AGREEMENT
OF
PURCHASE AND SALE
BETWEEN
XXXXXXXX PETROLEUM COMPANY, SELLER
AND
SKYLINE RESOURCES, INC AND SLATERDOME GAS, INC., hereinafter
collectively referred to as PURCHASER
DATED THE 4th DAY OF JUNE, 2002
AND MADE EFFECTIVE THE 30th DAY OF APRIL, 2002
TABLE OF CONTENTS
I. Effective Date
II. Sale Price and Manner of Payment
III. Closing
IV. Seller's Representations
V. Purchaser's Representations
VI. Property Review
VII. Obligations of Seller and Purchaser
VIII. Environmental Conditions/Indemnities
IX. Operations
X. Conditions of Closing
XI. Post-Closing Obligations
XII. Final Conditions
Exhibit "A": Properties, Contracts and Oil and
Gas Leases
Exhibit "B": Assignment and Xxxx of Sale
Exhibit "C": Property Transfer Accounting Agreement
Exhibit "D": Allocation of Sale Price
Exhibit "E": Dispute Resolution
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (hereinafter referred to as
("Agreement") is dated as of the 4th day of June, 2002, between
Xxxxxxxx Petroleum Company, a Delaware corporation, with a
regional office address at 0000 Xx. Xxxxxxx Xx., Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000, (hereinafter referred to as "Seller")
and Skyline Resources, Inc., a Colorado corporation, whose
address is 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
and Slaterdome Gas, Inc., a Florida corporation, whose address is
00000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxx X0X0X0 (hereinafter
collectively referred to as "Purchaser").
WHEREAS, Seller is the owner of certain properties located in
Moffat County, Colorado, and Carbon County, Wyoming, specifically
described in Exhibit "A", attached hereto and made a part hereof;
and
WHEREAS, Seller desires to sell and Purchaser desires to
acquire all of Seller's right, title and interest in and to the
following:
- the oil and gas lease(s) described in Exhibit "A
(hereinafter, as to said described acreage referred to
as "Leases", whether one or more),
- all permits, licenses, easements, surface leases and
rights of way of every kind as may be assignable relating
to operations conducted on the Leases,
- any contracts or agreements as may be assignable,
including but not limited to, unit agreements, joint
operating agreements, farmout and farmin agreements,
pooling agreements, gas contracts, and other validly
existing agreements, whether of record or not, insofar as
same pertain to operations conducted on the Leases and/or
to production therefrom subsequent to the Effective Date,
including but not limited to those listed on Exhibit "A",
(hereinafter referred to as "Contracts"), and
- the xxxxx, equipment, and personal property located on
the Leases and being used in connection with the
production of oil and gas therefrom, provided that Seller
reserves and shall retain vehicles, tools, rental
equipment, office equipment, communications equipment,
computer equipment, and software;
all of the above rights and interests to the extent and only to
the extent owned by Seller being hereinafter referred to as
"Subject Assets"; provided, however, that the term Subject Assets
shall not include intellectual property, patents, copyrights,
names, logos, trade secrets, proprietary information (including,
but not limited to, geological and geophysical data, engineering
studies, reserve reports, and interpretive studies), and any
rights, interests, or items excluded, excepted, or reserved under
any provision or term of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereby agree as
follows:
I. Effective Date
The effective date of the sale and purchase provided for in
this Agreement shall be May 1, 2002 at 7:00 a.m. local time for
all purposes, including apportionment of revenues, expenses and
production (hereinafter referred to as the "Effective Date").
II. Sale Price and Manner of Payment
1. (a) The sale price for the Subject Assets shall be the sum
of Fifty-Nine Thousand, Five Hundred and no/100's Dollars
($59,500.00) to be paid to Seller, the above being hereinafter
referred to as the "Sale Price".
(b) Seller and Purchaser shall allocate the Sale Price
among the interests and leasehold rights in the Subject Assets as
set forth in Exhibit "D", attached hereto and incorporated
herein. References in this Agreement to a "Property" or
"Properties" refer to xxxxx, units, and other subdivisions of the
Subject Assets listed on Exhibits "A" and "D" which have an
allocation of the Sale Price.
III. Closing
(a) The consummation of the transaction contemplated by
this Agreement (hereinafter referred to as the "Closing") shall
take place at 9:00 a.m. on June 11, 2002, in Seller's offices
located at 0000 Xx. Xxxxxxx Xx., Xxxxx 000, Xxxxxxxxx, Xxxxxxxx
00000, or at such other place to which the parties may agree in
writing, hereinafter referred to as the "Closing Date."
(b) At the Closing, the following shall occur:
(i) Purchaser shall deliver to Seller the Sale Price
by cashier's checks or bank wire transfers.
(ii) Seller in consideration for the Sale Price and
other undertakings by Purchaser under this Agreement shall
execute, acknowledge, and deliver to Purchaser an Assignment
and Xxxx of Sale in the form attached hereto as Exhibit "B"
assigning and transferring the Subject Assets to Purchaser,
including appropriate Federal and State assignments for the
Federal and State leases included in the Subject Assets.
(iii) Purchaser shall provide written documentation
establishing to Seller's satisfaction that Purchaser has
filed the appropriate bonds, surety letters, letters of
credit or proof of insurance in a form acceptable to the
governmental agency or agencies having jurisdiction or
regulatory authority over such well(s).
(iv) Subject to the provisions of Article IX, Seller
shall provide Purchaser with copies of executed change of
operator forms on all xxxxx (active or inactive) operated by
Seller, as required by the applicable regulatory body, to
effect a change of operator for the Subject Assets.
Purchaser shall be responsible for filing such forms with the
applicable regulatory body following Closing and shall pay
any fees related thereto.
(v) Seller and Purchaser shall execute and deliver a
Property Transfer Accounting Agreement substantially in the
form of Exhibit "C".
(vi) It is expressly agreed and understood that the
parties have specifically negotiated and bargained for the
time of Closing as set forth in Article III, and that time is
of the essence in Closing.
IV. Seller's Representations
Seller represents and warrants to and with Purchaser
that:
(a) Each of Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware, and Seller is duly qualified to carry on its business
in the state in which the Subject Assets are located.
(b) Each of Seller has all requisite power and authority to
carry on its business as presently conducted, to enter into this
Agreement, to sell the Subject Assets on the terms described in
this Agreement, and to perform its obligations hereunder.
(c) Each of Seller will protect, defend, and indemnify
Purchaser from and against any liability or expense as a result
of any undertakings or agreements of each Seller for each
Seller's brokerage fees, finder's fees, agent's commissions or
other similar forms of compensation in connection with this
Agreement or any agreement or transaction contemplated hereby.
(d) If any unrecorded written mortgage, deed of trust, or
similar lien created by either Seller exists with respect to the
Subject Assets, the appropriate Seller will obtain and file of
record a release of same.
(e) The assignment of the Subject Assets from Seller to
Purchaser shall be without warranty of title, either express or
implied, and shall be subject to all validly existing
encumbrances, other than those referred to in Article IV (d)
above, which pertain to the Leases or other assets. The
assignment of the Subject Assets from Seller to Purchaser shall
be made subject to all royalties, overriding royalty interests,
burdens and encumbrances of record as of the Effective Date,
except for encumbrances to be released pursuant to Article IV (d)
above.
(f) THE EXPRESS REPRESENTATIONS OF SELLER CONTAINED IN THIS
AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF ANY OTHER
REPRESENTATIONS OR WARRANTIES. SELLER EXPRESSLY DISCLAIMS AND
NEGATES AND PURCHASER HEREBY WAIVES, ANY REPRESENTATION OR
WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY, OR VOLUME OF
RESERVES, OIL, GAS OR OTHER HYDROCARBONS, IF ANY, IN OR UNDER THE
LEASES; THE ENVIRONMENTAL CONDITION, EITHER SURFACE OR
SUBSURFACE, OR OTHER CONDITION OF THE SUBJECT ASSETS; OR THE
OWNERSHIP OR OPERATION OF THE SUBJECT ASSETS OR ANY PART THEREOF.
SELLER DOES NOT MAKE OR PROVIDE, AND PURCHASER HEREBY WAIVES, ANY
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE
QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
CONFORMITY TO SAMPLES, OR CONDITION OF THE SUBJECT ASSETS OR ANY
PART THEREOF. SELLER DISCLAIMS AND NEGATES, AND PURCHASER HEREBY
WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY. THE PERSONAL PROPERTY, EQUIPMENT,
IMPROVEMENTS, FIXTURES, AND APPURTENANCES CONVEYED AS PART OF THE
SUBJECT ASSETS ARE SOLD AND PURCHASER ACCEPTS SAME "AS IS, WITH
ALL FAULTS".
V. Purchaser's Representations
Purchaser represents and warrants to and with Seller
that:
(a) Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Colorado (Skyline Resources, Inc.) and State of Florida
(Slaterdome Gas, Inc.), and Purchaser is duly qualified to carry
on its business in the state in which the Subject Assets are
located.
(b) Purchaser has all requisite power and authority to
carry on its business as presently conducted, to enter into this
Agreement, to purchase the Subject Assets on the terms described
in this Agreement, and to perform its obligations hereunder.
(c) Purchaser is now, and hereafter shall continue to be,
qualified to own Federal and State oil, gas and mineral leases in
all jurisdictions where such leases lie, if such leases are
included in the Subject Assets, and the consummation of the
transactions contemplated hereby will not cause Purchaser to be
disqualified as such an owner or to exceed any acreage limitation
imposed by any law, statute, rule, or regulation.
(d) Purchaser will protect, defend, and indemnify Seller
from and against, any liability or expense as a result of
undertakings or agreements of Purchaser for brokerage fees or
expenses, finder's fees, agent's commissions or other similar
forms of compensation in connection with this Agreement or any
agreement or transaction contemplated hereby.
(e) Purchaser shall not pay any commissions or fees to any
employee, officer or agent of Seller nor favor employees,
officers or agents of Seller with gifts or entertainment of
significant cost or value, nor enter into any business
arrangement with employees, officers or agents of Seller other
than as representatives of Seller, without Seller's written
approval.
VI. Property Review
(a) Seller shall allow Purchaser access to such documents
as listed in Article XI (a) which relate to the Leases at each of
Seller's office in Englewood, Colorado, for the purpose of
examining title. Seller shall not be obligated to perform any
title work and shall not be required to update or supplement
abstracts or title opinions. PURCHASER ACKNOWLEDGES THAT SELLER
HAS MADE NO REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OR
COMPLETENESS OF ANY INFORMATION OR AS TO ITS TITLE TO THE SUBJECT
ASSETS, AND IN ENTERING INTO AND PERFORMING THIS AGREEMENT,
PURCHASER HAS RELIED AND WILL RELY SOLELY UPON ITS INDEPENDENT
INVESTIGATION OF AND JUDGMENT WITH RESPECT TO THE SUBJECT ASSETS,
THEIR VALUE, AND SELLER'S TITLE THERETO.
VII. Obligations of Seller and Purchaser
(a) Each of Seller reserves and retains its respective
claims and accounts for recovery of money or damages, rights to
insurance and indemnity coverage, rights to tax refunds, claims
of Seller of whatsoever kind under Contracts, and audit rights,
if any, and adjustments resulting therefrom attributable to the
Subject Assets with respect to any period prior to the Effective
Date. Purchaser shall assume all risk and liability of
whatsoever nature connected with operations conducted on the
Subject Assets both before and after the Effective Date, and
agrees to release, indemnify, defend and hold Seller harmless
from all liabilities, penalties, claims, causes of action,
demands, lawsuits, and expenses associated with the operations
both before and after the Effective Date and as to all other
claims or causes of action asserted.
(b) Purchaser accepts and assumes all obligations and
liabilities related to and shall (i) properly plug and abandon
any and all xxxxx, including any inactive xxxxx or temporarily
abandoned xxxxx, included in the Subject Assets, or which are
present on, or have been or are drilled on, the land and premises
covered by the Leases (including land and premises pooled
therewith) or which otherwise are required to be plugged and
abandoned as a result of obligations and liabilities imposed by
or arising from the Leases and Contracts; (ii) replug any well,
borehole, or previously plugged well on the land and premises
covered by the Leases (including land and premises pooled
therewith) to the extent required or necessary by Contract, law,
rule, regulation, or Lease obligation; (iii) remove and properly
dispose of any equipment, structures, materials, platforms, flow
lines, and property of whatsoever kind related to or associated
with the Subject Assets; (iv) clean up, restore, and remediate
the premises covered by the Leases or related to the Subject
Assets; and (v) perform all obligations applicable to or imposed
on the lessee, owner, or operator under the Leases and Contracts
or as required by applicable laws, rules, and regulations related
or pertaining to the Subject Assets. Purchaser agrees to
release, protect, defend, indemnify and hold each Seller, its
respective officers, agents and employees free and harmless from
and against any and all costs, expenses, claims, demands and
causes of action of every kind and character (including claims of
any lessor, governmental authority, or other person or entity)
arising out of, incident to, or in connection with the
obligations accepted and assumed by Purchaser under this Article
VII (b), including, but not limited to plugging, replugging, and
abandonment of xxxxx and boreholes and/or abandonment of and
proper disposition of any property or other equipment associated
with the Subject Assets (including, without limitation, any
structures, materials, xxxxx, casing, leasehold equipment, and
other property), including bonding requirements, REGARDLESS OF
WHETHER THE LIABILITY THEREFOR IS BASED IN WHOLE OR IN PART UPON
AN ACT, OMISSION, NEGLIGENCE, OR STRICT LIABILITY OF SELLER, OR
OF THE PURCHASER, OR OF SOME OTHER PARTY, AND REGARDLESS OF
WHETHER THE LIABILITY OR OBLIGATION EXISTED OR HAD ACCRUED PRIOR
TO CLOSING. Purchaser shall comply with all bonding or other
requirements related to plugging, abandonment, and/or restoration
obligations as required by any governmental agency or authority.
(c) All accounts payable and other costs and expenses with
respect to the Seller's interest in the Subject Assets incurred
prior to the Effective Date shall be the obligation of and be
paid by Seller, and those incurred commencing with the Effective
Date shall be the obligation of and be paid by Purchaser.
(d) All prepaid utility charges applicable to periods after
the Effective Date shall be the responsibility of Purchaser.
(e) If monies are received by either party hereto which
under the terms of this Agreement belong to the other party, the
same shall immediately be paid over to the proper party. If an
invoice or other evidence of an obligation is received which is
applicable to periods both prior to and after the Effective Date
and is thus, under the terms of the preceding paragraphs,
partially the obligation of Seller and partially the obligation
of Purchaser, then the parties shall consult with each other and
each shall promptly pay its portion of such obligation to the
obligee.
(f) All unpaid ad valorem taxes relating to the Subject
Assets for the tax period in which the Effective Date occurs
shall be prorated as of the Effective Date between Seller and
Purchaser. The portion of such prorated tax liability which is
attributable to Seller shall be credited to Purchaser's account
in the final accounting statement provided for in Article XI(f)
hereof. Purchaser shall pay or cause to be paid to the taxing
authorities all such taxes relating to the tax period in which
the Effective Date occurs. Purchaser shall supply Seller with
proof of payment promptly after paying same.
All taxes, including, but not limited to, excise taxes,
state severance taxes, ad valorem taxes, and any other local,
state, and/or federal taxes or assessments attributable to the
Subject Assets or any part thereof prior to the Effective Date,
remain Seller's responsibility and all deductions, credits and
refunds relating to said taxes, attributable to the Subject
Assets or any part thereof prior to the Effective Date (no matter
when received), belong to Seller. All such taxes attributable to
the Subject Assets or any part thereof at and after the Effective
Date are Purchaser's responsibility, and Purchaser shall
reimburse Seller for any such taxes previously paid by Seller and
all deductions, credits, and refunds relating thereto at and
after the Effective Date (no matter when received) belong to
Purchaser.
(g) Purchaser shall be liable for any sales tax or other
transfer tax, as well as any applicable conveyance, transfer and
recording fees and real estate transfer stamps or taxes imposed
on the transfer of the Subject Assets pursuant to this Agreement.
Purchaser shall defend, indemnify, and hold Seller harmless with
respect to the payment of any of these taxes, including any
interest or penalties assessed thereon. If Seller is required by
applicable state law to report and pay these taxes and/or fees,
Purchaser shall, upon Seller's presentation of an invoice,
promptly deliver a check to Seller in full payment of the
invoice.
(h) Seller and Purchaser shall each bear its own costs and
expenses, including, but not limited to, attorney's fees and
third-party consultant fees, incurred in connection with the
preparation and consummation of the transactions contemplated in
this Agreement.
(i) The sale of the Subject Assets shall be subject to, and
Purchaser shall assume, pay for, and perform all duties,
liabilities, and obligations relating to the Subject Assets,
including, but not limited to, those imposed or required by any
applicable and valid recorded or unrecorded contracts and
agreements (including, but not limited to, royalties, production
payments, net profits interests, carried working interests,
required sale/delivery of oil or gas in accordance with any
existing contracts, and similar burdens and commitments).
VIII. Environmental Conditions/Indemnities
(a) The Subject Assets which have been identified herein
and are the subject of this Agreement have been utilized by
Seller for the purpose of exploration, development, processing,
temporary storage, and transportation of oil, gas and/or
condensate. Information, to the best of Seller's knowledge,
regarding any substantial quantity of crude oil and produced
water which may have been spilled or disposed of onsite and the
locations thereof, including pit closures, burial, land farming,
land spreading, and underground injection will be made available
to Purchaser prior to Closing; provided, however, that Seller
shall not be liable for unintentional failure to disclose such
information and shall not be required to provide information
which is a matter of public record or filed with governmental
agencies. Purchaser acknowledges that there may have been spills
of these materials in the past onto the Subject Assets described
herein. In addition, some oil and gas field production equipment
or flow lines may contain asbestos and/or Naturally Occurring
Radioactive Material (hereinafter referred to as "NORM"). In
this regard, Purchaser expressly understands that NORM may affix
or attach itself to the inside of xxxxx, materials and equipment
as scale, or in other forms, and that said xxxxx, material and
equipment located on the property described herein may contain
NORM and that NORM-containing material may be buried or otherwise
disposed of on the Subject Assets. Purchaser also expressly
understands that special procedures may be required for the
removal and disposal of asbestos and NORM from the Subject Assets
where it may be found and Purchaser agrees to assume all
liability for such asbestos and NORM and for use of appropriate
procedures and activities required to handle and dispose of same.
(b) Purchaser shall dispose of or discharge any waste from
the Subject Assets (including but not limited to produced water,
drilling fluids and other associated wastes) in accordance with
applicable local, state and federal regulations. To the extent
that the Subject Assets are not sold in fee to Purchaser,
Purchaser shall keep records of the types, amounts and location
of wastes which are disposed onsite and offsite. Purchaser shall
take at its sole expense whatever remedial action or cleanup and
restoration of the Subject Assets is necessary to meet any local,
state or federal requirements directed at protecting human health
and the environment in effect at that time, as well as whatever
action may be required to meet contractual or lease obligations
related to the Subject Assets.
(c) Purchaser, its successors and assigns, assumes full
responsibility for, and hereby releases and agrees to indemnify
and defend each of Seller, its respective agents, officers,
employees, subsidiaries, and affiliates, from and against all
requirements, obligations, suits, claims, demands, liabilities,
expenses, losses, fines, penalties, and causes of action, brought
or asserted by or arising in favor of any governmental authority
or agency, person (including Purchaser and Purchaser's employees
and agents), or entity for, on account of, related to, or
resulting from personal injury, sickness, death, property damage
or loss of property, clean up, remediation, restoration of
premises, contamination or pollution of natural resources
(including soil, land, air, surface water, or ground water) or
environmental damage, caused by, arising from, or connected in
any manner with the presence, disposal, release, or discharge of
any material or substance of any kind, including, without
limitation, asbestos, NORM, solid waste, pollutants,
contaminants, hydrocarbons, or hazardous substance, in, under, or
on the Subject Assets, or disposed, released, or discharged
therefrom into the atmosphere or into or upon land or into any
water course or body of water, including ground water, whether or
not attributable to Seller's activities or the activities of
Seller's officers, employees, or agents or to the activities of
third parties, and REGARDLESS OF WHETHER OR NOT SELLER OR OTHER
INDEMNITEE WAS OR IS AWARE OF SUCH ACTIVITIES AND REGARDLESS OF
WHETHER THE MATERIAL OR SUBSTANCE NOW EXISTS OR IS PRESENT ON THE
SUBJECT ASSETS, OR HAS BEEN RELEASED, DISCHARGED, OR DISPOSED
FROM THE SUBJECT ASSETS PRIOR TO ASSIGNMENT TO PURCHASER. This
indemnification and assumption shall include and apply to
liability for voluntary environmental response actions undertaken
pursuant either to the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA), as such may be amended
from time to time, or to any other federal, state or local law or
regulation.
(d) THE INDEMNITIES, ASSUMPTIONS OF OBLIGATIONS, AND
RELEASES SET FORTH IN (a), (b), AND (c) OF THIS ARTICLE VIII,
SHALL APPLY WITHOUT REGARD TO WHETHER OBLIGATIONS, LIABILITY,
INJURY, DEATH, DAMAGE, DESTRUCTION, LOSS OR CONTAMINATION IS
CAUSED IN WHOLE OR IN PART BY THE STRICT LIABILITY, NEGLIGENCE,
ACTIVE OR PASSIVE, ON THE PART OF SELLER, OR OTHER INDEMNITEE, OR
ANY OTHER PERSON OR ENTITY. Such indemnities, assumptions of
obligations, and releases shall be in addition to any other
indemnity provisions contained in this Agreement, and it is
expressly understood and agreed that the terms of this Article
shall control over any conflicting terms or provisions contained
in this Agreement and shall survive and remain as valid
continuing covenants and obligations following Closing.
IX. Operations
Seller, as to the portion of the Subject Assets to be
conveyed which it now operates, shall from the date of execution
of this Agreement, continue to operate the same in a good and
workmanlike manner until the Closing, when such operations shall
be turned over to and become the responsibility of Purchaser,
unless an applicable unit, pooling, communitization, operating or
other agreement requires otherwise, in which case (unless
Purchaser and Seller otherwise agree) Seller shall continue the
physical operation of such portion of the Subject Assets pursuant
to and under the terms of such applicable agreement, until such
time after the Closing as such applicable agreement may require;
PROVIDED, HOWEVER, THAT SELLER SHALL HAVE NO LIABILITY AS
OPERATOR TO PURCHASER FOR LOSSES OR DAMAGES SUSTAINED, OR
LIABILITIES INCURRED, EXCEPT AS MAY RESULT DIRECTLY FROM SELLERS'
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Such operations from and
after the Closing shall be conducted by Seller for and on behalf
of Purchaser, and Seller shall make appropriate charges to the
Purchaser pursuant to any applicable operating agreement. In the
absence of any applicable operating agreement, for any such
services as operator of the Subject Assets (or portions thereof)
performed by Seller from and after the Closing, Purchaser shall
pay to Seller all reasonable and necessary expenses incurred by
Seller in such operation, or in the protection or maintenance of
the Subject Assets. Any such charges and expenses shall be
recovered by Seller as part of the final accounting described in
Article XI (f). Provided, however, that Seller shall not conduct
any operations between the Effective Date and the Closing Date
resulting in expense in excess of Five Thousand and no/100's
($5,000.00) without the prior approval of Purchaser, except that
Seller, in its sole discretion or at the request or demand of a
government or other regulatory agency with jurisdiction, may make
reasonable expenditures in excess of Five Thousand and no/100's
Dollars ($5,000.00) if necessary to prevent loss or damage to
life, property or the environment..
Purchaser understands and agrees that operation of all or
part of the Subject Assets may be subject to an operating
agreement or other contract governing subsequent operation and
that Seller does not warrant or represent that Purchaser will
become operator.
X. Conditions of Closing
Each party's obligation to consummate the transaction
provided for herein is subject to the satisfaction or waiver by
the other party of the following conditions:
(a) The representations contained in Articles IV and V
hereof shall be true and correct in all material respects on
Closing Date as though made on and as of the Closing Date.
(b) Each party shall have performed in all material
respects the obligations, covenants and agreements hereunder to
be performed by it at or prior to the Closing Date.
(c) Purchaser has delivered or caused to be delivered to
Seller proof of bonds, in form and substance and issued by
corporate sureties satisfactory to Seller, covering the Subject
Assets required under any laws, rules or regulations of any
federal, Indian tribe, state or local government agencies having
jurisdiction over the Subject Assets, or a commitment by a surety
company, satisfactory to Seller, to issue such bonds upon
Closing.
XI. Post-Closing Obligations
(a) Seller shall deliver to Purchaser, as soon after
Closing as practicable, copies of title files, title opinions,
certificates of title, abstracts, supplemental abstracts,
division order files, surveys, agreements, contracts, lease
files, and other similar materials relating to operation or
ownership of the Subject Assets, together with well files, well
logs and charts, cores and related data, and absorption and
desorption data; provided that Seller shall exclude and retain
(i) papers protected by the attorney client privilege, or
attorney work product or other privilege; (ii) proprietary data,
which includes but is not limited to interpretive geological
and/or geophysical information or other interpretive studies and
analyses, reserve reports, economic analyses, bids or proposals
to purchase the Subject Assets; and (iii) any document or data
which is protected by third party confidentiality provisions or
other restrictions against disclosure. Seller does not warrant
the completeness or accuracy of the materials and documents to be
furnished to Purchaser and shall not be liable for unintentional
failure to deliver any such materials or documents. For a period
of seven (7) years after the Effective Date, Seller shall have
reasonable access to such materials and documents for purpose of
audit or where, in the opinion of Seller's counsel, access is
required by law or necessary to Seller's defense or prosecution
of legal actions. Purchaser shall not destroy such materials and
documents during said seven (7) year period without prior written
notification to Seller and shall, in such event and upon request
from Seller, return the requested materials and documents to
Seller at Seller's expense.
(b) Purchaser shall maintain a true and correct set of
records pertaining to all activities relating to its performance
of this Agreement and all transactions related thereto for at
least three (3) years from the Effective Date for purposes of
determining compliance with the terms and conditions of this
Agreement and the joint operating agreements in place as of the
Effective Date. Seller or its representatives shall have the
right to audit said records during the three (3) year period.
(c) Except as provided for in Article III (b)(iv),
Purchaser shall be solely responsible for all filings and
recording of documents and other costs related to the Subject
Assets and for all fees connected therewith, and Purchaser shall
advise Seller of the pertinent recording data. Seller shall not
be responsible for any loss to Purchaser because of Purchaser's
failure to file or record documents promptly.
(d) Purchaser shall use its best efforts after the Closing
to promptly obtain approval of assignments of federal and state
leases which require consent to assignment and at its own cost.
Until such approvals are obtained, Seller shall continue to hold
record title and/or operating rights to such Leases as nominee
for Purchaser, during which time Purchaser shall indemnify and
hold Seller harmless from any and all claims, suits, obligations
and liabilities of any kind, or character relating to such
Leases. Seller agrees to cooperate fully with Purchaser and to
assist Purchaser in obtaining the consent of the Bureau of Land
Management or Minerals Management Service or other state or
federal organization as to any and all assignments of working
interests and operating rights contained in the Subject Assets
covering federal, state or privately owned lands.
(e) Subject to the provisions of Article IX, Purchaser
shall within thirty (30) days after Closing remove or delete, or
cause to be removed or deleted, the names and marks used by
Seller and all variations and derivations thereof and logos
relating thereto from the Subject Assets and shall not thereafter
make any use whatsoever of those names, marks, and logos.
Purchaser further agrees that Seller, in addition to its other
remedies for breach hereof, shall have the right to enter and
remove at Purchaser's expense any such names and marks that are
not removed or deleted within the specified time.
(f) As soon as reasonably practicable after Closing, Seller
shall prepare, in accordance with this Agreement and with
standard industry practice, and deliver to Purchaser, a final
accounting statement showing the proration of credits and payment
obligations of Purchaser and Seller. Not later than thirty (30)
days after receipt thereof, Purchaser shall deliver to Seller a
written report containing any changes that Purchaser proposes to
be made to such statement. The parties shall use all reasonable
efforts to reach agreement on the final statement within one
hundred twenty (120) days after the Closing Date. If pursuant to
such accounting either party shall owe any obligation to the
other, then the party owing the obligation shall promptly pay to
the other party the amount of such obligation.
(g) After Closing, Seller and Purchaser shall execute,
acknowledge and deliver such further conveyances, transfer
orders, notices, assumptions and releases and such other
instruments, and shall take such further actions, as may be
necessary or appropriate to assure fully to Purchaser and its
successors or assigns all of the Subject Assets and to assure
fully to Seller and its successors and assigns the assumptions of
liabilities and obligations by Purchaser. However, Purchaser
shall assume all responsibility for notifying the purchaser of
oil and gas production from the Subject Assets, and such other
designated persons who may be responsible for disbursing payments
for the purchase of such production, of the change of ownership
of the Subject Assets.
(h) To the extent not already obtained prior to Closing,
Purchaser shall immediately upon Closing seek unconditional
approval from all governmental authorities, including, where
applicable, the Minerals Management Service, for assignment of
the Subject Assets and for designation of Purchaser as operator
thereof (to the extent permitted by any applicable operating
agreement or joint venture) and shall actively pursue recognition
and acceptance by such authorities of Purchaser's assumption of
obligations and responsibilities.
XII. Final Conditions
(a) Seller and Purchaser, singularly and plurally, warrant
and agree that each shall use all reasonable efforts to take or
cause to be taken such actions as may be necessary to consummate
and make effective the transaction contemplated by this Agreement
and to assure that it will not be under any material, corporate,
legal or contractual restriction that would prohibit or delay the
timely consummation of such transaction.
(b) In the event all or part of the Subject Assets,
including equipment and personal property, are damaged or
destroyed by fire or other calamity prior to Closing, Seller
shall have the option, but not the obligation, of repairing the
damage at its sole cost or removing the damaged Subject Assets
from the sale and adjusting the Sale Price to reflect retention
of such Subject Assets.
(c) All of the terms, covenants and conditions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, successors and assigns.
(d) This Agreement is for the benefit of Seller and
Purchaser only and not for the benefit of third parties.
(e) Neither Seller nor Purchaser may assign any rights or
delegate any duties established pursuant to this Agreement
without the prior written consent of the other party. In the
event of any such assignment, Purchaser shall remain obligated to
Seller for fulfillment of all terms, conditions, indemnities, and
performance of requirements set forth in this Agreement.
(f) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Colorado, without giving
effect to any principles of conflicts of law. All assignments
and instruments of conveyance executed in accordance with this
Agreement shall be governed by, interpreted and enforced in
accordance with the laws of the State where the Subject Assets
conveyed thereby are located.
(g) Neither party shall make any press release or other
public announcements, concerning this transaction, without the
prior written approval of the other party and agreement to the
form of the announcement, except as may be required by applicable
laws or rules and regulation of any governmental agency or stock
exchange. Purchaser shall keep the Sale Price and the terms of
this Agreement confidential at all times, except with Seller's
prior written consent or as may be required by applicable laws,
rules or regulations.
(h) All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be
deemed to be validly given, made or served, if in writing and
delivered personally or sent by courier service, telefax, telex,
or certified mail to the address listed below:
If to Seller:
Xxxxxxxx Petroleum Company
0000 Xx. Xxxxxxx Xx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
If to Purchaser:
Skyline Resources, Inc.
000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
Phone: 000-000-0000
Fax: 000-000-0000
Slaterdome Gas, Inc.
00000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxx X0X 0X0
Attention: Xx. Xxxxxx Xxxxx
Phone: 000-000-0000
Fax: 000-000-0000
(i) This Agreement is specifically conditioned upon Seller
receiving all waivers, consents, approvals, permits and
authorizations and actions of third parties, including lessors'
consents and waivers of preferential purchase rights, which by
federal, state or local law, rule or regulation, agreement or by
their inherent nature are required to be obtained to complete the
purchase and sale contemplated herein. Seller shall notify all
holders of such preferential rights and rights to consent to or
approve assignment of all or any part of the Subject Assets of
its intention to sell the portion of the Subject Assets affected
thereby, and of such terms and conditions of this Agreement to
which the holders of such rights are entitled. Seller shall
promptly notify Purchaser if any preferential rights are
exercised, any consents or approvals denied, or if the requisite
period has elapsed without said rights having been exercised or
consents or approvals having been received. Further, at Closing,
the Sale Price shall be adjusted downward by the value allocated
on Exhibit "D" to any Subject Asset affected by the failure to
obtain a consent or by the exercise of a preferential right and
such Subject Asset shall be excluded from sale hereunder. Seller
shall in its sole judgment determine whether there has been a
valid exercise of a preferential right or failure to obtain a
necessary consent related to a Property or Properties and shall
not be liable for exclusion from sale of any such Property;
provided, however, that if Seller determines to proceed with sale
of such Property and Purchaser receives assignment of same at
Closing then Purchaser shall indemnify, defend, and hold Seller
harmless from any claim or cause of action asserted by any person
who claims to have or to have exercised a preferential right or
refusal of consent or approval related to the Property.
(j) THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS
PROVIDED FOR IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION,
THOSE SET FORTH IN ARTICLES IV (f), VII (b), AND ARTICLE VIII
SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES, COSTS, EXPENSES
AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM THE GROSS,
ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, FAULT, OR STRICT
LIABILITY OF THE INDEMNITEE OR OF ANY OTHER PERSON OR ENTITY.
INDEMNITIES AND RELEASES SHALL BE FOR THE BENEFIT OF EACH SELLER,
INDIVIDUALLY AND SHALL EXTEND TO AND PROTECT THE INDEMNIFIED
PARTY'S OFFICERS, EMPLOYEES, AND AGENTS.
(k) The parties agree that they will use the procedures
outlined in Exhibit "E" attached hereto, to resolve disputes
which may arise between them under this Agreement; provided,
however, that this Article XII (k) and Exhibit "E" shall not
apply to disputes related in any manner to indemnity or release
obligations. It is further provided, notwithstanding the
provisions of Exhibit "E" that either party may seek a
restraining order, temporary injunction, or other provisional
judicial relief if the party in its sole judgment believes that
such action is necessary to avoid irreparable injury or to
preserve the status quo, but parties will continue to participate
in good faith in the procedures despite any such request for
provisional relief.
(l) If any release, assumption or obligation or liability,
or indemnity is held to be invalid or unenforceable, then the
parties intend and agree that the remaining portion of such
release, assumption, or indemnity shall remain in force and
effect, modified to the minimum extent required to comply with
applicable law for enforceability.
(m) The liability and obligations of Seller and Purchaser
under each of their respective representations and covenants,
including all indemnities, releases, and assumption of
obligations contained in this Agreement shall survive Closing and
execution and delivery of the assignments referenced herein and
remain in force and effect.
(n) This Agreement constitutes the entire agreement between
Seller and Purchaser with respect to the transactions
contemplated herein, and supersedes all prior oral or written
agreements, commitments, understandings, or information otherwise
furnished by Seller to Purchaser with respect to such matters.
No amendment shall be binding unless in writing and signed by
representatives of both parties.
(o) This Agreement may be executed in counterparts, each of
which shall be considered an original for all purposes, and the
signature pages of which may be combined to form multiple
original Agreements.
IN WITNESS WHEREOF, the Seller and Purchaser, acting
through their authorized representatives, do hereby execute and
deliver this Agreement as of the date first written above.
SELLER:
XXXXXXXX PETROLEUM COMPANY
By:
______________________________
Xxxxxxx Xxxxxxxx
Attorney-in-Fact
PURCHASER:
SKYLINE RESOURCES, INC.
By:
_____________________________
Title:
_____________________________
SLATERDOME GAS, INC.
By:
_____________________________
Title:
_____________________________
EXHIBIT "A"
ATTACHED HERETO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE
AGREEMENT DATED THE 4th DAY OF JUNE, 2002 BY AND BETWEEN XXXXXXXX
PETROLEUM COMPANY, AS SELLER, AND SKYLINE RESOURCES, INC. AND
SLATERDOME GAS, INC. AS PURCHASER.
Properties:
Oil and Gas Leases:
EXHIBIT "B"
ATTACHED HERETO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE
AGREEMENT DATED THE 4th DAY OF JUNE, 2002 BY AND BETWEEN XXXXXXXX
PETROLEUM COMPANY, AS SELLER, AND SKYLINE RESOURCES, INC. AND
SLATERDOME GAS, INC. AS PURCHASER.
ASSIGNMENT AND XXXX OF SALE
Xxxxxxxx Petroleum Company ("Xxxxxxxx") a Delaware
corporation with a regional office in Englewood, Colorado,
hereinafter referred to as "Assignor", for and in consideration
of the sum of Ten Dollars ($10.00) cash in hand paid and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, does hereby transfer and assign
unto Skyline Resources, Inc., a Colorado corporation, whose
address is 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
and Slaterdome Gas, Inc., a Florida corporation, whose address is
00000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxx X0X0X0, hereinafter
referred to collectively as "Assignee", all of Assignor's right,
title and interest in and to the oil and gas leases described in
Exhibit "A", in the proportions of Skyline Resources, Inc.
66.6666%, Slaterdome Gas, Inc. 33.3334%, attached hereto and
expressly made a part hereof, and the rights, privileges and
estates given, created and granted under said Leases described in
Exhibit "A" (said oil and gas leases being hereinafter referred
to as "Leases," whether one or more), together with all of
Assignor's right, title and interest in and to all contracts or
agreements, permits, licenses, easements, surface leases and
rights of way relating to operations conducted on the Leases
subsequent to assignment, and all of Assignor's right, title and
interest in and to the xxxxx (except as may be designated on
Exhibit "A"), equipment and personal property located on the
Leases and being used solely and exclusively in connection with
the production of oil and gas therefrom, provided that Seller
reserves and shall retain vehicles, tools, rental equipment,
office equipment, communications equipment, computer equipment,
and software. The above described properties and interests to
the extent transferred and assigned hereunder are referred to as
"Assigned Assets."
This Assignment and Xxxx of Sale (the "Assignment") is made
and accepted upon the following terms and conditions:
1. This Assignment shall be effective as of the 1st day of
May 2002, at 7:00 a.m., local time, regardless of the date of
execution.
2. THIS ASSIGNMENT IS MADE WITHOUT WARRANTY OF TITLE,
EITHER EXPRESS OR IMPLIED, AND IS SUBJECT TO ALL VALIDLY EXISTING
ENCUMBRANCES AND AGREEMENTS, WHETHER OR NOT RECORDED, WHICH MAY
AFFECT SAID LEASES AND OTHER ASSIGNED ASSETS, INCLUDING, BUT NOT
LIMITED TO THOSE CONTAINED IN EXHIBIT "A" ATTACHED HERETO.
ASSIGNOR DOES NOT MAKE OR PROVIDE, AND ASSIGNEE HEREBY WAIVES,
ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE
QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
CONFORMITY TO SAMPLES, OR CONDITION OF THE ASSIGNED ASSETS OR ANY
PART THEREOF. ASSIGNOR DISCLAIMS AND NEGATES, AND ASSIGNEE
HEREBY WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY. THE PERSONAL PROPERTY, EQUIPMENT,
IMPROVEMENTS, FIXTURES, AND APPURTENANCES CONVEYED AS PART OF THE
ASSIGNED ASSETS ARE SOLD AND ASSIGNEE ACCEPTS SAME "AS IS, WITH
ALL FAULTS".
3. Assignor reserves and retains all claims and accounts
of Assignor for recovery of money or damages, rights to insurance
and indemnity coverage, rights to tax refunds, claims of Assignor
of whatsoever kind under all contracts and agreements, and audit
rights, if any, and adjustments resulting therefrom attributable
to the Assigned Assets with respect to any period prior to the
effective date of this Assignment. Assignee shall assume all
risk and liability of whatsoever nature connected with operations
conducted on the Assigned Assets from and after the effective
date of this Assignment.
4. Assignee accepts and assumes all obligations and
liabilities related to and shall (i) properly plug and abandon
any and all xxxxx, including any inactive xxxxx or temporarily
abandoned xxxxx, included in the Assigned Assets, or which are
present on, or have been or are drilled on, the land and premises
covered by the Leases (including land and premises pooled
therewith) or which otherwise are required to be plugged and
abandoned as a result of obligations and liabilities imposed by
or arising from the Leases or contracts and agreements related to
the Assigned Assets; (ii) replug any well, borehole, or
previously plugged well on the land and premises covered by the
Leases (including land and premises pooled therewith) to the
extent required or necessary by contract, law, rule, regulation,
or Lease obligation; (iii) remove and properly dispose of any
equipment, structures, materials, platforms, flow lines, and
property of whatsoever kind related to or associated with the
Assigned Assets; (iv) clean up, restore, and remediate the
premises covered by the Leases or related to the Assigned Assets;
and (v) perform all obligations applicable to or imposed on the
lessee, owner, or operator under the Leases and contracts and
agreements related to the Assigned Assets or as required by
applicable laws, rules, and regulations related or pertaining to
the Assigned Assets. Assignee agrees to release, protect,
defend, indemnify and hold Assignor, its officers, agents and
employees free and harmless from and against any and all costs,
expenses, claims, demands and causes of action of every kind and
character (including claims of any lessor, governmental
authority, or other person or entity) arising out of, incident
to, or in connection with the obligations accepted and assumed by
Assignee under this Paragraph 4, including, but not limited to
plugging, replugging, and abandonment of xxxxx and boreholes
and/or abandonment of and proper disposition of any property or
other equipment associated with the Assigned Assets (including,
without limitation, any structures, materials, xxxxx, casing,
leasehold equipment, and other property), including bonding
requirements, regardless of whether the liability therefor is
based in whole or in part upon an act, omission, negligence, or
strict liability of Assignor, or of the Assignee, or of some
other party, and regardless of whether the liability or
obligation existed or had accrued prior to this Assignment.
5. Assignee, its successors and assigns, assumes full
responsibility for, and hereby releases and agrees to indemnify
and defend Assignor, its agents, officers, employees,
subsidiaries, and affiliates, from and against all requirements,
obligations, suits, claims, demands, liabilities, expenses,
losses, fines, penalties, and causes of action, brought or
asserted by or arising in favor of any governmental authority or
agency, person (including Assignee and Assignee's employees and
agents), or entity for, on account of, related to, or resulting
from personal injury, sickness, death, property damage or loss of
property, clean up, remediation, restoration of premises,
contamination or pollution of natural resources (including soil,
land, air, surface water, or ground water) or environmental
damage, caused by, arising from, or connected in any manner with
the presence, disposal, release, or discharge of any material or
substance of any kind, including, without limitation, asbestos,
NORM, solid waste, pollutants, contaminants, hydrocarbons, or
hazardous substance, in, under, or on the Assigned Assets, or
disposed, released, or discharged therefrom into the atmosphere
or into or upon land or into any water course or body of water,
including ground water, whether or not attributable to Assignor's
activities or the activities of Assignor's officers, employees,
or agents or to the activities of third parties, and REGARDLESS
OF WHETHER OR NOT ASSIGNOR OR OTHER INDEMNIFIED PERSON WAS OR IS
AWARE OF SUCH ACTIVITIES AND REGARDLESS OF WHETHER THE MATERIAL
OR SUBSTANCE NOW EXISTS OR IS PRESENT ON THE ASSIGNED ASSETS, OR
HAS BEEN RELEASED, DISCHARGED, OR DISPOSED FROM THE ASSIGNED
ASSETS PRIOR TO ASSIGNMENT TO ASSIGNEE. This indemnification and
assumption includes and applies to liability for voluntary
environmental response actions undertaken pursuant either to the
Comprehensive Environmental Response Compensation and Liability
Act (CERCLA), as such may be amended from time to time, or to any
other federal, state or local law or regulation.
6. THE INDEMNITIES, ASSUMPTIONS OF OBLIGATIONS, AND
RELEASES SET FORTH IN PARAGRAPHS 3, 4, AND 5 ABOVE SHALL APPLY
WITHOUT REGARD TO WHETHER OBLIGATIONS, LIABILITY, INJURY, DEATH,
DAMAGE, DESTRUCTION, LOSS OR CONTAMINATION IS CAUSED IN WHOLE OR
IN PART BY THE STRICT LIABILITY, NEGLIGENCE, ACTIVE OR PASSIVE,
ON THE PART OF ASSIGNOR OR OTHER INDEMNIFIED PERSON.
7. To the extent there is any conflict between this
Assignment and the Purchase and Sale Agreement between the
parties dated June 4, 2002, the latter Agreement shall prevail.
The terms and provisions hereof shall be deemed to be
covenants running with the lands, Leases, and interests covered
hereby and shall extend to, bind and inure to the benefit of the
parties hereto, their heirs, successors and assigns.
IN WITNESS WHEREOF, this Assignment is executed as of the
_____ day of ______________, 2002.
XXXXXXXX PETROLEUM COMPANY, ASSIGNOR
By:
________________________________________
Xxxxxxx Xxxxxxxx
Attorney-in-Fact
SKYLINE RESOURCES, INC.
By:
_____________________________________
Title:
_____________________________________
SLATERDOME GAS, INC.
By:
_____________________________________
Title:
_____________________________________
ACKNOWLEDGMENT
STATE OF COLORADO )
) SS.
COUNTY OF XXXXXXX )
On this _______ day of _________________, 200_, before me
personally appeared ________________________________, to me
personally known, who, being by me duly sworn, did say that he is
the Attorney-in-Fact of Xxxxxxxx Petroleum Company and that the
foregoing instrument was signed on behalf of said corporation by
authority of its Board of Directors, and said
________________________ acknowledged said instrument to be the
free act and deed of said corporation.
Witness my hand and seal this ______ day of
_______________, 200_.
_______________________________
____
Notary Public
My Commission Expires:
STATE OF COLORADO )
) SS.
COUNTY OF DENVER )
On this _____ day of _____________, 200_, before me
personally appeared ________________________________________, to
me personally known, who, being by me duly sworn, did say that he
is the ____________________________________ of
__________________________________, and that the foregoing
instrument was signed on behalf of said corporation by authority
of its Board of Directors, and said ______
_______________________________ acknowledged said instrument to
be the free act and deed of said corporation.
Witness my hand and seal this ______ day of _____________,
200_.
_______________________________
____
Notary Public
My Commission Expires:
EXHIBIT "C"
ATTACHED HERETO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE
AGREEMENT DATED THE 4th DAY OF JUNE, 2002 BY AND BETWEEN XXXXXXXX
PETROLEUM COMPANY, AS SELLER, AND SKYLINE RESOURCES, INC. AND
SLATERDOME GAS, INC. AS PURCHASER.
PROPERTY TRANSFER ACCOUNTING AGREEMENT
Purchaser: Skyline Resources, Inc. and Slaterdome Gas, Inc.
Seller: Xxxxxxxx Petroleum Company
Property: Fly Creek
Property Code (LCN): 800094, 800092, 800093, 810369, 080012
State: Colorado
County : Moffat
Wyoming Carbon
Sale _____X_____ Exchange __________
G. F. No.:
C64074
Sale Effective Date: May 1, 2002 Transfer of Operation
Date: July 1, 2002
The following accounting functions shall be performed where applicable
to the property transferred.
Seller will continue to pay all royalties and severance taxes through
the production month of May, 2002, as it pertains to Seller's
interest.
Purchaser will be responsible for marketing, collection of revenue and
payment of royalties and taxes on any production subsequent to this
date. Subsequent to Sale Effective Date, if royalties and severance
taxes are paid in error, Purchaser agrees to assist Seller in
collecting any overpayment of royalties and taxes, and reimburse Seller
promptly.
Seller will continue to pay all invoices/xxxxxxxx dated through June,
2002. All other expenditures will be returned to the vendor/operator
for rebilling to Purchaser. If subsequent expenditures are paid by
Seller, they will be included in the post closing accounting statement,
or a separate invoice and detail will be sent to Purchaser for
reimbursement of such expenditures, which invoice shall be due and
payable by Purchaser within 20 days of its date.
Seller will continue to prepare and file all required regulatory and
other monthly production reports through the production month of June,
2002. Copies of reports for periods after the Effective Date of
Transfer of Property Interest shown above will be provided to
Purchaser. Seller will provide any required notification to regulatory
agencies regarding change of ownership after closing.
Purchaser will notify all utility companies of the change in ownership
immediately after closing.
Purchaser accounting contact: Seller accounting contact:
Name:_________________________________ Name: Xx. Xxxxx de
Albuquerque
Telephone Number:______________________ Telephone Number:303-643-
3945
Accepted and agreed to this _____ day of ________________, 2002.
SELLER:
Xxxxxxxx Petroleum Company
By: _________________________________
Xxxxxxx Xxxxxxxx
Attorney-in-Fact
PURCHASER:
Skyline Resources, Inc.
By:_________________________________
Its:__________________________________
Slaterdome Gas, Inc.
By:_________________________________
Its:__________________________________
EXHIBIT "D"
Allocation of Sale Price
ATTACHED HERETO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE
AGREEMENT DATED THE 4th DAY OF JUNE, 2002 BY AND BETWEEN XXXXXXXX
PETROLEUM COMPANY, AS SELLER, AND SKYLINE RESOURCES, INC. AND
SLATERDOME GAS, INC. AS PURCHASER.
EXHIBIT "E"
ATTACHED HERETO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE
AGREEMENT DATED THE 4th DAY OF JUNE, 2002 BY AND BETWEEN XXXXXXXX
PETROLEUM COMPANY, AS SELLER, AND SKYLINE RESOURCES, INC. AND
SLATERDOME GAS, INC. AS PURCHASER.
DISPUTE RESOLUTION
Either party may initiate dispute resolution procedures by
sending written notice to the other party specifically stating
the complaining party's claim and requesting dispute resolution
in accordance with Article XII (k). The party receiving the
notice ("receiving party") shall reply with designation of a
person authorized to settle the dispute and shall list two
alternative dates (both of which must be within fourteen days
after receipt of the complaint) for meeting at the receiving
party's offices or at a mutually agreeable location.
The party's authorized representatives shall meet as they may
mutually agree to be advantageous for resolution of the dispute
and may, if they so agree, employ a neutral mediator to attempt
to resolve the dispute in accordance with the applicable CPR
Institute for Dispute Resolution procedures; provided, however,
that if the dispute has not been resolved within ninety (90) days
after the date when the receiving party received the notice
involving the dispute resolution procedures, then the complaining
party may require that the controversy be settled by binding
arbitration in accordance with the CPR Rules for Non-Administered
Arbitration, by three arbitrators who shall be neutral,
independent, and generally knowledgeable about the type of
transaction which gave rise to the dispute. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C.
' 1-16; provided, however, that the arbitrators shall include in
their report/award a list of findings, with supporting
evidentiary references, upon which they have relied in making
their decision. Judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction
thereof. The place of arbitration shall be Denver, Colorado.
Notwithstanding anything herein and regardless of any CPR
procedures or rules of the, it is expressly agreed that the
following shall apply and control over any other provision in
this exhibit or in Article XII (k):
(a) All applicable statutes of limitation and
defenses based
upon passage of time shall be tolled while the procedures
specified in Article XII (k) and this exhibit are
followed. Such tolling shall begin upon the receiving
party's receipt of the complaining party's notice of
claim. Parties shall take such action, if any, as may be
necessary to effectuate tolling. Statutes of limitation
shall be applied to claims except as tolled in accordance
herewith.
(b) All offers, conduct, views, opinions, and
statements made
in the course of negotiation or mediation by any of the
parties, their employees, agents, experts, attorneys, and
representatives and by any mediator are confidential,
made for compromise and settlement, protected from
disclosure under Federal and State Rules of Evidence and
Procedure, and inadmissible and not discoverable for any
purpose, including impeachment, in litigation or legal
proceedings between the parties, and shall not be
disclosed to anyone who is not an agent, employee,
expert, or representative of the parties; provided,
however, that evidence otherwise discoverable or
admissible is not excluded from discovery or admission as
a result of presentation or use in mediation.
(c) Except to the extent that the parties may
agree upon
selection of one or more arbitrators, the CPR shall
select arbitrators from a panel reviewed by the parties.
Parties shall be entitled to exercise peremptory strikes
against one-third of the panel and may challenge other
candidates for lack of neutrality or lack of
qualifications. Challenges shall be resolved in
accordance with CPR rules.
(d) Parties shall have at least twenty days
following close
of hearing within which to submit a brief (not to exceed
eighteen pages in length) and ten days from date of
receipt of the opponents brief within which to respond
thereto.
(e) The parties expressly agree that
arbitrators shall not
award punitive damages, consequential damages or
attorneys' fees (except attorneys fees specifically
authorized in this Agreement).
(f) The fees and expenses of any mediator or
arbitrator shall
be shared equally by the parties.
(g) Parties may by written agreement (signed
by both parties)
alter any time deadline or location(s) for meeting(s).
(h)Time is of the essence for purposes of the provisions of this
exhibit.
