PURCHASE AND SALE AGREEMENT BETWEEN GEOCHEM EXPLORATION, LLC AS SELLER AND AMERIWEST ENERGY CORP. AS BUYER
EXHIBIT
10.1
BETWEEN
GEOCHEM
EXPLORATION, LLC
AS
SELLER
AND
AS
BUYER
This
Purchase and Sale Agreement (this “Agreement”)
is
made and entered into this _____ day of _______________, 2008, by and between
Geochem Exploration, LLC, a Wyoming limited liability company (the “Seller”),
and
Ameriwest Energy Corp., a Nevada corporation (the “Buyer”).
Buyer
and Seller are collectively referred to herein as the “Parties”,
and
are sometimes referred to individually as a “Party.”
WITNESSETH:
WHEREAS,
Seller is willing to sell to Buyer, and Buyer is willing to purchase from
Seller, the Assets (as defined in Section 1.02), all upon the terms and
conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the mutual benefits derived and to be derived
from this Agreement by each Party, Seller and Buyer hereby agree as
follows:
Article
I
Assets
Section
1.01 Agreement
to Sell and Purchase.
Subject
to and in accordance with the terms and conditions of this Agreement, Buyer
agrees to purchase the Assets from Seller, and Seller agrees to sell the Assets
to Buyer.
Section
1.02 Assets.
Subject
to Section 1.03, the term “Assets” shall mean all of Seller’s right, title and
interest in and to:
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(a)
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the
leasehold estates in and to the oil, gas and mineral leases described
or
referred to in Exhibit A attached hereto (the “Leases”)
at the working interest and net revenue interest percentages described
on
Exhibit A attached hereto (collectively, the “Subject
Interests,”
or singularly, a “Subject
Interest”);
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(b)
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all
rights incident to the Subject Interests, including, without limitation,
(i) all rights with respect to the use and occupation of the surface
of
and the subsurface depths under the Subject Interests; (ii) all rights
with respect to any pooled, communitized or unitized acreage by virtue
of
any Subject Interest being a part thereof after the Effective Time
(as
defined in Section 2.03) attributable to the Subject Interests or
any such
pool or unit allocated to any such Subject
Interest;
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(c)
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all
easements, rights-of-way, surface leases, servitudes, permits, licenses,
franchises and other estates or similar rights and privileges directly
related to or used solely in connection with the Subject Interests
(the
“Easements”);
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(d)
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all
contracts, agreements and other arrangements that directly relate
to the
Subject Interests, the Leases or the Easements, including, without
limitation, production sales contracts, farmout agreements, operating
agreements, service agreements and similar arrangements (collectively,
the“Contracts”);
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(e)
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all
books, records, files, muniments of title, reports and similar documents
and materials, including, without limitation, lease records, well
records,
and division order records, well files, title records (including
abstracts
of title, title opinions and memoranda, and title curative documents
related to the Assets), contracts and contract files, correspondence,
that
relate to the foregoing interests in the possession of, and maintained
by,
Seller (collectively, the “Records”);
and
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(f)
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all
geological and geophysical data relating to the Subject Interests,
other
than such data that is interpretive in nature or which cannot be
transferred without the consent of or payment to any Third Party
as
disclosed on Exhibit A. For purposes of this Agreement, “Third
Party”
means any person or entity, governmental or otherwise, other than
Seller
or Buyer, and their respective affiliates; the term includes, but
is not
limited to, working interest owners, royalty owners, lease operators,
landowners, service contractors and governmental
agencies.
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Section
1.03 Excluded
Assets.
Notwithstanding the foregoing, the Assets shall not include, and there is
excepted, reserved and excluded from the sale contemplated hereby (collectively,
the “Excluded Assets”): (a) all credits and refunds and all accounts,
instruments and general intangibles (as such terms are defined in the Wyoming
Uniform Commercial Code) attributable to the Assets with respect to any period
of time prior to the Closing Date; (b) all claims of Seller for refunds of
or
loss carry forwards with respect to (i) ad valorem, severance, production or
any
other taxes attributable to any period prior to the Closing Date, (ii) income
or
franchise taxes attributable to any period prior to the Closing Date, or (iii)
any taxes attributable to the other Excluded Assets, and such other refunds,
and
rights thereto, for amounts paid in connection with the Assets and attributable
to the period prior to the Closing Date, including refunds of amounts paid
under
any gas gathering or transportation agreement; (c) all proceeds, income or
revenues (and any security or other deposits made) attributable to (i) the
Assets for any period prior to the Closing Date, or (ii) any other Excluded
Assets for any period prior to the Closing Date; (d) all of Seller’s proprietary
computer software, technology, patents, trade secrets, copyrights, names,
trademarks, logos and other intellectual property; (e) all of Seller’s rights
and interests in geological and geophysical data that is interpretive in nature
or which cannot be transferred without the consent of or payment to any Third
Party as disclosed on Exhibit A; (f) all documents and instruments of Seller
that may be protected by an attorney-client privilege; (g) data and other
information of Seller unrelated to the Assets that cannot be disclosed or
assigned to Buyer as a result of confidentiality or similar arrangements under
agreements with persons unaffiliated with Seller; (h) all audit rights arising
under any of the Contracts or otherwise with respect to any period prior to
the
Closing Date or to any of the other Excluded Assets for any period prior to
the
Closing Date; and (i) all corporate, partnership, income tax records of
Seller.
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Article
II
Purchase
Price
Section
2.01 Purchase
Price.
The
total consideration for the purchase, sale and conveyance of the Assets to
Buyer
is Buyer’s payment to Seller of the sum of US$400,000.00 (the “Purchase Price”).
The
Purchase
Price shall be paid to Seller (or its designee) at Closing (as defined in
Section 10.01) by means of a completed federal funds transfer to an account
designated in writing by Seller.
The
parties acknowledge that Buyer has paid Seller the sum of US$100,000.00, and
said sum is fully earned and non-refundable, but said sum shall be applied
as a
credit to the purchase price to be paid by Seller at Closing. Upon execution
of
this Agreement, Buyer shall pay Seller the sum of US$300,000.00, and said sum
is
fully earned and non-refundable, but said sum shall be applied as a credit
to
the purchase price to be paid by Seller at Closing.
Section
2.02 Allocated
Values.
The
Purchase Price is fully allocated to the Leases conveyed at Closing unless
such
allocation is contrary to U.S. generally accepted accounting principles, as
consistently applied to Buyer’s financial statements (“GAAP”),
in
which case, the maximum portion of the Purchase Price shall be allocated to
the
Leases and any remainder shall be allocated in accordance with GAAP (the
“Allocated Values”).
Section
2.03 Effective
Time.
If the
transactions contemplated hereby are consummated in accordance with the terms
and provisions hereof, the ownership of the Assets shall be transferred from
Seller to Buyer on the Closing Date, and shall be deemed effective as of 7:00
a.m. Mountain Time on __________, 2008 (the “Effective Time”).
Article
III
Title
Matters
Section
3.01 Title.
Seller
has permitted Buyer and/or its representatives the opportunity to fully examine
Seller’s title to the Assets. Buyer accepts the condition of Seller’s title to
the Assets, is fully satisfied that Seller has Defensible Title (as defined
in
Section 3.02) to the Assets, and waives any objection as to any title condition
that in any way relates to the Assets.
Section
3.02 Defensible
Title and Permitted Encumbrances.
For
purposes of this Agreement, the term “Defensible Title” means, with respect to a
given Asset, such ownership by Seller in such Asset that, subject to and except
for the Permitted Encumbrances (as defined in Subsection (c) of this Section
3.02):
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(a)
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entitles
Seller to receive not less than the net revenue interest percentage
set
forth in Exhibit A as Seller’s “Net
Revenue Interest”
of all Hydrocarbons produced, saved and marketed from each leasehold
property as set forth in Exhibit A; and
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(b)
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is
free and clear of all liens and encumbrances in
title.
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(c)
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The
term “Permitted Encumbrances” shall mean any of the following matters to
the extent the same are valid and subsisting and affect the Assets:
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(i)
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the
Leases, and Contracts to the extent the same do not reduce the Net
Revenue
Interests of Seller below those set forth in Exhibit A, decrease the
Working Interests of Seller below those set forth in Exhibit A, or
increase the Working Interests of Seller above those set forth in
Exhibit A without a corresponding increase in the Net Revenue
Interest;
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(ii)
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any
(A) undetermined or inchoate liens or charges constituting or securing
the
payment of expenses that were incurred incidental to the maintenance,
development, production or operation of the Assets or for the purpose
of
developing, producing or processing Hydrocarbons therefrom or therein,
and
(B) materialman’s, mechanics’, repairman’s, employees’, contractors’,
operators’ liens or other similar liens or charges for liquidated amounts
arising in the ordinary course of business (1) that Seller has agreed
to
assume or pay pursuant to the terms hereof, or (2) for which Seller
is
responsible for paying or releasing at the
Closing;
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(iii)
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any
liens for taxes and assessments not yet delinquent or, if delinquent,
that
are being contested in good faith in the ordinary course of business
and
for which the Seller has agreed to pay pursuant to the terms hereof
or
which have been prorated pursuant to the terms
hereof;
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(iv)
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the
terms, conditions, restrictions, exceptions, reservations, limitations
and
other matters contained in (including any liens or security interests
created by law or reserved in oil and gas leases for royalty, bonus
or
rental, or created to secure compliance with the terms of) the agreements,
instruments and documents that create or reserve to Seller its interest
in
the Assets to the extent the same do not reduce the Net Revenue Interests
of Seller below those set forth in Exhibit A, decrease the Working
Interests of Seller below those set forth in Exhibit A, or increase
the
Working Interests of Seller above those set forth in Exhibit A
without a corresponding increase in the Net Revenue
Interest;
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(v)
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any
obligations or duties affecting the Assets to any municipality or
public
authority with respect to any franchise, grant, license or permit
and all
applicable laws, rules, regulations and orders of any Governmental
Authority (as defined in Section
4.02(b));
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(vi)
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any
(A) easements, rights-of-way, servitudes, permits, surface leases
and
other rights in respect of surface operations, pipelines, grazing,
hunting, lodging, canals, ditches, reservoirs or the like, and (B)
easements for streets, alleys, highways, pipelines, telephone lines,
power
lines, railways and other similar rights-of-way on, over or in respect
of
property owned or leased by Seller or over which Seller owns
rights-of-way, easements, permits or licenses, to the extent that
same do
not materially interfere with the oil and gas operations to be conducted
on the Assets or materially affect the value
thereof;
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(vii)
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all
lessors’ royalties, overriding royalties, net profits interests, carried
interests, production payments, reversionary interests and similar
burdens
on or deductions from the proceeds of production created or in existence
as of the Effective Time, whether recorded or filed, provided that
the net
cumulative effect of such burdens do not operate to reduce the Net
Revenue
Interests of Seller below those set forth in Exhibit A, or decrease
the
Working Interests of Seller below those set forth in Exhibit A;
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(viii)
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preferential
rights to purchase or similar agreements with respect to which (A)
waivers
or consents are obtained from the appropriate parties for the transaction
contemplated hereby, or (B) required notices have been given for
the
transaction contemplated hereby to the holders of such rights and
the
appropriate period for asserting such rights has expired without
an
exercise of such rights;
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(ix)
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required
Third Party consents to assignments or similar agreements with respect
to
which (A) waivers or consents are obtained from the appropriate parties
for the transaction contemplated hereby, or (B) required notices
have been
given for the transaction contemplated hereby to the holders of such
rights and the appropriate period for asserting such rights has expired
without an exercise of such rights;
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(x)
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all
rights to consent by, required notices to, filings with, or other
actions
by Governmental Authorities in connection with the sale or conveyance
of
oil and gas leases or interests therein that are customarily
obtained subsequent to such sale or
conveyance;
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(xi)
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production
sales contracts; division orders; contracts for sale, purchase, exchange,
refining or processing of Hydrocarbons; unitization and pooling
designations, declarations, orders and agreements; operating agreements;
agreements of development; area of mutual interest agreements; gas
balancing or deferred production agreements; processing agreements;
plant
agreements; pipeline, gathering and transportation agreements; injection,
repressuring and recycling agreements; carbon dioxide purchase or
sale
agreements; salt water or other disposal agreements; seismic or
geophysical permits or agreements; and any and all other agreements
that
have terms that are ordinary and customary to the oil, gas, sulphur
and
other mineral exploration, development, processing or extraction
business
or in the business of processing of gas and gas condensate production
for
the extraction of products therefrom, to the extent the same do not
reduce
the Net Revenue Interests of Seller below those set forth in
Exhibit A, decrease the Working Interests of Seller below those set
forth in Exhibit A, or increase the Working Interests of Seller above
those set forth in Exhibit A without a corresponding increase in the
Net Revenue Interest;
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(xii)
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rights
reserved to or vested in any Governmental Authority to control or
regulate
any of the Assets and the applicable laws, rules, and regulations
of such
Governmental Authorities; and
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(xiii)
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all
defects and irregularities affecting the Assets which individually
or in
the aggregate (A) do not operate to (1) reduce the Net Revenue Interest
of
Seller, (2) increase the proportionate share of costs and expenses
of
leasehold operations attributable to or to be borne by the Working
Interests of Seller, (3) decrease the Working Interests of Seller
below
those set forth in Exhibit A, or (4) otherwise interfere materially
with
the operation, value or use of the Assets, or (5) that would not
be
considered material when applying general industry standards; or
(B)
operate to increase the proportionate share of costs and expenses
of
leasehold operations attributable to or to be borne by the Working
Interest of Seller, so long as there is a proportionate increase
in
Seller’s Net Revenue Interest.
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Section
3.03 Title
Defect.
The term
“Title Defect,” as used in this Agreement, shall mean: (a) any material
encumbrance, encroachment, or defect in or objection to Seller’s ownership of
any Asset (expressly excluding Permitted Encumbrances) that causes Seller not
to
have Defensible Title to such Asset; or (b) any default by Seller under a lease,
farmout agreement or other contract or agreement that would (i) have a material
adverse affect on the operation, value or use of such Asset, (ii) prevent Seller
from receiving the proceeds of production attributable to Seller’s interest
therein or (iii) result in cancellation of Seller’s interest
therein.
The term
“Title Defect,” as used in this Agreement, shall not include: (a) Defects based
solely on Buyer’s assertion that Seller’s files lack information, but
information not within Seller’s files may, as provided herein, be relied upon by
Buyer to evaluate and constitute the basis for an alleged Title Defect; (b)
Defects in the early chain of title consisting of the failure to recite marital
status in a document or omissions of successors of heirship or estate
proceedings, unless Buyer provides a reasonable basis for the assertion that
such failure or omission has resulted in a third party’s actual and superior
claim of title to the affected Asset; (c) Defects arising out of lack of survey;
(d) Defects arising out of lack of corporate or other entity authorization
unless Buyer provides a reasonable basis for the assertion that the action
was
not authorized and that such lack of authorization results in a third party’s
actual and superior claim of title to the affected Asset; (e) Defects that
are
defensible by possession under applicable statutes of limitations for adverse
possession or for prescription; (f) title requirements customarily considered
as
advisory or which are customarily waived as a matter of prudent business
judgment, if the net cumulative effect of such burdens does not operate to
render Seller’s title in any Asset less than Defensible Title.
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Section
3.04 Notice
of Title Defect and Remedy.
If
Buyer discovers a Title Defect affecting the Asset, Buyer shall notify Seller
promptly. To be effective, such notice must (i) be in writing, and (ii) describe
the Title Defect in sufficient, specific detail (including any alleged variance
in the Net Revenue Interest or Working Interest). Upon the receipt of such
effective notice from Buyer, Seller and Buyer shall attempt in good faith to
mutually agree on a resolution including, but not limited to (i) attempt to
cure
such Title Defect, or (ii) refund of all or a portion of the Purchase Price.
Section
3.05 Special
Warranty of Title.
Seller
hereby agrees to warrant and defend title to the Assets solely unto Buyer
against every person whomsoever lawfully claiming or to claim the same or any
part thereof, by, through or under Seller, but not otherwise; subject, however,
to the Permitted Encumbrances and the other matters set forth herein. In no
event shall the foregoing warranty extend to or be enforceable by any party
other than Buyer.
Article
IV
Environmental
Matters
Section
4.01 Environmental
Review.
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(a)
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Buyer
has had a full opportunity to conduct or cause a consultant to conduct
an
environmental review of the Assets, and Buyer accepts, and is satisfied
with, the environmental condition of the Assets, and waives all objections
as to any Environmental Defect. The cost and expense of Buyer’s
environmental review, if any, shall be borne solely by Buyer.
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(b)
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Unless
otherwise required by applicable law, Buyer shall treat confidentially
any
matters revealed by Buyer’s environmental review and any reports or data
generated from such review (the “Environmental
Information”),
and Buyer shall not disclose any Environmental Information to any
Governmental Authority or other Third Party without the prior written
consent of Seller. Unless otherwise required by law, Buyer may use
the
Environmental Information only in connection with the transactions
contemplated by this Agreement and may not, directly or indirectly
use the
Environmental Information in any manner contrary to Seller’s interests. If
Buyer or any Third Party to whom Buyer has provided any Environmental
Information become legally compelled to disclose any of the Environmental
Information, Buyer shall provide Seller with prompt notice sufficiently
prior to any such disclosure so as to allow Seller to file any protective
order, or seek any other remedy, as it deems appropriate under the
circumstances. If this Agreement is terminated prior to the Closing,
Buyer
shall deliver the Environmental Information to Seller, which Environmental
Information shall become the sole property of Seller. Buyer shall
provide
copies of the Environmental Information to Seller without
charge.
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Section
4.02 Environmental
Definitions.
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(a)
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Environmental
Defects.
For purposes of this Agreement, the term “Environmental
Defect”
shall mean, with respect to any given Asset, an individual environmental
condition that constitutes a material violation of Environmental
Laws in
effect as of the date of this Agreement in the jurisdiction in which
such
Asset is located or requires remediation under an Environmental Law.
Environmental Defect shall not be deemed to include an environmental
condition disclosed in writing to Buyer prior to the execution of
this
Agreement.
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(b)
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Governmental
Authority.
For purposes of this Agreement, the term “Governmental
Authority”
shall mean, as to any given Asset, the United States and the state,
county, parish, city and political subdivisions in which such Asset
is
located and that exercises jurisdiction over such Asset, and any
agency,
department, board or other instrumentality thereof that exercises
jurisdiction over such Asset.
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(c)
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Environmental
Laws.
For purposes of this Agreement, the term “Environmental
Laws”
shall mean all laws, statutes, ordinances, court decisions, rules
and
regulations of any Governmental Authority pertaining to the environment
as
may be interpreted by applicable court decisions or administrative
orders.
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Article
V
Representations
and Warranties of Seller
Each
respective Seller represents and warrants to Buyer that:
Section
5.01 Seller’s
Existence.
Geochem
Exploration, LLC is a limited liability company duly organized and validly
existing under the laws of the State of Wyoming and is qualified to conduct
business in the State of Wyoming. Seller has full legal power, right and
authority to carry on its business as such is now being conducted and as
contemplated to be conducted.
Except
as disclosed to Buyer in writing, there have been no issuances of shares of
Seller’s securities, or instruments exercisable for, convertible into or
otherwise entitling the holder to acquire Seller’s securities.
Section
5.02 Legal
Power.
Seller
has the legal power and right to enter into and perform this Agreement and
the
transactions contemplated hereby. The consummation of the transactions
contemplated by this Agreement will not violate, nor be in conflict
with:
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(a)
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any
provision of Seller’s articles of organization, operating agreement or
other governing documents;
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(b)
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any
material agreement or instrument to which Seller is a party or by
which
Seller is bound; or
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(c)
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any
judgment, order, ruling or decree applicable to Seller as a party
in
interest or any law, rule or regulation applicable to
Seller.
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Section
5.03 Execution.
The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby are duly and validly authorized by all requisite partnership
action on the part of Seller. This Agreement constitutes the legal, valid and
binding obligation of Seller enforceable in accordance with its
terms.
Section
5.04 Brokers.
No
broker or finder has acted for or on behalf of Seller or any affiliate of Seller
in connection with this Agreement or the transactions contemplated by this
Agreement. No broker or finder is entitled to any brokerage or finder’s fee, or
to any commission, based in any way on agreements, arrangements or
understandings made by or on behalf of Seller or any affiliate of Seller for
which Buyer has or will have any liabilities or obligations (contingent or
otherwise).
Section
5.05 Bankruptcy.
There
are no bankruptcy, reorganization or arrangement proceedings pending, being
contemplated by or to the knowledge of Seller threatened against
Seller.
Section
5.06 Business
Operations.
Seller’s business and financial condition remain materially unchanged from any
due diligence or financial statement documentation provided to Buyer prior
to
Closing; Seller owns the right, title and interest in and to the Assets
described on Exhibit A, subject to any Permitted Encumbrances and subject to
any
liens, charges, securitizations, UCC filings or debts disclosed in writing
to
Buyer prior to Closing. There are no outstanding mergers, acquisitions,
financial commitments, obligations, liabilities, etc. other than those
contemplated under this Agreement that would affect the conveyance of the
Assets.
Section
5.07 Suits.
There
is no suit, action, claim, investigation or inquiry by any person or entity
or
by any administrative agency or Governmental Authority, that Seller is current
in all filings with tax and regulatory agencies, and that no legal,
administrative or arbitration proceeding pending or, to Seller’s knowledge,
threatened against Seller or any affiliate of Seller or the Assets.
Section
5.08 Royalties.
All
rentals, royalties and other payments due under the Subject Interests have
been
paid in all material respects.
Section
5.09 Contracts.
All
material Contracts are in full force and effect, and Seller is not in default
with respect to any of its material obligations thereunder.
Section
5.10 Compliance
with Law.
Seller
has not received a written notice of a material violation of any statute, law,
ordinance, regulation, permit, rule or order of any Governmental Authority
or
any judgment, decree or order of any court, applicable to the Assets or
operations of the Assets, which remain uncured.
Section
5.11 Permits.
Seller
has all governmental licenses, filings and permits (including, without
limitation, permits, licenses, approval, registrations, notifications,
exemptions and any other authorizations pursuant to applicable law) necessary
or
appropriate to own and operate the Assets as presently owned and operated.
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Section
5.12 Liens.
Except
for Permitted Encumbrances, the Assets will be conveyed free and clear of all
liens, mortgages and encumbrances.
Article
VI
Representations
and Warranties of Buyer
Buyer
represents and warrants to Seller that:
Section
6.01 Buyer’s
Existence.
Buyer
is a corporation, duly organized and validly existing under the laws of the
State of Nevada and is qualified to conduct business in the State of Wyoming.
Buyer has full legal power, right and authority to carry on its business as
such
is now being conducted and as contemplated to be conducted.
Section
6.02 Legal
Power.
Buyer
has the legal power and right to enter into and perform this Agreement and
the
transactions contemplated hereby. The consummation of the transactions
contemplated by this Agreement will not violate, nor be in conflict
with:
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(a)
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any
provision of Buyer’s charter, bylaws,
or
other governing documents;
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(b)
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any
material agreement or instrument to which Buyer is a party or by
which
Buyer is bound; or
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(c)
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any
judgment, order, ruling or decree applicable to Buyer as a party
in
interest or any law, rule or regulation applicable to
Buyer.
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Section
6.03 Execution.
The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby are duly and validly authorized by all requisite corporate
action on the part of Buyer. This Agreement constitutes the legal, valid and
binding obligation of Buyer enforceable in accordance with its
terms.
Section
6.04 Brokers.
No
broker or finder has acted for or on behalf of Buyer or any affiliate of Buyer
in connection with this Agreement or the transactions contemplated by this
Agreement. No broker or finder is entitled to any brokerage or finder’s fee, or
to any commission, based in any way on agreements, arrangements or
understandings made by or on behalf of Buyer or any affiliate of Buyer for
which
Seller has or will have any liabilities or obligations (contingent or
otherwise).
Section
6.05 Bankruptcy.
There
are no bankruptcy, reorganization or arrangement proceedings pending, being
contemplated by or to the knowledge of Buyer threatened against Buyer or any
affiliate of Buyer.
Section
6.06 Suits.
There
is no suit, action, claim, investigation or inquiry by any person or entity
or
by any administrative agency or Governmental Authority and no legal,
administrative or arbitration proceeding pending or, to Buyer’s knowledge,
threatened against Buyer or any affiliate of Buyer.
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Section
6.07 Qualifications.
After
the Closing, Buyer shall be qualified with all applicable Governmental
Authorities to own and operate the Assets and shall maintain all necessary
bonds
to own and operate the Assets.
Section
6.08 Funds.
Buyer
has arranged or will arrange to have available by the dates set forth herein
sufficient funds to enable Buyer to pay in full the Purchase Price as herein
provided and otherwise to perform its obligations under this
Agreement.
Article
VII
Seller’s
Conditions to Close
The
obligations of Seller to consummate the transaction provided for herein are
subject, at the option of Seller, to the fulfillment on or prior to the Closing
Date of each of the following conditions:
Section
7.01 Representations.
The
representations and warranties of Buyer herein contained shall be true and
correct in all material respects on the Closing Date as though made on and
as of
such date.
Section
7.02 Performance.
Buyer
shall have performed all material obligations, covenants and agreements
contained in this Agreement to be performed or complied with by it at or prior
to the Closing.
Section
7.03 Pending
Matters.
No
suit, action or other proceeding shall be pending or threatened (a) against
Buyer or its directors or officers, or (b) that seeks to restrain, enjoin or
otherwise prohibit the consummation of the transactions contemplated by this
Agreement.
Section
7.04 Purchase
Price.
Buyer
shall have delivered to Seller the Purchase Price in accordance with the
provisions of Article II.
Section
7.05 Execution
and Delivery of the Closing Documents.
Buyer
shall have executed, acknowledged and delivered, as appropriate, to Seller
all
closing documents described in Section 10.04.
-11-
Article
VIII
Buyer’s
Conditions to Close
The
obligations of Buyer to consummate the transaction provided for herein are
subject, at the option of Buyer, to the fulfillment on or prior to the Closing
Date of each of the following conditions:
Section
8.01 Representations.
The
representations and warranties of Seller herein contained shall be true and
correct in all material respects on the Closing Date as though made on and
as of
such date.
Section
8.02 Performance.
Seller
shall have performed all material obligations, covenants and agreements
contained in this Agreement to be performed or complied with by it at or prior
to the Closing.
Section
8.03 Pending
Matters.
No
suit, action or other proceeding shall be pending or threatened that seeks
to
restrain, enjoin, or otherwise prohibit the consummation of the transactions
contemplated by this Agreement.
Section
8.04 Execution
and Delivery of the Closing Documents.
Seller
shall have executed, acknowledged and delivered, as appropriate, to Buyer all
closing documents described in Section 10.03.
Article
IX
Tax
Matters
Section
9.01 Transfer
Taxes.
All
sales, use or other taxes (other than taxes on gross income, net income or
gross
receipts) and duties, levies, recording fees or other governmental charges
incurred by or imposed with respect to the property transfers undertaken
pursuant to this Agreement shall be the responsibility of, and shall be paid
by,
Buyer.
Section
9.02 Ad
Valorem and Similar Taxes.
Buyer
shall assume responsibility for all ad valorem, property, severance and similar
taxes and assessments based upon or measured by the value of the assets for
the
period of time from and after the Closing Date. Any
such
taxes and assessments prior to the Closing Date shall be the responsibility
of
Seller.
Article
X
The
Closing
Section
10.01 Time
and Place of the Closing.
If the
conditions referred to in Articles VII and VIII of this Agreement have been
satisfied or waived in writing or as otherwise provided in this Agreement,
and
subject to any extensions agreed in writing signed by the parties, the
transactions contemplated by this Agreement (the “Closing”) shall take place at
the offices of Seller in Casper, Wyoming, or at such other place designated
by
the parties, on or about May 30, 2008 (the “Closing Date”).
Section
10.02 Adjustments
to Purchase Price at the Closing.
At the
Closing, Buyer shall receive a credit on the Purchase Price by the amount of
the
partial payments of the Purchase Price previously paid to Seller.
-12-
Section
10.03 Actions
of Seller at the Closing.
At
the
Closing, Seller shall:
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(a)
|
execute,
acknowledge and deliver to Buyer the Assignment (as defined in Exhibit
D
of this Agreement) and such other instruments (in form and substance
mutually agreed upon by Buyer and Seller) as may be reasonably necessary
to convey the Assets to Buyer;
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(b)
|
execute,
acknowledge and deliver to Buyer letters in lieu of transfer or division
orders directing all purchasers of production from the Subject Interests
to make payment of proceeds attributable to such production to Buyer
from
and after the Closing Date as reasonably requested by Buyer prior
to the
Closing Date;
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(c)
|
deliver
to Buyer possession of the Assets;
|
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(d)
|
execute
and deliver to Buyer an affidavit attesting to its non-foreign status;
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(e)
|
deliver
to Buyer appropriate change of operator forms on those Assets operated
by
Seller; and
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(f)
|
execute,
acknowledge and deliver any other agreements provided for herein
or
necessary or desirable to effectuate the transactions contemplated
hereby.
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Section
10.04 Actions
of Buyer at the Closing.
At
the
Closing, Buyer shall:
|
(a)
|
deliver
to Seller the Purchase Price (as adjusted pursuant to the provisions
hereof and net of the Deposit) by wire transfer to an account designated
in writing by Seller;
|
|
(b)
|
take
possession of the Assets;
|
|
(c)
|
execute,
acknowledge and deliver to Seller an assignment (in the form shown
on
Exhibit E of this Agreement) and such other instruments as may be
reasonably requested by Buyer to re-convey the Assets to Seller to
secure
performance of Buyer’s post-closing Drilling Obligation;
and
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(d)
|
execute,
acknowledge and deliver the Assignment and any other agreements provided
for herein or necessary or desirable to effectuate the transactions
contemplated hereby.
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-13-
Article
XI
Termination
Section
11.01 Right
of Termination.
This
Agreement may be terminated at any time at or prior to the Closing:
|
(a)
|
by
mutual written consent of the
Parties;
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|
(b)
|
by
Seller if the Closing shall not have occurred on or before May 30,
2008,
unless the parties have otherwise mutually agreed to extend the Closing
Date;
|
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(c)
|
by
either Party if any Governmental Authority shall have issued an order,
judgment or decree or taken any other action challenging, restraining,
enjoining, prohibiting or invalidating the consummation of any of
the
transactions contemplated herein;
or
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(d)
|
by
Seller if Buyer shall not have paid any partial payments of the Purchase
Price on or before their due dates as provided
herein.
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Section
11.02 Effect
of Termination.
In the
event that the Closing does not occur as a result of any Party exercising its
right to terminate pursuant to Section 11.01, then except as set forth in
Section 11.03, this Agreement shall be null and void and no Party shall
have any further rights or obligations under this Agreement, except as stated
herein, and except that nothing herein shall relieve any Party from any
liability for any breach hereof or any liability that has accrued prior to
the
date of such termination.
Section
11.03 Termination
Damages.
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(a)
|
If
all conditions precedent to the obligations of Buyer set forth in
Article
VIII have been met and the transactions contemplated by this Agreement
are
not consummated on or before the Closing Date because of the failure
of
Buyer to perform any of its material obligations hereunder or the
breach
of any representation herein by Buyer, then in such event, Seller
shall
have the option to terminate this Agreement, in which case Seller
shall
retain (i) all partial payments of the Purchase Price, (ii) intellectual
property, data, reports of Buyer and Buyer’s agents and contractors
related to the prospect, except to the extent said reports and data
are
not subject to the attorney-client or work-product privileges, and
(iii)
improvements, tools, equipment, and fixtures related to the prospect,
all
of (i) through (iii) to be deemed liquidated damages on account of
Buyer’s
failure to perform its obligations under this Agreement or Buyer’s breach
of any representation under this Agreement, which remedy shall be
the sole
and exclusive remedy available to Seller for Buyer’s failure to perform or
breach. Buyer shall also be responsible for paying the costs and
expenses
related to the Drilling Obligations, whether incurred prior to or
after
the Closing Date.
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Section
11.04 Attorneys’
Fees, Etc.
If
either Party to this Agreement resorts to legal proceedings to enforce this
Agreement, the prevailing Party in such proceedings shall be entitled to recover
all costs incurred by such Party, including reasonable attorneys’ fees, in
addition to any other relief to which such Party may be entitled.
Notwithstanding anything to the contrary in this Agreement, in no event shall
either Party be entitled to receive any punitive, indirect or consequential
damages unless same are a part of a Third Party claim for which a Party is
seeking indemnification hereunder, REGARDLESS
OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR
CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF THE OTHER
PARTY.
-14-
Article
XII
Post
Closing Obligations
Section
12.01 Drilling
Obligation.
Buyer
shall spud, drill and complete the well currently permitted as Skull Valley
Federal 21-1, located in Section 21, T.3S., R.9W., SLM, on or before September
1, 2008 (the “Drilling
Obligation”),
subject to the condition set forth below in Section 12.02 and the right of
Buyer
to pay Seller for one or more Extension Periods as set forth below in Section
12.03. Until satisfaction of the Drilling Obligation by Buyer, Buyer shall
not
convey any interest in the Assets, or any part thereof, to any individual
or
entity without the prior written consent of Seller (except to a wholly-owned
subsidiary of Buyer) and the execution of all documents necessary to secure
Seller’s rights set forth under this Article. All costs associated with the
maintenance of the Assets (including but not limited to payment of lease
fees
and rentals) and any and all costs, fees and expenses associated with and
related to the drilling and completion (and plugging and abandonment, if
necessary) of Skull Valley Federal 21-1 shall be borne by Buyer. Upon Seller’s
request, Buyer agrees to provide Seller with information and documentation
evidencing performance of, and payment for, the Drilling Obligation. To secure
Buyer’s Drilling Obligations, Buyer shall deliver an Assignment and Xxxx of Sale
for the benefit of Seller in the form attached hereto as Exhibit C, to be
held
in escrow by Seller until released in accordance with Sections 12.04 or 12.05
below.
Section
12.02 Delivery
of Rig.
In the
event the Parties are unable to locate a drilling rig to attend the property
pursuant to the time set out herein, the Parties agree that an extension
will be
granted for any such reasonable period as may be required (but not beyond
March
31, 2009) using diligent efforts, to locate and deliver the rig to the property
and that upon delivery of the rig, the well be promptly drilled, logged and
completed in accordance with the Drilling Obligation.
Section
12.03 Extension
of Drilling Obligation.
Buyer
shall have the right to extend the deadline for completion of the Drilling
Obligation by paying Seller one or more extension fees each in the amount
of
US$200,000.00 for each extension period, each of a three (3) month length,
but
in no event shall the Drilling Obligation deadline extend beyond March 31,
2009.
Section
12.04 Satisfaction
of Drilling Obligation.
Upon
satisfaction of, and payment for, the Drilling Obligation, Seller will deliver
to Buyer the original of the Assignment and Xxxx of Sale executed by Buyer
for
the benefit of Seller, in the form attached hereto as Exhibit C.
Section
12.05
Failure to Perform Drilling Obligation.
If
Buyer has not fully satisfied, and paid for, the Drilling Obligation in a
timely
manner, and in no event later than March 31, 2009, Buyer will have failed
to
perform its Drilling Obligation and will be in default. Seller shall deliver
written notice to Buyer of the general nature of the default and Buyer shall
have thirty (30) days after the date of Seller’s written notice within which to
cure the default. If default is not cured within said thirty (30) day period,
Seller may record and file all instruments necessary to re-convey the Assets
to
Seller, including the Assignment and Xxxx of Sale executed by Buyer for the
benefit of Seller, in the form attached hereto as Exhibit C, and all of Buyer’s
rights in and to the Assets shall be extinguished.
-15-
Section
12.06 Further
Cooperation.
Seller
shall make the Records available to be picked up by Buyer at the offices of
Seller during normal business hours within fifteen (15) Business Days after
the
Closing to the extent the Records are in the possession of Seller and are not
subject to contractual restrictions on transferability. Seller shall
have the right to retain copies of any of the Records and the rights granted
under Section 16.03. After
the
Closing Date, each Party, at the request of the other and without additional
consideration, shall execute and deliver, or shall cause to be executed and
delivered, from time to time such further instruments of conveyance and transfer
and shall take such other action as the other Party may reasonably request
to
convey and deliver the Assets to Buyer and to accomplish the orderly transfer
of
the Assets to Buyer in the manner contemplated by this Agreement. After the
Closing, the Parties will cooperate to have all proceeds received attributable
to the Assets be paid to the proper Party hereunder and to have all expenditures
to be made with respect to the Assets be made by the proper Party
hereunder.
Article
XIII
Operation
of the Assets
Section
13.01 Operations
after Execution Date. Seller
agrees, from and after the Execution Date until Closing, except as expressly
contemplated by this Agreement, as expressly consented to in writing by Buyer,
or in situations wherein emergency action is taken in the face of risk to life,
property or the environment, to maintain the books of account and records
relating to the Assets in the usual, regular and ordinary manner, in accordance
with its past practice, not enter into a material contract, or materially amend
or change the terms of any such contract that would adversely impact the Assets,
and preserve in full force and effect all oil and gas leases, operating
agreements, easements, rights-of-way, permits, licenses and agreements that
relate to the Assets.
Section
13.02 Limitations
on the Operational Obligations and Liabilities of Seller.
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(a)
|
From
and after the date of execution of this Agreement and until the Closing,
and subject to the provisions of applicable operating and other
agreements, and further subject to the provisions of this Article
XIII,
Seller shall use its reasonable efforts to administer the Assets
in a
manner consistent with its past practices, and shall carry on its
business
with respect to the Assets in substantially the same manner as before
execution of this Agreement.
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|
(b)
|
Notwithstanding
anything to the contrary in this Article XIII, Seller shall have
no
liability to Buyer for, and Buyer hereby agrees to release, defend,
indemnify and hold harmless Seller from, the incorrect payment of
delay
rentals, royalties, shut-in royalties or similar payments or for
any
failure to pay any such payments through mistake or oversight (INCLUDING
THOSE RESULTING FROM SELLER’S SOLE, JOINT, COMPARATIVE OR CONCURRENT
NEGLIGENCE OR STRICT LIABILITY)
provided that such payments relate to production months after the
Closing
Date. In no event shall Buyer’s remedy for any Seller’s breach of its
obligations under this Article XIII exceed the Allocated Value of
the
Subject Interest affected by such
breach.
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-16-
Section
13.03 Operation
of the Assets After the Closing.
It is
expressly understood and agreed that Seller shall not be obligated to operate
any of the Assets following the Closing and Buyer hereby assumes full
responsibility for operating (or causing the operation of) all Assets following
the Closing. Without implying any obligation on Seller’s part to continue
operating any Assets after the Closing, if Seller elects to continue to operate
any Assets following the Closing at the request of Buyer or any Third Party
working interest owner, due to constraints of applicable joint operating
agreement(s), failure of a successor operator to take over operations or other
reasonable cause, such continued operation by Seller shall be for the account
of
Buyer, at the sole risk, cost and expense of Buyer. Seller, as a part of the
Assumed Obligations, is hereby released and indemnified by Buyer from all
claims, losses, damages, costs, expenses, causes of action and judgments of
any
kind or character (INCLUDING
THOSE RESULTING FROM SELLER’S SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE
OR STRICT LIABILITY)
with
respect to (a) such continued operations by Seller, (b) Buyer’s assumption of
operations from Seller, and (c) compliance with the terms of any applicable
joint operating agreement related to the election of a successor operator.
Buyer
shall conduct or cause to be conducted all operations on the Assets after
Closing in a good and workmanlike manner and in compliance with all applicable
laws, rules, regulations and agreements.
Section
13.04 Risk
of Loss; Casualty
Loss.
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(a)
|
After
the Closing Date, Buyer shall assume all risk of loss with respect
to, and
any change in the condition of, the depreciation of personal property,
and
the depletion of Hydrocarbons even if caused by the watering-out
of any
well, the collapse of casing, or sand infiltration of
xxxxx.
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|
(b)
|
Seller
shall not be obligated to carry or maintain, and shall have no obligation
or liability to Buyer for its failure to carry or maintain, any insurance
coverage with respect to any of the Assets.
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Article
XIV
Obligations
and Indemnification
Section
14.01 Retained
Obligations.
Provided that the Closing occurs, for a period of six (6) months from Closing,
and not thereafter, Seller shall retain payment obligations of Seller that
accrue and become due prior to the Closing Date, except to the extent that
the
same were incurred by Buyer, any breach of any representation, warranty,
covenant or agreement of Seller contained in this Agreement, and all liability
of Seller to third parties for personal injury or death to the extent occurring
prior to the Closing Date as a result of the Seller’s operation of the Assets
(collectively, the “Retained Obligations”).
-17-
Section
14.02 Assumed
Obligations.
Provided that the Closing occurs, Buyer hereby assumes all duties, obligations
and liabilities of every kind and character with respect to the Assets or the
ownership or operation thereof (other than the Retained Obligations), whether
attributable to periods before or after the Closing Date, including, without
limitation, those arising out of the terms of the Easements, Contracts, Leases,
Personal Property or Subject Interests comprising part of the Assets, ad
valorem, property, severance and other similar taxes or assessments based upon
or measured by the ownership of the Assets or the production therefrom, the
condition of the Subject Interests, regardless of whether such condition arose
before or after the Closing Date, obligations to properly plug and abandon
or
re-plug or re-abandon or remove xxxxx, flowlines, gathering lines or other
facilities, equipment or other personal property or fixtures comprising part
of
the Assets, obligations to restore the surface of the Subject Interests and
obligations to remediate or bring the Subject Interests into compliance with
applicable Environmental Laws (including conducting any remediation activities
that may be required on or otherwise in connection with activities on the
Subject Interests), regardless of whether such obligations or conditions or
events giving rise to such obligations, arose, occurred or accrued before or
after the Closing Date, and any other duty, obligation, event, condition or
liability assumed by Buyer under the terms of this Agreement (collectively,
the
“Assumed Obligations”).
Section
14.03 Buyer’s
Indemnification.
Provided that the Closing occurs, Buyer shall release, defend, indemnify and
hold harmless Seller, its partners, and their respective officers, directors,
employees, agents, partners, representatives, members, shareholders, affiliates,
subsidiaries (collectively, the “Seller
Indemnitees”)
from
and against any and all claims, damages, liabilities, losses, causes of action,
costs and expenses (including, without limitation, those involving theories
of
negligence or strict liability and including court costs and attorneys’ fees)
(collectively, the “Losses”) as a result of, arising out of, or related to the
Assumed Obligations.
Section
14.04 Seller’s
Indemnification.
Provided that the Closing occurs, Seller shall release, defend, indemnify and
hold harmless Buyer, its partners, and their respective officers, directors,
employees, agents, representatives, members, shareholders, affiliates and
subsidiaries (collectively, the “Buyer
Indemnitees”)
from
and against any and all Third Party claims relating to Seller’s ownership or
operation of the Assets prior to the Closing Date as a result of, arising out
of, or related to the Retained Obligations. Provided, however, notwithstanding
anything to the contrary contained herein, Seller’s indemnification obligation
under this Section 14.04 shall only apply if Buyer has provided Seller with
written notice claiming indemnification within thirty (30) days prior to the
expiration of Seller’s six (6) month indemnification period stated in Section
14.01.
Section
14.05 Notices
and Defense of Indemnified Matters.
(a)
Each
Party shall promptly notify the other Party in writing of any matter of which
it
becomes aware and for which it is entitled to indemnification from the other
Party under this Agreement. Upon receipt by a Seller Indemnitee or a Buyer
Indemnitee (each, an “Indemnified
Person”)
of
notice of a claim, action or proceeding against such Indemnified Person in
respect of which indemnity may be sought hereunder, such Indemnified Person
shall promptly notify Seller or Buyer, as the case may be, with respect thereto.
In addition, an Indemnified Person shall immediately notify Seller or Buyer,
as
the case may be, after any action is commenced (by way of service with a summons
or other legal process giving information as to the nature and basis of the
claim) against such Indemnified Person.
-18-
(b)
Seller or Buyer, as the case may be, shall be entitled to assume the defense
of
any litigation or proceeding in respect of which indemnity may be sought
hereunder, including the employment of counsel reasonably satisfactory to the
other party and the payment of the fees and expenses of such counsel, in which
event, except as provided below, Seller or Buyer shall not be liable for the
fees and expenses of any other counsel retained by any Indemnified Person in
connection with such litigation or proceeding. In any such litigation or
proceeding the defense of which Seller or Buyer shall have so assumed, any
Indemnified Person shall have the right to participate in such litigation or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) Seller
or
Buyer, as the case may be, and such Indemnified Person shall have mutually
agreed in writing to the retention of such counsel, or (ii) the named parties
to
any such litigation or proceeding (including any impleaded parties) include
Seller or Buyer, as the case may be, and such Indemnified Person and
representation of both parties by the same counsel would, in the opinion of
counsel to such Indemnified Person, be inappropriate due to actual or potential
differing interests between Seller or Buyer, as the case may be, and such
Indemnified Person.
(c)
Seller or Buyer, as the case may be, shall not be liable for any settlement
of
any litigation or proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the claimant
against the Indemnified Person, Seller or Buyer, as the case may be, agrees
to
indemnify the Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Seller or Buyer, as the case may be,
will
not settle any claim, action or proceeding in respect of which indemnity may
be
sought hereunder, whether or not any Indemnified Person is an actual or
potential party to such claim, action or proceeding, without the Indemnified
Person’s written consent, which shall not be unreasonably withheld, delayed, or
conditioned. The provisions contained in this Section 14.06 shall remain
operative and in full force and effect regardless of the expiration or any
termination of the Agreement.
-19-
Article
XV
Limitations
on Representations and Warranties
Section
15.01 Disclaimers
of Representations and Warranties.
The
express representations and warranties of Seller contained in this Agreement
are
exclusive and are in lieu of all other representations and warranties, express,
implied or statutory. EXCEPT
FOR THE EXPRESS REPRESENTATIONS OF SELLER IN THIS AGREEMENT,
BUYER
ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS
AND
NEGATES, AND BUYER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY,
EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO (a)
PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING
INFORMATION OR THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF HYDROCARBONS,
IF ANY, ATTRIBUTABLE TO THE ASSETS, (b) THE ACCURACY, COMPLETENESS OR
MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) NOW,
HERETOFORE OR HEREAFTER FURNISHED TO BUYER BY OR ON BEHALF OF SELLER, AND (c)
THE ENVIRONMENTAL CONDITION OF THE ASSETS. EXCEPT
FOR THE EXPRESS REPRESENTATIONS OF SELLER IN THIS AGREEMENT,
SELLER
EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY WAIVES, AS TO PERSONAL
PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES CONSTITUTING A PART
OF
THE ASSETS (i) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY
IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY
IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS,
(iv) ANY RIGHTS OF PURCHASERS UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION
OF
CONSIDERATION OR RETURN OF THE PURCHASE PRICE, (v) ANY IMPLIED OR EXPRESS
WARRANTY OF FREEDOM FROM DEFECTS, WHETHER KNOWN OR UNKNOWN, (vi) ANY AND ALL
IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW, AND (vii) ANY IMPLIED OR
EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO
THE
ENVIRONMENT, OR PROTECTION OF THE ENVIRONMENT OR HEALTH, IT BEING THE EXPRESS
INTENTION OF BUYER AND SELLER THAT THE PERSONAL PROPERTY, EQUIPMENT, INVENTORY,
MACHINERY AND FIXTURES INCLUDED IN THE ASSETS SHALL BE CONVEYED TO BUYER, AND
BUYER SHALL ACCEPT SAME, AS IS, WHERE IS, WITH ALL FAULTS AND IN THEIR PRESENT
CONDITION AND STATE OF REPAIR AND BUYER REPRESENTS TO SELLER THAT BUYER WILL
MAKE OR CAUSE TO BE MADE SUCH INSPECTIONS WITH RESPECT TO SUCH PERSONAL
PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES AS BUYER DEEMS
APPROPRIATE. SELLER AND BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE
LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED IN THIS
SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW,
RULE OR ORDER.
Section
15.02 Independent
Investigation.
Buyer
represents and acknowledges that it is knowledgeable of the oil and gas business
and of the usual and customary practices of producers such as Seller and that
it
has had access to the Assets, the officers and employees of Seller, and the
books, records and files of Seller relating to the Assets, and in making the
decision to enter into this Agreement and consummate the transactions
contemplated hereby, Buyer has relied solely on the basis of its own independent
due diligence investigation of the Assets and upon the representations and
warranties made in Article V, and not on any other representations or warranties
of Seller or any other person or entity.
Section
15.03 Survival.
The
representations, warranties, covenants and obligations of Buyer under this
Agreement shall survive the Closing indefinitely. The representations,
warranties, covenants and obligations of Seller under this Agreement shall
survive the Closing for a period of six (6) months from the
Closing.
-20-
Article
XVI
Miscellaneous
Section
16.01 Names.
Subject
to the terms of this Agreement, as soon as reasonably possible after the
Closing, but in no event later than sixty (60) days after the Closing, Buyer
shall remove the names of Seller and its affiliates, and all variations thereof,
from all of the Assets and make the requisite filings with, and provide the
requisite notices to, the appropriate federal, state or local agencies to place
the title or other indicia of ownership, including operation of the Assets,
in a
name other than the name of the Seller or any of its affiliates, or any
variations thereof.
Section
16.02 Expenses.
Except
as specifically provided in this Agreement, each Party shall be solely
responsible for all expenses, including due diligence expenses, incurred by
it
in connection with this transaction, and neither Party shall be entitled to
any
reimbursement for such expenses from the other Party.
Section
16.03 Document
Retention.
As used
in this Section 16.03, the term “Documents”
shall
mean all files, documents, books, records and other data delivered to Buyer
by
Seller pursuant to the provisions of this Agreement (other than those that
Seller has retained either the original or a copy of), including, but not
limited to: financial and tax accounting records; land, title and division
of
interest files; contracts; engineering and well files; and books and records
related to the operation of the Assets prior to the Closing Date. Buyer shall
retain and preserve the Documents for a period of no less than four (4) years
following the Closing Date (or for such longer period as may be required by
law
or governmental regulation), and shall allow Seller or its representatives
to
inspect the Documents at reasonable times and upon reasonable notice during
regular business hours during such time period. Seller shall have the right
during such period to make copies of the Documents at its expense.
Section
16.04 Entire
Agreement.
This
Agreement, the documents to be executed hereunder, and the exhibits attached
hereto constitute the entire agreement between the Parties pertaining to the
subject matter hereof and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the Parties pertaining
to the subject matter hereof. No supplement, amendment, alteration, modification
or waiver of this Agreement shall be binding unless executed in writing by
the
Parties and specifically referencing this Agreement.
Section
16.05 Waiver.
No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar),
nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
Section
16.06 Publicity.
Prior
to Closing, neither Seller nor Buyer will issue any public announcement or
press
release concerning this transaction without the written consent of the other
Party, which consent shall not be unreasonably withheld (except as required
by
law and in such case with prior written agreement between the Parties on the
wording of the announcement or press release).
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Section
16.07 Construction.
The
captions in this Agreement are for convenience only and shall not be considered
a part of or affect the construction or interpretation of any provision of
this
Agreement. The Parties acknowledge that they have participated jointly in the
negotiation and drafting of this Agreement and as such the Parties agree that
if
an ambiguity or question of intent or interpretation arises hereunder, this
Agreement shall not be construed more strictly against one Party than another
on
the grounds of authorship.
Section
16.08 No
Third Party Beneficiaries.
Nothing
in this Agreement shall provide any benefit to any Third Party or entitle
any
Third
Party to any claim, cause of action, remedy or right of any kind, it being
the
intent of the Parties that this Agreement shall otherwise not be construed
as a
Third Party beneficiary contract.
Section
16.09 Assignment.
Neither
Party may assign or delegate any of its rights or duties hereunder without
the
prior written consent of the other Party and any assignment made without such
consent shall be void. Except as otherwise provided herein, this Agreement
shall
be binding upon and inure to the benefit of the Parties hereto and their
respective permitted successors, assigns and legal representatives.
Section
16.10 Governing
Law.
This
Agreement, other documents delivered pursuant hereto and the legal relations
between the Parties shall be governed and construed in accordance with the
laws
of the State of Wyoming, without giving effect to principles of conflicts of
laws that would result in the application of the laws of another jurisdiction.
The Parties agree to venue in Natrona County, Wyoming.
Section
17.11 Notices.
(a)
Method.
All
notices and other communications provided for or permitted under this Agreement
shall be made in writing by (i) hand-delivery, (ii) first class mail, or air
courier guaranteeing rapid delivery (FedEx, DHL, TNT, etc.) to the addresses
of
Seller and Buyer set forth below.
|
Seller:
|
Geochem
Exploration, LLC
X.X.
Xxx 000
Xxxxxx,
XX 00000
|
|
Buyer:
|
|
|
000
Xxxx 0xx
Xxx., Xxxxx 000Xxxxxx, Xxxxxxx
00000
|
(b)
Effectiveness.
All
such notices and communications shall be deemed to have been duly given (i)
at
the time delivered by hand, if personally delivered, (ii) five (5) Business
Days
after being deposited in the mail, postage prepaid, if mailed, (iii) when
receipt acknowledged, if telecopied, and (iv) when receipt acknowledged, if
sent
by air courier guaranteeing rapid delivery (FedEx, DHL, TNT, etc.). Either
Party
may, by written notice so delivered to the other Party, change its address
for
notice purposes hereunder.
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Section
17.12 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
and the Parties shall negotiate in good faith to modify this Agreement so as
to
effect their original intent as closely as possible in an acceptable manner
to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
Section
17.13 Time
of the Essence.
Time
shall be of the essence with respect to all time periods and notice periods
set
forth in this Agreement.
Section
17.14 Counterpart
Execution.
This
Agreement may be executed in any number of counterparts, and each counterpart
hereof shall be effective as to each party that executes the same whether or
not
all of such parties execute the same counterpart. If counterparts of this
Agreement are executed, the signature pages from various counterparts may be
combined into one composite instrument for all purposes. All counterparts
together shall constitute only one Agreement, but each counterpart shall be
considered an original.
IN
WITNESS WHEREOF, Seller and Buyer have executed and delivered this Agreement
as
of the date first set forth above.
|
SELLER:
|
||
|
GEOCHEM
EXPLORATION, LLC
|
||
|
By:
|
||
|
Name:
Xxxxxx X. Xxxxxxxx
|
||
|
Title:
Member Manager
|
||
|
BUYER:
|
||
|
By:
|
||
|
Name:
Xxx Xxxxxxxxxx
|
||
|
Title:
Director
|
||
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