Exhibit 10.1
Execution Copy
PURCHASE AND SALE AGREEMENT
Between
BANK OF NEW YORK TRUST COMPANY, N.A., solely in its capacity as trustee of
Santa Fe Energy Trust
And
AMEN PROPERTIES, INC.
Dated
November 8, 2007
TABLE OF CONTENTS
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1 Certain Definitions 1
2 Sale and Purchase 5
3 Sale Price 5
4 Deposit 5
5 Allocated Values 6
6 Seller's Representations 6
7 Buyer's Representations 7
8 Access to Records 8
9 Defects 9
10 Consents and Preferential Rights. 12
11 Physical and Environmental Inspection 13
12 Period Pending Closing 14
13 [Intentionally Deleted] 14
14 Notification of Breaches 14
15 Sale Price Adjustment 14
16 Termination 16
17 Conditions of Closing by Buyer 17
18 Conditions of Closing by Seller 17
19 Preliminary Closing Statement 18
20 Closing 18
21 Reservations and Exceptions 19
22 Payments 19
23 Assumption of Liabilities and Indemnities 19
24 Indemnification Action 21
25 Limitation on Actions 22
26 Casualty and Condemnation 23
27 Taxes 23
28 Sales Tax; Recording Fees 23
29 Records 24
30 Post-Closing Adjustments; Revenues 24
31 Notices 25
32 Further Assurance 26
33 Disclaimer of Warranties 26
34 Expenses 27
35 Due Diligence 27
36 Material Factor 27
37 Press Release 27
38 Entire Agreement 28
39 Tax Reporting. 28
40 Assignability. 28
41 Choice of Law 28
42 Dispute Resolution 28
43 Counterpart Execution. 28
44 Severance of Invalid Provisions. 28
45 Limitation on Damages 29
46 References 29
47 Waivers 29
48 Third Person Beneficiaries 29
49 Capacity of Trustee 29
50 Acknowledgement 29
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EXHIBITS AND SCHEDULES
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Exhibit A Oil and Gas Properties
Exhibit B Allocated Values
Exhibit C Form of Deed, Assignment and Xxxx of Sale
Exhibit D Form of Non-Foreign Affidavit
Schedule 1(d) Contracts
Schedule 1(e) Excluded Properties
Schedule 10 Consents and Preferential Rights
Schedule 15(h) Subject Assets Excluded from Revised Reserve Report
Adjustment
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INDEX OF DEFINED TERMS
----------------------
Defined Term Section
------------ -------
Accounting Arbitrator...........................................Section 30(a)
Affiliate.......................................................Section 1(a)
Agreed Rate.....................................................Section 15(k)
Agreement.......................................................Recitals
Allocated Values................................................Section 5
Assumed Obligations.............................................Section 23(b)
BNY.............................................................Recitals
Business Day....................................................Section 1(b)
Buyer...........................................................Recital
Claim Notice....................................................Section 24(b)
Claim...........................................................Section 24(b)
Closing ........................................................Section 20
Closing Date....................................................Section 20
Closing Date WTI Price..........................................Section 15(j)
Code............................................................Section 1(c)
Commitment Letter...............................................Section 7(f)(ii)
Confidentiality Agreement.......................................Section 8
Contracts.......................................................Section 1(d)
current Tax period..............................................Section 27
Damages.........................................................Section 23(a)
Deceptive Trade Practices Act...................................Section 33
Defect Amount...................................................Section 9(f)
Defect Arbitrator...............................................Section 9(i)
Defect Claim Date...............................................Section 9(d)
Defect..........................................................Section 9(a)
Deposit.........................................................Section 4
Devon ..........................................................Section 1(e)
Effective Time..................................................Section 1(f)
Environmental Arbitrator........................................Section 9(i)
Environmental Defect............................................Section 9(c)
Environmental Interest..........................................Section 9(c)
Environmental Laws..............................................Section 9(c)
Excluded Properties.............................................Section 1(g)
Excluded Records................................................Section 1(h)
Governmental Authority..........................................Section 1(i)
Indemnified Person..............................................Section 24(a)
Indemnifying Person.............................................Section 24(a)
July Reserve Report ............................................Section 15(h)
Laws............................................................Section 1(j)
Leases..........................................................Section 1(k)
MMMF............................................................Section 33
Net Profits Royalties...........................................Section 1(l)
NORM............................................................Section 9(c)
Party...........................................................Recital
Permitted Encumbrances..........................................Section 1(n)
Person..........................................................Section 1(o)
Properties......................................................Section 1(p)
Property........................................................Section 1(p)
Records.........................................................Section 1(q)
Revised Reserve Report..........................................Section 15(h)
Sale Price......................................................Section 3
Seller..........................................................Recital
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Seller Group....................................................Section 23(a)
Subject Assets..................................................Section 1(r)
Suspended Royalties ............................................Section 1(s)
Target Closing Date.............................................Section 20
Tax.............................................................Section 1(t)
Treasury Obligations............................................Section 1(u)
Title Arbitrator................................................Section 9(i)
Title Defect....................................................Section 9(b)
Trust ..........................................................Section 49
Trustee.........................................................Recitals
Units...........................................................Section 1(v)
Xxxxxx Royalties................................................Section 1(w)
Xxxxx...........................................................Section 1(x)
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PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT, dated as of November 8, 2007
("Agreement"), is between The Bank of New York Trust Company, N.A. ("BNY"),
solely in its capacity as Trustee of Santa Fe Energy Trust (BNY, solely in its
capacity as trustee of Santa Fe Energy Trust, being herein called the "Trustee";
and the Trustee, in its capacity as the seller of the Properties, being
sometimes called herein "Seller"), and Amen Properties, Inc., a Delaware
corporation (hereinafter referred to as "Buyer"). Seller and Buyer are sometimes
referred to collectively as the "Parties" and individually as a "Party."
WHEREAS, Seller desires to sell and Buyer desires to purchase those
certain interests in oil and gas properties, rights and related assets that are
defined and described as "Properties" herein.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Seller and Buyer agree as follows:
1. Certain Definitions. As used herein:
(a) "Affiliate" means, with respect to any Person, a Person that
directly or indirectly controls, is controlled by or is under common control
with such Person, with control in such context meaning the ability to direct the
management or policies of a Person through ownership of voting shares or other
securities, pursuant to a written agreement, or otherwise.
(b) "Business Day" means any day other than a Saturday, a Sunday, or a
day on which banks are closed for business in Xxx Xxxx, Xxx Xxxx xx Xxxxxxx,
Xxxxx, Xxxxxx Xxxxxx of America.
(c) "Code" means the United States Internal Revenue Code of 1986, as
amended.
(d) "Contracts" means all currently existing contracts, agreements and
instruments with respect to the Properties, to the extent burdening or
applicable to the Properties, including operating agreements, unitization,
pooling, and communitization agreements, declarations and orders, area of mutual
interest agreements, joint venture agreements, farmin and farmout agreements,
exchange agreements, transportation agreements, agreements for the sale and
purchase of oil and gas and processing agreements, including, but not limited
to, those contracts, agreements and instruments set forth on Schedule 1(d), but
excluding any contracts, agreements and instruments included within the
definition of "Excluded Properties".
(e) "Devon" shall mean Devon Energy Production Company, L.P., an
Oklahoma limited partnership.
(f) "Effective Time" shall mean October 1, 2007 at 7:00 a.m., local
time, said time to be determined for each locality in which the Properties are
located in accordance with the time generally observed in said locality.
(g) "Excluded Properties" shall mean the following:
(i) the Excluded Records;
(ii) all copies of other Records retained by Seller pursuant
to Section 29;
(iii) all contracts, agreements and instruments whose transfer
is prohibited or subjected to payment of a fee or other consideration by an
agreement with a Person other than an Affiliate of Seller, or by applicable Law,
and for which no consent to transfer has been received or for which Buyer has
not agreed in writing to pay the fee or other consideration, as applicable;
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(iv) all permits and other appurtenances for which transfer is
prohibited or subjected to payment of a fee or other consideration by an
agreement with a Person other than an Affiliate of Seller, or by applicable Law,
and for which no consent to transfer has been received or for which Buyer has
not agreed in writing to pay the fee or other consideration, as applicable;
(v) all claims against third Persons pending on or prior to
the Effective Time, but excluding any claims related to the Suspended Royalties;
(vi) any Tax refund (whether by payment, credit, offset or
otherwise, and together with any interest thereon) in respect of any Taxes for
which Seller is liable for payment or required to indemnify Buyer under Section
23 or 28;
(vii) all refunds relating from severance Tax abatements with
respect to all taxable periods or portions thereof ending on or prior to the
Effective Time, but excluding any refunds relating to the Suspended Royalties;
(viii) all claims against insurers under policies held by
Seller or its Affiliates;
(ix) all cash, cash equivalents and amounts receivable held by
the Trustee;
(x) the Xxxxxx Royalties;
(xi) the Treasury Obligations;
(xii) all audit rights under any Contracts or the Leases to
the extent related to periods prior to the Effective Time, but excluding any
audit rights related to the Suspended Royalties;
(xiii) any surface rights related to the Leases, Units or
Xxxxx; and
(xiv) any other assets, personal property, contracts or other
tangible or intangible rights described on Schedule 1(g).
Notwithstanding anything to the contrary in this Section 1(f) or elsewhere in
this Agreement, "Properties" shall not include any rights with respect to the
Excluded Properties.
(h) "Excluded Records" shall mean:
(i) all corporate, financial, Tax and legal data and records
of the Trustee that relate to the Trust generally (whether or not relating to
the Properties);
(ii) any data, software and records to the extent disclosure
or transfer is prohibited or subjected to payment of a fee or other
consideration by any license agreement or other agreement with a Person, or by
applicable Law, and for which no consent to transfer has been received or for
which Buyer has not agreed in writing to pay the fee or other consideration, as
applicable;
(iii) all legal records and legal files of the Trustee
including all work product of and attorney-client communications with the
Trustee's legal counsel;
(iv) all data and records relating to the sale of the
Properties, including communications and correspondence with Xxxxxx, Xxxxxxxx &
Company, Incorporated, Devon and its Affiliates, representatives and agents and
bids received from and records of negotiations with third Persons;
(v) all data and records relating to the other Excluded
Properties; and
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(vi) all original data, software and records, or copies
thereof, retained by Seller pursuant to Section 29.
(i) "Governmental Authority" means any national government and/or state
or other government of any political subdivision, and departments, courts,
commissions, boards, bureaus, ministries, agencies or other instrumentalities of
any of them.
(j) "Laws" means all laws, statutes, rules, regulations, ordinances,
orders, decrees, requirements, judgments and codes of Governmental Authorities.
(k) "Leases" means, collectively, the oil and gas leases, oil, gas and
mineral leases and subleases, royalties, overriding royalties, net profits
interests, mineral fee interests, carried interests, and other rights to oil and
gas in place, and mineral servitudes, that are described on Attachment 1 to
Exhibit A.
(l) "Net Profits Royalties" means the interests in the Subject Assets
granted pursuant to those instruments set forth in Part 1 of Exhibit A attached
hereto, including, but not limited to such interests constituting an undivided
variable royalty interest in and to the hydrocarbons that may be produced,
saved, and marketed from the Subject Assets equal to ninety percent (90%) of the
net proceeds attributable to the Properties, all as further described in the
instruments set forth in Attachment 1 of Exhibit A attached hereto.
(m) [Intentionally Deleted]
(n) "Permitted Encumbrances" means any or all of the following:
(i) Lessors' royalties and any overriding royalties,
reversionary interests and other burdens (other than the Net Profits Royalties)
to the extent that they do not, individually or in the aggregate, reduce the net
revenue interests with respect to the Subject Assets burdened by the Net Profits
Royalties below that shown in Attachment 2 of Exhibit A or increase the working
interests above that shown in Attachment 2 of Exhibit A without a corresponding
increase in the net revenue interest;
(ii) All leases, unit agreements, pooling agreements,
operating agreements, production sales contracts, division orders and other
contracts, agreements and instruments applicable to the Subject Assets,
including provisions for penalties, suspensions or forfeitures contained
therein, to the extent that they do not, individually or in the aggregate,
reduce the net revenue interests burdened by the Net Profits Royalties below
that shown in Attachment 2 of Exhibit A or increase the working interests with
respect to the Subject Assets burdened by the Net Profits Royalties above that
shown in Attachment 2 of Exhibit A without a corresponding increase in the net
revenue interest;
(iii) Rights of first refusal, preferential rights to purchase
and similar rights with respect to the Properties, but excluding, however, any
preferential rights to purchase or similar rights that are applicable to the
sale of the Properties contemplated by this Agreement, including those set forth
on Schedule 10, and for which the holder of such right has validly exercised
such right;
(iv) Third-Person consent requirements and similar
restrictions which are not applicable to the sale of the Properties contemplated
by this Agreement or with respect to which waivers or consents are obtained from
the appropriate Persons prior to the Closing Date or the appropriate time period
for asserting the right has expired or which need not be satisfied prior to a
transfer;
(v) Liens for Taxes or assessments not yet delinquent or, if
delinquent, that are being contested in good faith by appropriate actions;
(vi) Materialman's, mechanic's, repairman's, employee's,
contractor's, operator's and other similar liens or charges arising in the
ordinary course of business for amounts not yet delinquent (including any
amounts being withheld as provided by Law), or if delinquent, that are being
contested in good faith by appropriate actions;
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(vii) All rights to consent, required notices to, filings
with, or other actions by Governmental Authorities in connection with the
transactions contemplated hereby if they are customarily obtained subsequent to
the sale or conveyance of similar assets;
(viii) Rights of reassignment, termination or reversion of
title or interest in the Properties arising (A) upon final intention to abandon
or release the Subject Assets or Properties, or any of them; or (B) under any
instrument set forth in Attachment 1 of Exhibit A;
(ix) Easements, rights-of-way, covenants, servitudes, permits,
surface leases and other rights in respect of surface operations;
(x) Calls on production under existing Contracts;
(xi) Any actual or asserted termination of title to any
mineral servitude or any Subject Asset held by production as a consequence of
the failure to conduct operations, cessation of production or insufficient
production over any period;
(xii) All rights reserved to or vested in any Governmental
Authorities to control or regulate any of the Properties or the Subject Assets
in any manner or to assess Tax with respect to the Properties or Subject Assets,
the ownership, use or operation thereof, or revenue, income or capital gains
with respect thereto, and all obligations and duties under all applicable Laws
of any such Governmental Authority or under any franchise, grant, license or
permit issued by any Governmental Authority;
(xiii) Any lien, charge, cause of action, claim or other
encumbrance on or affecting the Properties which is expressly waived, assumed,
bonded or paid by Buyer at or prior to Closing or which is discharged by Seller
at or prior to Closing;
(xiv) any lien or trust arising in connection with workers'
compensation, unemployment insurance, pension or employment Laws or regulations;
(xv) Any matter set forth on any schedule or exhibit hereto,
or set forth on any agreement or instrument identified on any schedule or
exhibit hereto; and
(xvi) Any other liens, charges, claims, causes of action,
encumbrances, defects or irregularities which do not, individually or in the
aggregate, materially detract from the value of the Net Profits Royalties
subject thereto or affected thereby (as currently used or owned) and which would
be accepted by a reasonably prudent purchaser engaged in the business of owning
oil and gas interests similar in nature to the Net Profits Royalties, including,
without limitation, the absence of any lease amendment or consent by any royalty
interest or mineral interest holder authorizing the pooling of any leasehold
interest, royalty interest or mineral interest and the failure of Exhibit A to
reflect any lease or any unleased mineral interest where the owner thereof was
treated as a non-participating co-tenant during the drilling of any well.
(o) "Person" means any individual, corporation, partnership, limited
liability company, trust, estate, Governmental Authority or any other entity.
(p) "Property" or "Properties" means all of Seller's right, title and
interest in and to the Net Profits Royalties, the Suspended Royalties, the
Contracts, and the Records.
(q) "Records" means the data and records of Seller, to the extent
relating solely to the Properties, excluding, however, in each case, the
Excluded Records.
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(r) "Subject Assets" means the Leases, Xxxxx and Units.
(s) "Suspended Royalties" means any amounts attributable to the Net
Profits Royalties payable out of production of oil or gas from the Leases, Units
and Xxxxx or the proceeds thereof to Seller but held in suspense by any Person
as of the Closing Date (regardless of whether such amounts are attributable to
production for periods before, on, or after the Effective Time and any interest
accrued in escrow accounts for such suspended funds.
(t) "Tax" means all taxes, including any foreign, federal, state or
local income tax, surtax, remittance tax, presumptive tax, net worth tax,
special contribution, production tax, pipeline transportation tax, freehold
mineral tax, value added tax, withholding tax, gross receipts tax, windfall
profits tax, profits tax, severance tax, personal property tax, real property
tax, sales tax, goods and services tax, service tax, transfer tax, use tax,
excise tax, premium tax, stamp tax, motor vehicle tax, entertainment tax,
insurance tax, capital stock tax, franchise tax, occupation tax, payroll tax,
employment tax, unemployment tax, disability tax, alternative or add-on minimum
tax and estimated tax, imposed by a Governmental Authority together with any
interest, fine or penalty thereon.
(u) "Treasury Obligations" means the United States Treasury obligations
held by BNY in its capacity as depository for the benefit of the holders of
beneficial interest in the Trust.
(v) "Units" means all pooled, communitized or unitized acreage which
includes all or part of any Leases, and all tenements, hereditaments and
appurtenances belonging to the Leases and Units.
(w) "Xxxxxx Royalties" means (i) the interest held by the Trust known
as the Xxxxxx ODC Royalty; and (ii) the interest held or previously held by the
Trust in the Xxxxxx Xxxxxxx Unit, each as described in the original conveyances
of such interests to the Trustee.
(x) "Xxxxx" means any and all oil, gas, water, CO2 or injection xxxxx
located on the Leases or on the pooled, communitized or unitized acreage that
includes all or any part of the Leases, including the interests in the xxxxx
shown on Attachment 3 of Exhibit A attached hereto.
2. Sale and Purchase. Subject to and upon all of the terms, conditions,
reservations and exceptions hereinafter set forth, Seller shall sell, transfer,
assign, convey and deliver the Properties to Buyer, and Buyer shall purchase,
receive, pay for and accept the Properties from Seller, effective as of the
Effective Time.
3. Sale Price. The sale price for the Properties shall be fifty million and
four hundred and forty thousand dollars ($50,440,000.00) ("Sale Price"), subject
only to any applicable price adjustments as provided for in Section 15.
4. Deposit. Concurrently with the execution and delivery of this Agreement
Buyer has caused the delivery to Seller, via wire transfer of immediately
available funds, of an xxxxxxx money deposit in the amount of fifteen percent
(15%) of the Sale Price (such amount, together with all interest earned thereon,
the "Deposit"). Seller shall hold the Deposit in an interest bearing account in
accordance with written instructions from Buyer and reasonably acceptable to
Seller. In the event that this Agreement is terminated pursuant to Section 16,
the Deposit shall be distributed in accordance with Section 16, otherwise the
Deposit shall be distributed in accordance with Section 20(h).
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5. Allocated Values. Buyer and Seller herein agree upon the allocation of
the Sale Price among the Properties (the "Allocated Value"). Such Allocated
Values are made a part of this Agreement and are shown on Exhibit B, which is
attached hereto. The Allocated Value for any Net Profits Royalties burdening a
Lease, Well or Unit equals the portion of the Sale Price that is allocated to
such Net Profits Royalties burdening the Lease, Well or Unit on Exhibit B,
increased or decreased as provided herein. The share of each adjustment
allocated to a particular Well or Unit shall be obtained by allocating that
adjustment among the various Properties on a pro rata basis in proportion to the
Sale Price allocated to each such Property on Exhibit B. Within three (3)
Business Days after receipt of the Revised Reserve Report, Buyer may amend
Exhibit B by providing Seller with a written copy of such amendment, provided,
however, that such amendment shall be void and of no force or effect if the
changes reflected in such amendment are not materially consistent with the
differences between the information set forth in July Reserve Report and the
Revised Reserve Report (after taking into account the values set forth on the
original Exhibit B attached hereto and the proposed amended Exhibit B) and,
within three (3) Business Days Seller of Seller's receipt of such amendment,
Seller provides written notice to Buyer that Seller objects to such amendment.
Seller has accepted such Allocated Values for purposes of this Agreement and the
transactions contemplated hereby, but otherwise makes no representation or
warranty as to the accuracy of such values.
6. Seller's Representations. Seller represents and warrants to Buyer that
as of the date hereof:
(a) Qualification and Power. Seller is validly existing and in good
standing under the Laws of its jurisdiction of formation and has full power and
authority to enter into and perform this Agreement (and all documents required
to be executed and delivered by Seller at Closing) and to consummate the
transactions contemplated by this Agreement (and such documents).
(b) Authorization. Seller's execution, delivery and performance of this
Agreement (and all documents required to be executed by Seller at Closing), and
the consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by Seller. This Agreement has been duly executed and
delivered by Seller (and all documents required to be executed and delivered by
Seller at Closing will be duly executed and delivered by Seller) and this
Agreement constitutes, and at the Closing such documents will constitute, the
valid and binding obligations of Seller, enforceable in accordance with their
terms except as such enforceability may be limited by applicable bankruptcy or
other similar Laws affecting the rights and remedies of creditors generally as
well as to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Limitations.
(i) Except as and to the extent expressly set forth in this
Section 6, (A) Seller makes no representations or warranties, express or
implied, and (B) Seller expressly disclaims all liability and responsibility for
any representation, warranty, statement or information made or communicated
(orally or in writing) to Buyer or any of its Affiliates, employees, agents,
consultants or representatives (including, without limitation, any opinion,
information, projection or advice that may have been provided to Buyer by any
officer, director, employee, agent, consultant, representative or advisor of
Seller or any of their Affiliates).
(ii) Exhibits and Schedules may include matters not required
by the terms of this Agreement to be listed on the Exhibits and Schedules, which
additional matters are disclosed for the convenience of Buyer only, and
inclusion of any such matter does not mean that all such matters are included or
that any of such matters are material.
(iii) A matter scheduled as an exception to any
representation, warranty or statement set forth in this Section 6, set forth on
any schedule or exhibit hereto, or set forth on any agreement identified on any
schedule or exhibit hereto shall be deemed to be an exception to all
representations, warranties and statements to which it is relevant.
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7. Buyer's Representations. Buyer represents and warrants to Seller that as
of the date hereof:
(a) Qualification and Power. Buyer (i) is a duly organized corporation
validly existing and in good standing under the Laws of the State of Delaware;
(ii) is, or as of the Closing Date shall be, duly qualified as of the Closing
Date to carry on its business in the states in which the Properties are located,
and (iii) has full power and authority to enter into and perform this Agreement
(and all documents required to be executed and delivered by Buyer at Closing)
and to consummate the transactions contemplated by this Agreement (and such
documents).
(b) Authorization. Buyer's execution, delivery and performance of this
Agreement (and all documents required to be executed by Buyer at Closing), and
the consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all necessary corporate action on the part of
Buyer This Agreement has been duly executed and delivered by Buyer (and all
documents required to be executed and delivered by Buyer at Closing will be duly
executed and delivered by Buyer) and this Agreement constitutes, and at the
Closing such documents will constitute, the valid and binding obligations of
Buyer, enforceable in accordance with their terms except as such enforceability
may be limited by applicable bankruptcy or other similar Laws affecting the
rights and remedies of creditors generally as well as to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(c) No Conflicts. The execution, delivery and performance of this
Agreement by Buyer, and the consummation of the transactions contemplated by
this Agreement, will not (i) violate any provision of the certificate of
incorporation or bylaws (or other governing instruments) of Buyer, (ii) result
in a material default (with due notice or lapse of time or both) or the creation
of any lien or encumbrance or give rise to any right of termination,
cancellation or acceleration under any material note, bond, mortgage, indenture,
or other financing instrument to which Buyer is a party or by which it is bound,
(iii) violate any judgment, order, ruling, or regulation applicable to Buyer as
a party in interest or (iv) violate any Law applicable to Buyer, except any
matters described in clauses (ii), (iii) or (iv) above which would not have a
material adverse effect on Buyer or its properties or Buyer's ability to
consummate the transactions contemplated hereby.
(d) Consents, Approvals or Waivers. The execution, delivery and
performance of this Agreement by Buyer are not subject to any consent, approval
or waiver from any Governmental Authority or other Person.
(e) Litigation. There are no actions, suits or proceedings pending,
threatened in writing before any Governmental Authority or arbitrator against
Buyer or any Affiliate of Buyer which could impair or delay Buyer's ability to
perform its obligations under this Agreement.
(f) Financing.
(i) Buyer has sufficient cash, available lines of credit or
other sources of immediately available funds (in United States dollars) to
enable it to pay the Sale Price to Seller at the Closing.
(ii) Prior to the execution of this Agreement, Buyer has
received and delivered to Seller true and complete copies of commitment letters
from First Southern National Bank, Universal Guaranty Life Insurance Company,
Xxx Xxxxxx and Xxxx Xxxxxx that, collectively commit to the provision of all of
the financing required by Buyer to pay the unadjusted Sale Price, and any other
amounts payable under this Agreement, and all agreements, arrangements or
undertakings related to that commitment letter to which Buyer or any of its
Affiliates is a party (whether contained in a fee letter or otherwise) and all
schedules, annexes, exhibits or other attachments to any thereof, excluding any
actual fee payment amounts (collectively, the "Commitment Letters"). The
Commitment Letters are in full force and effect and neither Buyer nor any of its
Affiliates has agreed to any material amendment or modification thereof and
neither Buyer nor any of its Affiliates is in breach or default thereunder.
Buyer and/or its Affiliates are in a position to satisfy all conditions to
advances under the Commitment Letters to the extent such conditions are within
their control. The aggregate proceeds of the financings to which the Commitment
Letters relate are, together with available funds of the Buyer (details in
respect of which have been delivered by Buyer to Seller), sufficient to pay the
Sale Price.
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(g) Investment Intent. Buyer is acquiring the Properties for its own
account and not with a view to their sale or distribution in violation of the
Securities Act of 1933, as amended, the rules and regulations thereunder, any
applicable state blue sky Laws, or any other applicable securities Laws.
(h) Liability for Brokers' Fees. Seller shall not directly or
indirectly have any responsibility, liability or expense, as a result of
undertakings or agreements of Buyer, for brokerage fees, finder's fees, agent's
commissions or other similar forms of compensation to an intermediary in
connection with the negotiation, execution or delivery of this Agreement or any
agreement or transaction contemplated hereby.
(i) Qualification. Buyer is or as of the Closing will be qualified
under applicable Laws to own and hold the Properties.
(j) Independent Investigation; Reliance. Buyer is (or its advisors are)
sophisticated and experienced and knowledgeable in the oil and gas business and
aware of the risks of that business. Buyer acknowledges and affirms that (i) it
has completed its own independent investigation, verification, analysis and
evaluation of the Properties, and (ii) it has made all reviews and inspections
of the Properties and Subject Assets as it has deemed necessary or appropriate.
Buyer represents and affirms that in entering into this Agreement, Buyer has
relied solely on (i) the express representations and warranties made expressly
by Seller in Section 6 of this Agreement, (ii) Buyer's independent investigation
of, and judgment with respect to, the Subject Assets and the Properties and
(iii) the advice of its own legal, Tax, economic, environmental, engineering,
geological and geophysical advisors and not on any comments or other statements
of Seller or of any representatives of, or consultants or advisors engaged by or
on behalf of Seller. Except for the representations and warranties expressly
made by Seller in Section 6 of this Agreement, Buyer acknowledges that there are
no representations or warranties, express or implied, as to the financial
condition, liabilities, operations, business or prospects with respect to the
Properties and that in making its decision to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer has relied solely upon
its own independent investigation, verification, analysis and evaluation, has
evaluated the merits and risks of purchasing the Properties from Seller and has
formed its own opinion based solely on Buyer's knowledge and experience and,
except for the representations and warranties made expressly by Seller in
Section 6, not on any representations or warranties by Seller or any other
Person, including any representatives, consultants or advisors engaged by or on
behalf of Seller.
8. Access to Records. After execution of this Agreement, Seller shall give Buyer
and its authorized representatives, during regular business hours, at Buyer's
sole risk, cost and expense, access, with copying privileges, to data and
records, and to all contract, land, title and lease records, to the extent such
data and records are in Seller's possession and relate to the Properties, and to
such other information in Seller's possession relating to the Properties as
Buyer may reasonably request; provided, however, that Seller shall have no
obligation to provide Buyer access to any data or information (a) where such
access or disclosure would violate applicable Laws, (b) which Seller considers
proprietary or confidential or (c) to which Seller cannot legally provide Buyer
access because of third-Person restrictions on Seller or the nature of the
interests owned by Seller. Seller agrees to use its commercially reasonable
efforts to obtain the consent of any such third Person to furnish any such
information to Buyer as reasonably requested by Buyer. Such access by Buyer
shall be limited to Seller's normal business hours, and Buyer's investigation
shall be conducted in a manner that minimizes interference with the operation of
the Subject Assets and the operations of Seller. Buyer acknowledges that Seller
is not the operator of the Subject Assets and that, except as set forth in
Section 6, Seller makes no representations or warranties (i) regarding any
rights to provide Buyer with access to any data, information, or other materials
relating to the Properties held by third Persons, or (ii) as to the accuracy,
completeness or the sufficiency of the Records or any other access, or
information, data or reports provided hereunder. All information obtained by
Buyer and its representatives under this Section 8 shall be subject to the terms
of that certain confidentiality agreement between Xxxxxx, Xxxxxxxx & Company,
Incorporated, on behalf of Seller, and Buyer dated September 6, 2007
("Confidentiality Agreement") and any applicable privacy Laws regarding personal
information.
8
9. Defects.
(a) For the purpose of this Agreement, a "Defect" shall mean any Title
Defect or Environmental Defect.
(b) "Title Defect" shall mean any lien, charge, obligation, cause of
action, claim or title defect burdening the Properties, other than Permitted
Encumbrances, that:
(i) Entitles the Seller to receive at any time throughout the
duration of the productive life of any Net Profits Royalty, LESS THAN ninety
percent (90%) of the net proceeds attributable to the "net revenue interest" or
"NRI" share shown in Attachment 2 of Exhibit A of all oil, gas and other
minerals produced, saved and marketed from such Lease, Unit or Well, including
decreases in connection with those operations in which those Subject Assets
burdened by the Net Profits Royalties are subject to any non-consent or similar
penalties, decreases resulting from reversion of interest to co-owners with
respect to operations in which such co-owners elected not to consent, decreases
resulting from the establishment or amendment of pools or units, and decreases
required to allow other working interest owners to make up past underproduction
or pipelines to make up past underdeliveries and except as stated in Attachment
2 of Exhibit A;
(ii) Obligates the portion of the Subject Assets burdened by
the Net Profits Royalties to bear at any time a percentage of the costs and
expenses for the maintenance and development of, and operations relating to, any
Lease, Unit or Well NOT GREATER THAN the "working interest" or "WI" shown in
Attachment 2 of Exhibit A without increase throughout the productive life of
such Unit or Well, except as stated in Attachment 2 of Exhibit A and except
increases resulting from contribution requirements with respect to defaulting
co-owners under applicable operating agreements or applicable Law and increases
that are accompanied by at least a proportionate increase in the net revenue
interest.
(c) "Environmental Defect" shall mean the failure of the ownership and
operation of the Subject Assets to be in material compliance with all applicable
Environmental Laws or any contamination of groundwater, surface water, soil or
seabed on the Subject Assets resulting from hydrocarbon activities on such
Subject Assets required to be remediated under applicable Environmental Laws on
or before the date of this Agreement, in each case that are chargeable as
Production Costs (as such term is defined in the applicable instrument set forth
on Attachment 1 of Exhibit A) to the Properties in accordance with the
instrument set forth on Attachment 1 of Exhibit A but which have not been
remediated, provided, however, the presence or absence of naturally occurring
radioactive material ("NORM"), asbestos, mercury, drilling fluids and chemicals,
and produced waters and hydrocarbons in or on the Subject Assets in quantities
typical for oilfield operations in the areas in which the Subject Assets are
located or usual and customary obligations to plug and abandon xxxxx and
dismantle structures shall in no event constitute an "Environmental Defect".
"Environmental Laws" means, as the same have been amended to the date hereof,
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.
ss. 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et
seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. ss. 1471 et seq.; the Toxic Substances Control
Act, 15 U.S.C. xx.xx. 2601 through 2629; the Oil Pollution Act, 33 U.S.C. ss.
2701 et seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C.
ss. 11001 et seq.; and the Safe Drinking Water Act, 42 U.S.C. xx.xx. 300f
through 300j, in each case as amended to the date hereof, and all similar Laws
as of the date hereof of any Governmental Authority having jurisdiction over the
property in question addressing pollution or protection of the environment or
biological or cultural resources and all regulations implementing the foregoing.
9
(d) To assert a claim for any Defect, Buyer must deliver a claim notice
or notices to Seller on or before the date ten (10) Business Days prior to the
Target Closing Date ("Defect Claim Date"). Each such notice shall be in writing
and shall include: (i) a description of the alleged Defect(s); (ii) the Leases,
Units or Xxxxx affected; (iii) the Allocated Values of the Leases, Units or
Xxxxx subject to the alleged Defect(s); (iv) supporting documents reasonably
necessary for Seller (as well as any title attorney, environmental consultant or
examiner hired by Seller) to verify the existence of the alleged Defect(s); and
(v) the amount by which Buyer reasonably believes the Allocated Values of those
Leases, Units or Xxxxx are reduced by the alleged Defect(s) and the computations
and information upon which Buyer's belief is based. Buyer shall be deemed to
have waived, and hereby does waive, all claims for Defects of which Buyer has
not provided Seller notice on or before the Defect Claim Date.
(e) Seller shall have the right, but not the obligation, to attempt, at
Seller's sole cost, to cure or remove on or before the Closing Date any Defects
of which Seller has been notified by Buyer in accordance with Section 9(d). If
the Defect is not cured prior to the Closing Date, the adjustment required under
this Section 9 shall be made pursuant to this Section 9. Seller's election to
attempt to cure a Defect shall not constitute a waiver of Seller's right to
dispute the existence, nature or value of, or cost to cure, the Defect.
(f) With respect to each Lease, Unit or Well affected by Defects
reported in accordance with Section 9(d), the Net Profits Royalties burdening
such Lease, Unit or Well shall nevertheless be assigned to and acquired by Buyer
at Closing, subject to all uncured Defects, and the Sale Price shall be reduced
by an amount ("Defect Amount") equal to the reduction in the Allocated Value for
the Net Profits Royalties burdening such Lease, Unit or Well caused by such
Defects, as determined pursuant to Section 9(h).
(g) Seller makes no warranty or representation as to the quantity or
quality of title to the Properties. Buyer releases, remises and forever
discharges Seller and its Affiliates and all such Persons' stockholders,
officers, directors, employees, agents, advisors and representatives from any
and all suits, legal or administrative proceedings, claims, demands, damages,
losses, costs, liabilities, interest or causes of action whatsoever, in law or
in equity, known or unknown, which Buyer might now or subsequently may have,
based on, relating to or arising out of, any Defect or other deficiency in title
or environmental condition relating to the Properties. Buyer affirms that Buyer
has relied exclusively on its own independent investigation of all title and
environmental conditions relating to the Properties, including all Defects, and
that Buyer has not relied on Seller or on any of the representatives,
consultants, or advisors engaged by or on behalf of Seller.
(h) The Defect Amount resulting from a Defect shall be determined as
follows:
(i) if Buyer and Seller agree on the Defect Amount, that
amount shall be the Defect Amount;
(ii) if the Title Defect is a lien, encumbrance, cause of
action, claim, or other charge which is undisputed and liquidated in amount,
then the Defect Amount shall be the liquidated amount necessary to be paid to
remove, cure or remediate the Defect, but only to the extent such amount is
chargeable as Production Costs (as such term is defined in the applicable
instrument set forth on Attachment 1 of Exhibit A) to the Net Profits Royalties
in accordance with the instruments set forth on Attachment 1 of Exhibit A;
(iii) if the Title Defect is that (A) the net revenue interest
for any Lease, Unit or Well is less than (B) the net revenue interest or
percentage stated on Attachment 2 of Exhibit A, then the Defect Amount shall be
the product of the Allocated Value of the Net Profits Royalties burdening such
Lease, Unit or Well multiplied by a fraction, the numerator of which is the
actual net revenue interest or percentage ownership and the denominator of which
is the net revenue interest or percentage ownership stated on Attachment 2 of
Exhibit A, provided that if the Defect does not affect the Lease, Unit or Well
throughout its entire productive life, the Defect Amount determined under this
Section 9(h)(iii) shall be reduced to take into account the applicable time
period only;
10
(iv) if the Title Defect represents an obligation,
encumbrance, burden or charge upon or other defect in title to the affected
Lease, Unit or Well of a type not described in Sections 9(h)(i) through
9(h)(iii) above, the Defect Amount shall be determined by taking into account
the Allocated Value of the Net Profits Royalties burdening such Lease, Unit or
Well so affected, the portion of Seller's interest in the Net Profits Royalties
burdening the Lease, Unit or Well affected by the Defect, the legal effect of
the Defect, the potential economic effect of the Defect over the life of the Net
Profits Royalties burdening the affected Lease, Unit or Well, the values placed
upon the Defect by Buyer and Seller and such other factors as are necessary to
make a proper evaluation;
(v) if the Defect is an Environmental Defect, the Defect
Amount shall be the lesser of (A) the costs and expenses necessary to remediate
the portion of the Subject Assets burdened by the Net Profits Royalties, but
only to the extent such costs and expenses are chargeable as Production Costs
(as such term is defined in the applicable instrument set forth on Attachment 1
of Exhibit A) to the Net Profits Royalties in accordance with the instruments
set forth on Attachment 1 of Exhibit A, or (B) an amount equal to the adverse
economic effect of the Defect on the Properties;
(vi) notwithstanding anything to the contrary in this Section
9, (A) an individual claim for a Defect for which a claim notice is given prior
to the Defect Claim Date shall only generate an adjustment to the Sale Price
under this Section 9 if the Defect Amount with respect thereto exceeds twenty
thousand dollars ($20,000.00), (B) the aggregate Defect Amounts attributable to
the effects of all Title Defects upon the Net Profits Royalties burdening any
given Lease, Unit or Well shall not exceed the Allocated Value of the Net
Profits Royalties burdening such Lease, Unit or Well and (C) there shall be no
adjustment to the Sale Price for Defects unless and until the aggregate Defect
Amounts that are entitled to an adjustment under Section 9(h)(vi)(A) and for
which Claim Notices were properly delivered on or before the Defect Claim Date
exceed two percent (2%) of the unadjusted Sale Price, and then only to the
extent that such aggregate Defect Amounts exceed two percent (2%) of the
unadjusted Sale Price;
(vii) if a Defect is reasonably susceptible of being cured or
remediated, the Defect Amount determined under Sections 9(h)(iii), (iv) or (v)
above shall not be greater than the reasonable cost and expense of curing or
remediating such Defect, but only to the extent such costs and expenses are
chargeable as Production Costs (as such term is defined in the applicable
instruments set forth on Attachment 1 of Exhibit A) to the Net Profits Royalties
in accordance with the instrument set forth on Attachment 1 of Exhibit A;
(viii) if a Title Defect is attributable to any asserted claim
or cause of action that has not been finally adjudicated or resolved prior to
the Closing Date, the Defect Amount with respect to such Title Defect shall
equal the amount, if any, that may be reasonably determined based on the final
adjudication or resolution of such claim or cause of action, as such
adjudication or resolution may be reasonably determined based on the facts known
to the Parties hereto as of the Closing Date; and
(ix) the Defect Amount with respect to a Defect shall be
determined without duplication of any costs or losses included in another Defect
Amount hereunder, or for which Buyer otherwise receives credit in the
calculation of the Sale Price.
(i) Notwithstanding anything herein to the contrary, in the event that
the aggregate of all Defect Amounts attributable to Environmental Defects that
Buyer has validly asserted in accordance with this Section 9 exceeds twenty
percent (20%) of the unadjusted Sale Price, then Seller may elect, in its sole
discretion, to terminate this Agreement by delivering written notice to Seller
prior to the Closing.
(j) Seller and Buyer shall attempt to agree on all Defect Amounts by
the Closing Date. If Seller and Buyer are unable to agree by the Closing Date,
Seller's estimate shall be used to determine the adjusted Sale Price pursuant to
Section 15, and the Defect Amounts in dispute shall be exclusively and finally
resolved by arbitration pursuant to this Section 9(i). During the 15-day period
following the Closing Date, Defect Amounts in dispute with respect to Title
Defects shall be submitted to a title attorney or attorneys reasonably
satisfactory to Buyer and to Seller having at least ten (10) years of experience
in oil and gas title review and examination in the state where the Properties
subject to the disputed Title Defects are located ("Title Arbitrator"). During
the 15-day period following the Closing Date, Defect Amounts in dispute with
respect to Environmental Defects shall be submitted to E.Vironment or such other
environmental consulting firm as may be reasonably agreed upon by Buyer or
Seller ("Environmental Arbitrator" and with the Title Arbitrator, each a "Defect
Arbitrator".). The Defect Arbitrators shall not have worked as an employee,
consultant or outside counsel for either Party or its Affiliates during the five
(5) year period preceding the arbitration or have any financial interest in the
dispute. The arbitration proceedings shall be held in Houston, Texas and shall
be conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, to the extent such rules do not conflict with the terms
of this Section 9. The Defect Arbitrators' determination shall be made within
thirty (30) days after submission of the matters in dispute and shall be final
and binding upon the Parties, without right of appeal. In making his
determination, the applicable Defect Arbitrator shall be bound by the rules set
forth in Sections 9(h) and may consider such other matters as in the opinion of
the applicable Defect Arbitrator are necessary or helpful to make a proper
determination. Additionally, each applicable Defect Arbitrator may consult with
and engage disinterested third Persons to advise the arbitrator, including title
attorneys from other states and petroleum engineers. Each applicable Defect
Arbitrator shall act as an expert for the limited purpose of determining the
specific disputed Defect Amounts submitted by any Party and may not award
damages, interest or penalties to any Party with respect to any matter. Seller
and Buyer shall each bear its own legal fees and other costs of presenting its
case. Buyer shall bear one-half of the costs and expenses of each Defect
Arbitrator, and Seller shall bear the remaining one-half of such costs and
expenses.
11
10. Consents and Preferential Rights.
(a) Promptly after the date hereof, Seller shall prepare and send (i)
notices to the holders of any required consents to assignment, if any, that are
set forth on Schedule 10 requesting consents to the transactions contemplated by
this Agreement and (ii) notices to the holders of any applicable preferential
rights to purchase or similar rights, if any, that are set forth on Schedule 10
in compliance with the terms of such rights and requesting waivers of such
rights. Any preferential purchase right must be exercised subject to all terms
and conditions set forth in this Agreement, including the successful Closing of
this Agreement pursuant to Section 20. The consideration payable under this
Agreement for any particular Property for purposes of preferential purchase
right notices shall be the Allocated Value for such Property. Seller shall use
commercially reasonable efforts to cause such consents to assignment and waivers
of preferential rights to purchase or similar rights (or the exercise thereof)
to be obtained and delivered prior to Closing, provided that Seller shall not be
required to make payments or undertake obligations to or for the benefit of the
holders of such rights in order to obtain the required consents and waivers.
Buyer shall use commercially reasonable efforts to cooperate with Seller in
seeking to obtain such consents to assignment and waivers of preferential
rights.
(b) In no event shall there be transferred at Closing any Property for
which a consent requirement has not been satisfied and for which transfer is
prohibited or a fee is payable (and which has not been paid by Buyer). In cases
in which the Property subject to such a requirement is a Contract and Buyer is
assigned the Net Profits Royalties to which the Contract relates, but the
Contract is not transferred to Buyer due to the unwaived consent requirement,
Buyer shall continue after Closing to use commercially reasonable efforts to
obtain the consent so that such Contract can be transferred to Buyer upon
receipt of the consent, the Contract shall be held by Seller for the benefit of
Buyer, Buyer shall pay all amounts due thereunder, and Buyer shall be
responsible for the performance of any obligations under such Contract to the
extent that Buyer has been transferred the Properties necessary to perform under
such Contract until such consent is obtained. In cases in which the Property
subject to such a requirement is a Net Profits Royalty and the third Person
consent to the transfer of the Net Profits Royalty is not obtained by Closing,
Buyer may elect to treat the unsatisfied consent requirements as a Defect and
receive the appropriate adjustment to the unadjusted Sale Price under Section 15
by giving Seller written notice thereof in accordance with Section 9, except
that such notice may be given up to one (1) Business Day prior to the Closing
Date. If an unsatisfied consent requirement with respect to which an adjustment
to the unadjusted Sale Price is made under Section 15 is subsequently satisfied
prior to the date of the final adjustment to the unadjusted Sale Price under
Section 30, Seller shall be reimbursed in that final adjustment for the amount
of any previous deduction from the unadjusted Sale Price, the Net Profits
Royalty, if not previously transferred to Buyer, shall be transferred, and the
provisions of this Section 10(b) shall no longer apply to such consent
requirement.
12
(c) If any preferential right to purchase any Properties is exercised
prior to Closing, (i) the Sale Price shall be decreased by the Allocated Value
for such Properties, (ii) the affected Properties shall not be transferred at
Closing, (iii) the affected Properties shall be deemed to be deleted from
Exhibit A for all purposes, (iv) Seller shall convey the affected Properties to
the holder of the preferential right to purchase on the terms and provisions set
out in the applicable preferential right provision, (v) Seller shall be entitled
to the consideration paid by such holder; and (vi) the effective date of the
sale of the affected Properties shall be the Effective Time, regardless of the
actual closing date of such sale.
(d) Should a third Person fail to validly exercise or waive its
preferential right to purchase as to any portion of the Properties prior to
Closing and the time for exercise or waiver has expired, then subject to the
remaining provisions of this Section 10, such Properties shall be included in
the transaction at Closing and there shall be no adjustment to the Sale Price at
Closing with respect to such preferential right to purchase.
(e) Should a third Person fail to exercise or waive its preferential
right to purchase as to any portion of the Properties prior to Closing and the
time for exercise or waiver has not yet expired, then subject to the remaining
provisions of this Section 10(e), such Properties shall be transferred to Buyer
at Closing, there shall be no adjustment to the Purchase Price at Closing with
respect to such preferential right to purchase, and Seller shall, at its sole
expense, continue to use commercially reasonable efforts to obtain a waiver of
the preferential purchase rights and shall continue to be responsible for the
compliance therewith. Should the holder of the preferential purchase right
validly exercise such right after Closing, then: (i) the Sale Price shall be
decreased by the Allocated Value for such Properties, (ii) the affected
Properties shall be deemed to be deleted from Exhibit A for all purposes, (iii)
Buyer shall promptly convey the affected Properties to the holder on the terms
and provisions set out in the applicable preferential right provision, and (iv)
Seller shall be entitled to the consideration paid by such holder.
11. Physical and Environmental Inspection. After the execution of this
Agreement, Seller shall use commercially reasonable efforts (but in no event
shall Seller be required to make any payments or incur any other obligations to
any Person) to cause Buyer and its authorized representatives to have physical
access to the Properties and Subject Assets at Buyer's sole cost, risk and
expense for the purpose of inspecting the same, conducting such tests,
examination, investigations and assessments as may be reasonable and necessary
or appropriate to evaluate the environmental and physical condition of the
Properties and Subject Assets. Buyer's right of access, if any, to the
Properties and Subject Assets shall not entitle Buyer to operate equipment or
conduct intrusive testing or sampling, and any such access shall be further
limited by the Persons with rights to own, operate or use the Subject Assets or
the surface rights burdened thereby. Buyer acknowledges that Seller is not the
operator or owner of the Subject Assets and Seller has no right or ability to
grant Seller access to the Properties or the Subject Assets and that Seller
makes no representations or warranties as to access to the Properties or the
Subject Assets by Buyer. BUYER SHALL HOLD HARMLESS, DEFEND AND INDEMNIFY SELLER,
ITS AFFILIATES, THE OTHER OWNERS OF INTERESTS IN THE PROPERTIES AND ALL SUCH
PERSONS' DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES FROM AND
AGAINST ANY AND ALL LIABILITY, CLAIMS, LOSSES, CAUSES OF ACTION, COSTS AND
EXPENSES (INCLUDING COURT COSTS AND REASONABLE ATTORNEYS' FEES), INJURY TO
BUYER'S EMPLOYEES, AGENTS, CONTRACTORS, SUBCONTRACTORS OR INVITEES OR TO BUYER'S
PROPERTY, AND/OR INJURY TO SELLER'S PROPERTY, EMPLOYEES, AGENTS OR CONTRACTORS
WHICH MAY ARISE OUT OF OR ARE ATTRIBUTABLE TO ACCESS TO THE PROPERTIES OR
BUYER'S INSPECTIONS THEREOF, , EVEN IF CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL
FAULT OF ANY INDEMNIFIED PERSON. Buyer agrees to provide to Seller a copy of any
environmental assessments, including any reports, data, and conclusions. Any and
all data or information acquired by all such examinations and results of all
analysis of such data and information shall be subject to the terms of the
Confidentiality Agreement.
13
12. Period Pending Closing. Except as may be required by the terms of this
Agreement or as may be approved by Buyer in writing, from the date hereof until
the Closing Date Seller shall not transfer, sell, hypothecate, encumber or
otherwise dispose of any of the Properties. Buyer's approval of any action
restricted by this Section 12 shall not be unreasonably withheld or delayed and
shall be considered granted within ten (10) days (unless a shorter time is
reasonably required by the circumstances and such shorter time is specified in
Seller's notice) of Seller's notice to Buyer requesting such consent unless
Buyer notifies Seller to the contrary during that period. Notwithstanding the
foregoing provisions of this Section 12, in the event of an emergency, Seller
may take such action as may be reasonably necessary and shall notify Buyer of
such action promptly thereafter.
13. [Intentionally Deleted]
14. Notification of Breaches. Until the Closing,
(a) Buyer shall notify Seller promptly after Buyer obtains actual
knowledge that any representation or warranty of Seller contained in this
Agreement is untrue in any material respect or will be untrue in any material
respect as of the Closing Date or that any covenant or agreement to be performed
or observed by Seller prior to or on the Closing Date has not been so performed
or observed in any material respect;
(b) Seller shall notify Buyer promptly after Seller obtains actual
knowledge that any representation or warranty of Buyer contained in this
Agreement is untrue in any material respect or will be untrue in any material
respect as of the Closing Date or that any covenant or agreement to be performed
or observed by Buyer prior to or on the Closing Date has not been so performed
or observed in any material respect; and
(c) If any of Buyer's or Seller's representations or warranties is
untrue or shall become untrue in any material respect between the date of
execution of this Agreement and the Closing Date, or if any of Buyer's or
Seller's covenants or agreements to be performed or observed prior to or on the
Closing Date shall not have been so performed or observed in any material
respect, but such breach of representation or warranty or non-performance of
covenant or agreement shall (if curable) be cured by the Closing (or, if the
Closing does not occur, by the date set forth in Section 16(a)), then such
breach shall be considered not to have occurred for all purposes of this
Agreement.
15. Sale Price Adjustments. The unadjusted Sale Price shall be adjusted as
follows, but only with respect to matters (i) in the case of Section 15(a), for
which notice is given on or before the Defect Claim Date, and (ii) in the case
of Sections 15(b), (c), (d), (e), (f), (g), (h) (i) and (j) identified on or
before the February 1, 2008:
(a) Decreased, as appropriate, in accordance with Section 9;
(b) Decreased as a consequence of Properties being excluded from this
transaction as a consequence of the exercise of preferential rights to purchase,
as described in Section 10;
(c) Increased by the aggregate amount (using a settlement price of
three dollars ($3.00) per thousand cubic feet (Mcf)) that the Subject Assets are
underproduced, if at all, as to the Net Profits Royalties share of total oil,
condensate, gas or end product production, any balancing obligation or credit
arising from such underproduction, and any pipeline imbalance underproduced, in
each case determined as of the Effective Time;
(d) Decreased by the aggregate amount (using a settlement price of
three dollars ($3.00) per thousand cubic feet (Mcf)) that the Subject Assets are
overproduced, if at all, as to the Net Profits Royalties share of total oil,
condensate, gas or end product production, any balancing obligation or credit
arising from such overproduction, and any pipeline imbalance overproduced, in
each case determined as of the Effective Time;
14
(e) Decreased by an amount equal to the amounts received by Seller that
are attributable to the ownership of the Properties for periods on or after the
Effective Time and received by Seller on or prior to the Closing Date;
(f) Increased by the expenses paid by Seller that are attributable to
the ownership of the Properties for periods on or after the Effective Time;
(g) Decreased by an amount equal to the portion of the Allocated Value
of any Properties transferred or sold by Seller during the period on or after
July 1, 2007 but prior to the Closing Date; provided, however, that any
decreases made under this Section 15(g) shall be shall be determined without
duplication of any costs or losses included in another adjustment, or for which
Buyer otherwise receives credit in the calculation of the Sale Price and shall
exclude any transfer or sale of any Properties to Buyer or its Affiliates at
Closing as contemplated hereunder;
(h) Increased by a positive amount, if any, equal to (i) ninety percent
(90%) of the total proved discounted future net income aggregate value
(discounted at ten percent (10%)) of all of the Subject Assets as of December
31, 2006 as shown in the reserve report to be delivered by Xxxxx Xxxxx Company
after the date of this Agreement and prior to November 30, 2007 ("Revised
Reserve Report") minus (ii) $28,241,400 (such amount representing ninety percent
(90%) of the total proved discounted future net income aggregate value
(discounted at ten percent (10%)) as reported in the reserve report covering the
Subject Assets delivered by Xxxxx Xxxxx Company dated July 16, 2007 ("July
Reserve Report") minus (iii) ninety percent (90%) of the total proved discounted
future net income aggregate value, discounted at ten percent (10%), of those
Subject Assets set forth on Schedule 15(h) attached hereto (as such value is set
forth in the Revised Reserve Report);
(i) In the event that the forward price of West Texas Intermediate
Crude Oil for December 2008 as posted by the New York Mercantile Exchange as of
the close of trading on the Business Day immediately preceding the Closing Date
("Closing Date WTI Price") is less then seventy four dollars and eighty cents
($74.80), then decreased by an amount equal to the product of (i) the Sale
Price, as adjusted under clauses (a) through (h) of this Section 15, multiplied
by (ii) five tenths ((0.50), multiplied by (iii) the remainder of (A) ninety
five one hundredths (0.95), minus (B) the quotient of (1) the Closing Date WTI
Price, divided by (2) seventy eight dollars and seventy four cents (78.74);
provided, however, the adjustment to the Sale Price provided in this Section
15(i) shall in no event exceed ten percent (10%) of the Sale Price, as adjusted
under clauses (a) through (h) of this Section 15;
(j) In the event that the Closing Date WTI Price exceeds eighty two
dollars and sixty eight cents ($82.68), then increased by an amount equal to the
product of (i) the Sale Price, as adjusted under clauses (a) through (h) of this
Section 15, multiplied by (ii) twenty five hundredths (0.25), multiplied by
(iii) the remainder of (A) the quotient of (1) the Closing Date WTI Price,
divided by (2) seventy eight dollars and seventy four cents (78.74), minus (B)
one hundred and five one hundredths (1.05);
(k) Decreased by an amount equal to the Deposit; and
(l) In the event that closing does not occur on or prior to the Target
Closing Date due to the sole fault of Buyer, increased by an amount equal to (1)
the Agreed Rate multiplied by (2)(A) the unadjusted Sale Price, as adjusted
under clauses (a) through (j) above, multiplied by (B)(y) the number of days in
the period from the Target Closing Date through and including the Closing Date
divided by (z) 365. As used herein, the term "Agreed Rate" shall mean the lesser
of (i) the one month London Inter-Bank Offered Rate, as published on Telerate
Page 3750 on the last Business Day prior to the Effective Time, plus five
percentage points (LIBOR +5%) and (ii) the maximum rate allowed by applicable
Law.
The adjustments set forth in this Section 15 shall be determined in the order of
priority set forth in this Section 15, with the intent of the Parties being that
the adjustment set forth in Section 15(a) shall be made prior to the adjustment
set forth in Section 15(b) and the adjustment set forth in Section 15(b) shall
be made prior to the adjustment set forth in Section 15(c), and so on and so
forth. The amount of each adjustment to the unadjusted Sale Price described in
Sections 15(e), and 15(g) shall be determined in accordance with the United
States generally accepted accounting principles.
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16. Termination.
(a) Right of Termination. This Agreement may be terminated at any time
prior to Closing:
(i) by the mutual prior written consent of Seller and Buyer;
or
(ii) by Buyer if, through no fault of Buyer, any condition set
forth in Section 17 has not been satisfied or waived by Buyer by December 31,
2007, or
(iii) by Seller if, Seller has timely delivered to Buyer a
valid notice of termination in accordance with Section 9(i); or
(iv) by Seller if, through no fault of Seller, any condition
set forth in Section 18 has not been satisfied or waived by Seller by December
31, 2007; or
(v) by Seller, no later than November 23, 2007 if Seller deems
it reasonably necessary, in its sole discretion, to do so in order to comply
with its fiduciary duties; or
(vi) by Seller or Buyer if the aggregate adjustment to the
Sale Price provided in Section 15(h) exceeds four million dollars ($4,000,000),
by delivery, within two (2) Business Days after the delivery of the reserve
report described in Section 15(h)(i), to the other Party a written notice of
termination.
(b) Effect of Termination.
(i) If this Agreement is terminated pursuant to Section
16(a)(i), as each Party's exclusive remedy, Seller shall promptly (but in no
event later than three (3) Business Days after such termination) return the
Deposit to Buyer via wire transfer of immediately available funds.
(ii) If this Agreement is terminated pursuant to Section
16(a)(ii), as each Party's exclusive remedy, Seller shall promptly (but in no
event later than three (3) Business Days after such termination) return the
Deposit to Buyer via wire transfer of immediately available funds.
(iii) If this Agreement is terminated pursuant to Section
16(a)(iii), as each Party's exclusive remedy, Seller shall promptly (but in no
event later than three (3) Business Days after such termination return the
Deposit to Buyer via wire transfer of immediately available funds.
(iv) If this Agreement is terminated pursuant to Section
16(a)(iv) above, then Seller shall be entitled to retain the Deposit as
liquidated damages and as reimbursement for Seller's out-of-pocket fees and
expenses incurred in connection with the transactions contemplated by this
Agreement and Seller may, at its option, assert its right of specific
performance; provided, however, if this Agreement is terminated pursuant to
Section 16(a)(iv) solely due to the failure to receive the opinion described in
Section 18(d), then, as each Party's exclusive remedy, Seller shall promptly
(but in no event later than three (3) Business Days after such termination)
return the Deposit to Buyer via wire transfer of immediately available funds.
The Parties hereby acknowledge that the extent of damages to Seller occasioned
by any breach or default or failure to proceed by Buyer would be impossible or
extremely impractical to ascertain and that the amount of the Deposit is a fair
and reasonable estimate of such damage.
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(v) If this Agreement is terminated pursuant to Section
16(a)(v), as each Party's exclusive remedy, Seller shall promptly (but in no
event later than three (3) Business Days after such termination) return the
Deposit to Buyer via wire transfer of immediately available funds.
(vi) If this Agreement is terminated pursuant to Section
16(a)(vi), as each Party's exclusive remedy, Seller shall promptly (but in no
event later than three (3) Business Days after such termination) return the
Deposit to Buyer via wire transfer of immediately available funds.
(c) If this Agreement is terminated pursuant to this Section 16, this
Agreement shall become void and of no further force or effect (except for the
provisions of Section 1, 4, 8, 11, 16, 31, 33, 34, 37, 41, 44, 45, 46 48, and 49
and for the Confidentiality Agreement, all of which shall continue in full force
and effect). Notwithstanding anything to the contrary in this Agreement, the
termination of this Agreement under this Section 16 shall not relieve any Party
from liability (including liability for consequential damages) for any willful
or negligent failure to perform or observe in any material respect any of its
agreements or covenants contained herein that are to be performed or observed at
or prior to Closing. In the event this Agreement terminates under Section 16 and
any Party has willfully or negligently failed to perform or observe in any
material respect any of its agreements or covenants contained herein which are
to be performed or observed at or prior to Closing, then the other Party shall
be entitled to all remedies available at law or in equity (including strict
performance) and shall be entitled to recover court costs and attorneys' fees
from the other Party in addition to any other relief to which such Party may be
entitled.
17. Conditions of Closing by Buyer. The obligation of Buyer to close is subject
to the satisfaction of the following conditions:
(a) All representations and warranties of Seller contained in Sections
6(a) and 6(b) of this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on and as of the Closing Date,
and Seller shall have performed and satisfied in all material respects all
agreements and covenants required by Sections 8, 10, 11, 12 and 14 of this
Agreement to be performed and satisfied by Seller prior to or on the Closing
Date;
(b) No suit, injunction, order or award, or other proceeding shall be
pending or threatened before any court or governmental agency seeking to
restrain, enjoin or prohibit the consummation of the transactions contemplated
by this Agreement; and
(c) All material consents and approvals of any Governmental Authority
required for the transfer of the Properties from Seller to Buyer as contemplated
by this Agreement, except consents and approvals that are customarily obtained
after closing, shall have been granted, or, if applicable, the necessary waiting
period shall have expired, or early termination of the waiting period shall have
been granted.
18. Conditions of Closing by Seller. The obligation of Seller to close is
subject to the satisfaction of the following conditions:
(a) All representations and warranties of Buyer contained in Section 7
of this Agreement shall be true and correct in all material respects as of the
Closing Date as though made on and as of the Closing Date, and Buyer shall have
performed and satisfied in all material respects all agreements and covenants
required by this Agreement to be performed and satisfied by Buyer prior to or on
the Closing Date;
(b) No suit, injunction, order or award, or other proceeding shall be
pending or threatened before any court or governmental agency seeking to
restrain, enjoin or prohibit the consummation of the transactions contemplated
by this Agreement;
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(c) All material consents and approvals of any Governmental Authority
required for the transfer of the Properties from Seller to Buyer as contemplated
by this Agreement, except consents and approvals that are customarily obtained
after closing, shall have been granted, or, if applicable, the necessary waiting
period shall have expired, or early termination of the waiting period shall have
been granted; and
(d) Seller shall have received an opinion satisfactory to Seller from a
nationally recognized investment banking firm regarding the fairness, from a
financial point of view, of the transactions contemplated hereby to the Trust.
19. Preliminary Closing Statement. Seller shall prepare and furnish to
Buyer at least three (3) days prior to Closing a preliminary closing statement
setting forth the adjustments, if any, to the Sale Price and the total amount of
funds to be paid by Buyer at Closing. Such statement shall reflect each
adjustment and the calculation used to determine such amount. The adjusted Sale
Price shall mean the Sale Price adjusted as provided herein.
20. Closing. The consummation of the transactions contemplated hereby
("Closing") shall unless otherwise agreed to in writing by Buyer and Seller,
take place at the offices of Devon located at 00 X. Xxxxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx, at 10:00 a.m., local time, on December 17, 2007 ("Target Closing
Date"), or if all conditions in Sections 17 and 18 to be satisfied prior to
Closing have not yet been satisfied or waived, as soon thereafter as such
conditions have been satisfied or waived, subject to the provisions of Section
16. The date on which the Closing occurs is referred to herein as the "Closing
Date". At Closing the following shall occur:
(a) Seller and Buyer shall execute, acknowledge and deliver
counterparts of a Deed, Assignment and Xxxx of Sale substantially in the form
and substance of Exhibit C attached hereto, covering all of the Properties to be
sold pursuant hereto;
(b) Buyer shall deliver to Seller by wire transfer of immediately
available funds the total Sale Price as adjusted hereunder, subject to further
adjustment after Closing as provided for herein;
(c) In compliance with Section 1445 of the Code, Seller shall execute
and deliver to Buyer a Non-Foreign Affidavit in the form of Exhibit D attached
hereto;
(d) Seller and Buyer shall execute and deliver assignments, if any,
prepared by Buyer in form required by federal, state or tribal agencies for the
assignment of Net Profits Royalties burdening any federal, state or tribal lands
burdened by the Subject Assets, duly executed by Seller, in sufficient duplicate
originals to allow recording in all appropriate offices;
(e) Seller and Buyer shall execute and deliver letters-in-lieu of
transfer orders, if any, with respect to the Properties, as applicable;
(f) Buyer shall deliver to Seller a certificate duly executed by the
secretary or any assistant secretary of Buyer, dated as of the Closing, (i)
attaching and certifying on behalf of Buyer complete and correct copies of (A)
the certificate of incorporation and the bylaws of Buyer, each as in effect as
of the Closing, (B) resolutions of the Board of Directors of Buyer authorizing
the execution, delivery, and performance by Buyer of this Agreement and the
transactions contemplated hereby or an opinion of counsel to Buyer addressed to
Seller to the effect that board approval is not required (such opinion to be in
form and substance reasonably satisfactory to Seller and from counsel reasonably
satisfactory to Seller), and (C) any required approval by the stockholders of
Buyer of this Agreement and the transactions contemplated hereby and (ii)
certifying on behalf of Buyer the incumbency of each officer of Buyer executing
this Agreement or any document delivered in connection with the Closing;
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(g) Buyer shall deliver to Seller a certificate duly executed by an
authorized corporate officer of Buyer, dated as of the Closing Date, certifying
on behalf of Buyer that the conditions set forth in Section 18(a) have been have
been fulfilled;
(h) Seller shall be entitled to retain the Deposit for its own account
and the amount of the Deposit shall be applied to the payment of the Sale Price
in accordance with Section 15(k); and
(i) Seller shall deliver to Buyer a certificate duly executed by an
authorized corporate officer of Seller, dated as of the Closing Date, certifying
on behalf of Seller that the conditions set forth in Section 17(a) have been
have been fulfilled.
21. Reservations and Exceptions. The sale and purchase of the Properties is
made subject to all reservations, exceptions, limitations, contracts and other
burdens or instruments which are stated herein, on Exhibit A, or on any schedule
or exhibit hereto, which are of record or of which Buyer has actual or
constructive notice, including any matter included or referenced in the any
schedule or exhibit hereto or any materials made available by Seller to Buyer.
22. Payments. All payments made or to be made under this Agreement to Seller
shall be made by electronic transfer of immediately available funds to an
account of Seller that shall be designated by Seller in writing prior to the
Closing Date, for the credit of Seller, or to such other bank and account as may
be specified by Seller in writing on or before the Closing Date. All payments
made or to be made hereunder to Buyer shall be by electronic transfer of
immediately available funds to a bank and account specified by Buyer in writing
to Seller, for the credit of Buyer.
23. Assumption of Liabilities and Indemnities.
(a) Damages. As used in this Section 23, "Damages" shall mean the
amount of any actual liability, loss, cost, expense, claim, award or judgment
incurred or suffered by any Indemnified Person arising out of or resulting from
the indemnified matter, whether attributable to personal injury or death,
property damage, contract claims, torts or otherwise, including reasonable fees
and expenses of attorneys, consultants, accountants or other agents and experts
reasonably incident to matters indemnified against, and the costs of
investigation and/or monitoring of such matters, and the costs of enforcement of
the indemnity; provided, however, that Buyer and Seller shall not be entitled to
indemnification under this Section 23 for, and Damages shall not include, (i)
loss of profits or other special or consequential damages suffered by the Party
claiming indemnification, or any punitive damages, (ii) any liability, loss,
cost, expense, claim, award or judgment to the extent resulting from or
increased by the actions or omissions of any Indemnified Person after the
Closing Date or (iii) except with respect to claims for breach of Section 6, any
liability, loss, cost, expense, claim, award or judgment that does not
individually exceed two percent (2%) of the Sale Price, and, provided, further,
that "Damages" shall not include any adjustment for Taxes that may be assessed
on payments under this Section 23 or for Tax benefits received by the
Indemnified Person as a consequence of any Damages. "Seller Group" shall mean
Seller, and its current and former Affiliates, and its and their respective
directors, officers, employees, agents, contractors, insurers and invitees.
(b) Assumed Obligations. Without limiting Buyer's rights to indemnity
under this Section 23, on the Closing Date Buyer shall assume and hereby agrees
to fulfill, perform, pay and discharge (or cause to be fulfilled, performed,
paid or discharged) all of the obligations and liabilities of Seller and its
Affiliates, known or unknown, with respect to the Properties, regardless of
whether such obligations or liabilities arose prior to or after the Closing
Date, including but not limited to, obligations to furnish makeup gas according
to the terms of applicable gas sales, gathering or transportation Contracts,
production balancing obligations, crude oil scheduling imbalances, obligations
to pay working interests, royalties, overriding royalties and other interests
held in suspense, obligations under any Environmental Laws, obligations to plug
and abandon xxxxx and dismantle structures, and to restore and/or remediate the
Properties, ground water, surface water, soil or seabed in accordance with
applicable agreements and Laws, including any obligations to assess, remediate,
remove and dispose of NORM, MMMF, asbestos, mercury, drilling fluids and
chemicals, and produced waters and hydrocarbons, other environmental liabilities
with respect to the Properties and continuing obligations under the Contracts or
any agreements pursuant to which the Seller or its Affiliates purchased
Properties prior to the Closing (all of said obligations and liabilities,
subject to the exclusions of the proviso below, herein being referred to as
"Assumed Obligations"); provided, however, that Buyer does not assume any
obligations to the extent that they are: (i) attributable to or arise out of the
Excluded Properties; (ii) required to be borne by Seller under Section 15; (iii)
Tax obligations retained by Seller pursuant to Section 27 or 28; or (iv) the
responsibility of Seller under Section 23(d).
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(c) Buyer Indemnification. From and after Closing, Buyer shall
indemnify, defend and hold harmless Seller and its Affiliates from and against
all Damages incurred or suffered by Seller or any of Seller's Affiliates:
(i) caused by or arising out of or resulting from the Assumed
Obligations,
(ii) otherwise caused by or arising out of or resulting from
the ownership, use or operation of the Properties, whether before or after the
Closing Date,
(iii) caused by or arising out of or resulting from Buyer's
breach of any of Buyer's covenants or agreements contained herein, or
(iv) caused by or arising out of or resulting from any breach
of any representation or warranty made by Buyer contained herein or in any
certificate delivered by Buyer at Closing pursuant to Section 20,
EVEN IF SUCH DAMAGES ARE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER
SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF ANY
INDEMNIFIED PERSON, but excepting in each case Damages against which Seller
would be required to indemnify Buyer under Section 23(d) at the time the claim
notice is presented by Buyer.
(d) Seller Indemnification. From and after Closing, Seller shall
indemnify, defend and hold harmless Buyer and its Affiliates from and against
any and all Damages incurred or suffered by Buyer or any of Buyer's Affiliates:
(i) caused by or arising out of or resulting from Seller's
breach of any of Seller's covenants or agreements contained in Section 12,
(ii) caused by or arising out of or resulting from any breach
of any representation or warranty made by Seller contained in Section 6 of this
Agreement, or
(iii) caused by or arising out of or resulting from any the
undertakings or agreements of Seller for brokerage fees, finder's fees, agent's
commissions or other similar forms of compensation to an intermediary in
connection with the negotiation, execution or delivery of this Agreement or any
agreement or transaction contemplated hereby,
EVEN IF SUCH DAMAGES ARE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER
SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF ANY
INDEMNIFIED PERSON.
(e) Notwithstanding anything to the contrary contained in this
Agreement, Seller's and Buyer's exclusive remedy against each other with respect
to breaches of the representations, warranties, covenants and agreements of the
Parties contained in Sections 6 through 14 (excluding Sections 9 or 10, which
shall be separately enforceable by Seller pursuant to whatever rights and
remedies are available to it outside of this Section 23) and the affirmations of
such representations, warranties, covenants and agreements contained in the
certificates delivered by Buyer at Closing pursuant to Section 20, is set forth
in this Section 23 (and, where applicable with respect to Section 16). Except
for the remedies contained in this Section 23 and Section 16, and any other
remedies available to the Parties at law or in equity for breaches of provisions
of this Agreement other than Sections 6 through 8 or 11 through 14, Seller and
Buyer each release, remise and forever discharge the other and their or its
Affiliates and all such Persons' stockholders, officers, directors, employees,
agents, advisors and representatives from any and all suits, legal or
administrative proceedings, claims, demands, damages, losses, costs,
liabilities, interest, or causes of action whatsoever, in law or in equity,
known or unknown, which such Parties might now or subsequently may have, based
on, relating to or arising out of this Agreement or Seller's ownership, use or
operation of the Properties, or the condition, quality, status or nature of the
Properties, including rights to contribution under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
breaches of statutory and implied warranties, nuisance or other tort actions,
rights to punitive damages, common law rights of contribution, any rights under
insurance policies and any rights under agreements between Seller and any
Affiliate of Seller, EVEN IF CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE
(WHETHER SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF
ANY RELEASED PERSON. Without limiting the generality of the preceding sentence,
Buyer agrees that its only remedy with respect to Seller's breach of its
covenants and agreements in Sections 8, 10, 11, 12 and 14 shall be the indemnity
of Seller in Section 23(d), as limited by the terms of this Section 23, and, if
applicable, as set forth in Section 16.
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(f) The indemnity to which each Party is entitled under this Section 23
shall be for the benefit of and extend to such Party's current and former
Affiliates and its and their respective directors, officers, employees, and
agents. Any claim for indemnity under this Section 23 by any such Affiliate,
director, officer, employee or agent must be brought and administered by the
applicable Party to this Agreement. No Indemnified Person other than Seller and
Buyer shall have any rights against either Seller or Buyer under the terms of
this Section 23 except as may be exercised on its behalf by Buyer or Seller, as
applicable, pursuant to this Section 23(f). Each of Seller and Buyer may elect
to exercise or not exercise indemnification rights under this Section on behalf
of the other Indemnified Persons affiliated with it in its sole discretion and
shall have no liability to any such other Indemnified Person for any action or
inaction under this Section.
(g) This Section 23 shall not apply in respect of title matters, which
are exclusively covered by Section 9, or Tax matters, which are exclusively
covered by Sections 27 and 28.
(h) The Parties shall treat, for Tax purposes, any amounts paid under
this Section 23 as an adjustment to the applicable Sale Price.
24. Indemnification Actions. All claims for indemnification under Section 23
shall be asserted and resolved as follows:
(a) The term "Indemnifying Person" when used in connection with
particular Damages shall mean the Person having an obligation to indemnify
another Person or Persons with respect to such Damages pursuant to Section 23,
and the term "Indemnified Person" when used in connection with particular
Damages shall mean a Person having the right to be indemnified with respect to
such Damages pursuant to Section 23 (including, for the avoidance of doubt,
those Persons identified in Section 23(f)).
(b) To make a claim for indemnification under Section 23, an
Indemnified Person shall notify the Indemnifying Person of its claim, including
the specific details of and specific basis under this Agreement for its claim
("Claim Notice"). In the event that the claim for indemnification is based upon
a claim by a third Person against the Indemnified Person (a "Claim"), the
Indemnified Person shall provide its Claim Notice promptly after the Indemnified
Person has actual knowledge of the Claim and shall enclose a copy of all papers
(if any) served with respect to the Claim; provided that the failure of any
Indemnified Person to give notice of a Claim as provided in this Section 24
shall not relieve the Indemnifying Person of its obligations under Section 23
except to the extent such failure results in insufficient time being available
to permit the Indemnifying Person to effectively defend against the Claim or
otherwise prejudices the Indemnifying Person's ability to defend against the
Claim. In the event that the claim for indemnification is based upon an
inaccuracy or breach of a representation, warranty, covenant or agreement, the
Claim Notice shall specify the representation, warranty, covenant or agreement
that was inaccurate or breached.
21
(c) In the case of a claim for indemnification based upon a Claim, the
Indemnifying Person shall have thirty (30) days from its receipt of the Claim
Notice to notify the Indemnified Person whether it admits or denies its
obligation to defend the Indemnified Person against such Claim under this
Section 24. If the Indemnifying Person does not notify the Indemnified Person
within such thirty (30) day period regarding whether the Indemnifying Person
admits or denies its obligation to defend the Indemnified Person, it shall be
conclusively deemed obligated to provide such indemnification hereunder. The
Indemnified Person is authorized, prior to and during such thirty (30) day
period, to file any motion, answer or other pleading that it shall deem
necessary or appropriate to protect its interests or those of the Indemnifying
Person and that is not prejudicial to the Indemnifying Person.
(d) If the Indemnifying Person admits its obligation, it shall have the
right and obligation to diligently defend, at its sole cost and expense, the
Claim. The Indemnifying Person shall have full control of such defense and
proceedings, including any compromise or settlement thereof. If requested by the
Indemnifying Person, the Indemnified Person agrees to cooperate in contesting
any Claim which the Indemnifying Person elects to contest (provided, however,
that the Indemnified Person shall not be required to bring any counterclaim or
cross-complaint against any Person). The Indemnified Person may participate in,
but not control, any defense or settlement of any Claim controlled by the
Indemnifying Person pursuant to this Section 24. An Indemnifying Person shall
not, without the written consent of the Indemnified Person, settle any Claim or
consent to the entry of any judgment with respect thereto that does not result
in a final, complete and unconditional release of the Indemnified Person's
liability with respect to the Claim.
(e) If the Indemnifying Person does not admit its obligation or admits
its obligation but fails to diligently defend or settle the Claim, then the
Indemnified Person shall have the right to defend against the Claim (at the sole
cost and expense of the Indemnifying Person, if the Indemnified Person is
entitled to indemnification hereunder), with counsel of the Indemnified Person's
choosing, subject to the right of the Indemnifying Person to admit its
obligation to indemnify the Indemnified Person and assume the defense of the
Claim at any time prior to settlement or final determination thereof. If the
Indemnifying Person has not yet admitted its obligation to indemnify the
Indemnified Person, the Indemnified Person shall send written notice to the
Indemnifying Person of any proposed settlement and the Indemnifying Person shall
have the option for ten (10) days following receipt of such notice to (i) admit
in writing its obligation for indemnification with respect to such Claim and
(ii) if its obligation is so admitted, assume the defense of the Claim,
including the power to reject the proposed settlement. If the Indemnified Person
settles any Claim over the objection of the Indemnifying Person after the
Indemnifying Person has timely admitted its obligation for indemnification in
writing and assumed the defense of the Claim, the Indemnified Person shall be
deemed to have waived any right to indemnity therefor.
(f) In the case of a claim for indemnification not based upon a Claim,
the Indemnifying Person shall have thirty (30) days from its receipt of the
Claim Notice to (i) cure the Damages complained of, (ii) admit its obligation to
provide indemnification with respect to such Damages or (iii) dispute the claim
for such Damages. If the Indemnifying Person does not notify the Indemnified
Person within such thirty (30) day period that it has cured the Damages or that
it disputes the claim for such Damages, the Indemnifying Person shall be
conclusively deemed obligated to provide indemnification hereunder.
25. Limitation on Actions.
(a) The representations and warranties of the Seller in Section 6 and
the covenants and agreements of Seller in Section 12 shall survive the Closing
for a period of three (3) months after Closing. All other representations,
warranties and covenants of Seller shall terminate as of the Closing Date.
(b) The remainder of this Agreement shall survive the Closing without
time limit except as may otherwise be expressly provided herein.
Representations, warranties, covenants and agreements shall be of no further
force and effect after the date of their expiration, provided that there shall
be no termination of any bona fide claim asserted pursuant to this Agreement
with respect to such a representation, warranty, covenant or agreement prior to
its expiration date.
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(c) The indemnities in Section 23(d) shall terminate as of the
termination date of each respective representation, warranty, covenant or
agreement that is subject to indemnification, except in each case as to matters
for which a specific written claim for indemnity has been delivered to the
Indemnifying Person on or before such termination date. The indemnities in
Section 23(c) shall continue without time limit.
(d) Seller shall not have any liability for any indemnification under
Section 23 until and unless the aggregate amount of the liability for all
Damages for which Claim Notices are delivered by Buyer exceeds two percent (2%)
of the unadjusted Sale Price, and then only to the extent the amount of such
Damages exceeds two percent (2%) of the unadjusted Sale Price.
(e) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, Seller shall not be required to indemnify Buyer under Section 23
for aggregate Damages in excess of twenty five percent (25%) of the unadjusted
Sale Price.
(f) The amount of any Damages for which an Indemnified Person is
entitled to indemnity under Section 23 shall be reduced by the amount of any
insurance proceeds realized by the Indemnified Person or its Affiliates with
respect to such Damages (net of any collection costs).
26. Casualty and Condemnation. If, after the date of this Agreement but prior to
Closing Date, any portion of the Properties is destroyed by fire or other
casualty or is expropriated or taken in condemnation or under right of eminent
domain, Buyer shall nevertheless be required to close. In the event that the
amount of the diminutions in value of the Properties attributable to such
casualty, expropriation or taking (determined by reference to the Allocated
Value, determined in the same manner as a Defect in accordance with Section 9),
exceeds fifty thousand dollars ($50,000.00), Seller and Buyer shall treat the
diminution of value of the Properties attributable to such casualty,
expropriation or taking (determined by reference to Allocated Value) as a Defect
under Section 9. In each case, Seller shall retain all rights to insurance and
other claims against third Persons with respect to the casualty or taking except
to the extent the Parties otherwise agree in writing.
27. Taxes. All ad valorem Taxes, real property Taxes, and similar obligations
with respect to the Tax period in which the Effective Time occurs (the "current
Tax period") shall be apportioned between Seller and Buyer as of the Effective
Time based on the current Tax period assessment. Seller shall pay, and
indemnify, defend and hold Buyer harmless with respect to payment of all such
Taxes on the Properties for the current Tax period, together with any interest
or penalties assessed thereon. Buyer shall pay, and indemnify, defend and hold
Seller harmless with respect to payment of all such Taxes on the Properties for
any time subsequent to the current Tax period, together with any interest or
penalties assessed thereon.
28. Sales Tax; Recording Fees. The Sale Price provided for hereunder excludes
any sales Taxes or other Taxes in connection with the sale contemplated by this
Agreement. If a determination is ever made that a sales Tax or other transfer
Tax applies, Buyer shall be liable for such Tax as well as any applicable
conveyance, transfer and recording fees, and real estate transfer stamps or
Taxes imposed on any transfer of property pursuant to this Agreement. Buyer
shall indemnify, defend and hold Seller harmless with respect to the payment of
all such Taxes, if any, including any interest or penalties assessed thereon.
Notwithstanding other provisions of this Agreement, Buyer shall be responsible
for the prompt filing and recording of the conveyances, assignments or other
instruments required to convey title to the Properties to Buyer in the
appropriate federal, state and local records. Buyer shall supply Seller with a
true and accurate photocopy of all the recorded and filed conveyances within a
reasonable period of time after such are available and in any event within sixty
(60) days after the Closing Date.
23
29. Records. Within ten (10) days after the Closing Date, Seller shall deliver
or cause to be delivered to Buyer any Records that are in the possession of
Seller, subject to this Section 28. Seller may retain the originals of those
Records relating to Tax and accounting matters and provide Buyer, at its
request, with copies of such Records that pertain to non-income Tax matters
solely related to the Properties. Seller may retain copies of any other Records.
Buyer, for a period of seven (7) years following the Closing, shall: (i) retain
the Records, (ii) provide Seller, its Affiliates, and their respective officers,
employees and representatives with access to the Records during normal business
hours for review and copying at Seller's expense, (iii) provide Seller, its
Affiliates, and their respective officers, employees and representatives with
access for, during normal business hours, to materials received or produced
after Closing relating to (A) Seller's obligations under Section 27, or (B) any
claim for indemnification made under Sections 23 or 28 of this Agreement
(excluding, however, attorney work product and attorney-client communications
with respect to any such claim being brought by Buyer under this Agreement), for
review and copying at Seller's expense, and (iv) provide Seller, its Affiliates,
and their respective officers, employees and representatives with access for,
during normal business hours, to Buyer's personnel for the purpose of discussing
any such matter or claim described in Section 29(iii).
30. Post-Closing Adjustments; Revenues.
(a) As soon as reasonably practicable after the Closing but not later
than the later of (i) the February 1, 2007 and (ii) the date on which the
Parties or the Defect Arbitrators, as applicable, finally determines all Defect
Amounts under Section 9, Seller shall prepare and deliver to Buyer a draft
statement setting forth the final calculation of the Sale Price and showing the
calculation of each adjustment under Section 15, based on the most recent actual
figures for each adjustment. Seller shall at Buyer's request make reasonable
documentation available to support the final figures. As soon as reasonably
practicable but not later than the fifteenth (15th) day following receipt of
Seller's statement hereunder, Buyer shall deliver to Seller a written report
containing any changes that Buyer proposes be made in such statement. Seller may
deliver a written report to Buyer during this same period reflecting any changes
that Seller proposes to be made in such statement as a result of additional
information received after the statement was prepared. The Parties shall
undertake to agree on the final statement of the Sale Price no later than thirty
(30) days after delivery of Seller's statement. In the event that the Parties
cannot reach agreement within such period of time, any Party may refer the items
of adjustment which are in dispute to Xxxxx Xxxxxxxx LLP or to any other
nationally-recognized independent accounting firm or consulting firm mutually
acceptable to both Buyer and Seller ("Accounting Arbitrator"), for review and
final determination by arbitration. The Accounting Arbitrator shall conduct the
arbitration proceedings in Houston, Texas in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, to the extent such
rules do not conflict with the terms of this Section. The Accounting
Arbitrator's determination shall be made within thirty (30) days after
submission of the matters in dispute and shall be final and binding on all
Parties, without right of appeal. In determining the proper amount of any
adjustment to the Sale Price, the Accounting Arbitrator shall be bound by the
terms of Section 15 and may not increase the Sale Price more than the increase
proposed by Seller nor decrease the Sale Price more than the decrease proposed
by Buyer, as applicable. The Accounting Arbitrator shall act as an expert for
the limited purpose of determining the specific disputed aspects of Sale Price
adjustments submitted by any Party and may not award damages, interest (except
as expressly provided for in this Section) or penalties to any Party with
respect to any matter. Seller and Buyer shall each bear its own legal fees and
other costs of presenting its case. Seller shall bear one-half and Buyer shall
bear one-half of the costs and expenses of the Accounting Arbitrator. Within ten
(10) days after the earlier of (i) the expiration of Buyer's fifteen (15) day
review period without delivery of any written report or (ii) the date on which
the Parties or the Accounting Arbitrator finally determine the Sale Price, (x)
Buyer shall pay to Seller the amount by which the adjusted Sale Price paid by
Buyer to Seller on the Closing Date exceeds the final adjusted Sale Price as
determined pursuant to this Section 30 or (y) Seller shall pay to Buyer the
amount by which the final adjusted Sale Price as determined pursuant to this
Section 30 exceeds the adjusted Sale Price paid by Buyer to Seller on the
Closing Date, as applicable. Any post-adjusted Sale Price pursuant to this
Section 30 shall bear interest from the Closing Date to the date of payment at
the Agreed Interest Rate. Buyer shall assist Seller in preparation of the final
statement of the Sale Price under this Section 30 by furnishing invoices,
receipts, reasonable access to personnel and such other assistance as may be
requested by Seller to facilitate such process post-Closing.
24
(b) With respect to any proceeds attributable to the ownership of the
Properties prior to the Effective Time that are received after the Closing Date
(other than the Suspended Royalties), Seller shall be entitled to all such
proceeds. Should Buyer receive after Closing any proceeds to which Seller is
entitled under the immediately foregoing sentence, Buyer shall fully disclose,
account for and promptly, but in no event later than thirty (30) days after
receipt, remit the same to Seller.
(c) With respect to any proceeds attributable to (i) the ownership of
the Properties on or after the Effective Time or (ii) the Suspended Royalties
that are, in each case, received after the Closing Date, Buyer shall be entitled
to all such proceeds. Should Seller or its Affiliates receive after Closing any
proceeds to which Buyer is entitled under the immediately foregoing sentence,
Seller shall fully disclose, account for and promptly, but in no event later
than thirty (30) days after receipt, remit the same to Buyer.
31. Notices. All communications required or permitted under this Agreement shall
be in writing, in English, and any communication or delivery hereunder shall be
deemed to have been fully made if delivered by personal delivery or if sent by
nationally recognized next-business-day delivery courier service or sent by
facsimile transmission, to the address as set forth below:
If to Seller: The Bank of New York Trust Company,
N.A., as trustee of Santa Fe
Energy Trust
000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy: 000-000-0000
With a copy to: The Bank of New York Trust Company,
N.A., as trustee of Santa Fe
Energy Trust
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: 212-635-6590
and with a copy to: Xxxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Telecopy: 512.479.3940
If to Buyer: Amen Properties, Inc.
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Beckham, Xxxxxx & Xxxxxx, L.L.P.
First Financial Bank Building
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Either Party may change its address for notice by notice to the other in the
manner set forth above. All notices shall be deemed to have been duly given at
the time of receipt by the Party to which such notice is addressed, or in the
case by notice sent by courier service or mail, on the date three (3) Business
Days after the date sent.
25
32. Further Assurance. After Closing each of the Parties shall execute,
acknowledge and deliver to the other such further instruments, and take such
other actions as may be reasonably necessary to carry out the provisions of this
Agreement. However, Buyer shall assume all responsibility for notifying the
purchaser(s) of oil and gas production from the Properties, 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 Properties, and
Buyer shall take all actions necessary to effectuate the transfer of such
payments to Buyer.
33. Disclaimer of Warranties. EXCEPT AS PROVIDED IN SECTION 6, ANY INSTRUMENT OF
CONVEYANCE OR SALE EXECUTED PURSUANT HERETO SHALL BE EXECUTED WITHOUT ANY
WARRANTY OF TITLE, EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITHOUT ANY
EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION AS TO THE MERCHANTABILITY OF ANY
OF THE EQUIPMENT OR OTHER PERSONAL PROPERTY INCLUDED IN THE PROPERTIES OR ITS
FITNESS FOR ANY PARTICULAR PURPOSE, AND WITHOUT ANY OTHER EXPRESS OR IMPLIED
WARRANTY OR REPRESENTATION WHATSOEVER. IT IS UNDERSTOOD AND AGREED THAT BUYER
SHALL HAVE INSPECTED THE PROPERTIES FOR ALL PURPOSES, INCLUDING WITHOUT
LIMITATION FOR THE PURPOSE OF DETECTING THE PRESENCE OF NORM AND MAN MADE
MATERIAL FIBERS (HEREINAFTER REFERRED TO AS "MMMF") AND SATISFIED ITSELF AS TO
THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE,
INCLUDING, BUT NOT LIMITED TO, CONDITIONS RELATED TO THE PRESENCE, RELEASE, OR
DISPOSAL OF HAZARDOUS SUBSTANCES, AND THAT BUYER IS RELYING SOLELY UPON THE
RESULTS OF SUCH INSPECTION OF THE PROPERTIES AND SHALL ACCEPT ALL OF THE SAME IN
THEIR "AS IS, WHERE IS" CONDITION. SELLER DISCLAIMS ALL LIABILITY ARISING IN
CONNECTION WITH THE PRESENCE OF NORM OR MMMF ON THE PROPERTIES AND IF TESTS HAVE
BEEN CONDUCTED BY SELLER FOR THE PRESENCE OF NORM OR MMMF, SELLER DISCLAIMS ANY
WARRANTY RESPECTING THE ACCURACY OF SUCH TESTS OR RESULTS. IN ADDITION, SELLER
AND ITS CONSULTANTS MAKES NO AND EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO ANY OF THE PROPERTIES, (II) THE
CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, ECONOMIC
INFORMATION OR REPORTS, OR ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT,
OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE SUBJECT
ASSETS OR THE PROPERTIES, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF
PETROLEUM SUBSTANCES IN OR FROM THE SUBJECT ASSETS OR THE PROPERTIES, (IV) THE
EXISTENCE OF ANY PROSPECT, RECOMPLETION, INFILL OR STEP-OUT DRILLING
OPPORTUNITIES, (V) ANY ESTIMATES OF THE VALUE OF THE SUBJECT ASSETS OR
PROPERTIES OR FUTURE REVENUES GENERATED BY THE SUBJECT PROPERTIES OR SUBJECT
ASSETS, (VI) THE PRODUCTION OF PETROLEUM SUBSTANCES FROM THE PROPERTIES OR
SUBJECT ASSETS, OR WHETHER PRODUCTION HAS BEEN CONTINUOUS, OR IN PAYING
QUANTITIES, OR ANY PRODUCTION OR DECLINE RATES, (VII) THE MAINTENANCE, REPAIR,
CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE SUBJECT ASSETS
OR PROPERTIES, (VIII) INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT, OR (IX)
ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR
COMMUNICATED TO SELLER OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS,
CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING
THERETO, AND FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY AND ALL
SUCH DATA, INFORMATION AND OTHER MATERIALS FURNISHED BY SELLER IS PROVIDED TO
BUYER AS A CONVENIENCE AND BUYER AFFIRMS THAT IT HAS RELIED SOLELY ON ITS OWN
EVALUATION OF THE PROPERTIES AND NOT ON INFORMATION FURNISHED BY SELLER. AFTER
CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, BUYER EXPRESSLY WAIVES THE
PROVISIONS OF CHAPTER XVII, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63,
INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED), VERNON'S TEXAS CODE
ANNOTATED, BUSINESS AND COMMERCE CODE (THE "DECEPTIVE TRADE PRACTICES ACT") AND
IF ANY OF THE PROPERTIES ARE LOCATED IN LOUISIANA AND ARE SUBJECT TO LOUISIANA
LAW, BUYER EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR
GUARANTEE AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW,
INCLUDING LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548 (1870) AND THE
WARRANTY IMPOSED BY LOUISIANA CIVIL CODE ARTICLES 2476; WAIVES ALL RIGHTS IN
REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLES 2420, ET SEQ; ACKNOWLEDGES
THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF
THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT THIS WAIVER HAS
BEEN BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL AND THAT BUYER
HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF FITNESS
AND/OR WARRANTY AGAINST REDHIBITORY VICES AND DEFECT FOR THE PROPERTIES. BUYER
ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND
INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT
THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL
AND THAT BUYER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER. ALL
INSTRUMENTS OF CONVEYANCE TO BE DELIVERED BY SELLER AT CLOSING SHALL EXPRESSLY
SET FORTH THE DISCLAIMERS OF REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
PARAGRAPH. IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER, BUYER HEREBY
REPRESENTS AND WARRANTS TO SELLER THAT BUYER (A) IS NOT IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION AND (B) IS REPRESENTED BY LEGAL COUNSEL, OF ITS
OWN SELECTION, IN SEEKING OR ACQUIRING THE INTERESTS.
26
34. Expenses. Except as expressly otherwise provided herein, all expenses
incurred by Seller in connection with this Agreement, and all other matters
related to the Closing, including without limitation, all fees and expenses of
counsel, accountants and financial advisers employed by Seller, shall be borne
solely and entirely by Seller, and all such expenses incurred by Buyer shall be
borne solely and entirely by Buyer.
35. Due Diligence. Buyer represents that it has performed, or will perform prior
to Closing, sufficient review and due diligence with respect to the Properties,
which includes reviewing well-data, title, and other files, and performing
necessary evaluations, assessments, and other tasks involved in evaluating the
Properties, to satisfy its requirements completely and to enable it to make an
informed decision to acquire the Properties under the terms of this Agreement.
Buyer is capable of making such investigation, inspection, review and evaluation
of the Properties as a prudent purchaser would deem appropriate under the
circumstances, including with respect to all matters relating to the Properties,
their value, operation and suitability. Each of Seller and Buyer has had the
opportunity to exercise business discretion in relation to the negotiation of
the details of the transactions contemplated hereby. This Agreement is the
result of arm's-length negotiations from equal bargaining positions. It is
expressly agreed that this Agreement shall not be construed against any Party,
and no consideration shall be given or presumption made, on the basis of who
drafted this Agreement or any particular provision thereof.
36. Material Factor. Buyer acknowledges that Buyer's representations herein are
a material inducement to Seller to enter into this Agreement with, and close the
sale to, Buyer.
37. Press Release. Until the Closing, except as approved by the Parties there
shall be no press release or public communication concerning this purchase and
sale or any other transaction contemplated hereby by either Party or their
Affiliates; provided, however, the foregoing shall not restrict disclosures by
Buyer or Seller (i) to the extent that such disclosures are required by
applicable securities or other Laws or the applicable rules of any stock
exchange having jurisdiction over the disclosing Party or its Affiliates, (ii)
to Governmental Authorities and third Persons holding preferential rights to
purchase, rights of consent or other rights that may be applicable to the
transactions contemplated by this Agreement, as reasonably necessary to provide
notices, seek waivers. amendments or terminations of such rights, or seek such
consents, or (iii) to third Persons to the extent required by the Contracts.
Seller and Buyer shall each be liable for the compliance of its respective
Affiliates with the terms of this Section
27
37. The Parties will endeavor to consult each other in a timely manner on all
press releases required by applicable Law. Seller has advised Buyer that Seller
will be required under applicable Law to make certain disclosures regarding this
Agreement and the transactions contemplated hereby.
38. Entire Agreement. This Agreement and the Confidentiality Agreement and the
agreements and instruments contemplated hereby and thereby state the entire
agreement between the Parties regarding the subject matter hereof and thereof
and may be supplemented, altered, amended, modified or revoked by writing only,
signed by both Parties. This Agreement supersedes any prior agreements between
the Parties concerning sale of the Properties, except that the Confidentiality
Agreement shall survive the execution and of this Agreement and shall terminate
at Closing. The headings are for guidance only and shall have no significance in
the interpretations of this Agreement.
39. Tax Reporting. The allocated values set forth on Exhibit B shall be
completed in the manner required by Section 1060 of the Code. Buyer and Seller
further agree to comply with all filing, notice and reporting requirements
described in Section 1060 of the Code, including the timely preparation and
filing of Form 8594 based on the allocated values. Buyer and Seller hereby agree
that they will report the federal, state, foreign and other Tax consequences of
the transactions contemplated by this Agreement in a manner consistent with the
allocated values set forth on Exhibit B (as such may be revised per the terms
hereof).
40. Assignability. This Agreement and the rights and obligations hereunder shall
not be assignable or delegable by either Party hereto without the prior written
consent of the other, which consent may be given or withheld at the sole
discretion of the Party entitled to grant such consent, and any transfer or
delegation made without such consent shall be void. Notwithstanding anything to
the contrary in this Section 40, Buyer may, prior to Closing, assign its rights
hereunder to a wholly-owned Affiliate of Buyer by delivering to Seller prior to
Closing an assignment agreement in form and substance mutually acceptable to
Seller; provided, however, such assignment shall not release, and Buyer shall
remain liable for, all obligations to be performed by Buyer under this Agreement
and the instruments delivered by Buyer or its Affiliates hereunder. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective successors and assigns.
41. Choice of Law. This Agreement shall be governed by the Laws of the State of
Texas, without regard to principles of conflicts of laws that would direct the
application of the Laws of another jurisdiction.
42. Dispute Resolution. Each Party consents to personal jurisdiction in any
action brought in the United States federal courts located in the State of Texas
with respect to any dispute, claim or controversy arising out of or in relation
to or in connection with this Agreement, and each of the Parties hereto agrees
that any action instituted by it against the other with respect to any such
dispute, controversy or claim (except to the extent a dispute, controversy, or
claim arising out of or in relation to or in connection with the allocation of
the Sale Price pursuant to Section 5, the determination of a Defect Amount
pursuant to Section 9 or the determination of Sale Price adjustments pursuant to
Section 15 is referred to an expert pursuant to those Sections) will be
instituted exclusively in the United States District Court for the Southern
District of Texas, Houston Division. The Parties hereby waive trial by jury in
any action, proceeding or counterclaim brought by any Party against another in
any matter whatsoever arising out of or in relation to or in connection with
this Agreement.
43. Counterpart Execution. This Agreement may be executed in counterparts and
each counterpart shall constitute a binding agreement as if the Parties had
executed a single document.
44. Severance of Invalid Provisions. If, for any reason and for so long as, any
clause or provision of this Agreement is held by a court of competent
jurisdiction to be illegal, invalid, unenforceable or unconscionable under any
present or future Law (or interpretation thereof), the remainder of this
Agreement shall not be affected by such illegality or invalidity. Any such
invalid provision shall be deemed severed from this Agreement as if this
Agreement had been executed with the invalid provision eliminated. The surviving
provisions of this Agreement shall remain in full force and effect unless the
removal of the invalid provision destroys the legitimate purpose of this
Agreement; in which event this Agreement shall be null and void. The Parties
shall negotiate in good faith for any required modifications to this Agreement.
28
45. Limitation on Damages. Notwithstanding anything to the contrary contained
herein, none of Buyer, Seller or any of their respective Affiliates shall be
entitled to special, consequential, lost profits or punitive damages in
connection with this Agreement and the transactions contemplated hereby (other
than special, consequential, lost profits or punitive damages suffered by third
Persons for which responsibility is allocated between the Parties) and each of
Buyer and Seller, for itself and on behalf of its Affiliates, hereby expressly
waives any right to special or punitive damages in connection with this
Agreement and the transactions contemplated hereby. The Parties acknowledge that
the waivers and indemnities set forth herein constitute a specifically bargained
for allocation of risk among the Parties, which the Parties agree and
acknowledge satisfies the express negligence rule and conspicuousness
requirement under Texas Law.
46. References. In this Agreement: (a) references to any gender includes a
reference to all other genders; (b) references to the singular includes the
plural, and vice versa; (c) reference to any Section means a Section of this
Agreement; (d) reference to any Exhibit or Schedule means an Exhibit or Schedule
to this Agreement, all of which are incorporated into and made a part of this
Agreement; (e) unless expressly provided to the contrary, "hereunder", "hereof",
"herein" and words of similar import are references to this Agreement as a whole
and not any particular Section or other provision of this Agreement; (f)
references to "$" or "dollars" means United States dollars; and (g) "include"
and "including" shall mean include or including without limiting the generality
of the description preceding such term.
47. Waivers. Any failure by any Party to comply with any of its obligations,
agreements or conditions herein contained may be waived by the Party to whom
such compliance is owed by an instrument signed by the Party to whom compliance
is owed and expressly identified as a waiver, but not in any other manner. No
waiver of, or consent to a change in, any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of, or consent to a change in,
other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
48. Third Person Beneficiaries. Nothing in this Agreement shall entitle any
Person other than Buyer and Seller to any claim, cause of action, remedy or
right of any kind, except the rights expressly provided to the Persons described
in Sections 11 and 23.
49. Capacity as Trustee. Seller is executing and delivering this Agreement
solely in its capacity as Trustee of Santa Fe Energy Trust (the "Trust"), and
the Parties intend that the rights of Buyer shall be strictly limited to those
expressly set forth in this Agreement, and that any and all liabilities and
obligations of Seller arising hereunder or in connection with the transactions
contemplated hereby shall be satisfied, if at all, only by recourse to the
assets of the Trust, and that in no circumstance whatsoever shall BNY be liable
or responsible for any liability or obligation arising hereunder or in
connection with the transactions contemplated hereby.
50. Acknowledgement. BUYER ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT IN ITS
ENTIRETY, AND THAT IT UNDERSTANDS ALL THE PROVISIONS SET FORTH THEREIN,
INCLUDING, BUT NOT LIMITED TO, THOSE PROVISIONS LOCATED IN SECTIONS 11 AND 23
WHEREIN BUYER AGREES TO INDEMNIFY SELLER GROUP IN CERTAIN CIRCUMSTANCES EVEN
THOUGH THE LOSSES, COSTS, EXPENSE AND/OR DAMAGES MAY HAVE BEEN CAUSED BY THE
GROSS, SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE OF THE SELLER, ITS
EMPLOYEES, OR ANY THIRD PARTY AND EVEN THOUGH THE SELLER MAY BE RESPONSIBLE FOR
SUCH LOSSES, COSTS, EXPENSES AND/OR DAMAGES UNDER ANY THEORY OF LAW, INCLUDING
BUT NOT LIMITED TO STRICT LIABILITY
[Remainder of Page Intentionally Left Blank. Signature Page to Follow]
29
IN WITNESS WHEREOF, this Agreement has been signed by each of the
Parties effective as of the date first above written.
SELLER:
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
solely in its capacity as Trustee of
Santa Fe Energy Trust
By:
---------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
BUYER:
AMEN PROPERTIES, INC.
By:
---------------------------------------
Name: Xxxx Xxxxxx
Title: Chairman
Signature Page to Purchase and Sale Agreement
EXHIBIT A
---------
OIL AND GAS PROPERTIES
----------------------
Attachment 1: Net Profits Royalties Conveyances
Attachment 2: Leases
Attachment 3: Xxxxx
Exhibit A, Page 1
EXHIBIT B
---------
ALLOCATED VALUES
----------------
SEE ATTACHED
Exhibit B, Page 1
EXHIBIT C
---------
FORM OF ASSIGNMENT, XXXX OF SALE AND CONVEYANCE
-----------------------------------------------
ASSIGNMENT, XXXX OF SALE AND CONVEYANCE
---------------------------------------
The Bank of New York Trust Company, N.A., solely in its capacity as
Trustee of Santa Fe Energy Trust ("Assignor"), whose address is 000 Xxxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000 for Ten Dollars and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER, SET OVER, and
DELIVER unto [Amen Properties, Inc.], a Delaware corporation, whose address is
000 X. Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 ("Assignee"), effective as
of October 1, 2007 at 7:00 a.m., local time ("Effective Time"), said time to be
determined for each locality in which the Properties (as such term is defined
below) are located in accordance with the time generally observed in said
locality, all of Assignor's right, title and interest in and to the following:
A. any and all interests in the instruments set forth in Attachment 1 of
Exhibit A attached hereto, including, but not limited to such interests
constituting an undivided variable royalty interest in and to the
hydrocarbons that may be produced, saved, and marketed from the Subject
Assets equal to ninety percent (90%) of the net proceeds attributable
to the Properties, all as further described in the instruments set
forth in Attachment 1 of Exhibit A attached hereto ("Net Profits
Royalties");
B. any and all interests in the oil and gas leases, oil, gas and mineral
leases and subleases, royalties, overriding royalties, net profits
interests, mineral fee interests, carried interests, and other rights
to oil and gas in place, and mineral servitudes, that are described on
Attachment 2 of Exhibit A ("Leases");
C. any and all interests in any and all oil, gas, water, CO2 or injection
xxxxx located on the Leases or on the pooled, communitized or unitized
acreage that includes all or any part of the Leases, including, but not
limited to the interests in the xxxxx shown on Attachment 3 of Exhibit
A attached hereto ("Xxxxx"):
D. any and all interests in all pooled, communitized or unitized acreage
which includes all or part of any Leases ("Units", and together with
the Leases and the Xxxxx, the "Subject Assets"), and all tenements,
hereditaments and appurtenances belonging to the Leases and Units.
E. any and all any amounts payable to Assignor that are attributable to
the Net Profits Royalties that are, on or after the Closing Date, held
in suspense by any Person as of the Closing Date (regardless of whether
such amounts are attributable to production for periods before, on or
after the Effective Time and any interest accrued in escrow accounts
for such suspended funds ("Suspended Royalties");
F. all currently existing contracts, agreements and instruments with
respect to the Properties, to the extent burdening or applicable to the
Properties, including operating agreements, unitization, pooling, and
communitization agreements, declarations and orders, area of mutual
interest agreements, joint venture agreements, farmin and farmout
agreements, exchange agreements, transportation agreements, agreements
for the sale and purchase of oil and gas and processing agreements
("Contracts"); and
G. all data and records of Assignor, to the extent relating solely to the
Net Profits Royalties, the Suspended Royalties or the Contracts.
Exhibit C, Page 1
All of the real and personal properties, rights, titles, and interests described
in paragraphs (A) through (D) above are hereinafter collectively called the
"Properties" or, individually, a "Property", subject to the limitations and
terms expressly set forth herein and in Exhibit A and Exhibit B; provided,
however, the Properties shall in no event include any of the Excluded Properties
(as such tem if defined in the Purchase Agreement.
TO HAVE AND TO HOLD the Properties unto Assignee, its successors and assigns,
forever.
This Assignment, Xxxx of Sale and Conveyance (the "Assignment") is made and
accepted expressly subject to the following terms and conditions:
1. This Assignment is executed and delivered pursuant to and made subject to
that certain Purchase and Sale Agreement dated November 8, 2007 (the "Purchase
Agreement") between Assignor, as Seller, and Assignee, as Buyer, and in the
event of any conflict or inconsistency between any term hereof and any term of
the Purchase Agreement, the terms of the Purchase Agreement shall in all
respects control. All capitalized terms not defined herein shall have the
meaning ascribed to such term in the Purchase Agreement
2. THIS ASSIGNMENT IS MADE AND DELIVERED WITHOUT ANY WARRANTY OF TITLE, EITHER
EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITHOUT ANY EXPRESS OR IMPLIED
WARRANTY OR REPRESENTATION AS TO THE MERCHANTABILITY OF ANY OF THE EQUIPMENT OR
OTHER PERSONAL PROPERTY INCLUDED IN THE PROPERTIES OR ITS FITNESS FOR ANY
PARTICULAR PURPOSE, AND WITHOUT ANY OTHER EXPRESS OR IMPLIED WARRANTY OR
REPRESENTATION WHATSOEVER. IT IS UNDERSTOOD AND AGREED THAT ASSIGNEE HAS
INSPECTED THE PROPERTIES FOR ALL PURPOSES, INCLUDING WITHOUT LIMITATION FOR THE
PURPOSE OF DETECTING THE PRESENCE OF NORM AND MAN MADE MATERIAL FIBERS
(HEREINAFTER REFERRED TO AS "MMMF") AND SATISFIED ITSELF AS TO THEIR PHYSICAL
AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, INCLUDING, BUT NOT
LIMITED TO, CONDITIONS RELATED TO THE PRESENCE, RELEASE, OR DISPOSAL OF
HAZARDOUS SUBSTANCES, AND THAT ASSIGNEE IS RELYING SOLELY UPON THE RESULTS OF
SUCH INSPECTION OF THE PROPERTIES AND SHALL ACCEPT ALL OF THE SAME IN THEIR "AS
IS, WHERE IS" CONDITION. ASSIGNOR DISCLAIMS ALL LIABILITY ARISING IN CONNECTION
WITH THE PRESENCE OF NORM OR MMMF ON THE PROPERTIES AND IF TESTS HAVE BEEN
CONDUCTED BY ASSIGNOR FOR THE PRESENCE OF NORM OR MMMF, ASSIGNOR DISCLAIMS ANY
WARRANTY RESPECTING THE ACCURACY OF SUCH TESTS OR RESULTS. IN ADDITION, ASSIGNOR
AND ITS CONSULTANTS MAKES NO AND EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO ANY OF THE PROPERTIES, (II) THE
CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, ECONOMIC
INFORMATION OR REPORTS, OR ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT,
OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE SUBJECT
ASSETS OR THE PROPERTIES, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF
PETROLEUM SUBSTANCES IN OR FROM THE SUBJECT ASSETS OR THE PROPERTIES, (IV) THE
EXISTENCE OF ANY PROSPECT, RECOMPLETION, INFILL OR STEP-OUT DRILLING
OPPORTUNITIES, (V) ANY ESTIMATES OF THE VALUE OF THE SUBJECT ASSETS OR
PROPERTIES OR FUTURE REVENUES GENERATED BY THE SUBJECT PROPERTIES OR SUBJECT
ASSETS, (VI) THE PRODUCTION OF PETROLEUM SUBSTANCES FROM THE PROPERTIES OR
SUBJECT ASSETS, OR WHETHER PRODUCTION HAS BEEN CONTINUOUS, OR IN PAYING
QUANTITIES, OR ANY PRODUCTION OR DECLINE RATES, (VII) THE MAINTENANCE, REPAIR,
CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE SUBJECT ASSETS
OR PROPERTIES, (VIII) INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT, OR (IX)
ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR
COMMUNICATED TO ASSIGNOR OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS,
CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS ASSIGNMENT OR ANY DISCUSSION OR PRESENTATION RELATING
THERETO, AND FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY AND ALL
SUCH DATA, INFORMATION AND OTHER MATERIALS FURNISHED BY ASSIGNOR IS PROVIDED TO
ASSIGNEE AS A CONVENIENCE AND ASSIGNEE AFFIRMS THAT IT HAS RELIED SOLELY ON ITS
OWN EVALUATION OF THE PROPERTIES AND NOT ON INFORMATION FURNISHED BY ASSIGNOR.
AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, ASSIGNEE EXPRESSLY
WAIVES THE PROVISIONS OF CHAPTER XVII, SUBCHAPTER E, SECTIONS 17.41 THROUGH
17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED), VERNON'S
TEXAS CODE ANNOTATED, BUSINESS AND COMMERCE CODE (THE "DECEPTIVE TRADE PRACTICES
ACT") AND IF ANY OF THE PROPERTIES ARE LOCATED IN LOUISIANA AND ARE SUBJECT TO
LOUISIANA LAW, ASSIGNEE EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED
PURPOSES OR GUARANTEE AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA
LAW, INCLUDING LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548 (1870) AND
THE WARRANTY IMPOSED BY LOUISIANA CIVIL CODE ARTICLES 2476; WAIVES ALL RIGHTS IN
REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLES 2420, ET SEQ; ACKNOWLEDGES
THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF
THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT THIS WAIVER HAS
BEEN BROUGHT TO THE ATTENTION OF ASSIGNEE AND EXPLAINED IN DETAIL AND THAT
ASSIGNEE HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF
FITNESS AND/OR WARRANTY AGAINST REDHIBITORY VICES AND DEFECT FOR THE PROPERTIES.
ASSIGNEE ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL
AND INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES
THAT THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF ASSIGNEE AND EXPLAINED IN
DETAIL AND THAT ASSIGNEE HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER.
ALL INSTRUMENTS OF CONVEYANCE TO BE DELIVERED BY ASSIGNOR AT CLOSING SHALL
EXPRESSLY SET FORTH THE DISCLAIMERS OF REPRESENTATIONS AND WARRANTIES CONTAINED
IN THIS PARAGRAPH. IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER,
ASSIGNEE HEREBY REPRESENTS AND WARRANTS TO ASSIGNOR THAT ASSIGNEE (A) IS NOT IN
A SIGNIFICANTLY DISPARATE BARGAINING POSITION AND (B) IS REPRESENTED BY LEGAL
COUNSEL, OF ITS OWN SELECTION, IN SEEKING OR ACQUIRING THE INTERESTS.
Exhibit C, Page 2
3. To the extent permitted by law, Assignee shall be subrogated to Assignor's
rights in and to representations, warranties and covenants given by others with
respect to the Properties, and Assignor hereby grants and transfers to Assignee,
its successors and assigns, to the extent so transferable and permitted by law,
the benefit of and the right to enforce the covenants, representations and
warranties, if any, which Assignor is entitled to enforce with respect to the
Properties.
4. Assignee hereby assumes and agrees to fully and timely pay, perform, and
discharge in accordance with their terms, the all duties, liabilities and
obligations directly and primarily arising out of the Properties.
5. This Assignment is made expressly subject to and Assignee hereby assumes and
ratifies all Leases and Contracts, of which Assignee has actual notice,
(collectively, the "Assumed Contracts"). Assignee shall observe and comply with
all covenants, terms and provisions, express or implied, to the extent of
Assignee's interest in the Properties, in the Assumed Contracts, and shall
execute such instruments of ratification and joinder as may be required by the
terms thereof or the other parties thereto.
6. Assignor agrees to execute, acknowledge and deliver, or cause its affiliates
to execute, acknowledge and deliver, to Assignee, from time to time, such other
and additional instruments, notices, and other documents, and to do all such
other and further acts and things as may be necessary to more fully and
effectively grant, convey and assign to Assignee the Properties.
7. This Assignment shall be binding upon and inure to the benefit of Assignor
and Assignee and their respective successors and assigns and are covenants
running with the land and with each subsequent transfer or assignment of the
Properties or any part thereof.
Exhibit C, Page 2
8. This Assignment may be executed in any number of counterparts, each of which
will for all purposes be deemed to be an original, and all of which are
identical except that, to facilitate recordation, in any particular county or
parish counterpart portions of Exhibit A hereto which describe properties
situated in counties or parishes other than the county or parishes in which such
counterpart is to be recorded may have been omitted.
[Remainder of Page Intentionally Left Blank]
Exhibit C, Page 4
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment, Xxxx of Sale and Conveyance on the date set forth in their
respective acknowledgments below, but effective as of the Effective Time.
ASSIGNOR:
WITNESSES:
THE BANK OF NEW YORK TRUST COMPANY,
N.A., solely in its capacity as
Trustee of Santa Fe Energy Trust
Printed Name:
By:
--------------------------------
Name:
------------------------------------ Title:
Printed Name:
ASSIGNEE:
WITNESSES:
AMEN PROPERTIES, INC.
Printed Name:
By:
--------------------------------
Name:
------------------------------------ Title:
Printed Name:
Exhibit C, Page 5
[INSERT APPROPRIATE NOTARY BLOCKS PER EACH APPLICABLE STATE]
Exhibit C, Page 6
EXHIBIT A
PROPERTIES
Attachment 1: Net Profits Royalties Conveyances
Attachment 2: Leases
Attachment 3: Xxxxx
Exhibit C, Page 1
EXHIBIT D
---------
FORM OF NON-FOREIGN AFFIDAVIT
-----------------------------
CERTIFICATE OF NON-FOREIGN SELLER
Section 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. For U.S. tax purposes (including section 1445 of the Internal Revenue
Code), the owner of a disregarded entity (which has legal title to a U.S. real
property interest under local law) will be the transferor of the property and
not the disregarded entity. To inform the transferee, Amen Properties, LLC, a
Delaware corporation, ("Buyer"), that withholding of tax is not required upon
the disposition of a U.S. real property interest by The Bank of New York Trust
Company, N.A. ("BNY") solely in its capacity of trustee of Santa Fe Energy Trust
(the Trust") (BNY, in its capacity as trustee of the Trust, being herein called
"Trustee"; and the Trustee, in its capacity as the seller of the properties,
being called herein "Seller"), the undersigned hereby certifies the following on
behalf of the Trust and the Seller:
1. [Seller is a national association;
2. Trust is a trust;
3. Neither Seller nor the Trust is a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
4. Neither Seller nor the Trust is a disregarded entity as defined in Treasury
Regulations Section 1.1445-2(b)(b)(2)(iii);
5. Seller's U.S. employer identification number is __________________;
6. Trust's U.S. employer identification number is __________________;
7. Seller's office address is: 303 _______________________________;
8. Trust's office address is: _______________________________.]
Seller understands that this certification may be disclosed to the
Internal Revenue Service by Buyer 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 that I have authority to sign this document
on behalf of Seller.
SELLER:
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
solely in its capacity as Trustee of
Santa Fe Energy Trust
By:
---------------------------------------
Name:
Title:
Date:
Exhibit D, Page 1
SCHEDULE 1(d)
CONTRACTS
SEE ATTACHED
Schedule 1(d)
SCHEDULE 1(e)
EXCLUDED PROPERTIES
NONE
Schedule 1(e), Page 1
SCHEDULE 10
CONSENTS AND PREFERENTIAL RIGHTS
1. Any preferential rights to purchase all or any portion of the Properties held
by any Person under the terms of that certain Trust Agreement of Santa Fe Energy
Trust dated November 19, 1992 between Devon (as successor in interest to Santa
Fe Energy Resources, Inc. and the Seller (as successor trustee to Texas Commerce
Bank National Association), as such agreement has been amended, modified for
supplemented from time to time.
Schedule 10, Page 1
SCHEDULE 15(h)
SUBJECT ASSETS EXCLUDED FROM REVISED RESERVE REPORT ADJUSTMENT
SEE ATTACHED
Schedule 15(i), Page 1
