opinion is delivered to you pursuant to that certain Purchase and Sale
Agreement - Non-CPU Outside Huerfano by and between Amoco Production Company, a
Delaware corporation ("Amoco") and Evergreen Resources, Inc., a Colorado
corporation ("Evergreen") dated the 1st day of July, 1998 (the "Agreement").
Capitalized terms not otherwise defined have the same meanings as set forth in
the Agreement.
As counsel for ________________, I have made such legal and factual examinations
as I have deemed necessary and proper in rendering the opinions herein
expressed, and I have examined, among other things, the materials listed below:
(a) The Certificate of Incorporation and Bylaws of _________, as amended;
(b) Advice from the _______________ Secretary of State as to the good standing
of ________ in ________________;
(c) Certified copies of resolutions adopted by the Board of Directors of
__________ in connection with the Agreement and certain related matters; and
(d) An executed copy of the Agreement.
Based upon the foregoing and having regard to the legal considerations which I
deem relevant, it is my opinion that:
1. _____________________ is a corporation duly organized, validly existing
and in good standing under the Laws of the State of __________, having all
requisite corporate power and authority to own and lease the Properties.
________ is duly licensed or qualified to do business as a foreign
corporation and is in good standing in all jurisdictions in which the
Properties are located;
2. ________ has all requisite corporate power and authority to execute and
deliver the Agreement, to consummate the transactions contemplated therein
and to perform all of the terms and conditions to be performed by it as
provided for in the Agreement. The execution and delivery of the Agreement
by _______, the performance by ________ of all of the terms and conditions to
be performed by it and the consummation of the transactions contemplated
therein have been duly authorized and approved by all necessary corporate
action. The Agreement has been duly executed and delivered by _______ and
constitutes the valid and binding obligation of ______, enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency or other Laws relating to or affecting the
enforcement of creditors' rights and general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity);
3. The execution and delivery of the Agreement and the consummation of the
transaction contemplated therein will not conflict with or require the
consent of any person or entity under any of the terms, conditions or
provisions of the Certificate of Incorporation or Bylaws of _______;
4. The execution and delivery of the Agreement and the consummation of the
transaction contemplated therein will not violate any provision of, or
require any filing, consent or approval under any Law applicable to or
binding upon (assuming receipt of all consents and approvals of governmental
entities or tribal authorities customarily obtained subsequent to the
transfers of title); and
5. All necessary corporate action has been taken by _____ to authorize the
execution and delivery of the Agreement and the performance by _____ of its
obligations thereunder.
In rendering this opinion, I have assumed the genuineness of all signatures and
the authenticity of all documents submitted to me as originals and the
conformity with the originals of all documents submitted as certified,
photostatic or otherwise identified as copies. I also have obtained and relied
upon such certificates as to factual matters and other assurances from public
officials and officers of ______ as I considered necessary for the purpose of
rendering this opinion. With respect to the good standing of ______, I have
relied solely on the advice of the Secretary of State of _______.
The foregoing opinion is limited to the laws of the State of Colorado and the
federal laws of the United States of America, and I express no opinion as to
the applicability or the effect of the laws of any other jurisdiction.
2
This opinion is rendered solely for the benefit of the entity to which this
opinion is addressed in connection with the Agreement and the transactions
contemplated thereby, and may not be relied upon for any other purpose, nor may
it be furnished to, used, circulated, quoted or referred to by any other person
or entity without my prior written consent.
Sincerely,
-------------------------------------
Name:
--------------------------------
Counsel For:
-------------------------
3
EXHIBIT "H"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
NON-FOREIGN AFFIDAVIT
EXEMPTION FROM WITHHOLDING OF TAX FOR
DISPOSITIONS OF U.S. REAL PROPERTY INTERESTS
Article 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform Evergreen Resources, Inc. ("Evergreen") that withholding of
tax is not required upon the disposition of a U.S. real property interest by
Amoco Production Company, the undersigned hereby certifies the following:
1. Amoco Production Company is not a nonresident alien, foreign
corporation, foreign partnership, foreign trust, or foreign estate for purposes
of U.S. income taxation;
2. Amoco Production Company's taxpayer identifying number is 73-0466080;
and
3. Amoco Production Company's office address is 501 WestLake Park
Boulevard, Houston, Texas 77079.
Amoco Production Company understands that this certification may be
disclosed to the Internal Revenue Service by Evergreen and that any false
statement contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury, I declare that I have examined this
certification and, to the best of my knowledge and belief, it is true, correct,
and complete, and I further declare I have authority to sign this document.
AMOCO PRODUCTION COMPANY
By:
---------------------------------
Name: R. D. Howard
Title: Attorney-in-Fact
STATE OF COLORDO )
)
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 1st day of July,
1998, by R. D. Howard as Attorney-in-Fact on behalf of Amoco Production
Company, a Delaware corporation.
My commission expires:
------------------------------------
Signature
------------------------------------
Name (Printed, Typed or Stamped)
Notary Public in and for the
State of Colorado
EXHIBIT "I"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement") is dated the 1st day of July,
1998, by and between AMOCO PRODUCTION COMPANY, a Delaware corporation, with an
office at 501 WestLake Park Boulevard, Houston, Texas 77079 (hereinafter
referred to as "Amoco") and EVERGREEN RESOURCES, INC., a Colorado corporation,
with an office at 1401 17th Street, Suite 1200, Denver, Colorado 80202
(hereinafter referred to as "Evergreen"), and is based on the following
premises:
WHEREAS, Amoco and Evergreen entered into a Purchase and Sale Agreement -
Non-CPU Outside Huerfano dated the 1st day of July, 1998 wherein Amoco agreed
to sell and Evergreen agreed to purchase Amoco's interest in the Raton Basin,
Colorado ("Purchase and Sale Agreement");
WHEREAS, Amoco has developed or acquired certain Standard Automation
Modular System software known as SAMS and certain firmware that is used with
equipment known as AMOCAMS which is utilized in connection with field
automation systems (collectively referred to herein as "Proprietary Automation
System"); and
WHEREAS, Amoco and Evergreen have reached agreement with respect to the
terms of the above.
NOW, THEREFORE, for valuable consideration and the mutual covenants and
agreements herein contained, Amoco and Evergreen agree as follows:
1. GRANT. Amoco hereby grants to Evergreen, subject to all the terms
and conditions of this Agreement, a nonexclusive, nonassignable right and
license ("License") to the Proprietary Automation System. Under the License,
Evergreen shall be authorized to use the Proprietary Automation System;
provided however, Evergreen's use of the Proprietary Automation System shall be
expressly limited to activities associated with operating the wells existing as
of the date of this Agreement associated with the leases referenced on Exhibit
"A" of the Purchase and Sale Agreement.
2. THIRD-PARTY LICENSES. It is understood that certain third-party
licenses are required before Evergreen can utilize the Proprietary Automation
System licensed hereunder, as listed on Exhibit "A". Amoco will assist
Evergreen in obtaining (at Evergreen's sole cost) third-party software
license(s) needed to continue automation of
1
such wells. Evergreen shall be solely responsible for all transfer fees and
maintenance fees incurred which are associated with such third-party licenses.
3. FORMAT. Amoco will provide Evergreen with one (1) copy of the object
code and source code for the Proprietary Automation System, and one (1) copy of
any and all user instruction manuals or program documentation therefor.
4. MODIFICATIONS. Evergreen acknowledges Amoco's proprietary rights and
title to the Proprietary Automation System and agrees to make available to
Amoco promptly and at no charge for use in Amoco's normal business operations,
all modifications and enhancements, if any, which Evergreen or its contractors
hereafter may make to the Proprietary Automation System.
5. MAINTENANCE. Evergreen agrees and acknowledges that Amoco shall not
be required to perform any maintenance whatsoever of the Proprietary Automation
System, including without limitation, the performance of modifications and/or
enhancements to the Proprietary Automation System.
6. WARRANTIES. AMOCO WARRANTS THAT IT HAS THE RIGHT TO GRANT THIS
LICENSE. EVERGREEN ACKNOWLEDGES AND AGREES THAT THE PROPRIETARY AUTOMATION
SYSTEM IS BEING PROVIDED BY AMOCO TO EVERGREEN "AS-IS, WHERE-IS", AND WITH ALL
FAULTS IN ITS PRESENT CONDITION AND STATE OF REPAIR, WITHOUT RECOURSE. EXCEPT
FOR THE WARRANTY SET FORTH ABOVE, AMOCO HEREBY DISCLAIMS ANY AND ALL
REPRESENTATIONS AND/OR WARRANTIES CONCERNING THE PROPRIETARY AUTOMATION SYSTEM,
EXPRESS, STATUTORY, IMPLIED OR OTHERWISE, INCLUDING WITHOUT LIMITATION,
CONDITION, QUALITY, COMPLIANCE WITH APPLICABLE LAWS, ABSENCE OF DEFECTS (LATENT
OR PATENT), SAFETY, STATE OF REPAIR, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR ABILITY OF THE PROPRIETARY AUTOMATION SYSTEM TO COMPLY WITH, ADDRESS
OR ADAPT TO THE YEAR 2000 WHICH IS APPROACHING, AND EVERGREEN EXPRESSLY
RELEASES AMOCO FROM THE SAME.
7. RELEASE. EVERGREEN AGREES THAT AMOCO SHALL NOT BE RESPONSIBLE OR
LIABLE FOR ANY LOSS, DESTRUCTION OF PROPERTY, LOSS OF PROFITS OR OTHER DAMAGES
WHATSOEVER, INCLUDING WITHOUT LIMITATION, ANY DIRECT, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY NATURE WHICH MAY BE CAUSED BY THE PROPRIETARY
AUTOMATION SYSTEM OR BY EVERGREEN'S USE OF THE PROPRIETARY AUTOMATION SYSTEM,
AND EVERGREEN HEREBY RELEASES AMOCO FROM ALL SUCH RESPONSIBILITY AND LIABILITY.
8. INDEMNITY. EVERGREEN SHALL RELEASE AMOCO FROM AND SHALL FULLY
PROTECT, INDEMNIFY AND DEFEND AMOCO, ITS OFFICERS, AGENTS, EMPLOYEES AND
AFFILIATES AND HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS RELATING
TO, ARISING OUT OF, OR CONNECTED, DIRECTLY OR INDIRECTLY, WITH THE USE OF THE
PROPRIETARY AUTOMATION SYSTEM UNDER THE TERMS OF THIS AGREEMENT, NO MATTER WHEN
ASSERTED, INCLUDING WITHOUT LIMITATION, CLAIMS RELATING TO: (a) INJURY OR DEATH
OF ANY PERSON OR PERSONS WHOMSOEVER, (b) DAMAGES TO OR LOSS OF ANY PROPERTY OR
RESOURCES, (c) COMMON LAW CAUSES OF ACTION SUCH AS NEGLIGENCE, GROSS
NEGLIGENCE, STRICT LIABILITY, NUISANCE OR
2
TRESPASS AND/OR (d) FAULT IMPOSED BY STATUTE, RULE, REGULATION OR OTHERWISE.
THE INDEMNITY OBLIGATION AND RELEASE PROVIDED HEREIN SHALL APPLY REGARDLESS
OF CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS OF AMOCO, ITS OFFICERS,
AGENTS, EMPLOYEES OR AFFILIATES.
9. CONFIDENTIALITY. Evergreen shall maintain in confidence and not
disclose the Proprietary Automation System to any third parties, except
contractors of Evergreen performing maintenance or providing enhancements to
the Proprietary Automation System. Evergreen shall be responsible for any
disclosure or other breach of this provision by its contractors. Evergreen
agrees and acknowledges that all of the Proprietary Automation System is the
confidential information of and is proprietary to Amoco. All applicable
copyright, trade secret, patent and other intellectual property rights in the
Proprietary Automation System are and shall remain in Amoco. Evergreen shall
mark and maintain all documentation relating to the Proprietary Automation
System as follows:
COPYRIGHT 1998 AMOCO CORPORATION
CONFIDENTIAL AND PROPRIETARY
ALL RIGHTS RESERVED
10. AMOCO NAME. Evergreen shall make no oral or written statement or
perform any act indicating that Amoco or any of Amoco's affiliates endorse or
approve, or has endorsed or approved, any version of the Proprietary Automation
System made or used by Evergreen. Except as otherwise provided in Paragraph 9
above, Evergreen shall not associate or in any way connect any name or
trademark of Amoco or any of Amoco's affiliates with Evergreen's work products
without Amoco's prior written consent.
11. EXPORT CONTROL REGULATIONS. Evergreen agrees to abide by the export
control regulations of the United States with respect to the Proprietary
Automation System.
12. TERM. This Agreement shall commence on the Closing (as defined in
the Purchase and Sale Agreement) and shall have a term of one (1) year and as
long thereafter as Evergreen owns a majority interest in (i.e., greater than
50%) AND operates the wells existing as of the date of this Agreement
associated with the leases referenced on Exhibit "A" of the Purchase and Sale
Agreement, unless sooner terminated as provided herein. This Agreement may be
terminated in the following instances:
(a) This Agreement will terminate automatically if and when
Evergreen transfers more than fifty percent (50%) of its interest in the
wells existing as of the date of this Agreement associated with the leases
referenced on Exhibit "A" to the Purchase and Sale Agreement;
(b) This Agreement will terminate automatically if Evergreen
attempts to transfer all or any of its rights under this Agreement in
whole or in part without the
3
prior written consent of Amoco;
(c) This Agreement may be terminated at Amoco's option if Evergreen
breaches any material provision of this Agreement and fails to remedy said
breach within ten (10) days after receipt of written notice from Amoco
thereof; and
(d) This Agreement may be terminated by Evergreen (except for
Sections 6, 7, 8 and 9 which shall survive termination) at any time
effective upon Amoco's receipt of all documentation and software relating
to the Proprietary Automation System and a certification from Evergreen
warranting that Evergreen is no longer using and shall not in the future
use the Proprietary Automation System.
Termination of this Agreement shall not relieve either party of its obligations
hereunder which shall have arisen prior to termination. Upon termination of
this Agreement, Evergreen shall return to Amoco promptly the originals and all
of Evergreen's copies or reproductions of documentation and software relating
to the Proprietary Automation System.
13. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall not be assigned by
Evergreen, either in whole or in part, without the express written consent of
Amoco. The terms, covenants and conditions contained in this Agreement shall
be binding upon and shall inure to the benefit of Amoco and Evergreen and their
respective successors and assigns.
(b) GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Colorado, excluding any conflict of law rules
which may require the application of laws of another jurisdiction.
(c) NOTICES. All notices, requests and other communications shall be
provided in accordance with the terms of the Purchase and Sale Agreement.
(d) AMENDMENTS AND SEVERABILITY. No amendments or other changes to this
Agreement shall be effective or binding on either of the parties unless the
same shall be in writing and signed by both Amoco and Evergreen. The
invalidity of any one or more provisions of this Agreement shall not affect the
validity of this Agreement as a whole, and in case of any such invalidity, this
Agreement shall be construed as if the invalid provision had not been included
herein.
(e) NO THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement
shall entitle anyone other than Amoco or Evergreen or their authorized
successors and assigns to any claim, cause of action, remedy or right of any
kind whatsoever.
4
(f) HEADINGS. The titles and headings set forth in this Agreement have
been included solely for ease of reference and shall not be considered in the
interpretation or construction of this Agreement.
(g) NO PARTNERSHIP CREATED. It is not the purpose or intention of this
Agreement to create (and it shall not be construed as creating) a joint
venture, partnership or any type of association, and the parties are not
authorized to act as agent or principal for each other with respect to any
matter related hereto.
(h) ENTIRE AGREEMENT. This Agreement supersedes all prior and
contemporaneous negotiations, understandings, letters of intent and agreements
(whether oral or written) between the parties relating to the Proprietary
Automation System and constitutes the entire understanding and agreement
between the parties with respect to the license of the Proprietary Automation
System.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first set forth above.
AMOCO PRODUCTION COMPANY
By:
--------------------------------
Name: R. D. Howard
Title: Attorney-in-Fact
EVERGREEN RESOURCES, INC.
By:
--------------------------------
Name: Mark S. Sexton
Title: President & CEO
5
EXHIBIT "A"
TO LICENSE AGREEMENT
BETWEEN AMOCO PRODUCTION COMPANY
AND EVERGREEN RESOURCES, INC.
Third-Party Products necessary for use of Amoco SAMS Software:
- ---------------------------------------------------------------------------
PRODUCT VENDOR
- ---------------------------------------------------------------------------
SunSoft Interactive UNIX SunSoft, Inc.
Graphical Solution Multi-User 6601 Central Drive West, Suite 700
Los Angeles, CA 90099-5865
SunSoft Interactive SunSoft, Inc.
Software Development System 6601 Central Drive West, Suite 700
Los Angeles, CA 90099-5865
Unify Accel Unify Corporation
1 IDS 15770 North Dallas Pkwy., Suite 600
Development Version Dallas, TX 75248
Attn: Richard Templin
Vermont Views for UNIX Vermont Creative Software
Non-Commented Source Pinnacle Meadows
Richmond, VT 05476
Attn: Peter Drake
Third-Party Products Necessary for use of Amoco RTU Software:
- ---------------------------------------------------------------------------
PRODUCT VENDOR
- ---------------------------------------------------------------------------
C-Exec for 8086/88 JMI Software Consultants
Runtime Version 904 Sheble Lane
Spring House, PA 19477
1
EXHIBIT "J"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
LITIGATION AGREEMENT
THIS LITIGATION AGREEMENT (the "Agreement") is dated the 1st day of July,
1998, by and between Amoco Production Company, a Delaware corporation, with an
office at 501 WestLake Park Boulevard, Houston, Texas 77079 (hereinafter
referred to as "Amoco") and Evergreen Resources, Inc., a Colorado corporation,
with an office at 1401 17th Street, Suite 1200, Denver, Colorado 80202
(hereinafter referred to as "Evergreen"), and is based on the following
premises:
WHEREAS, Amoco and Evergreen entered into a Purchase and Sale Agreement -
Non-CPU Outside Huerfano dated the 1st day of July, 1998 wherein Amoco agreed
to sell and Evergreen agreed to purchase Amoco's interest in the Raton Basin,
Colorado ("Purchase and Sale Agreement");
WHEREAS, Amoco and Evergreen have reached agreement with respect to the
terms of the above.
NOW, THEREFORE, for valuable consideration and the mutual covenants and
agreements herein contained, Amoco and Evergreen agree as follows:
1. Prior to Closing (as defined in the Purchase and Sale Agreement),
Amoco shall use reasonable efforts to settle the litigation referenced in
Exhibit "A" attached hereto and incorporated herein by reference (the
"Litigation"); provided however, Amoco shall have no obligation to settle one
or more cases which are included in the Litigation if in its sole discretion it
determines that the terms of settlement being offered by the plaintiffs in each
case are not reasonable and further provided that no such settlement shall
impose any post-Closing obligation, duty or encumbrance upon Evergreen, its
ownership or operation of the properties or facilities which are the subject of
the Litigation.
2. If all the cases in the Litigation are not settled prior to the
Closing, the following provisions shall apply:
(a) Amoco and Evergreen shall cooperate with each other in
connection with the Litigation to the extent necessary to defend against
the outstanding allegations. Notwithstanding the foregoing, neither Amoco
nor Evergreen shall be under any obligation to take any affirmative
1
action or refrain from taking any action which said party determines in
its sole judgment would be detrimental to its individual position.
(b) Amoco shall be solely responsible for any and all losses,
damages, liabilities, fines and penalties relating to, arising out of, or
connected, directly or indirectly, with the Litigation, which pertain to
the period of time prior to the Closing. Amoco acknowledges that
Evergreen, by entering into the Purchase and Sale Agreement and this
Agreement, is not admitting responsibility for, nor is it indemnifying
Amoco, nor agreeing to any claim of contribution as it relates to losses,
damages, liabilities, fines and penalties relating to, arising out of, or
connected, directly or indirectly, with the Litigation to the extent any
such claims are based upon conduct or events occurring prior to the
Closing.
(c) Evergreen acknowledges that upon the Closing of the transaction
contemplated by the Purchase and Sale Agreement that it may find itself
joined as a Defendant in the Litigation. Evergreen agrees it will be
responsible for any and all losses, damages, liabilities, fines and
penalties relating to, arising out of or connected, directly or
indirectly, with the Litigation to the extent any such claims are based
upon Evergreen's ownership and/or operation of the relevant properties
subsequent to the Closing.
(d) Amoco and Evergreen shall each bear their individual court cost
and attorneys' fees incurred in defending the Litigation.
3. ASSIGNABILITY. The rights, duties and privileges under this
Agreement shall not be assigned by either party hereto without the prior
written consent of the non-assigning party.
4. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Colorado, excluding any conflict of law rules
which may require the application of laws of another jurisdiction.
5. NOTICES. All notices, requests and other communications shall be
provided in accordance with the terms of the Purchase and Sale Agreement.
6. OTHER AGREEMENTS. If there is a conflict between the terms of the
Purchase and Sale Agreement and the terms of this Agreement, the terms of this
Agreement shall control the rights and obligations of the parties, but only to
the extent necessary to resolve the conflict. Except as amended herein, the
terms of the Purchase and Sale Agreement shall remain in full force and effect.
2
The parties have executed this Agreement on the day and year first set
forth above.
AMOCO PRODUCTION COMPANY
By:
-------------------------------
Name: R. D. Howard
Title: Attorney-in-Fact
EVERGREEN RESOURCES, INC.
By:
-------------------------------
Name: Mark S. Sexton
Title: President & CEO
3
EXHIBIT "A"
TO LITIGATION AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
EVERGREEN RESOURCES, INC., BUYER
LITIGATION
The following is a summary of the four outstanding litigation matters
associated with the Properties:
1. CANYON COMMUNITIES FOR A QUIET ENVIRONMENT, INC. VS. BOARD OF COUNTY
COMMISSIONERS AND AMOCO PRODUCTION COMPANY, Civil Action No. 96-CV-17 (filed in
March, 1996 in Las Animas County District Court). The plaintiffs in this case
are objecting to the validity of the special use permit issued by the Board of
County Commissioners and associated noise levels as the same pertain to Amoco's
compressors located at the central gathering facility.
2. THOMAS WALSH VS. AMOCO PRODUCTION COMPANY (filed in November, 1996 in
Las Animas County District Court). The plaintiff in this case is objecting to
the noise levels as the same pertain to Amoco's compressors located at the
central gathering facility.
3. CLAUDINE BLINKEY VS. AMOCO PRODUCTION COMPANY, Civil Action No. 97CV14
(filed in February, 1997 in Las Animas County District Court). The plaintiff
in this case is objecting to the surface operations conducted by Amoco as
lessee under the oil and gas lease.
4. CLAUDINE BLINKEY VS. AMOCO PRODUCTION COMPANY, Civil Action No.
98 B 778 (removed to the United States District Court For the District Of
Colorado).
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