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EXHIBIT 10.20
AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT
This Amendment No. 1 to Purchase and Sale Agreement (Amendment No. 1")
is entered into by and between Anadarko Petroleum Corporation, a Delaware
corporation with offices located at 00000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx
00000 ("Seller") and Titan Resources, L.P., a Texas limited partnership acting
herein by and through Titan Resources I, Inc., its sole general partner with
offices located at 000 Xxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 ("Buyer").
RECITATIONS
Terms defined in the Agreement and delineated herein by initial capital
letters shall have the same meaning ascribed thereto in the Agreement, except
to the extent that the meaning of such term is specifically modified by the
provisions hereof. In addition, other terms not defined in the Agreement but
defined herein will, when delineated with initial capital letters, have the
meanings ascribed thereto in this Amendment No. 1. Terms and phrases which are
not delineated by initial capital letters shall have the meanings commonly
ascribed thereto.
Buyer and Seller have heretofore entered into that certain Purchase and
Sale Agreement (the "Agreement") dated October 12, 1995 pursuant to which Buyer
has contracted to purchase and Seller has contracted to sell certain oil and
gas leases covering lands in the Permian Basin of Texas and New Mexico, all as
more fully described in the Agreement.
Buyer and Seller have agreed to certain changes to the terms and
conditions of the Agreement to reflect the results of Buyer's pre-acquisition
environmental review of the property.
Buyer and Seller, to reflect such changes in environmental terms and
conditions and to accommodate the sale of certain properties directly to Cross
Timbers Oil Company and Apache Corporation by Seller, have agreed to the
following amendments to the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller agree as
follows:
1. Exhibit A, Exhibit C, and Exhibit 12.03 to the Agreement are
amended in their entirety and substituted in lieu thereof as attached hereto.
2. Section 2.01 of the Agreement shall be amended to reflect that
the Purchase Price payable by Buyer to Seller at Closing shall be
$42,315,000.00, subject to adjustments as provided in the Agreement (but
excluding adjustments for any and all Environmental Defects which have been
taken into account in the Purchase Price referenced above.
3. Section 11.01 of the Agreement shall be amended in its entirety
to read in its entirety as follows:
"Section 11.10 Seller's Obligations. On and after the Effective
date until the change of Operation Date, Seller shall continue to operate that
portion of the Property operated by Seller prior to the Effective Date in a
prudent manner consistent with generally accepted industry practices and
standards, applicable laws and regulations, and all applicable lease and
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other agreement terms and shall continue to administer the portion of the
Property not operated by Seller. Seller shall be entitled to retain any
overhead payments received from third parties as provided for in the XXXXX
accounting procedures attached to relevant operating agreements and which are
received and attributable to operations between the Effective Date and the
Change of Operation Date. Seller shall invoice Buyer at the rate of $30,000
per month for Buyer's share of the overhead attributable to the Property
operated and administered by Seller on behalf of Buyer during the period
between the Effective Date and the Change of Operation Date. In addition,
Seller will continue to provide such operational and administrative services as
Buyer may request for a period of not more than two calendar months following
the Change of Operations Date at a price per month agreed upon between Buyer
and Seller not to exceed $30,000 per month. Seller makes no representation or
warranty that Buyer will become operator of any portion of the Property, as
that matter is controlled by the applicable operating agreement. Following the
execution of this Agreement and prior to termination of operation of the
Property by Seller, Seller shall not remove or cause to be removed any
equipment used as part of its normal production operations without first
obtaining the written consent of Buyer nor shall Seller transfer, sell or
hypothecate, encumber or otherwise dispose of the Property. Seller further
agrees not to make any commitments to expend capital funds in connection with
the ownership or operation of the Property (other than as required by law of
governmental order or regulation or in connection with an emergency) in an
amount in excess of $25,000 (net to Seller's interest) per individual
authorization for expenditure without the approval of Buyer. If Buyer fails to
respond within a period of time (which period shall be equal to one-half of any
time limitations imposed upon Seller with respect to such matter) following
delivery by Seller of a request for approval with respect to any proposed
commitment for expenditures, then Buyer shall be deemed to have consented to
such commitment."
4. Section 12.03 of the Agreement shall be amended in its entirety
to read as follows:
"Section 12.03 Imbalances. Exhibit 12.03, contains Seller's good faith
estimate of imbalances (overproduction and/or under production) relating to the
Property as of the Effective Date. The Purchase Price shall be adjusted upward
or downward (as the case may be) at Closing and at the Final Settlement Date as
follows:
(i) If the actual overproduction is less than 289,500
MCF, then the Purchase Price will be increased by
$1.00 per MCF multiplied by the amount by which the
actual overproduction is less than 289,500 MCF;
(ii) If the actual overproduction is greater than
552,500 MCF, then the Purchase Price will be
decreased by $1.00 MCF multiplied by the amount by
which the actual overproduction exceeds 552,500
MCF;
(iii) If the actual overproduction is greater than
289,500 MCF and less than 552,500 MCF, then no
adjustment to the Purchase Price will be made."
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5. Section 13.15 of the Agreement shall be amended in its entirety
to read as follows:
"Section 13.15 Seller's General Indemnity. Subject to the other
express provisions of this Agreement, Seller, for a period of two years from
Closing, and only as to such actions attributable to it for periods prior to
the Effective Date where Seller has been the record owner, agrees to indemnify,
defend and hold Buyer harmless from and against any and all claims, demands,
losses, damages, punitive damages, costs, expenses, causes of action or
judgements of any kind or character with respect to all liabilities and
obligations or alleged or threatened liabilities and obligations, including
claims for personal injury, illness, disease, wrongful death, damage to
property, liability based on strict liability or condition of the Property and
which are attributable to or arising out of (i) Seller's acts or omissions, and
(ii) the ownership or operation of the Property by Seller prior to the
Effective Date, including, without limitation, any interest, penalty,
reasonable attorney's fees and other costs and expenses incurred in connection
therewith or the defense thereof, if the aggregate claims, damages, etc. exceed
$100,000. The indemnities in this Section 13.15 specifically exclude any and
all Environmental Claims for which Buyer has indemnified Seller under Section
13.18 hereof."
6. Section 13.18 of the Agreement shall be amended in its entirety
to read as follows:
"Section 13.18 General Environmental Indemnity. If the Closing
occurs, Buyer shall be responsible for and agrees to indemnify, defend and hold
harmless the Seller from and against any and all losses attributable to damage
to property, injury to or death of persons or other living things, natural
resource damages, CERCLA response costs, environmental remediation and
restoration costs, or fines or penalties (collectively, "Claims") arising out
of or attributable to, in whole or in part, either directly or indirectly, the
condition or operation of the Property at any time (past, present, or future)
that is determined to be a result of or caused in whole or in part by Buyer's
and/or Seller's violation of, failure to fulfill duties imposed by or
incurrence of liability under, any Environmental Laws (as defined below and is
in effect on the date hereof) or under any principle of common law relating to
duties to protect or not unduly disturb human health or environmental quality
(any such claim being referred to herein as an "Environmental Claim"). Buyer's
indemnity of Seller, as set forth in this section, shall not, however, cover
any claims, including Environmental Claims, resulting directly or indirectly
from a breach by Seller of any of its representations, warranties and covenants
set forth herein, including, but not limited to, Seller's obligations under
Section 13.17."
Executed this 11th day of December, 1995.
ANADARKO PETROLEUM CORPORATION
By: /s/ XXXXX X. XXXXXX
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XXXXX X. XXXXXX,
VICE PRESIDENT ACQUISITIONS
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TITAN RESOURCES, L.P.
By: Titan Resources I, Inc., its Sole
General Partner
By: /s/ XXX X. XXXXXXX
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XXX X. XXXXXXX,
VICE PRESIDENT
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TITAN RESOURCES, L.P.
By: Titan Resources I, Inc., its Sole
General Partner
By: /s/ XXXX XXXXXXXXX
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XXXX XXXXXXXXX
VICE PRESIDENT
