PREFERENTIAL RIGHT AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY
AND
EVERGREEN RESOURCES, INC.
PREFERENTIAL RIGHT AGREEMENT
THIS PREFERENTIAL RIGHT AGREEMENT ("Agreement") is entered into this 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 ("Amoco") and EVERGREEN RESOURCES, INC., a Colorado corporation, with an
office at 1401 17th Street, Suite 1200, Denver, Colorado 80202 ("Evergreen").
WHEREAS, Amoco proposed to assign certain properties, including those
properties described on Schedule 1 attached hereto and made a part hereof
("Schedule 1 Properties"), to MarkWest Resources, Inc. ("MarkWest") in
accordance with the terms of that certain Purchase and Sale Agreement by and
between Amoco and MarkWest dated the 15th day of May, 1997 ("Purchase and Sale
Agreement"), a copy of which is attached hereto as Schedule 2;
WHEREAS, Evergreen has elected to exercise its preferential right to
purchase the Schedule 1 Properties in accordance with the terms of that certain
Unit Operating Agreement Cottontail Pass Unit, Las Animas County, Colorado,
dated the 26th day of July, 1996, as amended, ("the Operating Agreements");
NOW, THEREFORE, based on the mutual covenants and agreements herein
contained, the parties agree as follows:
1. Amoco agrees to sell and Evergreen agrees to purchase the Schedule 1
Properties for the total consideration of Three Million One Hundred Seventy
Nine Thousand One Hundred Sixty United States Dollars (US $3,179,160)
("Purchase Price").
2. Amoco and Evergreen agree, with respect to Schedule 1 Properties
only, that Evergreen shall be deemed to be the "Buyer" and Amoco shall be
deemed to be the "Seller" under the terms of the Purchase and Sale Agreement.
3. Amoco and Evergreen agree that Articles 1.33.3, 3.1, 3.2, 3.3, 12.3
(the first sentence only), 12.6, 12.7, 12.8, 14.3.6, 14.3.7, 14.3.8, 14.3.9,
15.1.4, 16.1.6, 15.1.7, 16.2.8, 16.2.9, 16.2.10, 16.3.7, 16.3.8, 16.3.9 and
16.3.10 contained in the Purchase and Sale Agreement are inapplicable to this
transaction and shall not be binding on the parties.
4. Amoco and Evergreen agree that Article 15.5 of the Purchase and Sale
Agreement shall be amended to refect the fact that the Confidentiality
Agreement executed between Amoco and Evergreen was dated the 13th day of March,
1997, as opposed to the 31st day of March, 1997.
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5. In accordance with Article 10.6 of the Purchase and Sale Agreement,
Amoco and Evergreen agree to be bound by (and shall execute at Closing) the
Litigation Agreement attached hereto as Schedule 3.
6. Amoco and Evergreen agree that Article 19.1 shall be modified to
reflect that notice shall be sent to Evergreen as follows:
Evergreen Resources, Inc.
1401 17th Street, Suite 1200
Denver, Colorado 80202
Attn: Mr. Mark S. Sexton, President & CEO
Fax: 303-295-7895
7. Amoco and Evergreen agree to be bound by and comply with the terms
and conditions set forth in the Purchase and Sale Agreement (as modified by the
terms of this Agreement), to the extent the same apply to the Schedule 1
Properties, as if both parties were original signatory parties to such Purchase
and Sale Agreement.
8. Amoco and Evergreen agree that neither party shall have any
obligations or liabilities under the terms of this Agreement with respect to
properties (real, personal, mixed, contractual or otherwise) other than the
Schedule 1 Properties.
IN WITNESS WHEROF, 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 and CEO
2
SCHEDULE 1
TO PREFERENTIAL RIGHT AGREEMENT,
BY AND BETWEEN
AMOCO PRODUCTION COMPANY
AND
EVERGREEN RESOURCES, INC.
SCHEDULE 1 PROPERTIES
[SEE ATTACHED 27 PAGES]
Excluding the 160 acre leasehold interest associated with the below referenced
quarter sections.
PROPERTY DESCRIPTION
ITEM NUMBER WELLS*QUARTER SECTION SECTION TOWNSHIP RANGE COUNTY
- ----------- -------------- ------- ------- -------- ----- ----------
1 Biber-1 SE 1/4 21 32N 66W Las Animas
2 Burro Canyon-1 SW 1/4 28 32N 66W Las Animas
3 Burro Canyon-2 NE 1/4 28 32N 66W Las Animas
4 Burro Canyon-3 SE 1/4 28 32N 66W Las Animas
5 Burro Canyon-4 SW 1/4 28 32N 66W Las Animas
6 Colo University-1 SE 1/4 35 32N 67W Las Animas
7 Dixon-1 SE 1/4 25 32N 67W Las Animas
8 Garcia-Swift-1 NE 1/4 29 32N 66W Las Animas
9 Geisick-1 NE 1/4 32 32N 66W Las Animas
10 Givens-1 SW 1/4 25 32N 67W Las Animas
11 Horn Spring-1 NE 1/4 33 32N 66W Las Animas
12 Horn Spring-2 NE 1/4 33 32N 66W Las Animas
13 Horn Spring-3 NE 1/4 33 32N 66W Las Animas
14 Horn Spring-4 NE 1/4 33 32N 66W Las Animas
15 Horn Spring-5 SE 1/4 33 32N 66W Las Animas
16 Horn Spring-6 SW 1/4 33 32N 66W Las Animas
17 Horn Spring-7 NW 1/4 33 32N 66W Las Animas
18 Lincoln Canyon-1 NE 1/4 21 32N 66W Las Animas
19 Pachorek-2 SW 1/4 31 32N 66W Las Animas
20 Piaskoski-1 SE 1/4 29 32N 66W Las Animas
21 St of Colo-AS-1 NE 1/4 36 32N 67W Las Animas
22 St of Colo-AS-3 NW 1/4 36 32N 67W Las Animas
23 St of Colo-AU-1 NW 1/4 36 32N 66W Las Animas
24 St of Colo-AT-1 SE 1/4 16 32N 66W Las Animas
25 St of Colo-AT-2 NW 1/4 16 32N 66W Las Animas
26 Tokar-1 NW 1/4 31 32N 66W Las Animas
27 Upper Burro-1 NW 1/4 21 32N 66W Las Animas
28 Wacker-1 NE 1/4 25 32N 67W Las Animas
29 Wharton-1 SE 1/4 32 32N 66W Las Animas
1
SCHEDULE 2
TO PREFERENTIAL RIGHT AGREEMENT,
BY AND BETWEEN
AMOCO PRODUCTION COMPANY
AND
EVERGREEN RESOURCES, INC.
[ATTACHED IS A COMPLETE COPY OF THAT CERTAIN PURCHASE AND SALE AGREEMENT BY AND
BETWEEN AMOCO PRODUCTION COMPANY AND MARKWEST RESOURCES, INC., DATED THE 15TH
DAY OF MAY, 1997]
1
SCHEDULE 3
TO PREFERENTIAL RIGHT AGREEMENT,
BY AND BETWEEN
AMOCO PRODUCTION COMPANY
AND
EVERGREEN RESOURCES, INC.
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
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 action
or refrain from taking any action which said party determines in its sole
judgment would be detrimental to its individual position.
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(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
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
INDEX
Article 1. DEFINITIONS 1
Article 2. TRANSFER OF THE PROPERTIES
2.1 Sale and Purchase 8
Article 3. PURCHASE PRICE
3.1 Purchase Price 8
3.2 Earnest Money 8
3.3 Allocation 8
Article 4. TITLE REVIEW
4.1 Review of Title Records 8
4.2 Adjustment of Purchase Price for Increases
or Decreases in Interests Assigned 8
4.3 Waiver 10
Article 5. INSPECTION OF PREMISES
5.1 Inspection of Premises 10
5.2 Alleged Environmental Conditions 10
5.3 Waiver 11
Article 6. ACCOUNTING
6.1 Revenues, Expenses and Capital Expenditures 12
6.2 Taxes 12
6.3 Obligations and Credits 13
6.4 Miscellaneous Accounting 13
6.5 Final Accounting Settlement 13
6.6 Post-Final Accounting Settlement 14
Article 7. CASUALTY AND CONDEMNATION
7.1 Casualty and Condemnation 14
Article 8. INDEMNITIES
8.1 Opportunity for Review 14
8.2 Seller's Non-Environmental Indemnity Obligation 15
8.3 Disclaimer of Seller's Environmental Indemnity
Obligation 15
8.4 Buyer's Non-Environmental Indemnity Obligation 16
8.5 Buyer's Environmental Indemnity Obligation 16
8.6 Hazardous Substances 16
8.7 Notice and Cooperation 17
8.8 Defense of Claims 17
8.9 Waiver of Certain Damages 18
8.10 Limitation on Indemnities 18
i
Article 9. WARRANTIES AND DISCLAIMERS
9.1 Special Warranty of Title 18
9.2 Disclaimer - Representations and Warranties 18
9.3 Disclaimer - Statements and Information 19
Article 10. SELLER'S REPRESENTATIONS AND WARRANTIES
10.1 Organization and Good Standing 19
10.2 Corporate Authority; Authorization of Agreement 19
10.3 No Violations 20
10.4 Absence of Certain Changes 20
10.5 Operating Costs 20
10.6 Litigation 21
10.7 Bankruptcy 21
10.8 Royalties 21
10.9 No Demands 21
10.10 Information 21
10.11 Government Licenses 21
Article 11. BUYER'S REPRESENTATIONS AND WARRANTIES
11.1 Organization and Good Standing 22
11.2 Corporate Authority; Authorization of Agreement 22
11.3 No Violations 22
11.4 SEC Disclosure 22
11.5 Independent Evaluation 23
11.6 Buyer's Reliance 23
Article 12. ADDITIONAL AGREEMENTS
12.1 Covenants of Seller 23
12.2 Notice of Loss 23
12.3 Subsequent Operations 23
12.4 Buyer's Assumption of Obligations 24
12.5 Records 24
12.6 Financial Assurances 24
12.7 Licenses 24
12.8 Transition Agreement 24
Article 13. ANTITRUST NOTIFICATION
13.1 Antitrust Notification 25
Article 14. CONDITIONS PRECEDENT TO CLOSING
14.1 Conditions Precedent to Seller's Obligation to Close 25
14.2 Conditions Precedent to Buyer's Obligation to Close 25
14.3 Conditions Precedent to Obligation of Each Party
to Close 26
ii
Article 15. TERMINATION
15.1 Grounds for Termination 27
15.2 Effect of Termination 27
15.3 Dispute over Right to Terminate 28
15.4 Return of Documents 28
15.5 Confidentiality 28
Article 16. THE CLOSING
16.1 Closing 28
16.2 Obligations of Seller at Closing 28
16.3 Obligations of Buyer at Closing 29
Article 17. MISCELLANEOUS
17.1 Notices 30
17.2 Conveyance Costs 31
17.3 Brokers' Fees 31
17.4 Further Assurances 31
17.5 Survival of Representations and Warranties 32
17.6 Amendments and Severability 32
17.7 Successors and Assigns 32
17.8 Headings 32
17.9 Governing Law 32
17.10 No Partnership Created 32
17.11 Public Announcements 33
17.12 No Third Party Beneficiaries 33
17.13 Deceptive Trade Practices 33
17.14 Tax Deferred Exchange Election 33
17.15 Not to be Construed Against Drafter 33
17.16 Conspicuousness of Provisions 33
17.17 Arbitration 34
17.18 Execution in Counterparts 34
17.19 Entire Agreement 35
iii
EXHIBITS
EXHIBIT "A" - WORKING INTERESTS AND NET REVENUE INTERESTS
SCHEDULE 1 - NON-COTTONTAIL PASS UNIT ASSETS
EXHIBIT "A-1" - PROPERTIES
PART 1 - NORTHERN RATON BASIN LEASEHOLD ACREAGE
PART 2 - SOUTHERN RATON BASIN LEASEHOLD ACREAGE
PART 3 - SURFACE OWNERSHIP
PART 4 - MINERAL OWNERSHIP
PART 5 - DISPOSAL WELL
PART 6 - RIGHTS-OF-WAY
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
iv
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is dated the 15th day
of May, 1997, 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 MarkWest Resources, Inc., a Colorado
corporation, with an office at 5613 DTC Parkway, Suite 400, Englewood, Colorado
80111 (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 "ALLEGED ENVIRONMENTAL CONDITION" means an environmental condition
asserted by Buyer in accordance with Article 5.2 that, as of the Effective Time
(as hereinafter defined), is not in compliance with the then existing
Environmental Laws (as hereinafter defined).
1.5 "ALLEGED TITLE DEFECT" means: (a) a Title Defect (as hereinafter
defined) which is asserted by Buyer in accordance with Article 4.2, (b) the
failure of any well referenced on Exhibit "A" which is designated as "Tax
Credit
1
Qualified" to have been properly certified so as to allow production
therefrom to receive tax credits under Section 29 of the Internal Revenue
Code, or (c) the substantial non-compliance with the Laws (as hereinafter
defined) of any governmental or tribal agency or authority so as to affect
adversely the value of the Properties (as hereinafter defined).
1.6 "ARBITRABLE DISPUTE" has the meaning set forth in Article 17.17.
1.7 "ASSIGNMENT AND BILL OF SALE" means a document in the form of Exhibit
"D".
1.8 "BUSINESS DAY" means a Day (as hereinafter defined) excluding
Saturdays, Sundays and U.S. legal holidays.
1.9 "CASUALTY LOSS" means any loss, damage or reduction in value
resulting from mechanical failure or defects, catastrophic occurrences, acts of
God or any other losses which are not the result of normal wear and tear or of
natural reservoir changes.
1.10 "CERTIFICATE" means a document in the form of Exhibit "E".
1.11 "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 (as hereinafter defined).
1.12 "CLAIM NOTICE" has the meaning set forth in Article 8.7.
1.13 "CLAIMANT" has the meaning set forth in Article 17.17.
1.14 "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.
1.15 "CLOSING DATE" means July 1, 1997, or such other date as may be
mutually agreed upon by the parties.
1.16 "COMPUTED INTEREST" means simple interest of ten percent (10%) per
annum using a three hundred sixty-five (365) Day year.
1.17 "DAY" means a calendar day consisting of twenty-four (24) hours from
midnight to midnight.
1.18 "DEFENSIBLE TITLE" means, as to the Properties, such title held by
Seller that, subject to and except for the Permitted Encumbrances (as
hereinafter defined):
2
1.18.1 entitles Seller to receive not less than the "Net Revenue
Interests" set forth in Exhibit "A" of all oil, gas and associated liquid
and gaseous hydrocarbons produced, saved and marketed from the Properties;
1.18.2 obligates Seller to bear costs and expenses relating to the
ownership of the Properties, including without limitation, the operation,
maintenance and repair of the wells and facilities located on or
attributable to the Properties in an amount not greater than the "Working
Interests" set forth in Exhibit "A", unless there is a corresponding
increase in the Net Revenue Interests; and
1.18.3 is free and clear of liens, encumbrances and encroachments.
1.19 "EARNEST MONEY" has the meaning set forth in Article 3.2.
1.20 "EFFECTIVE TIME" means July 1, 1997, at 7:00 a.m., local time where
the Properties are located.
1.21 "EMPLOYEE" OR "EMPLOYEES" has the meaning set forth in Article 12.6.
1.22 "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) damage to or loss of any property or
resource, and/or (c) injury or death of any person(s) whomsoever; 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) asbestos, NORM (as hereinafter
defined) or other potentially hazardous substances, (iii) costs associated with
remediation or clean up, and/or (iv) fines or penalties associated with any of
the foregoing.
1.23 "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
3
Hazardous and the Solid Waste Amendments Act of 1984, as amended, and the Oil
Pollution Act of 1990, as amended.
1.24 "FINAL ACCOUNTING SETTLEMENT" has the meaning set forth in Article
6.5.
1.25 "FINAL SETTLEMENT DATE" has the meaning set forth in Article 6.5.
1.26 "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
1.27 "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.
1.28 "LETTERS-IN-LIEU" means a document in the form of Exhibit "F".
1.29 "NON-ENVIRONMENTAL CLAIMS" means all Claims, except Environmental
Claims.
1.30 "NON-FOREIGN AFFIDAVIT" means a document in the form of Exhibit "H".
1.31 "NORM" means naturally occurring radioactive materials.
1.32 "OPINION OF COUNSEL" means a document in the form of Exhibit "G".
1.33 "PERMITTED ENCUMBRANCES" means:
1.33.1 Royalties, overriding royalties, production payments,
reversionary interests, convertible interests, net profits interests,
division orders and similar burdens encumbering the Properties to the
extent the net cumulative effect of such burdens do not, as of Closing,
operate to reduce the Net Revenue Interests of the Properties to less
than the Net Revenue Interests set forth in Exhibit "A";
1.33.2 Preferential purchase rights and consents to assignment and
similar contractual provisions encumbering the Properties with respect to
which, prior to Closing: (a) waivers or consents are obtained from the
appropriate parties, and\or (b) the appropriate time period for asserting
such rights have expired without an exercise of such rights;
1.33.3 Preferential purchase rights encumbering the Properties which
are exercised by a Third Party. If, prior to Closing, a holder of a
preferential purchase right notifies Seller that it intends to exercise
its rights with respect to any of the Properties to which its
preferential purchase right applies, the Properties covered by said
preferential purchase right shall be
4
excluded from the Properties to be conveyed to Buyer, and the Purchase
Price (as hereinafter defined) shall be reduced by the value allocated to
said Properties by Buyer in accordance with Article 3.3. Notwithstanding
the foregoing, if more than twenty (20%) of the unadjusted Purchase Price
are excluded from this Agreement because of the exercise of one (1) or
more preferential rights to purchase, Buyer shall have the right to
terminate this Agreement. If the holder of the preferential purchase
right fails to consummate the purchase of the Properties in accordance
with the applicable provision of the agreement under which such
preferential right exists, Seller shall promptly notify Buyer. Within
ten (10) Business Days after Buyer's receipt of such notice or the
Closing, whichever is later, Seller shall sell to Buyer, and Buyer shall
purchase from Seller, such Properties under the terms of this Agreement
for a price equal to the value allocated to such Properties;
1.33.4 All rights to consent by, required notices to, filings with
or other actions by governmental entities or tribal authorities in
connection with the sale or conveyance of the Properties, if the same are
customarily obtained subsequent to the transfer of title;
1.33.5 Rights reserved to or vested in any governmental entity or
tribal authority having appropriate jurisdiction to control or regulate
the Properties in any manner whatsoever, and all Laws of any such
governmental entity or tribal authority;
1.33.6 Easements, rights-of-way, servitudes, surface leases,
sub-surface leases, grazing rights, logging rights, canals, ditches,
reservoirs, pipelines, utility lines, telephone lines, power lines,
railways, streets, roads, alleys, highways and structures on, over and
through the Properties, to the extent such rights, interests or
structures do not materially interfere with the operation of the
Properties or render the surface unusable for the establishment of a
drilling location such that directional drilling from adjacent land would
be required;
1.33.7 The terms and conditions of all leases, agreements, contracts
and instruments associated with, attributable to or encumbering the
Properties which have been filed with the appropriate federal or tribal
offices, placed of record in the appropriate County records or otherwise
been disclosed in writing (including inclusion in the data room) to Buyer;
1.33.8 Liens for taxes or assessments not yet due or not yet
delinquent or, if delinquent, that are being contested by Seller in good
faith in the normal course of business;
1.33.9 Liens of operators relating to obligations not yet due or not
yet delinquent or, if delinquent, that are being contested by Seller in
good faith in the normal course of business;
5
1.33.10 Alleged Title Defect(s) which do not meet the deductible
threshold amount under Article 4.2 or which Buyer has waived under
Article 4.3;
1.33.11 Alleged Environmental Condition(s) which do not meet the
deductible threshold amount under Article 5.2 or which Buyer has waived
under Article 5.3; and
1.33.12 Such defects or irregularities in the title to the
Properties that do not materially interfere with the operation, value or
use of the Properties affected thereby and that would be considered not
material when applying general industry standards.
1.34 "PROPERTIES" means Seller's ownership interest as set forth on Exhibit
"A-1" in and to the following properties (real, personal or mixed) and rights
(contractual or otherwise):
1.34.1 All of Seller's undivided oil and gas leasehold interests,
working interests, net revenue interests, fee interests, mineral
interests, royalty interests, production payments and overriding royalty
interests which are expressly described in Exhibit "A-1", 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-1" and
other hydrocarbons and products, whether liquid or gaseous, produced in
association therewith;
1.34.2 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
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-1" or the
production of oil, gas or other hydrocarbon substances attributable
thereto;
1.34.3 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,
easements, rights-of-way, servitudes, surface leases, 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-1"; and
1.34.4 All of Seller's right, title and interests in and to all
personal property, fixtures, improvements, seismic data and information
(except as
6
reserved by Seller), permits, 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-1" 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;
(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".
1.35 "PURCHASE PRICE" has the meaning set forth in Article 3.1.
1.36 "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.
1.37 "RESPONDENT" has the meaning set forth in Article 17.17.
1.38 "TITLE DEFECT" means any lien, encumbrance, encroachment or defect
associated with Seller's title to the Properties (excluding Permitted
Encumbrances) that would cause Seller not to have Defensible Title.
1.39 "TITLE DEFECT DISPUTE" has the meaning set forth in Article 4.2.
7
1.40 "THIRD PARTY" means any person or entity, governmental or otherwise,
other than Seller and Buyer, and their respective Affiliate(s).
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 Twenty-
Seven Million Six Hundred Thousand and No/100 United States Dollars (US
$27,600,000) ("Purchase Price"), payable in full at Closing in immediately
available funds. If Closing occurs after July 1, 1997, and said delay is the
result of a breach of this Agreement by Buyer, the Purchase Price shall be
increased by the Computed Interest from the Effective Time until the Closing.
3.2 EARNEST MONEY. Unless this Agreement is terminated in accordance with
Article 15.1.7, on or before the 21st day of May, 1997, Buyer shall pay to
Seller an earnest money deposit in the amount of ten percent (10%) of the
unadjusted Purchase Price ("Earnest Money"). In the event of Closing, the
Purchase Price shall be credited by the amount of the Earnest Money (plus
Computed Interest on the Earnest Money from the date of receipt by Seller until
Closing). If Closing does not occur, the Earnest Money (plus Computed Interest
on the Earnest Money from the date of receipt by Seller until termination) will
be refunded to Buyer unless Closing failed to occur as a result of Buyer's
breach of this Agreement in which case Seller shall retain the Earnest Money
plus all interest thereon as a liquidated damage and not as a penalty.
3.3 ALLOCATION. Buyer's good faith allocation of the Purchase Price as
set forth in Exhibit "A" shall be used, where appropriate, for Seller to
provide any required preferential purchase right notifications as well as
adjustments to the Purchase Price as provided for in this Agreement.
ARTICLE 4. TITLE REVIEW
4.1 REVIEW OF TITLE RECORDS. Seller shall make available to Buyer Records
in Seller's possession relating to the title to the Properties. Buyer shall be
entitled to review said title Records. Buyer shall have the right to
reasonably request copies of any and all such title Records and upon such
request, Seller shall provide the requested copies to Buyer at Buyer's expense.
4.2 ADJUSTMENT OF PURCHASE PRICE FOR INCREASES OR DECREASES IN INTERESTS
ASSIGNED. As soon as reasonably practicable after Buyer's review of
8
the title Records, but in no event later than three (3) Business Days prior
to the Closing Date, Buyer shall notify Seller of any Properties which are
subject to Alleged Title Defect(s). Seller shall also notify Buyer of any
Title Defects which Seller becomes aware. Notice of Alleged Title Defect(s)
shall include a description and full explanation (including any and all
supporting documentation) of each Alleged Title Defect being claimed and a
value which Buyer in good faith attributes to each said Alleged Title Defect.
With respect to Alleged Title Defect(s), Seller will either: (a) undertake
to satisfy some, all or none of the Alleged Title Defects raised by Buyer at
Seller's sole cost and expense, (b) reduce the Purchase Price to compensate
Buyer for the value of the Alleged Title Defect, or (c) agree to some other
remedy mutually agreeable to the parties. Buyer and Seller shall meet at
least two (2) Business Days prior to the Closing Date in an attempt to
mutually agree on a proposed resolution with respect to the Alleged Title
Defect(s) which by such time have not been cured by Seller or a resolution
agreed to by the parties. It is recognized that good faith differences of
opinion may exist between Buyer and Seller in connection with Alleged Title
Defect(s), including without limitation, disputes as to: (i) whether or not
the alleged defect constitutes an Alleged Title Defect within the meaning of
this Agreement, (ii) whether or not the magnitude of the alleged defect is
great enough (i.e. meets the deductible threshold as set forth below) that
Buyer is contractually entitled to assert an Alleged Title Defect, (iii)
whether or not the Alleged Title Defect was properly and timely asserted by
Buyer pursuant to this Article, and/or (iv) the appropriate upward or
downward adjustment, if any, to be made to the Purchase Price on account of a
change in the net revenue or working interests from those specified in
Exhibit "A". Closing shall not be delayed, postponed or canceled because an
Alleged Title Defect is not cured or a resolution agreed to prior to the
Closing Date. If any such difference of opinion regarding an Alleged Title
Defect ("Title Defect Dispute") is not resolved by mutual agreement of Buyer
and Seller prior to the Closing Date, the parties shall consummate the
transaction using the median of Buyer's and Seller's numbers; provided
however, either party shall have the right, exercisable within one (1)
calendar month after the Closing Date, to initiate arbitration in accordance
with Article 17.17, using arbitrator(s) who are attorney(s) licensed in the
State of Colorado and who have at least ten (10) years oil and gas title
experience. Subject to the terms of Article 17.17, the decision of the panel
of arbitrators regarding any Title Defect Dispute shall be final, binding and
non-appealable as between the parties. Buyer or Seller shall have the
right to terminate this Agreement on the Closing Date if the value
attributable to the Alleged Title Defect(s) which remain uncured as of the
Closing Date exceeds twenty percent (20%) of the unadjusted Purchase Price.
If the parties are unable to agree on whether the uncured Alleged Title
Defect(s) exceed twenty percent (20%), the matter shall be submitted to
arbitration pursuant to the terms of Article 17.17 herein. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, BUYER SHALL NOT BE ENTITLED TO RAISE AN
ALLEGED TITLE DEFECT UNLESS THE INDIVIDUAL VALUE OF EACH INDIVIDUAL ALLEGED
TITLE DEFECT EXCEEDS FIVE THOUSAND AND NO/100 UNITED STATES DOLLARS
(US$5,000); PROVIDED HOWEVER, ANY DEFECTS REACHING SUCH LEVEL SHALL BE
RECOVERABLE FROM THE FIRST DOLLAR (I.E., THE $5,000 IS A
9
THRESHOLD, NOT A DEDUCTIBLE). FURTHER, BUYER SHALL NOT BE ENTITLED TO RAISE
AN ALLEGED TITLE DEFECT UNLESS THE AGGREGATE VALUE OF ALL ALLEGED TITLE
DEFECT(S) EXCEEDS ONE PERCENT (1%) OF THE UNADJUSTED PURCHASE PRICE (IT BEING
AGREED THAT BUYER SHALL BE SOLELY RESPONSIBLE FOR ANY AND ALL ALLEGED TITLE
DEFECT(S) UP TO ONE PERCENT (1%) OF THE UNADJUSTED PURCHASE PRICE).
4.3 WAIVER. EXCEPT FOR CLAIMS BUYER ASSERTS UNDER SELLER'S SPECIAL
WARRANTY OF TITLE CONTAINED ARTICLE 9.1, ALL TITLE OBJECTIONS NOT RAISED BY
BUYER WITHIN THE TIME PERIOD PROVIDED IN ARTICLE 4.2 SHALL BE WAIVED BY BUYER
FOR ALL PURPOSES, AND BUYER SHALL HAVE NO RIGHT TO SEEK AN ADJUSTMENT TO THE
PURCHASE PRICE, MAKE A CLAIM AGAINST SELLER OR SEEK INDEMNIFICATION FROM SELLER
ASSOCIATED WITH THE SAME.
ARTICLE 5. INSPECTION OF PREMISES
5.1 INSPECTION OF PREMISES. Buyer shall have full access to Seller
operated Properties during reasonable business hours and Seller shall use
reasonable efforts to obtain permission for Buyer to gain access to the Third
Party operated Properties, for the purpose of inspecting the condition of the
same. Buyer shall have the right, where authorized by Seller (which
authorization shall not be unreasonably withheld) and by the Third Party
operator, if applicable, to conduct tests related to the environmental
condition of the Properties so long as the tests do not unreasonably interfere
with the operation of the Properties. BUYER'S ACCESS TO THE PROPERTIES SHALL
BE AT BUYER'S SOLE RISK, COST AND EXPENSE, AND BUYER SHALL RELEASE SELLER AND
THE OTHER WORKING INTEREST OWNERS OF THE APPLICABLE PROPERTY FROM AND SHALL
FULLY PROTECT, INDEMNIFY AND DEFEND SELLER AND THE OTHER WORKING INTEREST
OWNERS OF THE APPLICABLE PROPERTY AND THEIR RESPECTIVE 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
BUYER'S EXERCISE OF ITS RIGHTS UNDER THIS ARTICLE 5.1, INCLUDING WITHOUT
LIMITATION, CLAIMS RELATING TO: (a) INJURY OR DEATH OF ANY PERSON OR PERSONS
WHOMSOEVER, (b) DAMAGE TO OR LOSS OF ANY PROPERTY OR RESOURCE, (c) POLLUTION,
ENVIRONMENTAL DAMAGE OR VIOLATION OF ENVIRONMENTAL LAWS, (d) COMMON LAW CAUSES
OF ACTION SUCH AS NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY, NUISANCE OR
TRESPASS, AND\OR (e) FAULT IMPOSED BY STATUTE, RULE, REGULATION OR OTHERWISE.
THE INDEMNITY OBLIGATION AND RELEASE PROVIDED HEREIN SHALL APPLY REGARDLESS OF
CAUSE OR OF ANY ORDINARY NEGLIGENT ACTS OR OMISSIONS OF SELLER OR THE OTHER
WORKING INTEREST OWNERS OF THE APPLICABLE PROPERTY AND/OR THEIR RESPECTIVE
OFFICERS, AGENTS, EMPLOYEES OR AFFILIATES. Buyer additionally agrees to comply
with the rules, procedures and instructions issued by Seller or the Third
Party operator of the applicable Property while upon the Properties.
5.2 ALLEGED ENVIRONMENTAL CONDITIONS. As soon as reasonably practical
thereafter, but in no event later than seven (7) Business Days prior to the
Closing Date, Buyer shall notify Seller of any Properties which are subject to
Alleged
10
Environmental Condition(s). Buyer's notice of Alleged Environmental
Condition(s) shall include a complete description of each individual
environmental condition which Buyer takes exception to (including any and all
supporting documentation) and the costs which Buyer in good faith attributes
to remediating the same. With respect to Alleged Environmental Conditions,
Seller will either: (a) undertake to satisfy some, all or none of the Alleged
Environmental Conditions raised by Buyer at Seller's sole cost and expense,
(b) reduce the Purchase Price to compensate Buyer for the value of the
Alleged Environmental Condition, or (c) agree to some other remedy mutually
agreeable to the parties. Buyer and Seller shall meet at least five (5)
Business Days prior to the Closing Date in an attempt to mutually agree on an
acceptable resolution addressing the Alleged Environmental Condition(s) which
remains uncured. In evaluating the existence or magnitude of an Alleged
Environmental Condition, due consideration shall be given to the length of
time the Alleged Environmental Condition has been in existence and whether
such fact, circumstance or condition is of the type expected to be
encountered in the area involved, and whether the Alleged Environmental
Condition is customarily acceptable to reasonable persons engaged in the
business of ownership and operation of oil and gas properties. Buyer or
Seller shall have the right to terminate this Agreement on the Closing Date
if any of the following exists with respect to the Alleged Environmental
Condition(s): (i) the anticipated costs of remediation, in the good faith
estimate of Buyer exceeds twenty percent (20%) of the unadjusted Purchase
Price (irrespective of the value of the affected Properties), or (ii) the
anticipated or potential response costs associated with remediation
undertaken by any governmental agency (including without limitation,
interest, fines, penalties, attorneys' fees, costs of litigation and other
costs or assessments) exceeds twenty percent (20%) of the unadjusted Purchase
Price. Either party may initiate arbitration in accordance with Article
17.17 to resolve any dispute over the value, anticipated costs of remediation
or response attributable to the Alleged Environmental Condition(s) or whether
or not the Agreement can be terminated under this Article. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, BUYER SHALL NOT BE ENTITLED TO RAISE AN
ALLEGED ENVIRONMENTAL CONDITION UNLESS THE AGGREGATE VALUE OF OR ANTICIPATED
COSTS ASSOCIATED WITH ALL ALLEGED ENVIRONMENTAL CONDITION(S) EXCEEDS ONE
PERCENT (1%) OF THE UNADJUSTED PURCHASE PRICE. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, SELLER SHALL HAVE NO OBLIGATION UNDER THIS AGREEMENT
TO COMPENSATE (I.E. REDUCE THE PURCHASE PRICE OR OTHERWISE) BUYER FOR ALLEGED
ENVIRONMENTAL CONDITION(S) UP TO ONE PERCENT (1%) OF THE UNADJUSTED PURCHASE
PRICE (IT BEING AGREED THAT BUYER SHALL BE SOLELY RESPONSIBLE FOR ANY AND ALL
ALLEGED ENVIRONMENTAL CONDITION(S) UP TO ONE PERCENT (1%) OF THE UNADJUSTED
PURCHASE PRICE).
5.3 WAIVER. ALL ENVIRONMENTAL CONDITIONS NOT RAISED BY BUYER WITHIN THE
TIME PERIOD PROVIDED IN ARTICLE 5.2 SHALL BE WAIVED BY BUYER FOR ALL PURPOSES,
AND BUYER SHALL HAVE NO RIGHT TO SEEK AN ADJUSTMENT TO THE PURCHASE PRICE, MAKE
A CLAIM AGAINST SELLER OR SEEK INDEMNIFICATION FROM SELLER ASSOCIATED WITH THE
SAME.
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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, and these 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 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
12
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 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.
13
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 the Closing, a portion of the
Properties suffer a Casualty Loss, in whole or in part, and if the value of
such loss constitutes between one percent (1%) and ten (10%) of the unadjusted
Purchase Price, Seller may either: (a) repair or replace such Properties at its
expense prior to the Closing with property of the same utility, or (b) pay to
Buyer at the Closing the value of the loss. If, prior to the Closing, a
portion of the Properties suffer a Casualty Loss, in whole or in part, and if
the value of such loss constitutes between ten (10%) and twenty percent (20%)
of the unadjusted Purchase Price, Seller may either: (i) repair or replace such
Properties at its expense prior to the Closing with property of the same
utility, (ii) pay to Buyer at the Closing the value of the loss, or (iii)
terminate this Agreement. Notwithstanding the foregoing, Buyer shall be solely
responsible for any and all casualty losses up to one percent (1%) of the
unadjusted Purchase Price. If a substantial part of the Properties, being
greater than twenty percent (20%) of the unadjusted Purchase Price, shall: (1)
prior to Closing suffer a Casualty Loss, or (2) be taken in condemnation or if
proceedings for such purposes shall be pending; then either party may terminate
this Agreement. If either party terminates this Agreement in accordance with
this Article, neither party shall have any further obligations, except as
expressly provided in this Agreement, and Seller shall return to Buyer the
Earnest Money plus Computed Interest (on the Earnest Money from the date of
receipt by Seller until termination). If the parties do not terminate this
Agreement, this Agreement shall remain in full force and effect, and Seller and
Buyer shall attempt to agree on a reduction in the Purchase Price reflecting
the reduction in 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.
14
8.2 SELLER'S NON-ENVIRONMENTAL INDEMNITY OBLIGATION. SELLER SHALL,
SUBJECT TO THE LIMITATIONS 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 NON-
ENVIRONMENTAL 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 DATE, INCLUDING
WITHOUT LIMITATION, NON-ENVIRONMENTAL 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, 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 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: (i) NON-ENVIRONMENTAL CLAIMS FOR WHICH BUYER HAS NOT PROVIDED SELLER
WITH NOTICE OF SAID NON-ENVIRONMENTAL CLAIMS WITHIN TWO (2) YEARS AFTER THE
CLOSING DATE, AND/OR (ii) NON-ENVIRONMENTAL CLAIMS UP TO AND INCLUDING ONE
PERCENT (1%) OF THE UNADJUSTED PURCHASE PRICE (IT BEING AGREED THAT BUYER SHALL
BE SOLELY RESPONSIBLE FOR ANY AND ALL NON-ENVIRONMENTAL CLAIMS UP TO AND
INCLUDING ONE PERCENT (1%) OF THE UNADJUSTED PURCHASE PRICE).
8.3 DISCLAIMER OF SELLER'S ENVIRONMENTAL INDEMNITY OBLIGATION. SELLER
SHALL HAVE NO OBLIGATION WHATSOEVER UNDER THIS AGREEMENT OR OTHERWISE TO
PROTECT, INDEMNIFY, DEFEND AND HOLD HARMLESS BUYER, ITS OFFICERS, AGENTS,
EMPLOYEES AND AFFILIATES FROM AND AGAINST ENVIRONMENTAL CLAIMS RELATING TO,
ARISING OUT OF, OR CONNECTED, DIRECTLY OR INDIRECTLY, WITH THE OWNERSHIP OR
OPERATION OF THE PROPERTIES, NO MATTER WHEN ASSERTED, AND BUYER EXPRESSLY
RELEASES SELLER, ITS OFFICERS, AGENTS, EMPLOYEES AND AFFILIATES FROM THE SAME.
15
8.4 BUYER'S NON-ENVIRONMENTAL 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 NON-ENVIRONMENTAL 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 DATE,
NO MATTER WHEN ASSERTED, IN WHICH SELLER'S INDEMNITY OBLIGATION HAS CEASED,
TERMINATED OR DID NOT EXIST, AND FROM AND AGAINST ANY AND ALL NON-ENVIRONMENTAL
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 DATE, NO MATTER WHEN ASSERTED;
INCLUDING WITHOUT LIMITATION, NON-ENVIRONMENTAL 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, 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 SELLER, ITS OFFICERS, AGENTS, EMPLOYEES OR AFFILIATES.
8.5 BUYER'S ENVIRONMENTAL 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 ENVIRONMENTAL 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 DATE,
NO MATTER WHEN ASSERTED, AND FROM AND AGAINST ANY AND ALL ENVIRONMENTAL 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 DATE, NO MATTER WHEN ASSERTED;
INCLUDING WITHOUT LIMITATION, ENVIRONMENTAL CLAIMS RELATING TO: (a) INJURY OR
DEATH OF ANY PERSON OR PERSONS WHOMSOEVER, (b) DAMAGE TO OR LOSS OF ANY
PROPERTY OR RESOURCE, (c) POLLUTION, ENVIRONMENTAL DAMAGE OR VIOLATION OF
ENVIRONMENTAL LAWS, (d) COMMON LAW CAUSES OF ACTION SUCH AS NEGLIGENCE, GROSS
NEGLIGENCE, STRICT LIABILITY, NUISANCE OR TRESPASS, AND\OR (e) 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 SELLER, ITS OFFICERS, AGENTS, EMPLOYEES OR AFFILIATES.
8.6 HAZARDOUS SUBSTANCES. The parties acknowledge that the Properties may
contain asbestos, NORM or other potentially hazardous substances, and that
special procedures may be required for the assessment, remediation, removal,
transportation or disposal of said asbestos, NORM or other potentially
hazardous substances. 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
16
disposal of the asbestos, NORM or other potentially hazardous substances
associated with or attributable to the Properties and will conduct said
activities in accordance with all applicable Laws. 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, NORM OR OTHER POTENTIALLY HAZARDOUS SUBSTANCES 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)
POLLUTION, ENVIRONMENTAL DAMAGE OR VIOLATION OF ENVIRONMENTAL LAWS, (d) COMMON
LAW CAUSES OF ACTION SUCH AS NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY,
NUISANCE OR TRESPASS, AND\OR (e) 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 SELLER, ITS
OFFICERS, AGENTS, EMPLOYEES OR AFFILIATES.
8.7 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."
8.8 DEFENSE OF CLAIMS.
8.8.1 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.
8.8.2 SETTLEMENT. If the indemnifying party does not notify
the indemnified party within the earlier to occur of: (a) five (5)
Business Days
17
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.
8.9 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.
8.10 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 ALL FAULTS IN THEIR PRESENT
CONDITION AND STATE OF REPAIR, WITHOUT RECOURSE.
18
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.
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.
ARTICLE 10. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer that on the date hereof and as of
the Closing Date:
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.
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
19
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 Date, to the best of Seller's knowledge, 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;
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. To the best of Seller's knowledge, 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
20
Properties within the previous sixty (60) Days or as to which Seller has not
yet been billed.
10.6 LITIGATION. To the best of Seller's knowledge, 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. On
or before 15th day of June, 1997, Seller and Buyer shall enter into a letter
agreement wherein the parties mutually agree on how to defend (including
distribution or proration of any and all post-Closing expenses, attorneys'
fees, judgements or settlements) the litigation referenced on Exhibit "C".
10.7 BANKRUPTCY. To the best of Seller's knowledge, there are no
bankruptcy, reorganization or receivership proceedings pending, being
contemplated by or threatened against Seller.
10.8 ROYALTIES. To the best of Seller's knowledge, 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. To the best of Seller's knowledge, 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. To the best of Seller's knowledge, it
currently possesses and will possess at Closing, all governmental licenses,
permits, certificates, orders, approvals and authorizations necessary for
operation of the Properties, and is currently and will be at Closing 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.
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 Date:
21
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 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
22
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 of operatorship of the Properties to
MarkWest Resources, Inc. and to promptly notify purchasers, vendors, joint
interest owners, non-participating interest owners and other appropriate
parties of such 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).
23
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. 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 FINANCIAL ASSURANCES. On or before 15th day of June, 1997, Buyer
shall provide to Seller one of the following financial assurances to secure
Buyer's performance under the terms of the Agreement acceptable in form and
content to Amoco: (a) a corporate guaranty from an Affiliate of Buyer, or (b) a
continuing and/or renewable letter of credit.
12.7 LICENSES. On or before 15th day of June, 1997, Seller and Buyer shall
enter into a license agreement or license agreements necessary to vest Buyer
with the right to use the proprietary technology (including without limitation
automation) of Seller.
12.8 TRANSITION AGREEMENT. On or before 15th day of June, 1997, Seller
and Buyer shall enter into a transition agreement wherein Seller will agree
to continue the physical operation of the Properties (excluding accounting
associated activities) for a period not to exceed thirty-one (31) Days after
Closing.
24
ARTICLE 13. ANTITRUST NOTIFICATION
13.1 ANTITRUST NOTIFICATION. 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. CONDITIONS PRECEDENT TO CLOSING
14.1 CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE. Seller shall be
obligated to consummate the sale of the Properties as contemplated by this
Agreement on the Closing Date, provided the following conditions precedent have
been satisfied or have been waived by Seller:
14.1.1 All representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects at and as of
Closing as though such representations and warranties were made at and as
of such time; and
14.1.2 Buyer shall have complied in all material respects with all
obligations and conditions contained in this Agreement to be performed or
complied with by Buyer on or prior to the Closing.
14.2 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. Buyer shall be
obligated to consummate the purchase of the Properties as contemplated by this
Agreement on the Closing Date, provided the following conditions precedent have
been satisfied or have been waived by Buyer:
14.2.1 All representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects at and as of
Closing as though such representations and warranties were made at and as
of such time; and
14.2.2 Seller shall have complied in all material respects with all
obligations and conditions contained in this Agreement to be performed or
complied with by Seller on or prior to the Closing.
25
14.3 CONDITIONS PRECEDENT TO OBLIGATION OF EACH PARTY TO CLOSE. The
parties shall be obligated to consummate the sale and purchase of the
Properties as contemplated in this Agreement on the Closing Date, provided the
following conditions precedent have been satisfied or have been waived:
14.3.1 No suit, action or other proceedings shall be pending before
any court or governmental entity in which it is sought by a person or
entity other than the parties hereto or any of their Affiliates, officers,
directors or employees to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by this Agreement, or to
obtain substantial damages in connection with the transaction contemplated
herein, nor shall there be any investigation by a governmental entity
pending which might result in any such suit, action or other proceedings
seeking to restrain, enjoin or otherwise prohibit the consummation of the
transaction contemplated by this Agreement;
14.3.2 If applicable, consummation of the transaction contemplated
herein shall not have been prevented from occurring by (and the required
waiting period, if any, shall have expired under) the HSR Act and the rules
and regulations of the Federal Trade Commission and the Department of
Justice;
14.3.3 All consents and approvals, if any, whether required
contractually or by applicable federal, state, local or tribal Law, or
otherwise necessary for the execution, delivery and performance of this
Agreement by Seller (except for consents and approvals of governmental
entities or tribal authorities customarily obtained subsequent to the
transfer of title) shall have been obtained and delivered to Buyer by the
Closing and shall not have been withdrawn or revoked;
14.3.4 With respect to Properties which have not been excluded from
this Agreement because of exercise of a preferential purchase right, the
preferential rights of purchase applicable to such Properties shall have
been waived, or the time to elect under such preferential rights shall have
elapsed, prior to Closing;
14.3.5 Buyer and Seller shall have mutually agreed upon a resolution
of any uncured Alleged Environmental Condition(s) in accordance with
Article 5.2 and uncured Casualty Losses in accordance with Article 7.1;
14.3.6 Seller and Buyer shall have mutually agreed upon the terms of
the financial assurances referenced in Article 12.6;
14.3.7 Seller and Buyer shall have mutually agreed upon the terms of
the license agreement(s) referenced in Article 12.7;
26
14.3.8 Seller and Buyer shall have mutually agreed upon the terms of
the litigation letter agreement referenced in Article 10.6;
14.3.9 Seller and Buyer shall have mutually agreed upon the terms of
the transition agreement referenced in Article 12.8; and
14.3.8 Subject to the mutual consent of both the Seller and Buyer, the
parties may agree to close on any portion of the Properties and extend
Closing only with respect to those Properties for which conditions to close
have not been met or waived.
ARTICLE 15. TERMINATION
15.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any time
prior to Closing (unless expressly provided otherwise):
15.1.1 By the mutual written agreement of Seller and Buyer;
15.1.2 By either Seller or Buyer if the consummation of the
transactions contemplated herein would violate any nonappealable final
order, decree or judgment of any governmental entity having appropriate
jurisdiction enjoining or awarding substantial damages in connection with
the consummation of the transactions contemplated herein;
15.1.3 By either Seller or Buyer pursuant to Articles 4.2, 5.2 or 7.1;
15.1.4 By Buyer pursuant to Article 1.33.3;
15.1.5 By Seller if the Purchase Price would be adjusted downward by
twenty percent (20%) or more;
15.1.6 Notwithstanding anything contained herein to the contrary, by
Seller if Closing shall not have occurred by July 10, 1997; or
15.1.7 By Buyer if it serves formal written notice on Seller on or
before May 21, 1997, that the Board of Directors of MarkWest Hydrocarons,
Inc., has elected not to approve the transaction contemplated herein.
15.2 EFFECT OF TERMINATION. If this Agreement is terminated in accordance
with Article 15.1, such termination shall be without liability of any party to
this Agreement or any officer, director, Affiliate, or employee of such party,
except return of the Earnest Money plus Computed Interest (on the Earnest
Money from the date of receipt by Seller until termination) and performance of
the obligations provided in Articles 15.3, 15.4, 15.5 and 17.3 (which
provisions shall survive termination of this Agreement). If this Agreement is
terminated as a result of
27
Buyer's failure or refusal to perform an obligation hereunder (including
without limitation Closing on the Closing Date) or breach of Article 14.1,
Seller shall be entitled to retain the Earnest Money as a liquidated damage
(and not a penalty) to reimburse Seller for its out-of-pocket fees and
expenses incurred in connection with the transactions contemplated by this
Agreement.
15.3 DISPUTE OVER RIGHT TO TERMINATE. If there is a dispute between the
parties over either party's right to terminate this Agreement under Article
15.1, Closing shall not occur, as scheduled. The party which disputes the
other party's right to terminate may initiate arbitration proceedings in
accordance with Article 17.17 within thirty (30) Days of the date on which
Closing was scheduled to occur and, if arbitration is so initiated, the dispute
will be resolved through such arbitration proceeding. If the party which
disputes the termination right does not initiate an arbitration proceeding to
resolve the dispute within the time period specified hereinabove, such party
shall be deemed to have waived its right to object to such termination.
15.4 RETURN OF DOCUMENTS. If this Agreement is terminated prior to
Closing, each party shall return to the party which owns or is otherwise
entitled thereto all books, records, maps, files, papers and other property in
such party's possession relating to the transaction contemplated by this
Agreement.
15.5 CONFIDENTIALITY. Notwithstanding the termination of this Agreement
or any other provision of this Agreement to the contrary, the terms of the
Confidentiality Agreement executed by Seller and Buyer, dated the 31st day of
March, 1997, shall remain in full force and effect. If Closing of the
transaction is consummated, the Confidentiality Agreement shall terminate.
ARTICLE 16. THE CLOSING
16.1. CLOSING. One (1) Days prior to the Closing Date, 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. Closing shall be held in Seller's
office at the 4th Floor, 550 WestLake Park Boulevard, Houston, Texas 77079 or
any other location as mutually agreed in writing by Seller and Buyer.
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;
28
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
certifying as to the matters specified in Articles 14.2.1 and 14.2.2 above
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(s) referenced in Article 12.7;
16.2.9 The litigation letter agreement referenced in Article 10.6;
16.2.10 The transition agreement referenced in Article 12.8; and
16.2.11 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, less Earnest Money (plus Computed
Interest on the Earnest Money from the date of receipt by Seller until
Closing), by wire transfer in accordance with Article 3 hereof;
29
16.3.3 A Certificate executed by an authorized officer or Attorney-in-
Fact of Buyer certifying as to the matters specified in Articles 14.1.1 and
14.1.2 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 corporate guaranty and/or letter of credit referenced in
Article 12.6;
16.3.8 The license agreement(s) referenced in Article 12.7;
16.3.9 The litigation letter agreement referenced in Article 10.6;
16.3.10 The transition agreement reference in Article 12.8; and
16.3.11 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 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
30
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 MarkWest Resources, Inc.
by mail: 5613 DTC Parkway, Suite 400
Englewood, Colorado 80111
Attn: Land Manager
If to Buyer by MarkWest Resources, Inc.
hand delivery: 5613 DTC Parkway, Suite 400
Englewood, Colorado 80111
Attn: Land Manager
If to Buyer MarkWest Resources, Inc.
by facsimile: Number: 303-290-8769
Attn: Land Manager
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 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
31
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 AT 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.
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.
32
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 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 4.3, 5.3, 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
33
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 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.
34
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.
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
MARKWEST RESOURCES, INC.
By:
---------------------------------
Name: Kevin L. Stowe
Title: Attorney - in - Fact
35
EXHIBIT "A"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
WORKING INTERESTS AND NET REVENUE INTERESTS
1
SCHEDULE "1"
TO
EXHIBIT "A"
NON-COTTONTAIL PASS UNIT ASSETS
The Non-Cottontail Pass Unit Equipment includes any and all properties (real,
personal or mixed) and rights (contractual or otherwise) located downstream of
the outlet flange of the wellhead meter run(s), including without limitation,
the following:
CENTRAL GATHERING FACILITY. The Central Gathering Facility located in Section
33, T32S, R66W consists of equipment used to gather natural gas and water
produced from wells currently located in the Cottontail Pass Unit Area. These
facilities condition and compress the gas for delivery into the Eight-Inch Gas
Sales Line and dispose of produced water into the Horn Springs Canyon water
disposal well.
- - The central facility equipment associated with natural gas collection
generally includes two (2) central compressors, associated buildings,
sound walls, two (2) dehydrators, natural gas/water separators, associated
pits, valves, piping and associated equipment. Also included is the
central automation host computer, field radio telemetry system, fiber
optic cable, central facility gas meters and gas conditioning control
equipment and associated equipment.
- - The central facility equipment associated with water collection and
disposal generally includes the Horn Springs Canyon water disposal well,
water storage tanks, two (2) water injection pumps, building, large
emergency water storage pit and associated equipment.
FIELD COLLECTION SYSTEM. The Field Collection System consists of the
facilities necessary to gather natural gas and water produced from wells
currently located in the Cottontail Pass Unit Area and delivers the same to the
Central Gathering Facility. These facilities consist of three-inch, four-inch
and six-inch gas gathering pipelines and three-inch and four-inch water
gathering pipelines, associated pumps, valves, blow down pits and associated
equipment. Also included are the three-inch gas lift lines which are currently
out of service.
EIGHT-INCH GAS SALES LINE. The Eight-Inch Gas Sales Line consists of equipment
used to gather natural gas from the Central Gathering Facility to the Colorado
Interstate Gas Picketwire central delivery point in Section 35-T33S-R66W. Also
included are a 300 bbl tank at the State of Colorado AS No. 1 location, valves,
sundry piping, automation equipment (RTU) associated with the pipeline and
associated equipment.
RIGHTS-OF-WAY. Rights-of-way, easements and surface leases associated with
the: (a) Central Gathering Facility and Field Collection System, and (b) the
Eight-Inch Gas Sales Line.
SURFACE TRACTS AND IMPROVEMENTS. Amoco owned property consisting of the
following:
- - Field Office and associated site (including their content)
- - Storage Buildings and associated site (including their content)
- - A tract of land located in the SW/SE of Section 28, Township 32 South,
Range 66 West, Las Animas County, Colorado
- - A tract of land located in the NE/SW of Section 28, Township 32 South,
Range 66 West, Las Animas County, Colorado
- - A tract of land located in the SW/NE of Section 33, Township 32 South,
Range 66 West, Las Animas County, Colorado
- - A tract of land located in the NE\NW of Section 33, Township 32 South,
Range 66 West, Las Animas County, Colorado
Notwithstanding anything contained in this Exhibit/Schedule to the contrary,
the Non-Cottontail Pass Unit Assets shall not include the items set forth on
Exhibit B (Excluded Properties) which are being reserved by Seller.
2
EXHIBIT "A-1"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
PROPERTIES
EXHIBIT "B"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
EXCLUDED PROPERTIES
EXHIBIT "C"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
LITIGATION
The following is a summary of the three (3) outstanding litigation matters
associated with the Properties:
1. CANYON COMMUNITIES FOR A QUIET ENVIRONMENT, INC. VS. BOARD OF COUNTY
COMMISSIONERS AND AMOCO PRODUCTION COMPANY (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. TOM BEACH, MARY BEACH, INDIVIDUALLY AND ON BEHALF OF THEIR CHILDREN
ZACHARY BEACH AND CATIE LEE BEACH VS. AMOCO PRODUCTION COMPANY (filed in
November, 1996 in Las Animas County District Court). The plaintiffs in this
case are objecting to the noise levels as the same pertain to Amoco's
compressors located at the central gathering facility.
4. CLAUDINE BLINKEY VS. AMOCO PRODUCTION COMPANY (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.
EXHIBIT "D"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
ASSIGNMENT AND BILL OF SALE
STATE OF COLORADO )
)
COUNTY OF __________ )
This ASSIGNMENT AND BILL OF SALE ("Assignment") dated the ______ day of
________________, 199___, but effective as of the __ day of ___, 199___
("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 ____________, a ________
corporation, with an office at __________ (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):
[INSERT DEFINITION OF PROPERTIES AND EXCLUDED ASSETS.]
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.
1
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 dated ______________, 199__, by and between
Amoco Production Company, as Seller and __________________, as Buyer ("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.
EXECUTED on the day and year first referenced above, but effective as of
the Effective Time.
Assignor
AMOCO PRODUCTION COMPANY
By:
----------------------------------
Name:
--------------------------------
Title: Attorney-in-Fact
Assignee
-------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
2
STATE OF TEXAS )
)
COUNTY OF HARRIS )
The foregoing instrument was acknowledged before me this _______ day of
___________________, 199__, by ________________________, Attorney-in-Fact on
behalf of AMOCO PRODUCTION COMPANY, a Delaware corporation.
My commission expires:
------------------------------------
Signature
------------------------------------
Name (Printed, Typed of Stamped)
Notary Public in and for the
State of Texas
STATE OF TEXAS )
)
COUNTY OF HARRIS )
The foregoing instrument was acknowledged before me this _______ day of
_______________, 199__, by ________________________, ________ on behalf of,
__________________________ a _______________ corporation.
My commission expires:
------------------------------------
Signature
------------------------------------
Name (Printed, Typed of Stamped)
Notary Public in and for the
State of Texas
3
EXHIBIT "E"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
CERTIFICATE
I, ______________________, __________________ of ___________________, a
_______________ corporation ("__________"), do hereby certify pursuant to
Article of the Purchase and Sale Agreement by and between ___________ and
__________, dated the ______ day of ___________, 199__ (the "Agreement"),
that the representations and warranties contained in Articles ____ of 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:
-------------------------------
Date:
-------------------------------
EXHIBIT "F"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
LETTERS-IN-LIEU
______________, 199___
[Product Purchaser's Name]
[Product Purchaser's Address]
Gentlemen:
Enclosed is a copy of an unrecorded Assignment and Bill of Sale dated the
____ day of _____________, 199___, from Amoco Production Company ("Seller") to
____________________________________ ("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:
[Buyer's Name]
[Buyer's Address]
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:
[Buyer's Name]
[Buyer's Address]
[Attn:_______________]
[Tel. No:_____________]
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
- ----- ------
- ------------------------------ AMOCO PRODUCTION COMPANY
By: By:
--------------------------- -------------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
------------------------- ----------------------------
RECEIPT IS ACKNOWLEDGED THIS ______ DAY OF ___________________, 199___.
- ------------------------------
By:
---------------------------
Name:
--------------------------
Title:
-------------------------
2
EXHIBIT "G"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST RESOURCES, INC., BUYER
OPINION OF COUNSEL
To: [Seller/Buyer]
Gentlemen:
This opinion is delivered to you pursuant to that certain Purchase and Sale
Agreement by and between _________________________, a ____________ corporation
("Seller") and ______________________________, a _____________ corporation
("Buyer") dated the ________ day of ______________, 199____ (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 ________ 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:
--------------------------
Date:
--------------------------------
3
EXHIBIT "H"
TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
AMOCO PRODUCTION COMPANY, SELLER
AND
MARKWEST 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 _____________ 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 home or 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 ______________ 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:
---------------------------------
Title: Attorney-in-Fact
STATE OF TEXAS )
)
COUNTY OF HARRIS )
The foregoing instrument was acknowledged before me this _______ day of
___________________, 199__, by ________________________ as Attorney-in-Fact, on
behalf of Amoco Production Company, a Delaware corporation.
My commission expires:
--------------------------------
Signature
--------------------------------
Name (Printed, Typed of Stamped)
Notary Public in and for the
State of Texas
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).
1