EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
By And Among
MANTI RESOURCES, INC.,
MANTI OPERATING COMPANY, MANTI CABALLOS CREEK, LTD.,
MANTI OPOSSUM HOLLOW, LTD., J&P OIL AND GAS, INC.,
LARA ENERGY, INC., SOFROC FUEL CO.,
Sellers
and
DELTA PETROLEUM CORPORATION
DOING BUSINESS IN TEXAS AS
DELTA EXPLORATION COMPANY, INC.,
Buyer
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS ..................................... 1
ARTICLE 2 SALE AND TRANSFER OF ASSETS; CLOSING ............ 6
2.01 Assets........................................... 6
2.02 Purchase Price................................... 7
2.03 Closing.......................................... 7
2.04 Closing Obligations.............................. 7
2.05 Allocations and Adjustments...................... 8
2.06 Assumption....................................... 10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER........... 11
3.01 Organization and Good Standing................... 11
3.02 Authority; No Conflict........................... 11
3.03 Bankruptcy....................................... 12
3.04 Taxes............................................ 12
3.05 Legal Proceedings; Orders........................ 12
3.06 Environmental.................................... 13
3.07 Personal Property................................ 13
3.08 Title to Properties.............................. 13
3.09 Brokers.......................................... 13
3.10 Tax Sharing Agreements........................... 13
3.11 Consents......................................... 13
3.12 Gas Imbalances, Prepayment Arrangements;
Take-or-Pay.................................... 13
3.13 Status of Leases................................. 14
3.14 Contracts........................................ 14
3.15 Insurance........................................ 14
3.16 Accuracy of Disclosures.......................... 14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER............ 14
4.01 Organization and Good Standing................... 14
4.02 Authority; No Conflict........................... 15
4.03 Certain Proceedings.............................. 15
4.04 Knowledgeable Investor........................... 15
4.05 Securities Laws.................................. 15
4.06 Due Diligence.................................... 15
4.07 Basis of Buyer's Decision........................ 16
4.08 Material Factor.................................. 16
ARTICLE 5 COVENANTS OF SELLER................................ 16
5.01 Access and Investigation......................... 16
5.02 Operation of the Assets.......................... 16
5.03 Insurance........................................ 17
5.04 Consent and Waivers.............................. 17
5.05 Notification..................................... 18
5.06 Satisfaction of Conditions....................... 18
ARTICLE 6 COVENANTS OF BUYER................................. 18
6.01 Notification..................................... 18
6.02 Satisfaction of Conditions....................... 18
ARTICLE 7 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO
CLOSE...................................................... 18
7.01 Accuracy of Representations...................... 19
7.02 Seller's Performance............................. 19
7.03 No Proceedings................................... 19
ARTICLE 8 CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO
CLOSE..................................................... 19
8.01 Accuracy of Representations...................... 19
8.02 Buyer's Performance.............................. 19
8.03 No Proceedings................................... 20
ARTICLE 9 TERMINATION........................................ 20
9.01 Termination Events............................... 20
9.02 Effect of Termination............................ 20
ARTICLE 10 INDEMNIFICATION; REMEDIES......................... 20
10.01 Survival......................................... 20
10.02 Indemnification and Payment of Damages by Seller. 21
10.03 Indemnification and Payment of Damages by Buyer.. 21
10.04 Time Limitations................................. 22
10.05 Limitations on Amount--Seller.................... 22
10.06 Limitations on Amount--Buyer..................... 22
10.07 Procedure for Indemnification--Third Party
Claims......................................... 22
10.08 Procedure for Indemnification--Other Claims...... 23
10.09 Extent of Representations and Warranties......... 23
10.10 Compliance With Express Negligence Test.......... 24
10.11 Limitations of Liability......................... 24
ARTICLE 11 TITLE MATTERS AND ENVIRONMENTAL MATTERS........... 24
11.01 Title Examination and Access..................... 24
11.02 Defensible Title................................. 25
11.03 Title Defects.................................... 25
11.04 Adjustments...................................... 26
11.05 Environmental Audit.............................. 26
11.06 Remedies For Violations Of Environmental Laws.... 26
11.07 Right of Termination............................. 27
11.08 Disputes......................................... 27
11.09 Casualty Loss and Condemnation................... 27
ARTICLE 12 GENERAL PROVISIONS................................ 28
12.01 Expenses......................................... 28
12.02 Notices.......................................... 28
12.03 Jurisdiction; Service of Process................. 29
12.04 Further Assurances............................... 30
12.05 Waiver........................................... 30
12.06 Entire Agreement and Modification................ 30
12.07 Assignments, Successors, and No Third-Party
Rights......................................... 30
12.08 Severability..................................... 30
12.09 Section Headings, Construction................... 31
12.10 Time of Essence.................................. 31
12.11 Governing Law.................................... 31
12.12 Counterparts..................................... 31
12.13 Waiver Of Texas Deceptive Trade Practices -
Consumer Protection Act........................ 31
12.14 Arbitration...................................... 31
12.15 Tax Deferred Exchange............................ 32
12.16 Press Release.................................... 32
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of December 15th,
2004, by and among Manti Resources, Inc., a Texas corporation, Manti Operating
Company, a Texas corporation, Manti Caballos Creek, LTD., a Texas Limited
Partnership, Manti Opossum Hollow, LTD., a Texas Limited Partnership, J&P Oil
and Gas, Inc., a Texas Corporation, Lara Energy, Inc., a Texas Corporation,
and SofRoc Fuel Co., a Texas Corporation (collectively "Sellers" and
individually, a "Seller") and Delta Petroleum Corporation doing business in
Texas as Delta Exploration Company, Inc, a Colorado corporation ("Buyer").
RECITALS
Seller desires to sell, in the proportions set forth herein, and Buyer
desires to purchase, undivided interests in certain oil, gas, and mineral
properties and related assets and contracts, for the consideration and on the
terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, in addition to the other Capitalized
terms defined herein, the following terms have the meanings specified or
referred to in this Article 1:
"Affiliate" --any Person directly or indirectly controlled by,
controlling, or under common control with, Buyer or Seller, including any
subsidiary of Buyer or Seller and any "affiliate" of Buyer or Seller within
the meaning of Reg. SS 240.12b-2 of the Securities Exchange Act of 1934, as
amended, with "control," as used in this definition, meaning possession,
directly or indirectly, of the power to direct or cause the direction of
management, policies or action through ownership of voting securities,
contract, voting trust, or membership in management or in the group appointing
or electing management or otherwise through formal or informal arrangements or
business relationships.
"Allocated Values" --the values assigned among the Asset categories set
forth on Schedule 2.02.
"Assets" --the Subject Leases, Xxxxx, and Contracts.
"Assignment Proportions" - the varying ownership percentages of the
Sellers in the Assets as described in Section 2.01.
"Breach"--a "Breach" of a representation, warranty, covenant, obligation,
or other provision of this Agreement or any instrument delivered pursuant to
this Agreement will be deemed to have occurred if there is or has been any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision.
"Buyer's Closing Documents"--as defined in Section 4.02.
"Closing"--as defined in Section 2.03.
"Closing Date"--the date and time as of which the Closing actually takes
place.
"Consent"--any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization) relating to the
conveyance of the Assets or a portion thereof.
"Contemplated Transactions"--all of the transactions contemplated by this
Agreement, including, but not limited to:
(a) the sale of the Assets by Seller to Buyer;
(b) the execution, delivery, and performance of the Instruments of
Conveyance and all other instruments and documents required under this
Agreement;
(c) the performance by Buyer and Seller of their respective covenants
and obligations under this Agreement; and
(d) Buyer's acquisition, ownership, and exercise of control over the
Assets.
"Contract"--any written agreement or contract that is legally binding
relating to the Subject Leases or Xxxxx, including without limitation, those
listed on Exhibit B.
"Damages"--any loss, liability, claim or damage, whether or not involving
a third-party claim.
"Defensible Title"--as defined in Section 11.02.
"Disclosure Schedule"--the disclosure schedule attached as Exhibit D.
"Effective Time"--December 1, 2004, at 7:00 a.m., Central Daylight Time.
"Encumbrance"--any charge, equitable interest, privilege, lien, option,
pledge, security interest, right of first refusal, or restriction of any kind.
"Environment"--soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins,
and wetlands), groundwater, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental Law"--any Legal Requirement that requires or relates to:
(e) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or materials
that could have significant impact on the Environment;
(f) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(g) reducing the quantities, preventing the release, or minimizing
the hazardous characteristics of wastes that are generated;
(h) protecting resources, species, or ecological amenities;
(i) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(j) cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or prevention; or
(k) making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"Environmental Liabilities"--any cost, damage, expense, liability,
obligation, or other responsibility arising from or under either an
Environmental Law or third party claims relating to the Environment which
relates to the Assets.
"Existing Burdens" --the total of Lessor Royalty Burdens and Override
Burdens attributable to the Subject Leases, determined on a lease by lease
basis.
"GAAP"--generally accepted United States accounting principles applied on
a consistent basis.
"Governmental Authorization"--any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement.
"Governmental Body"--any:
(l) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(m) federal, state, local, municipal, foreign, or other government;
(n) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity
and any court or other tribunal);
(o) multi-national organization or body; or
(p) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
"Hydrocarbons"--oil, gas, minerals, and other gaseous and liquid
hydrocarbons or any combination of the foregoing.
"Instrument of Conveyance"--the instruments of conveyance transferring
title to the Assets in the form of Exhibit C.
"IRC"--the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS"--the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of a
particular fact or other matter if (a) such individual is actually aware of
such fact or other matter or (b) a prudent individual could be expected to
discover or otherwise become aware of such fact or other matter in the course
of conducting a reasonably comprehensive investigation concerning the
existence of such fact or other matter, being only under a commercially
reasonable duty of inquiry.
A Seller will be deemed to have "Knowledge" of a particular fact or other
matter if any individual who is an owner, or is serving as an officer,
director or supervisory employee of such Seller has, or at any time had,
Knowledge of such fact or other matter.
"Legal Requirement"--any federal, state, local, municipal, foreign,
international, or multinational law, administrative order, constitution,
ordinance, principle of common law, regulation, statute, or treaty.
"Lessor Royalty Burdens"--as to each Subject Lease, all reserved
royalties arising under the terms thereof and payable to the mineral owners
in, on and under the lands covered thereby.
"Order"--any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" if such action is
consistent with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person.
"Organizational Documents"--(a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the articles of
organization and regulations of a limited liability company; (c) the
certificate of limited partnership and limited partnership agreement of a
limited partnership; and (d) any amendment to any of the foregoing.
"Override Burdens"--overriding royalty interests burdening the Subject
Leases (a) which are presently of record in the Counties in which they are
located, or (b) otherwise arise pursuant to a Contract.
"Permitted Encumbrance"--any of the following: (a) any obligations or
duties reserved to or vested in any municipality or other Governmental Body to
regulate any Asset in any manner including all applicable Legal Requirements;
(b) the terms and conditions of all leases, options, servitudes, contracts for
sale, purchase, exchange, refining or processing of Hydrocarbons, operating
agreements, construction agreements, construction and operation agreements,
participation agreements, shoot-to-earn agreements, exploration agreements,
partnership agreements, processing agreements, plant agreements, pipeline,
gathering, exchange and transportation agreements, disposal agreements,
permits, licenses and any other agreements affecting the Assets, as set forth
as Contracts on Exhibit B attached hereto; (c) the Consents identified in Part
3.11 of the Disclosure Schedule with respect to which prior to Closing (i)
waivers or consents have been obtained from the appropriate Person, (ii) the
applicable period of time for asserting such rights has expired without any
exercise of such rights, or (iii) mutually agreed upon arrangements have been
made by the parties to the consents to allow Buyer to receive substantially
the same economic benefits as if all such waivers and consents had been
obtained; (d) easements, rights-of-way, servitudes, permits, surface leases
and other similar rights on, over or in respect of any of the Assets, as long
as any such encumbrance does not serve to diminish Buyer's right to ingress
and egress below that enjoyed by Seller and were in effect as of the Effective
Time; (e) lessor's royalties, overriding royalties (including those in favor
of Seller), production payments, net profits interests, reversionary
interests, and similar burdens if the net cumulative effect of such burdens
does not operate to reduce a Seller's entitlement to production from the Xxxxx
below the net revenue interests set forth in Exhibit A, (f) such other defects
or irregularities of title or Encumbrances as Buyer may have waived in writing
or which Buyer shall be deemed to have waived pursuant to the provisions of
Section 10.3 hereof; (g) conventional rights of reassignment obligating Seller
to reassign their interests in any portion of the Leases to a third party in
the event they intend to release or abandon such interest prior to the
expiration of the primary term or other termination of such interest; and (h)
from and after consummation of the Closing, defects and irregularities of
title which existed on the date Seller acquired the affected Asset, unless
Buyer and Seller agree otherwise in writing at or before Closing.
"Person"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other
entity or Governmental Body.
"Preliminary Amount"--as defined in Section 2.05(a).
"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Property Costs"--as defined in Section 2.05(a).
"Purchase Price"--as defined in Section 2.02.
"Representative"--with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"Seller's Closing Documents"--as defined in Section 3.02.
"Subject Leases"--the oil, gas, and mineral leases described on Exhibit
A.
"Tax"--any tax (including any income tax, capital gains tax, value-added
tax, sales tax, property tax, severance tax, gift tax, or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency, or other
fee, and any related charge or amount (including any fine, penalty, interest,
or addition to tax), imposed, assessed, or collected by or under the authority
of any Governmental Body or payable pursuant to any tax-sharing agreement or
any other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.
"Tax Return"--any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal Requirement
relating to any Tax.
"Threatened"--a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) to a party or any of its officers, directors, or
employees that would lead a prudent Person to conclude that such a claim,
Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
"Title Defect"--as defined in Section 11.03.
"Violation of Environmental Laws" --a violation of, or the failure to
perform any obligation imposed by, an Environmental Law.
"Xxxxx"--oil and gas xxxxx located on the Subject Leases and Prospects,
and more particularly described on Exhibit A.
ARTICLE 2
SALE AND TRANSFER OF ASSETS; CLOSING
2.01 Assets. Subject to the terms and conditions of this Agreement, at
the Closing, Sellers shall sell and transfer the Assets, in the Assignment
Proportions, to Buyer.
Baffin Bay Caballos Creek
Manti Resources, Inc - 100% Manti Caballos Creek, LTD-75/91.75ths
J&P Oil and Gas, Inc.-5.25/91.75ths
Lara Energy, Inc.- 5.25/91.75ths
SofRoc Fuel Co.- 6.25/91.75ths
Opossum Hollow (except for Jambers # 1
Jambers #1)
Manti Opossum Hollow, LTD- 85/98ths Manti Caballos Creek, LTD-
J&P Oil and Gas, Inc., 4/98ths -75.5565/87.928785ths
Lara Energy, Inc.-4/98ths J&P Oil and Gas, Inc- 3.8250175/
SofRoc Fuel Co. 5/98ths 87.928785ths
Lara Energy, Inc- 3.8250175/
87.928785ths
SofRoc Fuel Co.- 4.72225/ 87.928785ths
2.02 Purchase Price. Subject to any adjustments that may be made under
Section 2.05, the purchase price (the "Purchase Price") for the Assets will be
Sixty-Two Million Eight Hundred Sixty Thousand Three Hundred Ninety Nine
Dollars ($62,860,399.00). The Purchase Price for the Assets will be
allocated among each of the Assets, as set forth in Schedule 2.2 hereto. The
amount so allocated to a part of the Assets will constitute the Allocated
Values for such part of the Assets. Seller and Buyer agree to be bound by the
allocation set forth in Schedule 2.02 for purposes of Article 11 hereof.
Contemporaneously herewith, Buyer has paid Seller the sum of Three Million
Dollars ($3,000,000.00) (the "Deposit Amount"). If Closing timely occurs, the
Deposit Amount will be applied as a credit toward the Purchase Price. If
Closing does not timely occur, and Buyer is not obligated under the terms of
this Agreement to close, the Deposit Amount will be returned to Buyer. If
Closing does not timely occur, and Buyer is obligated under the terms of this
Agreement to close, the Deposit Amount will be retained by Seller as its sole
and exclusive remedy and as liquidated damages (and not as a penalty).
2.03 Closing. The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of Seller's counsel, at 10:00
a.m. (local time) on or before January 21, 2005, or at such other time and
place as the parties may agree. Subject to the provisions of Articles 8, 9
and 10, failure to consummate the purchase and sale provided for in this
Agreement on the date and time and at the place determined pursuant to this
Section 2.03 will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
2.04 Closing Obligations. At the Closing:
(a) Seller will deliver, or cause to be delivered, to Buyer:
(i) the Instruments of Conveyance executed by Seller;
(ii) possession of the Assets;
(iii) a certificate executed by Seller representing and
warranting to Buyer that each of Seller's representations and warranties in
this Agreement is accurate in all material respects as of the Closing Date as
if made on the Closing Date;
(iv) all required Consents;
(v) such documents as Buyer or counsel for Buyer may
reasonably request, including but not limited to letters-in-lieu of transfer
order to purchasers of production from the Xxxxx, and releases of all recorded
Encumbrances and unrecorded Encumbrances within Seller's actual knowledge
(other than Permitted Encumbrances) affecting the Assets.
(b) Buyer will deliver to Seller:
(i) the Preliminary Amount, by wire transfer to the
account(s) specified by Seller;
(ii) the Instruments of Conveyance executed by Buyer;
(iii) a certificate executed by Buyer representing and
warranting to Seller that each of Buyer's representations and warranties in
this Agreement is accurate in all material respects as of the Closing Date as
if made on the Closing Date; and
(iv) such other documents as Seller or counsel for Seller
may reasonably request.
2.05 Allocations and Adjustments. If Closing occurs:
(a) Buyer will be entitled to all revenues, production, proceeds,
income, and products from or attributable to each Asset on and after the
relevant Effective Time, and will be responsible for (and entitled to any
refunds with respect to) all Property Costs attributable to the Assets and
incurred on and after the Effective Time. Seller will be entitled to all
revenues, production, proceeds, income, and products from or attributable to
each Asset prior to the Effective Time and will be responsible for (and
entitled to any refunds with respect to) all Property Costs attributable to
each Asset and incurred prior to the Effective Time. "Property Costs" will
mean all amounts attributable to the operation and ownership of the Assets
incurred and paid in the Ordinary Course of Business. For purposes of
allocating production, products, accounts receivable and proceeds under this
Section, (i) liquid hydrocarbons will be deemed to be "from or attributable
to" the Xxxxx when they pass through the pipeline connecting into the storage
facilities into which they are run and (ii) gaseous hydrocarbons will be
deemed to be "from or attributable to" Xxxxx when they pass through the
delivery point sales meters on the pipelines through which they are
transported. In order to accomplish the foregoing allocation of production the
parties will rely upon gauging, metering and strapping procedures conducted by
Seller on or about the Effective Time to the extent possible and unless
demonstrated to be inaccurate will utilize reasonable interpolating procedures
to arrive at an allocation of production when exact gauging, metering and
strapping data is not available on hand as of the Effective Time. Seller will
provide to Buyer evidence of all gauging, metering and strapping procedures
conducted hereunder in connection with the Xxxxx, together with all data
necessary to support any estimated allocation, for purposes of establishing
the adjustment to the Purchase Price. Notwithstanding the foregoing, the
parties have agreed that Buyer is acquiring as part of the Assets the accounts
receivable and gas imbalance makeup rights set forth on Schedule 3.12
attributable to time periods before the Effective Time, and the Purchase Price
has been computed based upon the estimated underproduction attributable to the
Well described thereon. The Purchase Price will be adjusted to reflect the
actual volumes of underproduced gas as of the Effective Time in accordance
with Sections 2.05(b) and (c) below. Seller agrees to use its commercially
reasonable efforts in assisting Buyer in exercising gas volume makeup rights
with respect to such underproduced gas. Ad valorem taxes for 2004 will be
prorated on a daily basis, with Buyer liable for the portion allocated to the
period on and after the Effective Time and Seller liable for the portion
allocated to the period before the Effective Time. If the amount of such
taxes for part, or all, of the Assets is not available on the Closing Date,
proration of taxes shall be made on the basis of taxes assessed in the
previous year, with a subsequent cash adjustment of such proration to be made
between Seller and Buyer, when actual tax figures are available. The
"Preliminary Amount" will be the Purchase Price, adjusted as provided below,
based upon the best information available at time of Closing.
(b) The Purchase Price will be, without duplication,
(i) increased by the following amounts:
(A) the aggregate amount of all non-reimbursed Property
Costs which are attributable to the period from the Effective Time to the
Closing Date and which are incurred and paid by Seller with respect to the
Xxxxx and Subject Leases;
(B) an amount equal to the agreed value of all
Hydrocarbons in storage above the pipeline connection at the Effective Time
that is credited to the Xxxxx and which stored Hydrocarbons have not been sold
by Seller or for which Seller has not been paid;
(C) the amount of any upward adjustment pursuant to
Section 11.04;
(D) any other upward adjustment mutually agreed upon by
the parties;
(ii) decreased by the following amounts:
(A) the aggregate amount of proceeds received by Seller
from the sale of Hydrocarbons produced from and attributable to the Xxxxx
between the Effective Time and the Closing Date;
(B) the amount of any downward adjustment relating to
Title Defects as set forth in Article 11;
(C) the amount of any adjustment relating to an uninsured
casualty as required by Section 11.09;
(D) Seller' s share of estimated ad valorem taxes through
the Effective Time; and
(E) the amount of any downward adjustment mutually agreed
upon by the parties.
(c) Subject to the arbitration provisions of Article 12.14 as to
adjustments under Section 2.05(b)(ii)(b), as soon as practicable after
Closing, but no later than ninety (90) days following the Closing Date, Seller
will prepare and submit to Buyer, a statement (the "Final Settlement
Statement") setting forth each adjustment or payment which was not finally
determined as of the Closing Date and showing the values used to determine
such adjustments to reflect the final adjusted Purchase Price (the "Final
Amount"). On or before thirty (30) days after receipt of the Final Settlement
Statement, Buyer will deliver to Seller a written report containing any
changes which Buyer proposes be made to the Final Settlement Statement.
Seller and Buyer shall undertake to agree with respect to the amounts due
pursuant to the post-closing adjustment no later than one hundred fifty (150)
days from the Closing Date. If Seller and Buyer are unable to agree within
one hundred fifty (150) days after the Closing Date as to adjustment matters
not subject to arbitration in accordance with this Agreement, Seller will
select an independent accounting firm in Corpus Christi, Texas, from a list of
three such firms provided by Buyer (none of which will be the independent
accounting firm regularly used by Buyer or Seller), which firm will audit the
Final Settlement Statement and determine the Purchase Price adjustment or
payment amount in accordance with the terms and conditions set forth in this
Agreement. The decision of such independent accounting firm will be binding
on Seller and Buyer, and the fees and expenses of such independent accounting
firm will be borne one-half by Seller and one-half by Buyer. The date upon
which such agreement is reached or upon which the Purchase Price is otherwise
established, as provided in the preceding sentence, will be called the
"Settlement Date." In the event that (a) the Final Amount is more than the
Preliminary Amount, Buyer will pay to Seller the amount of the difference; or
(b) the Final Amount is less than the Preliminary Amount, Seller will pay to
Buyer the amount of the difference. Such payment will be made within five (5)
business days of the Settlement Date via wire transfer to accounts specified
by Seller or Buyer as appropriate.
2.06 Assumption. If the Closing occurs, from and after the Closing
Date, Buyer will assume, pay, and discharge the following liabilities
("Assumed Liabilities"):
Any and all duties, claims, damages, expenses, fines, penalties, costs
(including attorneys' fees and expenses), liabilities, and obligations
(collectively the "Obligations") (i) arising from Buyer's ownership or
operation of the Assets and occurring on or after the Effective Time under any
Contract, Governmental Authorization, or Subject Lease relating to the Assets,
(ii) imposed by any Legal Requirement relating to the Assets, (iii) for
plugging, abandonment, and surface restoration of the oil, gas, injection,
water, or other xxxxx located on the lands covered by the Subject Leases, (iv)
from any act, omission, event, condition, or occurrence subsequent to the
Effective Time relating to the Assets, and (v) attributable to all
Environmental Liabilities relating to the Assets; provided, however, the
provisions of this Section 2.06 will not relieve Seller from liability
resulting from a Breach, if any, of its representations, warranties or
covenants under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller, severally as to its respective interest and not jointly,
represents and warrants to Buyer as follows:
3.01 Organization and Good Standing. Manti Resources, Inc. and Manti
Operating Company are Texas corporations, Manti Caballos Creek, LTD. and Manti
Opossum Hollow, LTD., are Texas Limited Partnerships, J&P Oil and Gas, Inc. is
a Texas Corporation, Lara Energy, Inc., is a Texas Corporation, and SofRoc
Fuel Co. is a Texas Corporation, duly organized, validly existing, and in good
standing under the laws of its state of organization and every state in which
it is qualified to do business, with full corporate power and authority to
conduct its business as it is now being conducted, and to own or use the
properties and assets that it purports to own or use. Seller is not a
"foreign person" for purposes of Section 1445 or Section 7701 of the IRC.
3.02 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its terms.
Upon the execution and delivery by Seller of the Instruments of Conveyance and
any other documents executed and delivered by Seller at the Closing
(collectively, the "Seller's Closing Documents"), Seller's Closing Documents
will constitute the legal, valid, and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms. Except
as set forth in Part 3.02 of the Disclosure Schedule, Seller has the absolute
and unrestricted right, power, authority, and capacity to execute and deliver
this Agreement and Seller's Closing Documents, and to perform its obligations
under this Agreement and Seller's Closing Documents.
(b) Except as set forth in Part 3.02 of the Disclosure Schedule,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of Seller, or (B) any
resolution adopted by the board of directors or the stockholders of Seller;
(ii) contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right to challenge any of
the Contemplated Transactions or to exercise any remedy or obtain any relief
under, any contract or agreement or any Legal Requirement or Order to which
Seller, or any of the Assets, may be subject;
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental Body the right
to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that relates to the Assets;
(iv) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any Contract; or
(v) result in the imposition or creation of any Encumbrance
upon or with respect to any of the Assets.
(c) Part 3.02 of the Disclosure Schedule contains a complete list
of the Consents that are required to be obtained from third parties in order
to consummate the transactions contemplated by this Agreement. Except as set
forth in Part 3.02 of the Disclosure Schedule, Seller is not nor will be
required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions. If any
such consent is required, such consent shall be given in writing not less than
three (3) business days prior to Closing.
3.03 Bankruptcy. There are no bankruptcy, reorganization, or
arrangement proceedings being contemplated by Seller or pending or Threatened
against Seller.
3.04 Taxes. Seller has filed or caused to be filed all Tax Returns that
it has been or was required to file, either separately or as a member of a
consolidated group, pursuant to applicable Legal Requirements. All Tax
Returns filed by (or that include on a consolidated basis) Seller are true,
correct, and complete. Seller has paid all Taxes that have become due
pursuant to those Tax Returns or otherwise, or pursuant to any assessment
received by Seller, to the extent not being contested in good faith. Seller
does not have any Knowledge of any Threatened Tax assessment against it except
as disclosed in Part 3.05 of the Disclosure Schedule.
3.05 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.05 of the Disclosure Schedule,
there is no pending Proceeding:
(i) that relates to or may affect any of the Assets; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions.
(b) Except as set forth in Part 3.05 of the Disclosure Schedule, to
Seller's Knowledge (1) no Proceeding of the type referenced in Section 3.05
(a) has been Threatened, (2) no event has occurred nor does any circumstance
exist that may give rise to or serve as a basis for the commencement of any
such Proceeding, and (3) no basis exists for any claim by any employee of
Seller under any Legal Requirement for which Buyer could become liable as a
successor or otherwise.
(c) Except as set forth in Part 3.05 of the Disclosure Schedule,
there is no Order relating to the use or ownership of the Assets to which
Seller, or any of the Assets, is subject.
3.06 Environmental. To the Knowledge of Seller, there are no Violations
of Environmental Laws that arise from events occurring during the period
Seller owned the affected Assets, which have not been corrected or remediated
under the requirements of any Governmental Body having jurisdiction, and to
the Knowledge of Seller, there are no Environmental Liabilities that arise
from events occurring prior to Seller's ownership of the Assets.
There are no environmental investigations, studies or audits with respect
to any of the Assets owned or commissioned by, or in the possession of, Seller
or Affiliates which have not been disclosed in writing to Buyer.
3.07 Personal Property. To the extent the Assets constitute personal
property or fixtures, Seller expressly disclaims and negates (a) any implied
or express warranty of merchantability, (b) any implied or express warranty of
fitness for a particular purpose, (c) any implied or express warranty of
conformity to models or samples of materials, and (d) any other warranty of
any nature, express or implied, except as expressly provided herein, and are
to be conveyed "As Is" And "Where Is", with All faults.
3.08 Title to Properties. On the Closing Date, Seller will convey to
Buyer Defensible Title to the Assets. Seller has delivered or made available
to Buyer all items in its possession which would be relevant in the
determination as to whether Seller has the ability to convey Defensible Title
to the Assets.
3.09 Brokers. Seller has not incurred any obligation or liability,
contingent or otherwise, for broker's or finder's fees with respect to the
transactions contemplated by this Agreement other than obligations which are
the sole responsibility of Seller.
3.10 Tax Sharing Agreements. There are no tax sharing agreements or any
other contract relating to the sharing or payment of any Tax.
3.11 Consents. Part 3.11 of the Disclosure Schedule sets forth all
consents and approvals which are required in order to consummate the
transactions contemplated hereunder.
3.12 Gas Imbalances, Prepayment Arrangements; Take-or-Pay. Except as
set forth on Part 3.12 of the Disclosure Schedule, there are no gas imbalances
between Seller and any third party working interest owners or gatherers or
transporters relative to the Assets, and Seller is not obligated by any gas
prepayment arrangement or by any take-or-pay requirement or by any other
financial penalty or payback obligation to deliver any gas at a future time
without then or thereafter receiving payment therefore.
3.13 Status of Leases. With respect to the oil, gas and/or mineral
leases comprising part of the Assets (i) to Seller's Knowledge, such leases
have been maintained according to their terms, in compliance with the
agreements to which such leases are subject; (ii) to Seller's Knowledge all
royalties (other than royalties held in suspense), delay rentals and other
payments due under such leases have been properly and timely paid and all
conditions necessary to keep such leases in force have been fully performed;
(iii) to Seller's Knowledge, except as shown on the Exhibits hereto, and
without expanding or enlarging any warranty of title given elsewhere herein,
such leases are presently in force and effect; and (iv) neither Seller nor, to
Seller's Knowledge, any other party to any such lease has received notice of
any claim or action seeking to terminate, cancel, rescind or procure a
judicial reformation of any such lease or any provisions thereof or seeking
the release of any such lease (or portion thereof) comprising any part of the
Assets.
3.14 Contracts. Exhibit B contains a list of all Contracts which Seller
believes to be material to the Assets. Seller has made available to Buyer
complete and correct copies of all Contracts listed on Exhibit B. Except as
set forth on Parts 3.02 and 3.14 of the Disclosure Schedule, Seller has
received no written notice of any threatened cancellation of any Contract nor
any outstanding disputes thereunder, and, assuming all required consents are
received, Seller has not and will not have breached any provision of, nor, to
Seller's Knowledge, does there exist any default under, or event, that is, or
with the giving of notice or the passage of time or both would become a breach
or default in respect under the terms of any Contract. The Contracts have
been duly executed by Seller, constitute valid and enforceable rights and
obligations of Seller, and are freely assignable without the consent of third
parties. Except as set forth on Part 3.14 of the Disclosure Schedule, there
are no gas purchase Contracts which may not be canceled by Seller upon ninety
(90) days notice to the other party.
3.15 Insurance. Schedule 3.15 contains a true and complete list of all
policies of insurance which are maintained by Sellers and which cover or
relate to any of the Assets and which would reasonably be expected to be the
basis for a claim made to an insurer contemplated by Section 11.09.
3.16 Accuracy of Disclosures. To Seller's Knowledge, all of the
information provided to Buyer directly by such Seller in connection with the
Contemplated Transaction is accurate and complete in all material respects
and, when taken in the aggregate, does not contain a misstatement of a
material fact or omit to state any material fact necessary to make the
statements made therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.01 Organization and Good Standing. Buyer is in good standing as a
foreign corporation under the laws of the State of Texas under the name "Delta
Exploration Company, Inc."
4.02 Authority; No Conflict.
(a) his Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Upon the execution and delivery by Buyer of the Instruments of Conveyance and
any other documents executed and delivered by Buyer at the Closing
(collectively, the "Buyer's Closing Documents"), the Buyer's Closing Documents
will constitute the legal, valid, and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms. Buyer has the
absolute and unrestricted right, power, and authority to execute and deliver
this Agreement and the Buyer's Closing Documents, and to perform its
obligations under this Agreement and the Buyer's Closing Documents.
(b) Except as disclosed to Buyer on Part 4.02 on the Disclosure
Schedule, neither the execution and delivery of this Agreement by Buyer nor
the consummation or performance of any of the Contemplated Transactions by
Buyer will give any Person the right to prevent, delay, or otherwise interfere
with any of the Contemplated Transactions.
(c) Except as disclosed to Buyer on Part 4.02 on the Disclosure
Schedule, Buyer is not and will not be required to give any notice to or
obtain any Consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.
4.03 Certain Proceedings. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has
been Threatened.
4.04 Knowledgeable Investor. Buyer is an experienced and knowledgeable
investor in the oil and gas business. Prior to entering into this Agreement,
Buyer was advised by its own legal, tax, and other professional counsel
concerning this Agreement, the Contemplated Transactions, the Assets and their
value, and it has relied solely thereon and the representations and
obligations of Sellers in this Agreement and the documents to be executed by
Sellers in connection with this Agreement at Closing. Buyer is acquiring the
Assets for its own account and not for distribution.
4.05 Securities Laws. The solicitation of offers and the sale of the
Assets by Sellers have not been registered under any securities laws. Buyer
represents that at no time has it been presented with or solicited by or
through any public promotion or any form of advertising in connection with
this transaction. Buyer represents that it intends to acquire the Assets for
its own benefit and account and that it is not acquiring the Assets with the
intent of distributing fractional, undivided interests that would be subject
to regulation by federal or state securities laws, and that if it sells,
transfers, or otherwise disposes of the Assets or fractional undivided
interest therein, it will do so in compliance with applicable federal and
state securities laws.
4.06 Due Diligence. Buyer represents that it has performed, or will
perform, before closing, sufficient review and due diligence with respect to
the Assets, which includes reviewing well data and other files in performing
necessary evaluations, assessments, and other tasks involved in evaluating the
Assets to satisfy its requirements completely and to enable it to make an
informed decision to acquire the Assets under the terms of this Agreement.
4.07 Basis of Buyer's Decision. Buyer represents that by reason of its
knowledge and experience in the evaluation, acquisition and operation of oil
and gas properties, Buyer has evaluated the merits and the risks of purchasing
the Assets from Sellers and has formed an opinion based solely on Buyer's
knowledge and experience and not on any representations or warranties by
Sellers. Buyer represents that it has not relied and will not rely on any
statements by Sellers or their representatives in making its decision to enter
into this Agreement or to close this transaction.
4.08 Material Factor. Buyer acknowledges that Buyer's representations
under this Article are a material inducement to Sellers to enter into this
Agreement with, and close the Contemplated Transactions with Buyer.
ARTICLE 5
COVENANTS OF SELLER
5.01 Access and Investigation. Between the date of this Agreement and
the Closing Date, Seller will (a) afford Buyer and its Representatives
(collectively, "Buyer's Advisors") reasonable access to Seller's personnel,
properties, contracts, books and records, and other documents and data, (b)
furnish Buyer and Buyer's Advisors with copies of all such contracts, books
and records, and other existing documents and data as Buyer may reasonably
request, and (c) furnish Buyer and Buyer's Advisors with such additional
financial, operating, and other data and information as Buyer may reasonably
request; provided that, except as expressly provided herein, Seller makes no
warranty, and expressly disclaims all warranties as to the accuracy or
completeness of the documents, information, books, records, files and other
pertinent data that it may provide to Buyer.
5.02 Operation of the Assets. Between the date of this Agreement and
the Closing Date, Seller will conduct the business relating to the Assets only
in the Ordinary Course of Business. By way of example, and not as a
limitation, during such period, Sellers will use commercially reasonable
efforts to:
(a) maintain the Assets and operate the Assets or cause the Assets
to be operated in the Ordinary Course of Business;
(b) pay or cause to be paid all bonuses and rentals, royalties,
overriding royalties, shut-in royalties, and minimum royalties and development
and operating expenses, current taxes and other payments incurred with respect
to the Assets except royalties held in suspense as a result of title issues
and that do not give any third party a right to cancel an interest in an Asset
and except for expenses being contested in good faith and for which adequate
reserves have been provided;
(c) maintain the personal property comprising part of the Assets in
at least as good a condition as it is on the date hereof, subject to ordinary
wear and tear; and,
(d) safeguard and maintain confidential all records of a nonpublic
nature (including without limitation geological and geophysical data and maps
and interpretations thereof) that relate to the Assets.
Similarly, between the date of this Agreement and Closing, Seller will
not, except in the Ordinary Course of Business:
(a) take any action that would cause its representations or
warranties to be materially incorrect as of the Closing Date;
(b) abandon any Asset (except the abandonment of producing leases
not capable of producing in paying quantities after the expiration of their
primary terms and having secured consent to such abandonment from Buyer);
(c) commence, propose, or agree to participate in any single
operation with respect to the Xxxxx or Subject Leases with an anticipated cost
in excess of $25,000 without notice to Buyer, except for emergency operations;
(d) elect to participate in any single operation proposed by a
third party with respect to the Xxxxx or Subject Leases with an anticipated
cost in excess of $25,000 without notice to Buyer, except for emergency
operations;
(e) terminate or materially amend or modify any Contract set forth
on the Disclosure Schedule;
(f) waive any right of material value under any Contract set forth
on the Exhibit B or relating to the Xxxxx;
(g) sell, lease, encumber or otherwise dispose of all or any
portion of any Assets except sales of Hydrocarbons in the Ordinary Course of
Business; or
(h) enter into any new production sales, processing, gathering or
transportation agreement with respect to the Xxxxx not terminable at will
without penalty by Buyer after Closing on thirty (30) days notice or less.
5.03 Insurance. Sellers will maintain in force until the Closing all of
Sellers' general liability, workers compensation, auto liability and well
control insurance policies covering the Assets (provided that the costs of
such insurance will constitute Property Costs.)
5.04 Consent and Waivers. Sellers agree to use commercially reasonable
efforts to obtain prior to Closing waivers of all preferential rights to
purchase and all waivers and Consents necessary for the transfer of the Assets
to Buyer.
5.05 Notification. Between the date of this Agreement and the Closing
Date, Sellers will promptly notify Buyer in writing if Sellers become aware of
any fact or condition that causes or constitutes a Breach of any of Seller's
representations and warranties as of the date of this Agreement, or if Seller
becomes aware of the occurrence after the date of this Agreement of any fact
or condition that would (except as expressly contemplated by this Agreement)
cause or constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Should any such fact or condition require any
change in the Disclosure Schedule if the Disclosure Schedule were dated the
date of the occurrence or discovery of any such fact or condition, Sellers
will promptly deliver to Buyer a supplement to the Disclosure Schedule
specifying such change. During the same period, Sellers will promptly notify
Buyer of the occurrence of any Breach of any covenant of Sellers in this
Article 5 or of the occurrence of any event that may make the satisfaction of
the conditions in Article 7 impossible or unlikely.
5.06 Satisfaction of Conditions. Between the date of this Agreement and
the Closing Date, Sellers will use commercially reasonable efforts to cause
the conditions in Article 7 to be satisfied.
ARTICLE 6
COVENANTS OF BUYER
6.01 Notification. Between the date of this Agreement and the Closing
Date, Buyer will promptly notify Sellers in writing if Buyer becomes aware of
any fact or condition that causes or constitutes a Breach of any of Buyer's
representations and warranties as of the date of this Agreement, or if such
Buyer becomes aware of the occurrence after the date of this Agreement of any
fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such representation or warranty
had such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition require
any change in the Disclosure Schedule if the Disclosure Schedule were dated
the date of the occurrence or discovery of any such fact or condition, Buyer
will promptly deliver to Sellers a supplement to the Disclosure Schedule
specifying such change. During the same period, Buyer will promptly notify
Sellers of the occurrence of any Breach of any covenant of Buyer in this
Article 6 or of the occurrence of any event that may make the satisfaction of
the conditions in Article 8 impossible or unlikely.
6.02 Satisfaction of Conditions. Between the date of this Agreement and
the Closing Date, Buyer will use commercially reasonable efforts to cause the
conditions in Article 8 to be satisfied.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Assets and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Buyer, in whole or in part):
7.01 Accuracy of Representations. All of Sellers' representations and
warranties in this Agreement (considered collectively) must have been accurate
in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the Disclosure
Schedule.
7.02 Seller's Performance.
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively) must have been duly performed and complied
with in all material respects.
(b) Seller must deliver, or be prepared to deliver, each document
required to be delivered by it pursuant to Section 2.04.
7.03 No Proceedings. Since the date of this Agreement, there must not
have been commenced or Threatened against Sellers, or against any Affiliates
thereof, any Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated Transactions, or (b)
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the assets and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Seller, in whole or in part):
8.01 Accuracy of Representations. All of Buyer's representations and
warranties in this Agreement (considered collectively) must have been accurate
in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the Disclosure
Schedule.
8.02 Buyer's Performance.
(a) All of the covenants and obligations that Buyers are required
to perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively) must have been duly performed and complied
with in all material respects.
(b) Buyer must deliver, or be prepared to deliver, each document
required to be delivered by it pursuant to Section 2.04.
8.03 No Proceedings. Since the date of this Agreement, there must not
have been commenced or Threatened against Buyer, or against any Affiliates
thereof, any Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated Transactions, or (b)
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
ARTICLE 9
TERMINATION
9.01 Termination Events. This Agreement may, by written notice given
prior to or at the Closing, be terminated:
(a) by either Buyer or Seller if a material Breach of any provision
of this Agreement has been committed by the other party and such Breach has
not been waived or cured;
(b) by mutual consent of Buyer and Seller;
(c) by either Buyer or Seller if the Closing has not occurred
(other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before January 31, 2005, or such later date as the parties may agree upon in
writing;
(d) by Buyer if the conditions in Article 7 have not been satisfied
on or before Closing;
(e) by a Seller if the conditions in Article 8 have not been
satisfied on or before Closing; or
(f) as provided in Article 11.
9.02 Effect of Termination. Each party's rights of termination under
Article 11 are in addition to the rights it may have under this Article 9. If
this Agreement is terminated pursuant to Section 9.01, all further obligations
of the parties under this Agreement will terminate, but such termination will
not impair nor restrict the rights of either party against the other under
Article 10 or under Section 2.02 regarding reimbursement or retention of the
Deposit Amount.
ARTICLE 10
INDEMNIFICATION; REMEDIES
10.01 Survival. Subject to Section 10.04, all representations,
warranties, covenants, and obligations in this Agreement, the Disclosure
Schedule, the certificates delivered pursuant to Section 2.04, and any other
certificate or document delivered pursuant to this Agreement will survive the
Closing, except to the extent of any written waiver signed by the waiving
party.
10.02 Indemnification and Payment of Damages by Seller. Except as
otherwise limited in this Article 10, each Seller, severally as its interest
may appear and not jointly, will indemnify and hold harmless Buyer and its
respective Representatives, stockholders, controlling persons, directors,
officers, and affiliates (collectively, the "Buyer Indemnified Persons") for,
and will pay to the Buyer Indemnified Persons the amount of any Damages
arising from:
(a) any Breach of any representation or warranty made by Seller in
this Agreement, or in any certificate delivered by such Seller pursuant to
this Agreement;
(b) any Breach by Seller of any covenant or obligation of Seller in
this Agreement;
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with Seller (or any Person acting
on its behalf) in connection with any of the Contemplated Transactions;
(d) if Closing occurs, the use, ownership or operation of the
Assets by Seller prior to the Effective Time, except to the extent assumed by
Buyer as Assumed Liabilities; or
(e) failure to disclose material obligations, defects or
liabilities relating to the Assets that are within Seller's Knowledge.
Except for Buyer's termination rights under Articles 9 and 11 of this
Agreement, the remedies provided in this Article 10 (if Closing occurs) and
Section 2.02 (if Closing does not occur) are Buyer's and Buyer Indemnified
Persons' exclusive remedies for Seller's Breaches.
10.03 Indemnification and Payment of Damages by Buyer. Except as
otherwise limited in this Article 10, Buyer will indemnify and hold harmless
Seller and its Representatives, stockholders, controlling persons, directors,
officers, and affiliates (collectively, the "Seller Indemnified Persons"), and
will pay to Seller Indemnified Persons the amount of any Damages arising from:
(a) any Breach of any representation or warranty made by Buyer in
this Agreement or in any certificate delivered by Buyer pursuant to this
Agreement;
(b) any Breach by Buyer of any covenant or obligation of Buyer in
this Agreement;
(c) any loss, liability, claim, damage or suit which any of Buyer's
employees or agents or their heirs, executors, or assigns may assert against
Seller, based upon injury to person, including death or to property, arising
in any manner whatsoever from any inspections of Sellers' property prior to
Closing, whether or not based upon strict liability or caused by the sole or
concurrent negligence (whether active or passive) of Sellers, or any person or
entity, unless such injury was occasioned by the gross negligence or
intentional tort of Sellers or any officer, director, or employee or agent
thereof; provided that Sellers agree to indemnify, release and hold Buyer
harmless for any damage to the facilities and/or equipment of Sellers that
occurs during such inspection so long as such inspection is made under the
supervision of a Sellers' employee or agent physically at the location when
and where the damage occurs;
(d) if Closing occurs, the use, ownership, or operation of the
Assets after the Effective Time;
(e) if Closing occurs, the Assumed Liabilities.
Except for Sellers' termination rights under Article 9 and Article 11 of
this Agreement, the remedies provided in this Article 10 (if Closing occurs)
and Section 2.02 (if Closing does not occur) are Seller's and Seller's
Indemnified Persons' exclusive remedies for Buyer's Breaches.
10.04 Time Limitations. Seller will have no liability (for
indemnification or otherwise) with respect to any representation or warranty,
or covenant or obligation to be performed and complied with prior to the
Closing Date, unless on or before one (1) year from the Closing Date, Buyer
notifies Seller of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known by Buyer.
10.05 Limitations on Amount--Seller. If the Closing occurs, Seller will
have no liability under Section 10.02 until the total of all Damages
indemnified thereunder exceeds $100,000, and then Seller will be liable for
the entire amount of such Damages.
10.06 Limitations on Amount--Buyer. If the Closing occurs, Buyer will
have no liability under Section 10.03 until the total of all Damages
indemnified thereunder exceeds $100,000, and then Buyer will be liable for the
entire amount of such Damages.
10.07 Procedure for Indemnification--Third Party Claims.
(a) Promptly after receipt by an indemnified party under Section
10.02 or 10.03 of a claim for Damages or notice of the commencement of any
Proceeding against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim.
(b) If any Proceeding referred to in Section 10.07(a) is brought
against an indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will be entitled
to participate in such Proceeding and, to the extent that it wishes (unless
(i) the indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial capacity to defend such
Proceeding and provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding,
the indemnifying party will not, as long as it diligently conducts such
defense, be liable to the indemnified party under this Article 10 for any fees
of other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding. If the indemnifying party
assumes the defense of a Proceeding, no compromise or settlement of such
claims may be effected by the indemnifying party without the indemnified
party's consent unless (A) there is no finding or admission of any violation
of Legal Requirements or any violation of the rights of any Person and no
effect on any other claims that may be made against the indemnified party, and
(B) the sole relief provided is monetary damages that are paid in full by the
indemnifying party; and (C) the indemnified party will have no liability with
respect to any compromise or settlement of such claims effected without its
consent.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding,
but the indemnifying party will not be bound by any determination of a
Proceeding so defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
10.08 Procedure for Indemnification--Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
10.09 Extent of Representations and Warranties.
(a) Except as and to the extent expressly set forth in this
Agreement, Seller makes no representations or warranties whatsoever, and
disclaim all liability and responsibility for any representation, warranty,
statement or information made or communicated (orally or in writing) to Buyer
(including any opinion, information or advice which may have been provided to
Buyer by any affiliate, officer, director, stockholder, partner, employee,
agent, consultant or representative of Seller or by any investment bank or
investment banking firm, any petroleum engineer or engineering firm, Seller's
counsel or any other agent, consultant or representative). Without limiting
the generality of the foregoing, except as and to the extent expressly set
forth in this Agreement, Seller expressly disclaim and negate any
representation or warranty, express, implied, at common law, by statute, or
otherwise relating to (a) the title to any of the Assets except that Seller
expressly warrant that the subject leases are free and clear of all liens,
security interests, encumbrances or defects in title, except Permitted
Encumbrances, (b) the condition of the Assets (including without limitation,
any implied or express warranty Of merchantability, of fitness for a
particular purpose, or of conformity to models or samples of materials), it
being distinctly understood the Assets are being sold "As Is", "Where Is" and
"With All Faults As To All Matters", (c) any infringement by Seller of any
patent or proprietary right of any third party (d) any information, data or
other materials (written or oral) furnished to Buyer on behalf of Seller
(including without limitation, in respect of geological and engineering data,
the existence or extent of oil, gas or the mineral reserves, the
recoverability of such reserves, any product pricing assumptions, and the
ability to sell oil or gas production after Closing), and (e) the
environmental condition and other condition of the Assets and any potential
liability arising from or related to the Assets.
(b) Buyer acknowledges and affirms that it has had full access to
information with respect to the Assets, and that Buyer has made its own
independent investigation, analysis and evaluation of the Contemplated
Transactions (including Buyer's own estimate and appraisal of the extent and
value of Seller's Hydrocarbon reserves attributable to the Assets and an
independent assessment and appraisal of the environmental risks associated
with the acquisition of the Assets). Buyer hereby irrevocably covenants to
refrain from, directly or indirectly, asserting any claim, or commencing,
instituting or causing to be commenced, any Proceeding of any kind against a
Seller, or Affiliate thereof, alleging facts contrary to the foregoing
acknowledgement and affirmation.
10.10 Compliance With Express Negligence Test. The parties agree that
the obligations of the indemnifying party to indemnify the indemnified party
will be without regard to the negligence or strict liability of the
indemnified party, whether the negligence or strict liability is active,
passive, joint, concurrent or sole. The foregoing is a specifically bargained
for allocation of risk among the parties, which the parties agree and
acknowledge satisfies the express negligence rule and conspicuousness
requirement under Texas law.
10.11 Limitations of Liability. Except in the event of fraud, neither
Seller nor Buyer shall ever be liable to the other for any consequential,
special, indirect, exemplary or punitive Damages relating to or arising out of
the Contemplated Transactions or the Assets, except as expressly provided in
this Article.
ARTICLE 11
TITLE MATTERS AND ENVIRONMENTAL MATTERS
11.01 Title Examination and Access. Buyer may make or cause to be made
at its expense such examination as it may desire of the title of Seller to the
Assets. For such purposes, Seller will (a) give to Buyer and to the
employees, consultants, independent contractors, attorneys and other advisers
of Buyer full access at any reasonable time to all of the files, records,
contracts, correspondence, computer output and data files, maps, data,
reports, plats, abstracts of title, lease files, well files, unit files,
division order files, production marketing files, title opinions, title files
and title records, title insurance policies, ownership maps, surveys and any
other information, data, records and files which Seller may have (or have
access to) relating in any way to the title to the Assets, the past or present
operation thereof and the marketing of production therefrom; (b) furnish to
Buyer all other information in the possession of or available to Seller with
respect to the title to the Assets as Buyer may from time to time reasonably
request, except to the extent that (i) Seller is prohibited therefrom by any
agreement or contract to which they are a party or of which they are a
beneficiary, and (ii) the same constitute interpretations made by Seller which
they deem confidential or proprietary and which relate to other properties
owned by Seller; and (c) authorize Buyer and its representatives to consult
with attorneys, abstract companies and other consultants or independent
contractors of Seller, whether utilized in the past or presently, concerning
title-related matters with respect to the Assets. Seller will advise Buyer of
any restrictions or constraints on the right of Seller to provide and disclose
to Buyer all data and information herein provided, and Buyer will have the
right and power to attempt to remove such restrictions and constraints.
11.02 Defensible Title. On the Closing Date, each Seller will convey to
Buyer Defensible Title to such Seller's interest in the Assets. As used
herein the term "Defensible Title" will mean, as to such Seller's interest in
the Assets, that title which:
Entitles Seller, as to the Xxxxx described on Exhibit A to receive
not less than the interests set forth in such Exhibit as the respective "Net
Revenue Interests", of all Hydrocarbons produced, saved and marketed
therefrom, through the plugging, abandonment and salvage of such Xxxxx, except
for any decrease (i) caused by orders of the appropriate regulatory body
having jurisdiction over the Xxxxx that are promulgated after the Effective
Time that concern pooling, unitization, communization or spacing matters, (ii)
caused by Buyer, its successors or assigns; or (iii) arising from operation of
any Contract proportionately assigned to Buyer hereby.
Obligates Seller, as to the Xxxxx described on Exhibit A to bear not
more than the respective percentages designated as the "Working Interests" set
forth in such Exhibits of the costs and expenses relating to the maintenance,
development and operation of the said Xxxxx, through the plugging, abandonment
and salvage of such Xxxxx, except for any increase (i) caused by Buyer, its
successors and assigns, (ii) that also results in the Net Revenue Interest
associated with the Well being proportionately increased, or (iii) caused by
orders of the appropriate regulatory agency having jurisdiction over the Xxxxx
that are promulgated after the Effective Time that concern pooling,
unitization, communization or spacing matters;
Constitutes all of Seller's right, title and interest in and to
leasehold estate and working interest in and to all of the Assets (expressly
excluding any overriding royalty interests therein in favor of a Seller, which
are expressly reserved herefrom); and
Is free and clear of all Encumbrances except for Permitted
Encumbrances.
11.03 Title Defects. On or before five (5) days before Closing, Buyer
will notify Seller in writing of any matter affecting the Assets which in the
opinion of Buyer would not give Buyer Defensible Title, in accordance with
Section 11.02 hereof, and the Allocated Value of each such title defect (all
of which are herein called the "Title Defects"). Seller will thereupon have
the right but not the obligation to attempt to cure the Title Defects at their
expense on or before the Closing Date. If Seller elects not to cure the Title
Defects or the Title Defects cannot be cured or removed to the satisfaction of
Buyer on or before the Closing Date, Buyer may elect in writing (a) to waive
the uncured Title Defects or (b) to eliminate that portion of the Assets
affected by the Title Defects from the purchase and sale hereunder, in which
event the Purchase Price specified in Section 2.02 will be reduced by the
Allocated Value of the portion thereof so excluded; provided, however, that
the Purchase Price will not be adjusted pursuant to this Section 11.03(b)
until the aggregate amount of the value of the Title Defects exceeds $10,000
and then to the full extent of such value. Any Title Defects which are not
objected to by Buyer on or before five (5) days before Closing will be deemed
waived by the Buyer and to be Permitted Encumbrances.
11.04 Adjustments. If only a portion of any of the Assets is affected
by Title Defects, Buyer may elect to accept said Assets and pay a reduced
Purchase Price based upon the percentage loss of the affected Assets and the
Purchase Price will be adjusted by deducting the value of such Title Defect
from the Allocated Value of such Asset. If it is determined prior to Closing,
by the Seller or Buyer, that Seller's net revenue interest in any of the Xxxxx
is greater than represented herein, the Xxxxx will be increased by a
proportionate adjustment based upon the Allocated Value of such Producing
Properties, taking into account the relative increase in the expense bearing
working interest, if any, associated with the increased net revenue interest.
11.05 Environmental Audit. Buyer may, at its option, cause an
environmental audit of the Assets to be conducted until five (5) days prior to
Closing ("Examination Period"). Provided that, buyer will repair any damage
to the properties of sellers resulting from its inspection of such properties,
and buyer will indemnify, defend (including reasonable attorneys' fees) and
hold Sellers harmless from and against any and all losses, costs, damages,
obligations, claims, liabilities, expenses or causes of action (collectively
the "Claims") arising from such inspections, including without limitation
claims for personal injury, death, property damage and liens for services
provided, in each instance, excluding claims resulting from the negligence or
strict liability of Sellers or their respective officers, employees, and
agents. Buyer will notify Sellers in writing (the "Environmental Notice") on
or before 5:00 p.m. (Central Standard Time) not later than the end of the
Examination Period of any environmental matters disclosed by such audit or
with respect to which Buyer otherwise has knowledge, that Buyer reasonably
believes in good faith may constitute a Violation of Environmental Laws,
including with such notice a reasonably detailed description of the specific
matter that is an alleged Violation of Environmental Laws. Upon receipt of
the Environmental Notice, Seller will have the right, but not the obligation,
to attempt to cure the applicable environmental liabilities attributable to
the Violations of Environmental Laws prior to Closing. Seller's consideration
of, or election to proceed with, any of the remedies hereunder will not be
deemed to be an admission by any Person with respect to the occurrence of any
Violation of Environmental Law or any violation of any other Legal
Requirement.
11.06 Remedies For Violations Of Environmental Laws. In the event that
any Violation of Environmental Law is not expressly waived by Buyer or cured
by Seller on or before the Closing, the following provisions will apply:
(a) If, in Buyer's reasonable good faith estimate, the aggregate
amount to cure all Violations of Environmental Law described in the
Environmental Notice (collectively, the "Defect Amount") is $100,000 or less,
Buyer will proceed to Closing in accordance with the remaining provisions
hereby and such Violations of Environmental Law will be deemed waived.
(b) If, in Buyer's reasonable good faith estimate, the Defect
Amount is more than $100,000 but less than five percent (5%) of the Purchase
Price, Buyer will reduce the Purchase Price by an amount equal to the cost to
cure the Violations of Environmental Law and proceed to Closing.
(c) If, in Buyer's reasonable good faith estimate, the Defect
Amount is more than five percent (5%) of the Purchase Price, then either Buyer
or Seller may elect to terminate this Agreement.
11.07 Right of Termination. If the adjustments to the Purchase Price
pursuant to Sections 11.03, 11.04 and 11.06 in the aggregate exceed ten
percent (10%) of the Purchase Price, either party may terminate this Agreement
by written notice to the other prior to the Closing Date, in which case
neither party will have any liability to the other except as otherwise set
forth in this Agreement.
11.08 Disputes. If the parties are unable to agree as to (a) whether a
particular matter constitutes a Title Defect or Violation of Environmental
Law; (b) the portion of the Assets affected by the Title Defect or Defect
Amount; or (c) the appropriate reduction in the Purchase Price to be made upon
elimination from this transaction of the portion of the Assets affected by the
Title Defect or Defect Amount; then in those events if Closing occurs the
amount of Sellers' estimate of the value of asserted Title Defects and Defect
Amount will be used to adjust the Purchase Price in accordance with Article 2
for purposes of Closing, provided, that Sellers' estimate will be consistent
with the Allocated Values set forth on the Exhibits attached hereto. It is
further provided that, if the difference between Buyer's and Sellers'
estimates as to such amounts exceeds $100,000, Sellers may elect to terminate
this Agreement. If Closing occurs, such disagreement will be resolved after
Closing by arbitration in accordance with Section 12.14. In the event the
values of Title Defects and Defect Amount as estimated by Buyer are such that
Buyer believes it is entitled to refuse to close and Buyer elects to refuse to
close over Sellers' objection, such disagreement will be resolved by
arbitration in accordance with Section 12.14.
11.09 Casualty Loss and Condemnation.
(a) If after the date of execution of this Agreement and prior to
the Closing any part of the Assets is destroyed by fire or other casualty or
if any part of the Assets is taken in condemnation or under the right of
eminent domain or if proceedings for such purposes are pending or Threatened,
this Agreement will remain in full force and effect notwithstanding any such
destruction, taking, proceeding, or threat.
(b) Except to the extent permitted or required pursuant to this
Agreement, after the date of execution of this Agreement, without Buyer's
prior consent, no insurance or condemnation proceeds will be committed or
applied by Seller prior to the Closing Date to repair, restore, or replace a
damaged or taken portion of the Assets if the cost to repair, restore, or
replace a damaged or taken portion of the Assets is projected to exceed
$25,000. To the extent such proceeds are not committed or applied by Seller
prior to the Closing Date in accordance with this Section 11.07(b), Seller
will at the Closing pay to Buyer all sums paid to Seller by reason of such
destruction or taking, less any reasonable costs and expenses incurred by
Seller in collecting such proceeds. In addition and to the extent such
proceeds have not been committed or applied by Seller in accordance with this
Section 11.07(b), in such repair, restoration, or replacement, Seller will
transfer to Buyer, at Closing, without recourse against Seller, all of the
right, title, and interest of Seller in and to any unpaid insurance or
condemnation proceeds arising out of such destruction or taking, less any
reasonable costs and expenses incurred by Seller in collecting such proceeds.
Any such funds which have been committed by Seller for repair, restoration, or
replacement as aforesaid will be paid by Seller for such purposes or, at
Seller's option, delivered to Buyer upon Seller's receipt from Buyer of
adequate assurance and indemnity that Seller will incur no liability or
expense as a result of such commitment.
(c) If and to the extent a casualty occurring after the date of
execution of this Agreement and before Closing is not covered by insurance,
Buyer and Seller will attempt to agree on the value of the uninsured casualty
on or before the date five (5) days after Buyer receives written notice of the
casualty. If the parties are not able to agree on such value within such
5-day period, the value will be determined by an independent casualty
adjuster, experienced in determining casualty losses in matters similar to the
disputed casualty loss, who will be selected by Seller from a list of three
(3) such independent casualty adjusters that is provided to Seller by the
Buyer. Said independent casualty adjuster will be selected by Seller within
five (5) days of the written receipt by Seller of Buyer's written listing of
independent casualty adjusters and will provide both Seller and Buyer with a
complete and documented report as to his findings within ten (10) business
days of being selected by Seller.
For purposes of this Section, the value of the uninsured casualty will be
equal to the lesser of (i) the aggregate reduction in Allocated Value of the
affected portion of the Assets resulting from the uninsured casualty, or (ii)
the amount required to repair the affected portion of the Assets to its
condition immediately preceding the occurrence of the casualty. The Purchase
Price will be reduced by the amount of the value of such an uninsured casualty
as finally determined pursuant to this Section, and if such final
determination is not available on the scheduled Closing Date, Closing will not
be delayed, but rather, such Purchase Price reduction will be a part of the
final adjustments to be made after Closing as contemplated by Section 2.05;
provided, however if the amount of the value of such uninsured casualty is
more than five percent (5%) of the Purchase Price, then Buyer may elect to
terminate this Agreement.
ARTICLE 12
GENERAL PROVISIONS
12.01 Expenses. Except as otherwise expressly provided in this
Agreement each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of
this Agreement and the Contemplated Transactions, including all fees and
expenses of agents, representatives, counsel, and accountants.
12.02 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a
copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other addresses
and telecopier numbers as a party may designate by notice to the other
parties):
Buyer: Delta Petroleum Corporation
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx, President
with a copy to: Xxxxxxx X. Xxxxxxxx, Esq.
Xxxx Xxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 0000 Xxxxx
Xxxxxx, Xxxxxxxx 00000
Seller: Manti Resources, Inc., Manti Operating Company Inc.,
Manti Caballos Creek, LTD., Manti Opossum Hollow, LTD.
Suite 2300 South Tower
000 Xxxxx Xxxxxxxxx Xxxx.
Xxxxxx Xxxxxxx, Xxxxx 00000
J & P Oil & Gas Inc.
X.X. Xxx 0000
Xxxxxx Xxxxxxx, Xxxxx 00000
Lara Energy, Inc.
000 Xxxxxxx, Xxxxx 0000
Xxxxxx Xxxxxxx, Xxxxx 00000
SofRoc Fuel Co.
X.X. Xxx 000
Xxxxxx, Xxxxx 00000-0000
with a copy to: Xxxxxx X. Xxxxxxxx, Xx.
Xxxxxxxx & Xxxxxxxxx, P.C.
000 X. Xxxxxxxxxx, Xxx. 0000
Xxxxxx Xxxxxxx, Xxxxx 00000-0000
12.03 Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of,
this Agreement or the Contemplated Transactions must be brought against any of
the parties in the courts of the State of Texas, County of Nueces, or, if it
has or can acquire jurisdiction, in the United States District Court for the
Southern District of Texas (Corpus Christi Division), and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue
laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
12.04 Further Assurances. The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each
other such other documents, and (c) to do such other acts and things, all as
the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
12.05 Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.
12.06 Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be charged with the
amendment. No representation, promise, inducement or statement of intention
with respect to the subject matter of this Agreement has been made by any
party which is not embodied in this Agreement together with the documents,
instruments and writings that are delivered pursuant hereto, and none of the
parties shall be bound by or liable for any alleged representation, promise,
inducement or statement of intention not so set forth.
12.07 Assignments, Successors, and No Third-Party Rights. Any party may
assign any of its rights under this Agreement provided that any such
assignment will not relieve such party of any of its obligations under this
Agreement without the prior consent of any other party. Subject to the
preceding sentences, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed
to give any Person other than the parties to this Agreement or any other
agreement contemplated herein, any legal or equitable right, remedy, or claim
under or with respect to this Agreement or any provision of this Agreement.
This Agreement, any other agreement contemplated herein, and all provisions
and conditions hereof and thereof are for the sole and exclusive benefit of
the parties to this Agreement and such other agreements, and their respective
successors and assigns.
12.08 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions
of this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.09 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
12.10 Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
12.11 Governing Law. This Agreement and the relationship of the parties
with respect to the Contemplated Transaction will be governed by the laws of
the State of Texas without regard to conflicts of laws principles.
12.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
12.13 Waiver Of Texas Deceptive Trade Practices - Consumer Protection
Act. Buyer's rights and remedies with respect to this transaction and with
respect to all acts or practices of Seller, past, present, or future, in
connection with this transaction will be governed by legal principles other
than the Texas Deceptive Trade Practices - Consumer Protection Act, V.C.T.A.
BUS & COMM Xxx. SS 17.41 et seq. (the "DTPA"), or any similar statute of any
jurisdiction that may be applicable to the transactions contemplated hereby.
Buyer hereby unconditionally waives the applicability of the DTPA, or any
similar statute, to this transaction and any and all rights, duties, or
remedies that might be imposed by the DTPA, or any similar statute, provided,
however, Buyer does not waive Section 17.555 of the DTPA. Buyer represents,
warrants, and acknowledges that it is purchasing the Assets for commercial or
business use. Buyer further acknowledges, represents, and warrants that Buyer
has knowledge and experience in financial and business matters that enables it
to evaluate the merits and the risks of a transaction such as this and that
Buyer is not in a significantly disparate bargaining position with Seller.
Buyer expressly acknowledges and recognizes that the price for which Seller
has agreed to sell the Assets and perform its obligations under the terms of
this Agreement has been predicated upon the inapplicability of the DTPA, or
any similar statute, and this waiver of the DTPA, and any similar statute, by
the Buyer. Buyer further recognizes that Seller, in determining To proceed
with entering into this Agreement, has expressly relied on the provisions of
this Section 12.13.
12.14 Arbitration. All disputes, controversies, or claims that may
arise among the parties relating to this Agreement will be submitted to, and
determined by, binding arbitration. The arbitration will be conducted before
a single arbitrator pursuant to the Commercial Arbitration Rules then in
effect of the American Arbitration Association. The arbitrator will apply the
laws of the State of Texas (without regard to conflict of law rules) to the
dispute, controversy, or claim. Evidentiary questions will be governed by the
Texas Rules of Evidence. The arbitrator's award will be in writing and shall
set forth findings and conclusions upon which the arbitrator based the award.
The prevailing party in the arbitration will be entitled to recover its
reasonable attorneys' fees, costs, and expenses incurred in connection with
the arbitration, as determined by the arbitrator. Any award pursuant to the
arbitration will be final and binding upon the parties and judgment on the
award may be entered in any federal or state court having jurisdiction. The
provisions of this Section will survive the termination of this Agreement.
Notwithstanding the foregoing, this Section will not prevent any party from
seeking injunctive relief from a court of competent jurisdiction under
appropriate circumstances, provided, however, such action will not constitute
a waiver of the provisions of this Section.
12.15 Tax Deferred Exchange. Each party has advised the other that it
may use the Assets in connection with a tax-deferred exchange described in
Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code").
Each party agrees to cooperate with the other and will execute such documents
as may reasonably be required by the requesting party ("Requesting Party")
both before and after Closing in order to effectuate such tax deferred
exchange or reinvestment, provided that the other party ("Cooperating Party")
will not assume any liability or cost in connection with the tax deferred
exchange or reinvestment, that the Cooperating Party will not be required to
receive record title to any other property in connection therewith and that
the tax deferred exchange or reinvestment shall not delay the Closing hereof.
The Requesting Party agrees to indemnify, defend and hold harmless the
Cooperating Party from and against any and all costs, expenses, claims,
damages, losses or liabilities (including, without limitation, reasonable
attorney fees and costs) incurred by the Cooperating Party in connection with
any exchange transaction or transactions or the performance by it of its
obligations in cooperating with the Requesting Party pursuant to this Section
12.15. Each party hereby reserves the right to assign their respective rights
(but not their obligations) hereunder to an intermediary party in connection
with such exchange. A party's inability to obtain any benefits for a tax
deferred exchange or reinvestment under Section 1031 of the Code will not
relieve such party of any of its obligations under this Agreement.
12.16 Press Release. Except as may be required by applicable law,
neither Buyer nor Seller will issue at or prior to Closing any publicity or
other press release without the prior written consent of the other party.
After Closing of the Contemplated Transactions, it is agreed that Buyer will
issue any and all such releases, and Seller will not do so without Buyer's
prior written consent.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
SELLER:
MANTI OPERATING COMPANY
By: /s/ Xxx Xxxxxxxxx
Name: Xxx Xxxxxxxxx
Title: Vice President
MANTI CABALLOS CREEK, LTD.
By: /s/ Xxx Xxxxxxxxx
Name: Xxx Xxxxxxxxx
Title: President
MANTI OPOSSUM HOLLOW, LTD.
By: /s/ Xxx Barerito
Name: Xxx Xxxxxxxxx
Title: President
MANTI RESOURCES, INC.
By: /s/ Xxx Barerito
Name: Xxx Xxxxxxxxx
Title: President
J&P OIL AND GAS, INC.
By: /s/ Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: President
LARA ENERGY, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
Name: Xxxx X. Xxxxx, Xx.
Title: Preident
SOFROC FUEL COMPANY
By: /s/ [illegible]
Name: SOF ROC Fuel Co.
Title: President
BUYER:
DELTA PETROLEUM CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman/Secretary
