EXHIBIT 10.1
May 8, 2002
Xx. Xxxxx X Xxxxxx
DELTA PETROLEUM CORPORATION
000 Xxxxxxxxxxx Xx., Xxx. 0000
Xxxxxx, XX 00000
Re: Simultaneous purchase and sale of undivided interests owned by
Tipperary Oil & Gas Corporation ("TOGC") and by Delta Petroleum
Corporation ("Delta")
Dear Xx. Xxxxxx:
This letter sets forth the material terms of our agreement with
respect to the simultaneous (a) sale by TOGC, and purchase by Delta, of
all of TOGC's undivided interests in certain oil & gas leases and
mineral interests covering lands in Jasper and Xxxxxx Counties, Texas as
more particularly described on Exhibit A hereto ("West Buna Field") and
(b) sale by Delta, and purchase by TOGC or its nominee, of all of
Delta's undivided interests in certain Authorities to Prospect and
Petroleum Leases covering lands in Queensland, Australia as more
particularly described on Exhibit B hereto ("Queensland Properties", the
West Buna Field and the Queensland Properties sometimes collectively
referred to herein as the "Properties").
1. TOGC will pay Delta an aggregate purchase price of USD
$5,250,000.00 for all of Delta's undivided interests in the Queensland
Properties, which shall be paid as follows: (a) total cash consideration
of (USD) $4,800,000.00; and (b) 250,000 unregistered shares of Tipperary
Corporation stock, which for purposes of this transaction shall be
valued at USD $450,000.00 regardless of any change in the market price
which may occur before Closing (as hereafter defined).
2. Delta will pay TOGC a purchase price of USD $4,100,000.00 for
all of TOGC's undivided interests in the West Buna Field.
3. Both purchase and sale transactions shall be completed, and the
purchase prices paid in full, at a single closing to take place no later
than 10:00 o'clock a.m. on May 24, 2002, at TOGC's offices in Denver,
Colorado or at such other location as the parties may agree ("Closing").
At the Closing TOGC and Delta shall each deliver to the other
assignments, bills of sale and other conveyances ("Assignments") as may
be reasonably necessary to convey the Queensland Properties and the West
Buna Field under the laws of the jurisdiction in which each of the
Properties are situated. The Assignments shall contain a special
warranty of title obligating the assignor to defend the assignee against
any liens or encumbrances arising by, through or under the assignor, but
not otherwise and such additional terms and conditions as TOGC and Delta
may mutually agree. The effective date of both transactions shall be
April 1, 2002 for accounting purposes, except that Tipperary will assume
actual unpaid xxxxxxxx and cash calls up to a maximum of $600,000 of
payables to the joint accounts of the properties acquired.
4. Upon Closing the assignee of each Property shall: (i) waive,
release, remise, acquit and forever discharge, (ii) release and
relinquish any right of contribution, reimbursement, indemnification, or
other rights of a similar nature, (iii) assume all liability for, and
(iv) shall protect, defend, indemnify, and hold harmless, the assignor
of that Property (together with the assignor's affiliates, and their
respective shareholders, directors, officers, employees, agents,
successors and assigns) from and with respect to any and all Claims and
Damages (including Corrective Action Costs (hereinafter defined),
monitoring costs (including reasonable capital and operating costs),
remediation studies, and natural resource damages) that may at any time
arise on account of, or in any way arising out of, or in connection
with: (I) the known or unknown environmental condition of the Queensland
Properties or the West Buna Field, as the case may be, including any
Releases (hereinafter defined), and (II) any violation of any
administrative or judicial decision, statute, regulation or rule ("Law")
relating to the protection of health or the environment, whether or not
attributable to the assignor's activities or the activities of third
parties, regardless of whether or not the assignor was or is aware of
such activities, and regardless of whether or not the condition
(including any Release) or violation occurred before or after the
Closing.
a. THE INDEMNIFICATION, RELEASE, WAIVER, AND ASSUMPTION
PROVISIONS OF THIS SECTION APPLY REGARDLESS OF WHETHER THE ASSIGNOR (AND
ITS AFFILIATES, AND THEIR SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, SUCCESSORS AND ASSIGNS) CAUSED, IN WHOLE OR IN PART, AN
INDEMNIFIED CLAIM OR DAMAGES, INCLUDING INDEMNIFIED CLAIMS ARISING OR
RESULTING, IN WHOLE OR IN PART, FROM, OUT OF, OR IN CONNECTION WITH THE
CONDITION OF THE ASSETS OR THE SOLE, JOINT, COMPARATIVE, OR CONCURRENT
NEGLIGENCE, STRICT LIABILITY, OR FAULT OF THE ASSIGNOR OR ITS AFFILIATES
AND THEIR SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
SUCCESSORS AND ASSIGNS. THE PARTIES ACKNOWLEDGE THAT THIS PROVISION
COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.
b. As used in this Agreement, the following definitions shall
apply:
(i) "Hazardous Substances" means any substance or
material defined or designated as hazardous or toxic waste, hazardous or
toxic material, hazardous or toxic substance, or other similar term, by
any Law relating to the protection of health or the environment of the
jurisdiction in which each of the Properties is situated (which Laws
include, without limitation, the Federal Resource Conservation and
Recovery Act of 1976; Federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980; the Superfund Amendment and
Reauthorization Act of 1986; Federal Clean Air Act; Federal Clean Water
Act; Federal Water Pollution Control Act; Federal Insecticide,
Fungicide, and Rodenticide Act; and similar state Laws in effect as of
the relevant dates, as such Laws were or are amended from time to time).
(ii) "Releases" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, depositing,
placing, releasing, escaping, leaching, dumping or disposing of
Hazardous Substances or non-hazardous substances (to the extent the Law
requires the removal of the same) into the atmosphere, soil, surface
water, subsurface strata, groundwater, or otherwise into the
environment, including the abandonment or discarding of barrels,
containers, tanks, or other receptacles containing or previously
containing Hazardous Substances.
(iii) "Corrective Action" means, to the extent required
by Law, any expenditures or activities taken to monitor and, if
required, xxxxx, clean up, remove, treat, cover or in any other way
remediate a Release at, from, or emanating to either of the Properties.
(iv) "Corrective Action Costs" includes any and all: (A)
costs or expenses that arise directly from or in connection with the
performance of Corrective Action, including removal, remediation or
cleanup costs, site investigation and assessment costs, consultants
costs, attorneys fees and expert fees, government oversight and response
costs, penalties, liens, interests, fines, assessments, and charges, and
(B) any payment of any third party Claims or Damages (including any
federal, state or local government agency) arising out of or relating to
a Release at or from either of the Properties.
5. As partial consideration for this agreement, TOGC and Delta
represent and warrant to the other, as of the date of this agreement and
the Closing date, as follows:
a. TOGC represents and warrants to Delta that (i) it has the
full right, power and authority to convey the West Buna Field to Delta
as contemplated hereby; (ii) the West Buna Field is not burdened by any
liens or similar encumbrances; and (iii) to the best of TOGC's
knowledge, all of the oil and gas leases composing the West Buna Field
are valid and subsisting and are presently in force according to their
respective terms.
b. Delta represents and warrants to TOGC that (i) it has the
full right, power and authority to convey the Queensland Property to
TOGC as contemplated hereby; (ii) the Queensland Property is not
burdened by any liens or similar encumbrances; and (iii) to the best of
Delta's knowledge, all of the Authorities to Prospect and Petroleum
Leases composing the Queensland Properties, are valid and subsisting and
are presently in force according to their respective terms.
THE PARTIES ACKNOWLEDGE THAT THE FOREGOING REPRESENTATIONS AND
WARRANTIES AND THE SPECIAL WARRANTY OF TITLE TO BE INCLUDED IN THE
ASSIGNMENT ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EACH
PARTY EXPRESSLY DISCLAIMS ANY AND ALL SUCH OTHER REPRESENTATIONS
AND WARRANTIES. WITHOUT LIMITING THE FOREGOING, EACH OF THE
PROPERTIES WILL BE CONVEYED: (1) "AS IS" "WHERE IS" AND "SUBJECT
TO ALL FAULTS": (2) WITHOUT ANY OTHER REPRESENTATION OR WARRANTY
WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, THE CONDITION,
QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO
THE MODELS OR SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANY
EQUIPMENT OR ITS FITNESS FOR ANY PURPOSE: AND (3) EXCEPT THE
SPECIAL WARRANTY OF TITLE, WITHOUT ANY OTHER EXPRESS, IMPLIED,
STATUTORY OR OTHER WARRANTY WHATSOEVER.
6. TOGC and Delta shall cooperate with each other, and act in good
faith, to amend, supplement and restate this agreement with purchase and
sale agreements containing such terms and conditions as each of the
parties may reasonably agree.
7. Each party's obligation to sell and purchase the other party's
property as provided in this agreement is conditioned on a simultaneous
closing at which TOGC conveys the West Buna Field to Delta, and Delta
conveys the Queensland Properties to TOGA, as provided herein.
a. Neither party shall during the period before Closing,
directly or indirectly through its affiliates: (i) encourage, initiate,
publicly or privately list, or solicit any inquires, offers, proposals
or any other communications from any third person relating to the
Property it has agreed to sell to the other party pursuant to this
agreement, including any acquisition or other transaction structured as
a consolidation, merger or exchange of equity interests; (ii) encourage,
permit, participate in or support any agreements, communications,
discussions or negotiations with, or any deliveries, disclosures or
transfers of any information to, any third person relating to the
Property it has agreed to sell to the other party pursuant to this
agreement, including any acquisition or other transaction structured as
a consolidation, merger or exchange of equity interests; or (iii) agree
to, conditionally commit to, or execute and deliver (or offer to execute
and deliver) any agreements which would in any way diminish, impair,
interfere with or negate the other party's acquisition, exploration,
development, ownership or enjoyment and use of the Property it has
agreed to sell to the other party pursuant to this agreement.
b. If either party fails or refuses to sell and convey the
Property they currently own, or purchase and accept the Property that
the other party currently owns, the other party shall have the right to
either: (i) obtain specific performance of the other party's agreement
to deliver the Assignment the Property it agreed to sell and convey
hereunder or (ii) terminate this agreement, whereupon neither party
shall have any further obligation to the other with respect to their
Property or this agreement.
8. Confidentiality. (a) The terms of this Agreement, and all data,
reports, records, and other information of any kind whatsoever developed
or otherwise obtained in connection with the performance of this
Agreement (collectively, "Information") shall be the exclusive property
of the parties, shall be treated as confidential, and except as provided
in subsection (b), shall not be disclosed to any third party or the
public without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
(b) The confidentiality obligations of subsection (a) shall
not apply to:
(i) Information that at the time of disclosure by one
party to the other was developed by the other party and was already in
its possession, provided that it provides competent evidence of its
possession of such Information within two (2) days following its
disclosure to it by the other party;
(ii) Information that at the time of disclosure by one
party to the other was in the public domain or which after disclosure
becomes a part of the public domain through no action or failure to act
on the part of the other party; or
(iii) Information that at the time of disclosure was or
is thereafter lawfully acquired by the other party from a source other
than the disclosing party, provided such source was not under an
obligation of confidence with respect thereto, and provided further that
the other party provides competent evidence of his possession of such
Information within two (2) days following its disclosure to him by the
disclosing party.
(iv) A disclosure to any of the following; provided
however, that in any case to which this subsection is applicable, the
disclosing party shall give notice to the other party concurrently with
the making of such disclosure and, as to any disclosure pursuant to this
subsection, only such confidential information as such third party shall
have a legitimate business need to know shall be disclosed.
(A) To an affiliate, legal or financial advisor,
consultant, or contractor that has a bona fide need to be informed;
(B) To any third party to whom the disclosing party
contemplates a transfer of all or any part of its interest; or
(C) To a governmental agency, or to the public
which the disclosing party believes in good faith is required by
pertinent Laws or the rules of any stock exchange or securities
regulatory authority. The text of a stock exchange announcement shall
be communicated to the other party prior to its release and in time to
enable the other party to comment thereon, unless upon advice of counsel
there is insufficient time to await comment from the other party;
otherwise, the disclosing party shall give due consideration to comments
received.
(c) If a party asserts that information is not subject to the
confidentiality obligations hereof, it shall have the burden of proof of
substantiating such assertion.
(d) The provisions of this Section shall apply for so long
thereafter as the Information remains confidential or proprietary.
(e) Each party agrees that if it breaches its confidentiality
obligations, the other party would be irreparably damaged and any remedy
at law may be inadequate, and therefore, without limiting (and in
addition to) any other remedy available at law or in equity, an
injunction, specific performance, or other forms of equitable relief or
any combination thereof shall be available to the other party to the
fullest extent permitted by law. The parties do not intend that this
provision regarding remedies be construed as a limitation on the nature
of the rights and remedies to which they may be entitled under this
Agreement with respect to a breach of other provisions of this
Agreement.
This agreement will be executed in multiple counterparts, each of
which shall be deemed an original, and all of which shall constitute the
same agreement.
Your signature as provided below shall constitute your agreement to
the terms set forth herein.
Very Truly Yours,
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
President. Tipperary Oil & Gas Corporation
AGREED TO:
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President, Delta Petroleum Corporation
Date: May 8, 2002
Exhibit A
West Buna Field
{To Come}
Exhibit B
Queensland Properties
All undivided interests in all Authorities to Prospect and Petroleum
Leases issued by the State of Queensland, Australia that are owned
legally, equitably or beneficially by Delta and cover lands in
Queensland, Australia including, without limitation: (1) Authorities to
Prospect 526, 592, 606, 623, 631 and 701; and (2) Any and all Petroleum
Leases issued covering lands excised from these ATP's.
