Common use of Covenants of Seller and Buyer Clause in Contracts

Covenants of Seller and Buyer. Section 5.1. Investigation of Business, Access to Properties, Records and ------------------------------------------------------------ Employees. (a) Seller shall afford to representatives of Buyer reasonable access --------- to the offices, plants, properties, books and records of Seller during normal business hours, in order that Buyer may have full opportunity to make such investigations as it desires of the affairs of Seller to the extent such affairs relate to the Acquired Assets or to the Assumed Liabilities; provided, however, that such investigation shall not unreasonably disrupt the personnel and operations of Seller. If, in the course of any investigation pursuant to this Section 5. 1, Buyer discovers any breach of any representation or warranty contained in this Agreement or any circumstance or condition that upon Closing would constitute such a breach, Buyer covenants and that it will promptly so inform Seller. (b) Any information provided to Buyer or its representatives pursuant to this Agreement shall be held by Buyer and its representatives in accordance with, and shall be subject to the terms of, the Confidentiality Agreement dated July 13, 1998 by and between Raytheon and Buyer, which is hereby incorporated in this Agreement as though fully set forth herein. (c) Buyer agrees to (i) hold all of the books and records of Seller acquired hereunder existing on the Closing Date and not to destroy or dispose of any thereof for a period of four (4) years from the Closing Date or such longer time as may be required by law, and thereafter, if it desires to destroy or dispose of such books and records, to offer first in writing at least sixty (60) days prior to such destruction or disposition to surrender them to Seller and (ii) following the Closing Date to afford Seller, its accountants and counsel, during normal business hours, upon reasonable request, full access to such books, records and other data to the extent that such access may be requested for any legitimate purpose, including without limitation preparation of filings under federal and state securities laws, responding to Governmental Authorities, defending or prosecuting litigation and preparation of Income Tax Returns and other tax filings, at no cost to Seller (other than for reasonable out-of-pocket expenses); provided, however, that nothing herein shall limit any of Seller's rights of discovery. Buyer shall have the same rights, and Seller the same obligations, as are set forth above in this Section 5. 1 (c), with respect to any material nonprivileged records of Seller pertaining to the Acquired Assets or to the Assumed Liabilities that are retained by Seller, with the exception of Returns relating to Taxes that are not the responsibility of Buyer or alleged by a Governmental Authority to be the responsibility of Buyer.

Covenants of Seller and Buyer. Section 5.1Pending Closing. Investigation Between the date of Business, Access to Properties, Records this Agreement and ------------------------------------------------------------ Employees.the Closing Date: (a) Seller shall afford permit Buyer access as follows: (i) Seller shall give Buyer and its attorneys and other representatives, who have a legitimate need to representatives of Buyer know, access at all reasonable access --------- to the offices, plants, properties, books and records of Seller times during normal business hourshours to the Properties and, in at Seller's office, to Seller's records (including, without limitation, title files, division order that files, well files, production records, equipment inventories, and production severance, and ad valorem tax records) pertaining to the ownership and operation of the Properties, to conduct due diligence reviews as contemplated by Section 8. below. Buyer may have full opportunity make copies of such records, at its expense but shall, if Seller so requests, return all copies so made if the Closing does not occur. Seller shall not be obligated to make such investigations as it desires of the affairs of provide Buyer with access to any records or data that Seller cannot provide to the extent such affairs relate to the Acquired Assets Buyer without breaching, or to the Assumed Liabilities; risking a breach of, confidentiality agreements with other parties, provided, however, that Seller agrees to use its best efforts to obtain the consent of any such investigation third party to the furnishing of such records or data to Buyer. All records and data provided shall not unreasonably disrupt be subject to the personnel previously executed Confidentiality Agreement between Buyer and operations of Seller. IfSELLER MAKES NO WARRANTY, in AND EXPRESSLY DISCLAIMS ALL WARRANTIES, AS TO THE ACCURACY OR COMPLETENESS OF THE FILES AND OTHER INFORMATION THAT IT MAY PROVIDE TO BUYER OR THAT MAY BE PROVIDED BY OTHERS. (ii) Seller shall make a good faith effort to give Buyer, or Buyer's authorized representatives, who have a legitimate need to know, at reasonable times and upon adequate notice to Seller, physical access to the course Properties for the purpose of inspecting same. Buyer recognizes that some of the Properties are operated by third parties and that Seller's ability to obtain access to such properties, and the manner and extent of such access, is subject to the consent of such third parties. Buyer agrees to comply fully with the rules, regulations, and any investigation pursuant to instructions issued by Seller or third party (where a Property is operated by such third party) regarding the actions of Buyer while upon, entering, or leaving the Properties. (iii) If Buyer exercises rights of access under this Section 5or otherwise, or conducts examinations or inspections under this Section or otherwise, then (a) Buyer will be accompanied by Seller's representative at all times; (b) such access, examination, and inspection shall be at Buyer's sole risk, cost, and expense, and Buyer waives and releases all claims against Seller (its affiliates and their respective directors, officers, employees, attorneys, contractors, and agents) arising in any way therefrom or in any way connected therewith or arising in connection with the conduct of its directors, officers, employees, attorneys, contractors, and agents in connection therewith; and (c) BUYER SHALL RELEASE, INDEMNIFY, DEFEND, AND HOLD HARMLESS SELLER (AND ITS PARENT, SUBSIDIARY COMPANIES, AND OTHER AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, CONTRACTORS, AND AGENTS) (HEREINAFTER COLLECTIVELY REFERRED TO AS "SELLER GROUP") FROM ANY AND ALL CLAIMS, ACTIONS, CAUSES OF ACTION, LIABILITIES, DAMAGES, LOSSES, COSTS, OR EXPENSES (INCLUDING, WITHOUT LIMITATION, COURT COSTS AND ATTORNEYS' FEES),OR LIENS OR ENCUMBRANCES FOR LABOR OR MATERIALS, ARISING OUT OF OR IN ANY WAY CONNECTED WITH SUCH ACCESS, EXAMINATION, AND INSPECTION. 1THE FOREGOING RELEASE AND INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH CLAIMS, Buyer discovers any breach of any representation or warranty contained in this Agreement or any circumstance or condition that upon Closing would constitute such a breachACTIONS, Buyer covenants and that it will promptly so inform SellerCAUSES OF ACTION, LIABILITIES, DAMAGES, LOSSES, COSTS, OR EXPENSES ARISE OUT OF (i) NEGLIGENCE (INCLUDING SOLE NEGLIGENCE, SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, OR OTHERWISE, BUT EXPRESSLY NOT INCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF SELLER OR ANY OTHER INDEMNIFIED PARTY, OR (ii) STRICT LIABILITY. (b) Any information provided Seller shall continue to Buyer or conduct its representatives pursuant to this Agreement shall be held by Buyer business in its ordinary course, and its representatives in accordance withwith all applicable ordinances, statutes, rules, and regulations of all local, state, and federal governments. Seller shall be subject not enter into or assume any contract or commitment which is not in the ordinary course of business as heretofore conducted in association with the Properties and shall carry on its business and operate the Properties as a reasonably prudent operator. Subject to existing contractual obligations, Seller shall not conduct, or commit to participate in, on behalf of Buyer, any operation affecting the terms Properties in which Seller's net share of expense is greater than $50,000.00 for such operation without Buyer's prior written consent. However, Seller may take such steps and incur such expenses as it deems necessary in its sole opinion to deal with an emergency to safeguard any part of the Property without first consulting with Buyer. As soon as possible after the emergency, Seller shall advise Buyer of such emergency action. Except as set forth in this Agreement, Seller shall not sell, assign, transfer, mortgage, farmout, or otherwise dispose of, abandon, or encumber any material portion of the Confidentiality Agreement dated July 13, 1998 by and between Raytheon and Buyer, which is hereby incorporated in this Agreement as though fully set forth hereinProperties. (c) Buyer agrees Seller shall use reasonable efforts, consistent with industry practices in transactions of this type, to identify, with respect to each material portion of the Properties, (i) hold all of preferential rights to purchase that would apply to the books and records of Seller acquired hereunder existing on the Closing Date and not to destroy or dispose of any thereof for a period of four (4) years from the Closing Date or such longer time as may be required by law, and thereafter, if it desires to destroy or dispose of such books and records, to offer first in writing at least sixty (60) days prior to such destruction or disposition to surrender them to Seller transaction contemplated hereby and (ii) following the Closing Date parties holding such rights. In attempting to afford Selleridentify the same, Seller shall not be obligated to go beyond its accountants own records. Seller shall request from the parties so identified, and counselin accordance with the documents creating such rights, during normal business hours, upon reasonable request, full access waivers of the preferential rights to purchase. Seller shall have no obligation hereunder other than to attempt to identify such preferential rights and to request such waivers. Seller shall not be obligated to assure that such waivers are obtained. Seller may tender to any party refusing to waive such a preferential right the interest covered by such right at a price equal to the value allocated to such books, records and other data interest according to Exhibit E. To the extent that such access may an interest is actually sold to a party exercising such a preferential right, it shall be requested for any legitimate purposeexcluded from the transaction contemplated hereby, including without limitation preparation of filings under federal and state securities laws, responding to Governmental Authorities, defending or prosecuting litigation and preparation of Income Tax Returns and other tax filings, at no cost the Base Purchase Price shall be reduced by the amount such party paid to Seller for such interest unless the parties hereto agree otherwise. (other than for reasonable out-of-pocket expenses); providedd) If applicable, howeveras soon as practicable after the execution hereof, that nothing herein Buyer shall limit prepare and submit any of Seller's rights of discoverynecessary filings in connection with the transaction contemplated by this Agreement under the HSR Act. Buyer shall have pay all filing fees in connection with such filing, shall request expedited treatment of such filing by the Federal Trade Commission ("FTC"), shall promptly make any appropriate or necessary subsequent or supplemental filings, and shall furnish to Seller copies of all filings made under the HSR Act at the same rightstime they are filed with the FTC. Seller shall cooperate with Buyer as to all filings required by the HSR Act. (e) After both parties have executed this Agreement, Seller shall deliver to Buyer a copy of its "pay list" for each well listed on Exhibit B (which pay list shall include the name, address, social security number, and applicable share of proceeds of production, to the extent such information is contained in Seller's records, for each party to whom Seller the same obligations, as are set forth above in this Section 5. 1 (c), is disbursing proceeds of production with respect to any material nonprivileged records such property); and, a list of all parties for whom it is holding in suspense proceeds of production. Seller pertaining does not represent or warrant to Buyer the Acquired Assets or to accuracy of the Assumed Liabilities that are retained by Seller, with the exception of Returns relating to Taxes that are not the responsibility of Buyer or alleged by a Governmental Authority to be the responsibility of Buyer"pay lists" so delivered.