PURCHASE AND SALE AGREEMENT between ENCANA OIL & GAS (USA) INC. AS SELLER AND KERR-MCGEE GATHERING LLC AS BUYER AND DATED JANUARY 14, 2011
Exhibit 2.1
Execution Copy
between
ENCANA OIL & GAS (USA) INC.
AS SELLER
AND
XXXX-XXXXX GATHERING LLC
AS BUYER
AS BUYER
AND
DATED JANUARY 14, 2011
TABLE OF CONTENTS
Page | ||||||
EXHIBIT LIST | v | |||||
RECITALS |
1 | |||||
ARTICLE I PURCHASE AND SALE | 1 | |||||
1.1 |
Purchase and Sale | 1 | ||||
1.2 |
The Assets | 1 | ||||
1.3 |
Excluded Assets | 3 | ||||
1.4 |
Effective Date | 5 | ||||
1.5 |
1031 Exchange | 5 | ||||
ARTICLE II PURCHASE PRICE | 5 | |||||
2.1 |
Purchase Price | 5 | ||||
2.2 |
Adjustments to Purchase Price | 5 | ||||
ARTICLE III BUYER’S INSPECTION | 8 | |||||
3.1 |
Access to Records | 8 | ||||
3.2 |
Disclaimer | 8 | ||||
3.3 |
Access to the Assets | 8 | ||||
ARTICLE IV TITLE MATTERS | 8 | |||||
4.1 |
No Title Warranty or Representation | 8 | ||||
4.2 |
Casualty Loss | 9 | ||||
4.3 |
Preferential Rights and Consents | 9 | ||||
ARTICLE V ENVIRONMENTAL MATTERS | 11 | |||||
5.1 |
Environmental Procedures | 11 | ||||
5.2 |
Contested Environmental Defects | 11 | ||||
5.3 |
Environmental Liabilities and Obligations | 12 | ||||
5.4 |
Definitions | 12 | ||||
5.5 |
Aristocrat, 100 Lateral, Xxxx, Comanche Creek and Xxxx Remediation | 15 | ||||
ARTICLE VI SELLER’S REPRESENTATIONS | 16 | |||||
6.1 |
Incorporation/Qualification | 16 | ||||
6.2 |
Power and Authority | 16 | ||||
6.3 |
No Lien, No Violation | 16 | ||||
6.4 |
Authorization and Enforceability | 16 | ||||
6.5 |
Liability for Brokers’ Fees | 17 | ||||
6.6 |
No Bankruptcy | 17 | ||||
6.7 |
Material Agreements | 17 | ||||
6.8 |
Litigation | 18 | ||||
6.9 |
Compliance with Laws | 18 | ||||
6.10 |
Regulatory Status | 18 | ||||
6.11 |
Governmental Authorizations | 18 | ||||
6.12 |
Capital and Expense Projects | 18 | ||||
6.13 |
Taxes | 19 | ||||
6.14 |
Absence of Certain Changes | 19 | ||||
6.15 |
Disclaimers | 19 |
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Page | ||||||
ARTICLE VII BUYER’S REPRESENTATIONS | 20 | |||||
7.1 |
Organization and Standing | 20 | ||||
7.2 |
Power | 20 | ||||
7.3 |
Authorization and Enforceability | 20 | ||||
7.4 |
Liability for Brokers’ Fees | 20 | ||||
7.5 |
Litigation | 20 | ||||
7.6 |
Securities Laws, Access to Data and Information | 20 | ||||
7.7 |
Financial Resources | 21 | ||||
7.8 |
Buyer’s Evaluation | 21 | ||||
ARTICLE VIII COVENANTS AND AGREEMENTS | 21 | |||||
8.1 |
Covenants and Agreements of Seller | 21 | ||||
8.2 |
Covenants and Agreements of Buyer | 22 | ||||
8.3 |
Covenants and Agreements of the Parties | 22 | ||||
ARTICLE IX TAX MATTERS | 23 | |||||
9.1 |
Apportionment of Tax Liability | 23 | ||||
9.2 |
Apportionment of Taxes/Purchase Price Adjustment | 24 | ||||
9.3 |
Tax Reports and Returns | 24 | ||||
9.4 |
Sales Taxes | 24 | ||||
9.5 |
Federal Tax Reporting | 24 | ||||
ARTICLE X CONDITIONS PRECEDENT TO CLOSING | 24 | |||||
10.1 |
Seller’s Conditions Precedent | 24 | ||||
10.2 |
Buyer’s Conditions Precedent | 25 | ||||
ARTICLE XI RIGHT OF TERMINATION | 25 | |||||
11.1 |
Termination | 25 | ||||
11.2 |
Termination Pursuant to Section 11.1 | 26 | ||||
11.3 |
Limitation on Damages | 26 | ||||
ARTICLE XII CLOSING | 26 | |||||
12.1 |
Date of Closing | 26 | ||||
12.2 |
Time and Place of Closing | 26 | ||||
12.3 |
Closing Obligations | 26 | ||||
ARTICLE XIII POST-CLOSING OBLIGATIONS | 28 | |||||
13.1 |
Post-Closing Adjustments | 28 | ||||
13.2 |
Records | 28 | ||||
13.3 |
Proceeds and Invoices For Property Expenses Received After the Final Settlement Date | 29 | ||||
13.4 |
Further Assurances | 29 | ||||
ARTICLE XIV ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION | 29 | |||||
14.1 |
Buyer’s Assumption of Liabilities and Obligations | 29 | ||||
14.2 |
Seller’s Retention of Liabilities and Obligations | 30 | ||||
14.3 |
Indemnification | 30 | ||||
14.4 |
Limitation on Seller’s Indemnity Obligations | 30 | ||||
14.5 |
Procedure | 31 | ||||
14.6 |
No Insurance; Subrogation | 33 | ||||
14.7 |
Reservation as to Non-Parties | 33 | ||||
ARTICLE XV MISCELLANEOUS | 33 |
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Page | ||||||
15.1 |
Expenses | 33 | ||||
15.2 |
Notices | 33 | ||||
15.3 |
Amendments | 34 | ||||
15.4 |
Assignment | 34 | ||||
15.5 |
Announcements | 34 | ||||
15.6 |
Counterparts/Fax Signatures | 35 | ||||
15.7 |
Governing Law | 35 | ||||
15.8 |
Entire Agreement | 35 | ||||
15.9 |
Knowledge | 35 | ||||
15.10 |
Binding Effect | 35 | ||||
15.11 |
Survival | 35 | ||||
15.12 |
No Third-Party Beneficiaries | 35 | ||||
15.13 |
Parent Guaranty | 35 |
iii
EXHIBIT LIST
EXHIBIT A
|
Easements | |
EXHIBITS B-1 to B-6
|
Gathering Systems | |
EXHIBIT B-7
|
Ft. Xxxxxx Plant | |
EXHIBIT C
|
Material Agreements | |
EXHIBIT D
|
Existing Claims and Litigation | |
EXHIBIT E
|
Capital and Expense Projects | |
EXHIBIT F
|
Assignment, Xxxx of Sale and Conveyance | |
EXHIBIT G
|
Buyer’s Officer Certificate | |
EXHIBIT H
|
Seller’s Officer Certificate | |
EXHIBIT I
|
Certificate of Non-Foreign Status | |
EXHIBIT K
|
License Agreement | |
EXHIBIT L
|
Access Agreement | |
EXHIBIT M
|
Royalty Information Agreement | |
EXHIBIT N
|
Transition Services Agreement |
SCHEDULE LIST
SCHEDULE 1.2(h)
|
Vehicles | |
SCHEDULE 1.2(i)
|
Form of Partial Assignment for Development Agreements | |
SCHEDULE 1.2(j)
|
Form of Partial Assignment for NGL Exchange Agreement and NGL Purchase Agreement | |
SCHEDULE 5.1
|
Form of Indemnity | |
SCHEDULE 6.9
|
Exceptions to Compliance with Laws |
iv
This Purchase and Sale Agreement (“Agreement”), dated January 14, 2011, is by and between
Encana Oil & Gas (USA) Inc., 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (“Seller”), and
Xxxx-XxXxx Gathering LLC, 0000 Xxxx Xxxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx 00000 (“Buyer”), a
wholly-owned subsidiary of Western Gas Partners, LP (“Parent”). Seller and Buyer may be referred
to individually as a “Party” or collectively as the “Parties.”
A. Seller owns and operates five natural gas gathering systems and related compression
facilities (the “Gathering Systems”) located in Xxxxx, Arapahoe, Boulder, Broomfield, Denver,
Xxxxxx, and Weld Counties, Colorado, as well as a natural gas processing plant known as the “Ft.
Xxxxxx Plant” located in Weld County, Colorado.
B. Buyer desires to purchase and Seller desires to sell and convey, the Assets (as defined in
this Agreement) pursuant to and in accordance with the terms and conditions of this Agreement.
C. Buyer has conducted an independent investigation of the nature and extent of the Assets and
desires to purchase the Assets.
D. Concurrent with the Closing (as defined in this Agreement) of the transaction contemplated
by this Agreement but effective as of the Effective Date, Seller and Buyer also will enter into a
Gas Gathering and Processing Agreement (the “Gas Gathering and Processing Agreement”) covering
Seller’s current and future gas production from the Denver-Julesberg area of northeastern Colorado.
E. Buyer and Seller wish to accomplish the foregoing, all pursuant to the terms of this
Agreement.
In consideration of the mutual promises, covenants and warranties contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Buyer and Seller agree as follows:
ARTICLE I
PURCHASE AND SALE
PURCHASE AND SALE
1.1 Purchase and Sale. Seller agrees to sell the Assets to Buyer and Buyer agrees to
purchase the Assets from Seller, pursuant to the terms of this Agreement.
1.2 The Assets. As used herein, the term “Assets” refers to all of Seller’s right,
title and interest in and to the following midstream assets located in Xxxxx, Arapahoe, Boulder,
Broomfield, Denver, Xxxxxx, and Weld Counties, Colorado:
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(a) The easements, rights of way, and surface use agreements, surface leases, and other
agreements to use the surface (subject to Section 1.3(a)(4) below) associated with the Gathering
Systems and the Ft. Xxxxxx Plant, including but not limited to those set forth on Exhibit A
(collectively, the “Easements”);
(b) A surface lease for the ten (10) acre fee property associated with the Third Creek
Compressor Station located at 00000 Xxxx 000xx Xxxxxx, Xxxxxx, Xxxxxxxx, also known as
XX/0, XX/0, Xxxxxxx 00, Xxxxxxxx 0X, Xxxxx 00X, in form to be reasonably agreed upon by the Parties
(the “Third Creek Property”);
(c) The Gathering Systems consisting of the Xxxx System, the Wattenberg System, the Third
Creek System, the Aristocrat System, and the Xxxxxx System, as described on Exhibit B-1 and
depicted on Exhibits X-0, X-0, X-0, X-0 and B-6, respectively, together with all facilities,
gathering lines, field compression cathodic protection equipment, meters, valves, fittings,
equipment, tanks, personal property and appurtenances located downstream of the inlet flange of
each Receipt Point (as such term is defined in the Gas Gathering and Processing Agreement) as of
the Effective Date (as defined in Section 1.4 below) and extending to the delivery point into
third-party pipelines or gathering systems or the Ft. Xxxxxx Plant, in each case used or held for
use (even if inactive or not currently in service) in ownership and operation of the Gathering
Systems;
(d) The Ft. Xxxxxx Plant, which includes, collectively, all equipment, compression facilities
and property associated therewith and as described on Exhibit B-6;
(e) All permits, licenses, sublicenses, certificates, approvals, consents, notices, waivers,
variances, franchises, registrations, orders, filings, accreditations, or other similar
authorizations required by any law or governmental entity or tribal authority or granted by any
governmental authority insofar as they relate to the Gathering Systems and the Ft. Xxxxxx Plant
(collectively, “Permits”), to the extent assignable;
(f) All existing and effective gathering contracts, processing contracts, gas purchase
contracts, facilities agreements, and other contracts, agreements and instruments, insofar as they
relate to the Gathering Systems and the Ft. Xxxxxx Plant, including without limitation, the
material agreements described in Exhibit C (the “Material Agreements”);
(g) Subject to Section 13.2, the files, records and data maintained by Seller and relating to
the Gathering Systems and Ft. Xxxxxx Plant (the “Records”);
(h) The vehicles and related equipment described on Schedule 1.2(h);
(i) The following agreements to the extent and only to the extent of Seller’s interest as
applicable to the Gathering Systems and/or Plant: that certain Settlement and Compatible
Development Surface Use Agreement entered into as of July 17, 2007 by and between Huran and I-25
Land, LLC, Kevamra, LLC, Broomfield Urban Renewal Authority, Xxxx-XxXxx Oil & Gas Onshore, LP and
EnCana Oil & Gas (USA) Inc.; and, that certain Well Abandonment Agreement entered into as of August
16, 2002 between Encana Energy Resources Inc., Community Development Group of Broomfield, LLC, Red
Leaf Development Company, Inc., Sweetgrass Investors, LLC and Dacono Properties, LLC (the
“Development Agreements”),
2
which shall be assigned to Buyer in the form of the Partial Assignment and Assumption
Agreement attached as Schedule 1.2(i);
(j) That certain Natural Gas Liquids Exchange Agreement entered into as of February 1, 2010,
by and between EnCana Marketing (USA) Inc. and Oneok Hydrocarbon, L.P. (the “NGL Exchange
Agreement”) and that certain Natural Gas Liquids Purchase Agreement dated January 1, 2010, by and
between Oneok Hydrocarbon, L.P. and EnCana Marketing (USA) Inc. (the “NGL Purchase Agreement”), to
the extent and only to the extent of the NGLs (as defined therein) owned or controlled by Buyer,
which shall be assigned to Buyer in the form of the Partial Assignment and Assumption Agreement
attached as Schedule 1.2(j); and
(k) The line pack associated with the Plant and Gathering Systems.
1.3 Excluded Assets. The Assets do not include, and there is hereby expressly
excepted and excluded therefrom and reserved to Seller, the Excluded Assets (defined below).
(a) The Excluded Assets are comprised of the following:
(1) Seller’s oil, gas and mineral leases and all xxxxx and other property and
equipment located on such leases except as specifically described in Section 1.2(a)
above;
(2) Seller’s share of the condensate collected from the Gathering Systems and
the Ft. Xxxxxx Plant as of the Effective Date (which condensate would be allocated to
Seller as of the Effective Date in accordance with the allocation procedures set
forth in the Gas Gathering and Processing Agreement);
(3) all production facilities located upstream of the inlet flange of the
Receipt Points (as such term is defined in the Gas Gathering and Processing
Agreement), including, without limitation, Seller’s oil and gas and water disposal
xxxxx;
(4) all real property of Seller, other than as set forth in Section 1.2(b),
relating to the Assets and owned in fee;
(5) Seller’s Wattenberg Plant site located at the following addresses: 1245 WCR
19 and 000 XXX 0, Xxxxxxxx, Xxxxxxxx 00000;
(6) Seller’s office located in Longmont, Colorado, and all equipment located in
or based from that office, including computers and cell phones;
(7) all rights to lay pipelines under the terms of an applicable oil and gas
lease (such access to be granted Buyer under the provisions of Section 12.3(j) and
Exhibit K of this Agreement);
(8) Seller’s SCADA system and all associated equipment and property including
software, communication equipment, radios and Permits, even
3
if connected to the Receipt Points, provided that Seller will provide
information to Buyer as required by the Transition Services Agreement to be entered
into between the Parties in connection with Closing in order to utilize Seller’s
SCADA system and associated assets until Buyer installs its own such system;
(9) Seller’s meters on Seller-operated xxxxx;
(10) all portable and hand-held equipment used by Seller’s staff for testing and
analyzing purposes, including the spill response trailer currently located at the Ft.
Xxxxxx Plant, FLIR cameras, analysis equipment used by integrity and measurement
technicians, and safety analysis equipment used by environmental coordinators;
(11) all software except as may be described in Section 1.2;
(12) gas lift systems and gas lift pipelines, if any;
(13) all rights and causes of action in favor of or against Seller arising,
occurring or existing prior to the Effective Date with respect to the Retained
Liabilities (as defined in Section 14.2 below) and the Excluded Assets including, but
not limited to, any and all contract rights, claims, receivables, revenues,
recoupment rights, recovery rights, and accounting adjustments, or other claims of
any nature in favor of Seller and relating or accruing to any time period prior to
the Effective Date;
(14) all corporate formation and governance, financial, and tax records of
Seller not involving or relating to the Assets or the business thereof, other than
the Records;
(15) all compressors related to the operation of Seller’s xxxxx upstream of the
Receipt Points;
(16) any refund or claim for refund of costs, Taxes (as defined in Section 9.1
below) or expenses borne by Seller attributable to the period prior to the Effective
Date;
(17) existing positive or negative imbalances, receiveables or claims related to
under- or over-xxxxxxxx in periods prior to the Closing (as defined in Section 12.1),
all of which shall be retained by Seller;
(18) all master service agreements and similar enabling agreements, whether or
not any work orders or attachments thereto relate to the Assets, unless specifically
listed on Exhibit C;
(19) all liquid sales and residue gas resale contracts, unless specifically
listed in Exhibit C;
4
(20) the following communication towers: (i) Xxxx Tower, (ii) Xxxxxx Tower,
(iii) Xxxxxxx Tower, (iv) Erie Tower, (v) 49 Tower, and (vi) Xxxxxxx Tower;
(21) the right to use Easements with respect to the Excluded Assets; and
(22) other assets of Seller that do not relate to the Gathering Systems, the Ft.
Xxxxxx Plant, or the Assets.
(b) Buyer shall not be responsible for, and Seller expressly retains, all rights and
liabilities related to the Excluded Assets.
1.4 Effective Date. The purchase and sale of the Assets shall be effective as of
January 1, 2011, at 7:00 a.m. Mountain Time (the “Effective Date”).
1.5 1031 Exchange. Seller reserves the right, at or prior to Closing, to assign its
rights under this Agreement with respect to all or a portion of the Purchase Price, and that
portion of the Assets associated therewith (“1031 Assets”), to a Qualified Intermediary (as that
term is defined in Section 1.1031(k)-1(g)(4)(v) of the Treasury Regulations) (the “QI”) to
accomplish this transaction, in whole or in part, as a like-kind exchange (“Like-Kind Exchange”)
under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”). Buyer hereby (i)
consents to Seller’s assignment of its rights in this Agreement to the 1031 Assets, and (ii) if
such an assignment is made, provided Buyer received timely notice thereof, Buyer agrees to pay all
or a portion of the Purchase Price into a qualified trust or escrow account at Closing as directed
in writing by Seller. Buyer likewise reserves the right, at or prior to Closing, to assign all or a
portion of its rights in this Agreement to a QI or to Buyer’s Exchange Accommodation Titleholder
(as that term is defined in Revenue Procedure 2000-37) (the “EAT”) in connection with effecting a
Like-Kind Exchange. Seller and Buyer acknowledge and agree that a whole or partial assignment of
this Agreement to a QI or EAT shall not release either Party from or expand any of their respective
liabilities and obligations to each other under this Agreement. Neither Party shall be obligated
to pay any additional costs or incur any additional obligations as a result of any Like-Kind
Exchange effected by the other Party. Seller agrees to hold harmless and indemnify Buyer from and
against all claims, losses and liabilities, if any, resulting from such Like-Kind Exchange.
ARTICLE II
PURCHASE PRICE
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Assets shall be Three Hundred Three
Million Three Hundred Thousand U.S. Dollars (U.S. $303,300,000) (the “Purchase Price”). If the
transaction contemplated by this Agreement (“Transaction”) closes, Buyer agrees to pay to Seller
the Purchase Price at Closing subject to the adjustments to the Purchase Price contained in this
Agreement.
2.2 Adjustments to Purchase Price. All adjustments to the Purchase Price shall be
made (i) according to the factors described in this Section, (ii) in accordance with generally
5
accepted accounting principles as consistently applied in the oil and gas industry, and (iii)
without duplication.
(a) Settlement Statements. The Purchase Price shall be adjusted at Closing
pursuant to a “Preliminary Settlement Statement” prepared by Seller and submitted to Buyer no
later than five (5) business days prior to Closing for Buyer’s comment and review. Seller shall
provide Buyer wire transfer instructions for payment of the Purchase Price and the Parties shall
settle on the contents of the Preliminary Settlement Statement and execute same, no later than
two (2) business days before Closing. The Preliminary Settlement Statement shall set forth the
Closing Amount and all adjustments to the Purchase Price and associated calculations. The term
“Closing Amount” means the Purchase Price, adjusted as provided in this Section using reasonable
estimates if actual numbers are not available. After Closing, the Purchase Price shall be
adjusted pursuant to the Final Settlement Statement delivered pursuant to Section 13.1. Upon
execution of this Agreement, the Parties will attempt to agree on the value of the personal
property comprising the Assets for purposes of payment of sales tax or any other taxes
contemplated by Section 9.4 of this Agreement. In the event that the Parties cannot reach
agreement on the value of the personal property comprising the Assets, Seller will, in good
faith, estimate the value of such personal property and remit the sales tax as contemplated by
Sections 2.2(c) and 9.4 of this Agreement; the amount of sales tax to which the Parties agree to
or which is estimated by Seller shall constitute an adjustment to the Purchase Price under
Section 2.2(c) of this Agreement and such amount shall be included in the Closing Amount on the
Preliminary Settlement Statement. To the extent the estimated sales tax is more or less than
the actual sales tax, such difference shall be reflected on the Final Settlement Statement
delivered pursuant to Section 13.1.
(b) Property Expenses. The term “Property Expenses” shall mean all expenses of
every kind attributable to the Assets, including but not limited to capital expenses, operating
expenses, facilities and plant expenses, Taxes (as defined and apportioned as of the Effective
Date pursuant to Article IX), transportation, processing or maintenance expenditures chargeable
under applicable agreements and consistent with the standards established by the Council of
Petroleum Accountant Societies of North America that are attributable to the Assets prior to the
Effective Date or after the Effective Date, as applicable.
(c) Upward Adjustments. The Purchase Price shall be adjusted upward by:
(1) An amount equal to all proceeds (net of Taxes not otherwise accounted for
hereunder) received and retained by Buyer from the transportation, gathering,
processing, treating or sale of hydrocarbons, produced from or credited to the Assets
prior to the Effective Date (collectively “Proceeds”);
(2) An amount equal to all direct and actual expenses and capital costs
attributable to the Assets, including, without limitation, the Property Expenses and
amounts under Section 8.1(a), if any, paid by or on behalf of Seller that are
attributable to the period after the Effective Date and prior to Closing Date (as
defined in Section 12.1);
6
(3) To the extent not covered in the preceding paragraph, an amount equal to all
prepaid expenses attributable to the Assets after the Effective Date that were paid
by or on behalf of Seller, including without limitation, prepaid compressor,
right-of-way, surface use, and rental charges and prepaid utility charges; but,
excluding any prepaid insurance;
(4) The amount of the sales tax in connection with the Transaction based on the
personal property value of the Assets for the purposes described in Section 2.2(a) of
this Agreement;
(5) An amount equal to general and administrative services, as well as overhead,
in the amount of $249,600 that the Parties hereby agree are attributable to the
period after the Effective Date and prior to the Closing Date; provided, however, in
the event that Closing is extended beyond February 28, 2011, then the amount set
forth in this Section 2.2(c)(5) will be proportionately increased; and
(6) Any other amount as may be agreed to in writing by Buyer and Seller.
(d) Downward Adjustments. The Purchase Price shall be adjusted downward by:
(1) Proceeds received and retained by Seller (net of applicable Taxes and
royalties) that are attributable to revenue from the Assets after the Effective Date;
(2) The amount of all direct and actual expenses attributable to the Assets,
including, without limitation, the Property Expenses, that Buyer agrees to pay, or
that have been paid by Buyer, that are attributable to the period prior to the
Effective Date;
(3) An amount equal to the Environmental Defect Adjustment (as defined in
Section 5.1);
(4) To the extent not covered in Section 2.2(d)(2) above, an amount equal to the
Gathering and Processing Fee (as defined in the Gas Gathering and Processing
Agreement) for the period after the Effective Date and prior to the Closing Date;
(5) An amount equal to $1,400,000 in consideration for Buyer waiving any and all
claims for any defect of title relating to the Assets in connection with Section 4.1;
and
(6) Any other amount as may be agreed to in writing by Buyer and Seller.
7
ARTICLE III
BUYER’S INSPECTION
BUYER’S INSPECTION
3.1 Access to Records. From and after the date hereof until Closing and subject to
Sections 8.3(a)-(c), Seller will make the Records available to Buyer and its representatives for
inspection and review during normal business hours to permit Buyer to perform its due diligence
review. Subject to the consent and cooperation of third parties, Seller will assist Buyer in
Buyer’s efforts to obtain, at Buyer’s expense, such additional information from third parties as
Buyer may reasonably request in writing, for the purposes of Buyer’s due diligence review. Buyer
may inspect the Records and such additional information only to the extent such inspection does not
violate any contractual commitment of Seller to a third party.
3.2 Disclaimer. Except for the representations and warranties contained in this
Agreement, Seller makes no warranty or representation of any kind as to the Records or any
information contained therein.
3.3 Access to the Assets. Seller agrees to grant Buyer access to the Assets during
reasonable business hours, so Buyer may, at its sole risk and expense, (i) conduct on-site
inspections and environmental assessments of the Assets, including but not limited to, Phase I and
II site assessments, and (ii) prepare to assume ownership and operation of the Assets after
Closing. If Buyer or its agents prepares an environmental assessment of any Asset, Buyer agrees to
keep such assessment confidential (unless legally required to disclose) and to furnish copies
thereof to Seller. In connection with any on-site inspections, Buyer (i) agrees not to interfere
with the normal operation of the Assets, (ii) agrees to comply with Seller’s requirements of the
operators of the Assets and (iii) represents that it is adequately insured. Buyer waives, releases
and agrees to indemnify Seller, and its affiliates, and each of their directors, officers,
shareholders, members, employees, agents and representatives (“Seller Group”) against all claims,
liabilities and obligations, including without limitation, personal injury, death and/or property
damage, arising from Buyer’s activities on the Assets, except to the extent such liabilities or
damages are caused by Seller’s gross negligence or willful misconduct. The provisions of this
Section shall survive termination of this Agreement. Upon execution of this Agreement, that
certain Release and Indemnity Agreement entered into by the Parties effective November 12, 2010
(the “Release”) shall terminate; provided, however, the Parties shall remain responsible for their
respective obligations under the Release prior to the date of this Agreement.
ARTICLE IV
TITLE MATTERS
TITLE MATTERS
4.1 No Title Warranty or Representation. Notwithstanding any other provision of this
Agreement, Seller makes no warranty or representation, express, implied, statutory or otherwise,
with respect to Seller’s title to any of the Assets and Buyer hereby acknowledges and agrees that
Buyer has no claim or remedy against Seller, its successors or assigns for any defect of title
relating to the Assets, including but not limited to any lien, encumbrance, claim, defect in or
objection to real property title, and the existence or non-existence of any leases, easements, or
rights-of-way.
8
4.2 Casualty Loss. If a portion of the Assets is destroyed by fire or other casualty
prior to Closing (“Casualty Loss”), Buyer shall nevertheless purchase the Asset at Closing, but the
Purchase Price will be reduced by an amount of money equal to the estimated cost to repair the
affected Asset (or to replace it with equipment of similar utility). Seller, at its sole option,
may elect to cure such Casualty Loss by replacing, at Seller’s expense, any personal property that
is the subject of a Casualty Loss with equipment of equal grade and utility; if Seller elects to so
cure the Casualty Loss, Buyer shall purchase the affected Asset at Closing without reduction of the
Purchase Price. Notwithstanding the foregoing provisions of this Section 4.2, if the casualty loss
has a Material Adverse Change, then either Party may terminate this Agreement. For purposes of
this Section 4.2, the term “Material Adverse Change” shall mean a change (or effect) in the
condition of the Assets that result in or could reasonably be expected to result in a quantifiable
diminution in value of the Assets which exceeds in aggregate of thirty percent (30%) of the
Purchase Price.
4.3 Preferential Rights and Consents. To Seller’s knowledge, the preferential
purchase rights and the Assets subject to such rights, and the Required Consents, and the Assets
affected by such Required Consents are listed on Exhibits A and C. The term “Required Consent”
means a consent that if not obtained by Closing would invalidate the conveyance of the Assets;
provided, however, that consents and approvals that are customarily obtained post- Closing (such as
federal and state approvals of assignments), and other consents that do not specifically invalidate
the conveyance if not obtained are not “Required Consents.” Seller shall use commercially
reasonable efforts to obtain all Required Consents and to give notices required in connection with
preferential purchase rights prior to Closing. Prior to Closing, if Buyer discovers other Assets
affected by Required Consents or preferential purchase rights, Buyer shall notify Seller
immediately and Seller shall use commercially reasonable efforts to obtain such consents and/or to
give the notices required in connection with the preferential rights prior to Closing; if Seller
discovers other Assets affected by Required Consents or preferential purchase rights, Seller shall
notify Buyer immediately and Seller shall use commercially reasonable efforts to obtain such
consents and/or to give the notices required in connection with the preferential rights prior to
Closing. If the value of all preferential purchase rights and Required Consents discovered or
disclosed prior to Closing that have not been obtained exceeds thirty percent (30%) of the Purchase
Price, Buyer may terminate this Agreement without liability to Seller and have no further
obligation hereunder.
(a) Consents. If a Required Consent has not been obtained as of the Closing with
respect to an Asset (a “Restricted Asset”), then (i) the Restricted Asset shall not be conveyed
at the Closing, (ii) the Purchase Price shall not be adjusted, (iii) Seller shall use
commercially reasonable efforts (and Buyer shall assist Seller as reasonably requested) to
obtain the consent of the third parties required thereunder, and (iv) Seller shall make the
benefit of such Restricted Asset available to Buyer. With respect to any such Restricted Asset
as to which the necessary approval or consent for the assignment or transfer to Buyer is
obtained following Closing, Seller shall transfer such Restricted Asset to Buyer by execution
and delivery of an instrument of conveyance reasonably satisfactory to Buyer and Seller.
Notwithstanding the foregoing, Seller shall not be required to renew or extend any Restricted
Asset at the end of its primary term; provided, however, if Seller does not convey the
Restricted Asset to Buyer within 1 year of the Closing Date, the Purchase Price will be adjusted
by an amount equal to the value of the Restricted Asset, pursuant to Section
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14.5(d). For purposes of this Section 4.3(a) the value of a Restricted Asset shall be determined
with reference to (i) the amount necessary to replace the Restricted Asset, (ii) the portion of
the Asset affected by the failure to have the Restricted Asset, (iii) the effect of Seller
making the benefit of the Restricted Asset available to Buyer, and (iv) other such factors as
are necessary to make a proper evaluation of the value of the Restricted Asset.
(b) Preferential Purchase Rights.
(1) If any preferential right to purchase any portion of the Assets is exercised
prior to the Closing Date, or if the time frame for the exercise of such preferential
purchase right has not expired and Seller has not received notice of an intent not to
exercise or waiver of the preferential purchase right, then that portion of the
Assets affected by such preferential purchase right shall be excluded from the Assets
at Closing and the Purchase Price shall be adjusted downward by an amount equal to
the reasonable value of such affected Assets as agreed by the Parties (“Exclusion
Adjustment”).
(2) If a third party exercises its preferential right to purchase, but fails to
consummate the transaction prior to Closing, Seller shall retain the affected Assets
at Closing and the Purchase Price shall be adjusted downward by an amount equal to
the value of such affected Assets as agreed by the Parties.
(3) If a third party exercises its preferential right to purchase, but does not
consummate the transaction within the time frame specified in the preferential
purchase right (provided that the reason therefor is not Seller’s default), Seller
agrees to convey the affected Asset to Buyer as soon as possible after the expiration
of the time for consummation of the transaction by the holder of the preferential
right by execution and delivery of an instrument of conveyance reasonably
satisfactory to Buyer and Seller, such conveyance to be effective as of the Effective
Date, and Buyer agrees to pay Seller the value of the affected Asset as agreed to by
the Parties.
(4) If a preferential purchase right is not discovered prior to Closing, and the
affected Asset is conveyed to Buyer at Closing, Buyer agrees to convey such affected
Asset to the party exercising such right on the same terms and conditions under which
Seller conveyed such Asset to Buyer (with the purchase price being the reasonable
value for the affected Asset as agreed by Buyer and the third party) and retain all
amounts paid by the party exercising such preferential right to purchase. In the
event of such exercise, Buyer shall prepare, execute and deliver a form of conveyance
of such Asset to such exercising party, such conveyance to be in a form and substance
as reasonably satisfactory to Buyer and the third party.
(c) Remedies. The remedies set forth in this Section 4.3 are the exclusive
remedies for the preferential purchase rights and consents.
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ARTICLE V
ENVIRONMENTAL MATTERS
ENVIRONMENTAL MATTERS
5.1 Environmental Procedures.
(a) Buyer will have from the date this Agreement is executed until the Environmental Defect
Notice Date (as defined in Section 5.4) to conduct an investigation of the environmental condition
of the Assets. Should Buyer elect to conduct such investigation, Buyer will employ a third party
environmental consultant selected by Buyer and approved by Seller (which approval shall not be
unreasonably withheld) (the “Environmental Consultant”) to determine the existence of any
Environmental Defects (as defined in Section 5.4) and the Remediation Costs (as defned in Section
5.4) associated therewith.
(b) If the Environmental Consultant identifies and Buyer claims, one or more Environmental
Defects in the course of its investigation, Buyer may, on or before the Environmental Defect Notice
Date, deliver to Seller one or more Environmental Defect Notices (as defined in Section 5.4).
Buyer must deliver Environmental Defect Notices as soon as reasonably practical, but no later than
the Environmental Defect Notice Date.
(c) If Buyer delivers an Environmental Defect Notice to Seller in excess of the Environmental
Threshold (as hereinafter defined), Seller may elect one of the following options with respect to
each Environmental Defect so identified: (i) remediate the Environmental Defect(s), provided that
if Seller elects this option, remediation will be subject to Buyer’s approval of the selected
remediation methodology and of the environmental contractor (which approvals shall not be
unreasonably withheld, delayed or conditioned); (ii) contest the existence of the Environmental
Defect(s) or the Remediation Costs in accordance with Section 5.2; (iii) pay Buyer’s estimate of
the Remediation Cost (with such amount being the “Environmental Defect Adjustment”); or (iv)
indemnify Buyer against any Loss attributable to the relevant Environmental Defect, which indemnity
shall not exceed 30% of the sum of all estimated Remediation Costs for all Environmental Defects,
and which indemnity shall continue for a period of time set forth in, and in the form of, Schedule
5.1.
5.2 Contested Environmental Defects. If Seller contests the existence of an
Environmental Defect or the Remediation Costs, Seller shall notify Buyer in writing on or before
February 24, 2011, at 5:00 p.m. Mountain Time (Rejection Notice”). The Rejection Notice shall
state with reasonable specificity the basis for the rejection of the Environmental Defect or the
Remediation Costs. If practicable under the circumstances, representatives of Buyer and Seller
knowledgeable in environmental matters shall meet and, either (i) mutually agree to reject the
particular Environmental Defect or (ii) agree on the validity of such Environmental Defect and the
Remediation Costs. If the Parties cannot agree on either options (i) or (ii) in the preceding
sentence, or the Parties cannot meet (and do not otherwise agree to resolve the matter), the
Environmental Defect and/or the Remediation Costs subject to the Rejection Notice shall be resolved
in accordance with the arbitration procedures set forth in Section 14.5(d). If such resolution
will occur after the Closing Date, the amount at issue shall be placed in escrow, in accordance
with a mutually agreeable escrow agreement at a mutually agreeable financial institution, pending
resolution of the arbitration.
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5.3 Environmental Liabilities and Obligations.
(a) Upon Closing, Buyer agrees to assume and pay, perform, fulfill, discharge and release
Seller from all Losses (as defined in Section 5.4) relating to the Assumed Environmental
Liabilities (as defined in Section 5.4).
(b) Upon Closing, Seller agrees to retain and pay, perform, fulfill, discharge and release
Buyer from all Losses attributable to and relating to (i) the Environmental Remediation Projects
(provided, however, that Seller shall not retain liability for any violations of Environmental Laws
caused by Buyer or its agents at the sites of such Environmental Remediation Projects after the
Closing Date), and (ii) Environmental Defects identified in a timely-delivered Environmental Defect
Notice, to the extent that such Environmental Defects are not disputed by Seller (or, if disputed,
such dispute is resolved in favor of Buyer), exceed in the aggregate the Environmental Threshold,
and for which Seller agrees to indemnify Buyer pursuant to Section 5.1(c)(iv). Timely receipt of a
valid Environmental Defect Notice, and written estimation of the Remediation Costs by an
Environmental Consultant, are conditions precedent to Seller’s obligations as to Environmental
Defects under this Section 5.3(b). Notwithstanding the foregoing, the Environmental Remediation
Projects shall become Assumed Environmental Liabilities at such time that the Colorado Oil and Gas
Conservation Commission (or the appropriate regulatory agency or body) determines that no further
action is necessary with respect to any such Environmental Remediation Project, whether by way of a
“closure letter” or otherwise (such action referred to this Agreement as “Environmental Closure”).
(c) Upon Closing, Seller agrees to indemnify, save and hold harmless Buyer, its officers,
directors, employees and agents, from and against claims asserted by third parties (i.e., parties
not affiliated with the Parties) (a “Third Party Claim”) for environmental conditions associated
with the Assets arising prior to the Effective Date that were not in conformance with Environmental
Laws at the time the environmental conditions arose (“Pre-Effective Date Environmental Claims”);
provided, however, Buyer shall not affirmatively cause a third party to issue a Third Party Claim,
unless required to do so under applicable law; (ii) Buyer shall not be entitled to indemnity under
this Section 5.3(c) if Buyer discovered or reasonably should have discovered any such environmental
condition prior to the Environmental Defect Notice Date; and (iii) Seller’s indemnity obligations
under this Section 5.3(c) shall be subject to, and limited by, the same threshold, deductible and
time limitations provided under Sections 14.4(a)-(c) of this Agreement. The procedures for notice
set forth in Section 14.5(b)-(c) shall also apply with respect to Third Party Claims. After the
expiration of the time period set forth in Section 14.4(c) of this Agreement, Pre-Effective Date
Environmental Claims for which Buyer has not provided notice of a Third Party Claim, as applicable,
shall become Assumed Environmental Liabilities.
5.4 Definitions. For the purposes of the Agreement, the following terms shall have
the following meanings:
“100 Lateral Remediation Project” means that project relating to a November 24, 2010, leak on
a 2 inch dump line and involving (i) contaminated soil above the Colorado Oil and Gas Conservation
Commission TPH standard, such contamination consisting of a 20 foot by 20 foot surface area
extending south and west from the east footer of the bullet taking; and (ii)
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contaminated soil and groundwater restricted to the area inside the perimeter of the 100
Lateral Compressor Building, such project located approximately one-half mile north of the
intersection of WCR 11 and 8, SE/4NE/4, Xxxxxxx 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00X.
“Aristocrat Remediation Project” means that project generally described in that certain
Spill/Release Report and corresponding Site Investigation and Remediation Work Plan submitted to
the State of Colorado Oil and Gas Conservation Commission on November 23, 2004.
“Assumed Environmental Liabilities” means all environmental conditions in, on or under the
Assets, whether arising before or after the Closing Date, including without limitation any and all
liability for Naturally Occurring Radioactive Materials and man-made material fibers, the
obligation to remove or decommission all or any part of the Assets, and any associated reclamation
obligations, other than Retained Environmental Liabilities or Pre-Effective Date Claims (until the
expiration of the time period referenced in Section 14.4(c), after which time Pre-Effective Date
Claims become Assumed Environmental Liabilities).
“Comanche Creek Remediation Project” means that project relating to a pipeline leak in a 4
inch gathering line and involving groundwater exceeding the Colorado Oil & Gas Conservation
Commission benzene standard in an area approximately 150 feet in circumference around said pipeline
leak, such project located in the SW/4SW/4, Section 13, Township 6 South, Range 63 West and located
approximately 25 feet north of County Road 182 and 1.15 miles east of County Road 53 in Xxxxxx
County, Colorado.
“Environmental Defect” means a condition in, on or under the Assets (including, without
limitation, air, land, soil, surface and subsurface strata, surface water and ground water) that
(i) is attributable to the period of time prior to the Closing Date, (ii) causes an Asset to be in
violation of a then existing Environmental Law, and (iii) requires Remediation Costs in excess of
$75,000 per condition (“Defect Threshold”).
“Environmental Defect Notice” means a written notice of an Environmental Defect made by Buyer
to Seller, on or before the Environmental Defect Notice Date. In order to be valid, an
Environmental Defect Notice must (i) be in writing and received on or before the Environmental
Defect Notice Date, (ii) name the affected Asset, (iii) name the condition in, on or under the
Asset that causes the Environmental Defect, (iv) provide factual substantiation for the
Environmental Defect, (v) state the estimated Remediation Cost, and (vi) contain the Environmental
Consultant’s written estimates of the Remediation Costs, if available. For the purpose of the
preceding sentence, “factual substantiation for the Environmental Defect” shall mean reports
prepared by, or the basis of tests performed by, an Environmental Consultant.
“Environmental Defect Notice Date” means February 11, 2011, at 5:00 pm Mountain Time.
“Environmental Laws” means all federal, state, and local laws, statutes, rules, regulations,
orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally
enforceable requirements and rules of common law relating to (i) pollution or protection of the
environment or natural resources, (ii) any actual or threatened depositing, spilling, leaking,
pumping, pouring, placing, emitting, discarding, abandoning, emptying,
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discharging, migrating, injecting, escaping, leaching, dumping or disposing into the
environment of, or any exposure of any individual, firm, corporation, partnership (general or
limited), limited liability company, trust, joint venture, Governmental Entity, other entity, or
property to, any Hazardous Substances or (iii) the generation, manufacture, processing,
distribution, use, treatment, storage, transport, disposal or handling of any Hazardous Substances;
including the federal Comprehensive Environmental Response, Compensation and Liability Act, the
Superfund Amendments and Reauthorization Act, the Resource Conservation and Recovery Act, the Clean
Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the
Oil Pollution Act of 1990, the Federal Hazardous Materials Transportation Law, the Occupational
Safety and Health Act, the Marine Mammal Protection Act, the Endangered Species Act, the National
Environmental Policy Act and other environmental conservation and protection laws, each as amended
through the Closing Date.
“Environmental Permit” means any permit, approval, identification number, license,
registration, certification, consent, exemption, variance or other authorization required under or
issued pursuant to any applicable Environmental Law.
“Environmental Remediation Projects” means the (i) Aristocrat Remediation Project, the Xxxx
Remediation Project, the 100 Lateral Remediation Project, the Comanche Creek Remediation Project
and the Xxxx Remediation Project; and (ii) any other ongoing remediation projects discovered by
Seller or Buyer, during the course of Buyer’s due diligence, in which Seller (or its agents), as of
the Effective Date, is taking action (including, but not limited to, attenuation) in order to bring
an Asset into compliance with Environmental Laws, provided that the Party discovering an ongoing
remediation must provide notice of any such project to the other Party by February 27, 2011 at 9:00
a.m. Mountain Time.
“Environmental Threshold” means an amount of money equal to one percent (1.0%) of the Purchase
Price.
“Hazardous Substance” means (i) any substance that is designated, defined or classified under
any Environmental Law as a hazardous waste, solid waste, hazardous material, pollutant, contaminant
or toxic or hazardous substance, or terms of similar meaning, or that is otherwise regulated under
any Environmental Law, including any hazardous substance as defined under the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended, (ii) oil as defined in the Oil
Pollution Act of 1990, as amended, including oil, gasoline, natural gas, fuel oil, motor oil, waste
oil, diesel fuel, jet fuel and other refined petroleum hydrocarbons and petroleum products, and
(iii) radioactive materials, asbestos containing materials or polychlorinated biphenyls.
“Xxxx Remediation Project” means that project relating to a contaminated plume discovered by
Seller in the course of excavation of contaminated soil (which contaminated soil has since been
removed and is the subject of a Letter of Closure from the Colorado Oil and Gas Conservation
Commission), which consisted of soils in excess of the Colorado Oil and Gas Conservation Commission
500 ppm TPH standard for soils, such project located at the Xxxx Compressor Station, 1.75 miles
north of WCR 22 and 31, SW/4SW/4, Section 3, Township 2 North, Range 66 West.
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“Xxxx Remediation Project” means that project currently being performed by Xxxx Hydrocarbon
Company and/or Xxxx Exploration Company, or by Xxxx’x successors and/or assigns (collectively,
“Xxxx”), as further described in (i) that certain Agreement for Sale “Third Creek Processing Plant
Related Gathering System” entered into July 2, 1996 by and between Xxxx and Vessels Hydrocarbons,
Inc., (ii) that certain Post-Closing Clean-Up Agreement dated August 15, 1996, by and between Xxxx
Hydrocarbon Company and Vessels Hydrocarbons, Inc., (iii) that certain Termination of Post-Closing
Clean-Up Agreement dated February 18, 2003, by and between Xxxx Hydrocarbon, LP and EnCana Energy
Resources Inc., and/or (iv) reports submitted by Xxxx or its successors to the Colorado Oil and Gas
Conservation Commission relating to the such project.
“Loss” or “Losses” means any actual losses, costs, expenses (including court costs, reasonable
fees and expenses of attorneys, technical experts and expert witnesses and the cost of
investigation), liabilities, damages, demands, suits, judgments, claims, penalties and sanctions of
every kind and character (including civil fines).
“Remediation” means actions taken to bring an Asset into compliance with Environmental Laws
and: (i) as recommended in writing by an Environmental Consultant; or (ii) as agreed upon between
the Parties.
“Remediation Costs” means the costs or estimates thereof, to remediate a particular
Environmental Defect, as estimated in writing by an Environmental Consultant.
“Retained Environmental Liabilities” means (i) the condition of the sites of the Environmental
Remediation Projects as of the Closing Date (until Environmental Closure, at which time such
Environmental Remediation Projects and the sites thereof shall become Assumed Liabilities), (ii)
Pre-Effective Date Environmental Claims identified in accordance with Section 5.3(c) (until the
expiration of the time period set forth in Section 14.4(c), at which time Pre-Effective Date
Environmental Claims for which Buyer has not provided notice of a Third Party Claim, as applicable,
shall become Assumed Environmental Liabilities), and (iii) all Environmental Defects identified in
a timely-delivered Environmental Defect Notice, which defects are not disputed by Seller (or, if
disputed, such dispute is resolved in favor of Buyer) and which are, in the aggregate, in excess of
the Environmental Threshold and for which Seller agrees to indemnify Buyer pursuant to Section
5.1(c)(iv).
5.5 Aristocrat, 100 Lateral, Xxxx, Comanche Creek and Xxxx Remediation. Seller is in
the process of completing the Aristocrat Remediation Project, the 100 Lateral Remediation Project,
the Xxxx Remediation Project, the Comanche Creek Remediation Project and the Xxxx Remediation
Project. Seller, or Seller’s permitted assigns, shall complete the Remediation relating to such
projects, and in order to accomplish the same, the Parties agree as follows:
(a) At Closing, Seller, without limiting any of its rights or remedies, and Buyer shall enter
into that certain Access Agreement in the form attached hereto as Exhibit L in order for Buyer to
grant Seller access to the sites of the Environmental Remediation Projects in order for Seller to
complete the Remediation relating to the Aristocrat Remediation Project, the 100 Lateral
Remediation Project, the Xxxx Remediation Project, the Comanche Creek Remediation Project and the
Xxxx Remediation Project. Buyer agrees to cooperate in good faith with Seller
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with respect to (i) the Remediation of the Aristocrat Remediation Project, the 100 Lateral
Remediation Project, the Xxxx Remediation Project, the Comanche Creek Remediation Project and the
Xxxx Remediation Project, and (ii) obtaining any permits or authorizations, if any are required, in
connection with access contemplated under this Section 5.5(a);
(b) The Parties acknowledge and agree that the Aristocrat Remediation Project, the 100 Lateral
Remediation Project, the Xxxx Remediation Project, the Comanche Creek Remediation Project and the
Xxxx Remediation Project could require the following: (i) the installation, modification,
reworking, plugging and abandoning of existing and future monitoring and extraction xxxxx; (ii)
excavation; and/or (iii) any other activities deemed reasonably necessary or desirable by Seller in
order to complete the Remediation of such projects. The foregoing activities shall be conducted in
such a manner as to not unreasonably interfere with Buyer’s facilities and operations, and the
Parties shall consult in good faith, as is necessary, to provide the Seller with the access
contemplated under this Section 5.5 and to minimize, to the extent possible, disruptions to Buyer’s
operations; and,
(c) The condition of the sites of the Aristocrat Remediation Project, the 100 Lateral
Remediation Project, the Xxxx Remediation Project, the Comanche Creek Remediation Project and the
Xxxx Remediation Project or any other portion of the Assets subject to such Remediation Projects
shall not constitute an Environmental Defect.
ARTICLE VI
SELLER’S REPRESENTATIONS
SELLER’S REPRESENTATIONS
Seller makes the following representations:
6.1 Incorporation/Qualification. Seller is a Delaware corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware and is qualified to
conduct business in Colorado.
6.2 Power and Authority. Seller has all requisite power and authority to own the
Assets and to carry on its business as presently conducted and to execute and deliver this
Agreement and perform its respective obligations under this Agreement.
6.3 No Lien, No Violation. The execution and delivery of this Agreement does not, and
the fulfillment of and compliance with the terms and conditions hereof, will not, as of Closing,
(i) create a lien or encumbrance on the Assets or trigger an outstanding security interest in the
Assets that will remain in existence after Closing, (ii) violate, or be in conflict with, any
material provision of Seller’s governing documents or any material provision of any statute, rule
or regulation applicable to Seller or any agreement or instrument to which Seller is bound, or
(iii) to Seller’s knowledge, violate or be in conflict with any statute, rule, regulation,
judgment, decree, or order applicable to Seller.
6.4 Authorization and Enforceability. This Agreement is duly and validly authorized
and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with
its terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium
and other laws for the protection of creditors, as well as to general principles of equity,
regardless whether such enforceability is considered in a proceeding in equity or at law.
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6.5 Liability for Brokers’ Fees. Seller has not incurred any liability, contingent or
otherwise, for brokers’ or finders’ fees relating to the Transaction for which Buyer shall have any
responsibility whatsoever.
6.6 No Bankruptcy. There are no bankruptcy proceedings pending, being contemplated by
or, to Seller’s knowledge, threatened against Seller.
6.7 Material Agreements.
(a) Seller, to its knowledge, has made available to Buyer a true and complete copy of each
Material Agreement listed on Exhibit C. Each Material Agreement constitutes the valid and
binding agreement of Seller, and, to Seller’s knowledge, any other person or party thereto,
enforceable against Seller and, to Seller’s knowledge, any other person party thereto, except as
such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally
and by general principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(b) To Seller’s knowledge, the Material Agreements listed on Exhibit C sets forth all of
the following contracts and agreements to which any of the Assets are bound as of the date
hereof or Closing and which are material to the ownership and operation of the Assets as
currently owned and operated:
(i) any agreement with any Affiliate of Seller that will not be terminated at or before
Closing;
(ii) any compressor lease agreements, plant agreements, operational balancing agreements,
connection agreements and liquids purchase agreements;
(iii) any agreement or contract for the gathering, processing, transportation, purchase, sale,
exchange, or other disposition of hydrocarbons that is not cancelable without penalty or other
payment on not more than 30 days prior written notice;
(iv) leases of personal property used or held for use primarily in the operation of the Assets
to which Seller is a party or by which it is bound (“Personal Property Leases”) involving annual
payments in excess of $150,000, other than any Personal Property Leases that have been terminated
or will expire by their terms before or upon the Closing.
(c) Seller has not received any notice of default of Seller under any Material Agreement in
the 6-month period prior to the date of this Agreement.
(d) Seller, to its knowledge, has paid its share of all costs due payable by Seller under
the Material Agreements, has not taken or failed to take or permitted or failed to prevent any
action that with notice, the passage of time or both would result in any material breach,
default or acceleration of any Material Agreement. There are no material uncured defaults or
breaches (or conditions or events that, with notice, the passage of time or both would
constitute such a material default or breach) of Seller, to its knowledge, under any
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Material Agreement or, to Seller’s knowledge, any other person party to any Material
Agreement.
6.8 Litigation. Except as set forth on Exhibit D, Seller has not received any written
claim or written demand notice that has not been resolved that would adversely affect the Assets.
Except as set forth on Exhibit D, there are no actions, suits, ongoing governmental investigations,
written governmental inquiries or proceedings pending or, to Seller’s knowledge, threatened in
writing against Seller or any of the Assets, in any court or by or before any federal, state,
municipal or other governmental agency that would affect Seller’s ability to consummate the
Transaction, or affect the Assets.
6.9 Compliance with Laws. To Seller’s knowledge, and except as disclosed in Schedule
6.9 or otherwise in this Agreement, Seller has not received any written notice from any
governmental authority or any other person in connection with the Assets regarding (a) any actual,
alleged, possible or potential violation of, or failure to comply with any legal requirement, or
(b) any actual, alleged, possible or potential obligation on the part of Seller to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.
6.10 Regulatory Status. To Seller’s knowledge:
(a) None of the Assets is presently subject to the jurisdiction of the Federal Energy
Regulatory Commission under the Natural Gas Act (15 U.S.C. Section 717, et seq.) or under the
Natural Gas Policy Act of 1978 (15 U.S.C. Section 3301);
(b) Seller is in compliance with all of the orders, regulations, rules, and authorizing or
enabling statutes of the Colorado Public Utility Commission that pertain to the Assets; and
(c) there are no actions, suits, ongoing governmental investigations, written governmental
inquiries or proceedings pending, or to Seller’s knowledge, threatened in writing against Seller
or any of the Assets, that challenge any of the rates, charges, or fees currently received for
providing gathering, treating, or other services with respect to the Assets.
6.11 Governmental Authorizations. To Seller’s knowledge and except as disclosed in
this Agreement, Seller has obtained and is in material compliance with all federal, state and
local governmental licenses, permits, orders, exemptions, waivers, authorizations, certificates,
consents and applications (collectively, “Authorizations”) that are presently necessary or required
for the ownership and operation of the Assets, except such Authorizations which the failure to
obtain or hold would not, individually or in the aggregate, have a material adverse effect on the
Assets.
6.12 Capital and Expense Projects. As of the date of execution of this Agreement,
Exhibit E is a list and description of all capital projects related to the Assets in progress and
associated costs or estimates thereof to the extent such costs or estimates exceed $50,000 per
project (the “Capital Projects”).
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6.13 Taxes. During Seller’s period of ownership and with respect to Taxes (as that
term is defined in Article IX), for all taxable periods during Seller’s period of ownership through
the taxable period in which this Agreement is executed, all such Taxes have been paid when due,
unless contested in good faith by appropriate proceeding. There are no federal, state or local
governmental liens for taxes on the Assets except for Taxes not yet due. Seller has filed or will
file all federal, state, local and other tax returns and reports required to be filed by Seller in
connection with its ownership or operations of the Assets. None of the Assets is subject to any
tax partnership as defined in Section 761 of the Code.
6.14 Absence of Certain Changes. To Seller’s knowledge, since September 30, 2010:
(a) the Assets have been operated in and have not been engaged in any material transaction
outside of the ordinary course of business;
(b) none of the Assets have been mortgaged or pledged;
(c) no damage, destruction or loss has occurred (whether partial or total and whether or
not covered by insurance) that materially adversely affects the ownership, operation or use of
the Assets, or the value or usefulness of the Assets in connection with the performance of the
transactions contemplated by this Agreement;
(d) Seller has not settled or waived any material claims or rights with respect to the
ownership, operation or use of the Assets; and,
(e) none of Seller or any of its Affiliates have agreed or committed to do any of the
foregoing.
6.15 Disclaimers. THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN
THIS AGREEMENT (COLLECTIVELY “SELLER’S WARRANTIES”) ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. SELLER EXPRESSLY
DISCLAIMS ANY AND ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES. WITHOUT LIMITATION OF THE
FOREGOING AND, EXCEPT FOR SELLER’S WARRANTIES, THE INTEREST IN THE ASSETS TO BE CONVEYED TO BUYER
SHALL BE CONVEYED PURSUANT HERETO WITHOUT (i) ANY WARRANTY, COVENANT OR REPRESENTATION WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE RELATING TO TITLE TO THE ASSETS, THE CONDITION, QUANTITY,
QUALITY, EXISTENCE OF DEFECTS, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO THE MODELS OR
SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANY EQUIPMENT OR PROPERTY OR ITS FITNESS FOR ANY PURPOSE
OR (ii) ANY OTHER EXPRESS, IMPLIED, STATUTORY OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER.
BUYER IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE ASSETS, AND, SUBJECT TO BUYER’S EXPRESS
RIGHTS UNDER THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, BUYER SHALL ACCEPT ALL OF THE SAME
IN THEIR “AS IS”, “WHERE IS” CONDITION,
“WITH ALL FAULTS’.
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ARTICLE VII
BUYER’S REPRESENTATIONS
BUYER’S REPRESENTATIONS
Buyer makes the following representations:
7.1 Organization and Standing. Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Colorado and on the Closing
Date will be duly qualified to carry on its business in Colorado and in each state, including but
not limited to, Colorado, where failure to be so qualified could adversely affect the Assets or
consummation of the Transaction.
7.2 Power. Buyer has all requisite power and authority to carry on its business as
presently conducted and to execute and deliver this Agreement and perform its obligations under
this Agreement. The execution and delivery of this Agreement and consummation of the Transactions
and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be
in conflict with, any material provision of its governing documents or any material provision of
any agreement or instrument to which it is a party or by which it is bound, or, to its knowledge,
any judgment, decree, order, statute, rule or regulation applicable to it. Buyer meets the
requirements of applicable law to hold federal oil and gas leases and to become operator of the
Assets within all federal, state and local jurisdictions having jurisdiction over the Assets.
7.3 Authorization and Enforceability. The execution, delivery and performance of this
Agreement and the Transaction have been duly and validly authorized by all requisite corporate
action on behalf of Buyer. This Agreement constitutes Buyer’s legal, valid and binding obligation,
enforceable in accordance with its terms, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium and similar laws for the protection of creditors, as well as
to general principles of equity, regardless whether such enforceability is considered in a
proceeding in equity or at law.
7.4 Liability for Brokers’ Fees. Buyer has not incurred any liability, contingent or
otherwise, for brokers’ or finders’ fees relating to the Transaction for which Seller shall have
any responsibility whatsoever.
7.5 Litigation. There is no action, suit, proceeding, claim or investigation by any
person, entity, administrative agency or governmental body pending or, to Buyer’s knowledge,
threatened against it before any governmental authority that impedes or is likely to impede its
ability (i) to consummate the Transaction or (ii) to assume the liabilities to be assumed by it
under this Agreement.
7.6 Securities Laws, Access to Data and Information. Buyer acknowledges that the
Assets are or may be deemed to be “securities” under the Securities Act of 1933, as amended, and
certain applicable state securities or Blue Sky laws and that resale thereof may therefore be
subject to the registration requirements of such acts. The Assets are being acquired solely for
Buyer’s own account for the purpose of investment and not with a view to resale, distribution or
granting a participation therein in violation of any securities laws. Buyer is familiar with
Assets and it is a knowledgeable, experienced and sophisticated investor in the oil and gas
business.
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Buyer understands and accepts the risks and absence of liquidity inherent in ownership of the
Assets.
7.7 Financial Resources. Buyer has the financial resources available to close the
Transaction without any financing contingency and to perform its post-Closing obligations
hereunder.
7.8 Buyer’s Evaluation.
(a) Opportunity to Examine the Assets. Buyer is experienced and knowledgeable in
the oil and gas midstream and facilities business and is aware of its risks. Buyer has been
afforded the opportunity to examine the Assets, including the Records and other data in Seller’s
files. Except for the representations and warranties of Seller contained in this Agreement,
Buyer acknowledges and agrees that Seller has not made any other representations or warranties,
express or implied, written or oral, as to the accuracy or completeness of the information
supplied by Seller or any other information relating to the Assets furnished or to be furnished
to Buyer or its representatives by or on behalf of Seller, including without limitation any
estimate of the value of the Assets or reserves or any projections as to future events.
(b) Independent Evaluation. In entering into this Agreement, Buyer acknowledges
and affirms that it has relied on and will rely solely on the terms of this Agreement and upon
its own independent analysis, evaluation and investigation of, and judgment with respect to, the
business, economic, legal, tax or other consequences of this Transaction, including without
limitation, its estimate and appraisal of the extent and value of the Assets, and the petroleum,
natural gas and other reserves associated with the Assets. Buyer’s representatives have been
given opportunities to examine the Assets, including the Records. Except as expressly provided
in this Agreement, Seller shall not have any liability to Buyer or its affiliates, agents,
representatives or employees resulting from any use, authorized or unauthorized, of the Records
and other information supplied by Seller or other information relating to the Assets provided by
or on behalf of Seller.
ARTICLE VIII
COVENANTS AND AGREEMENTS
COVENANTS AND AGREEMENTS
8.1 Covenants and Agreements of Seller. Seller covenants and agrees with Buyer as
follows:
(a) Operations Prior to Closing. Seller will operate, or will use its reasonable
efforts to cause the operator to operate, the Assets in a good and workmanlike manner consistent
with past practices. From the date of execution of this Agreement to the Closing Date, Seller
will pay or cause to be paid its proportionate shares of all costs and expenses incurred in
connection with such operations and Seller will notify Buyer of capital expenditures in excess
of $100,000 per activity conducted on the Assets, provided that no such notification shall be
required for those matters set forth on Exhibit E.
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(b) Restriction on Operations. Subject to Section 8.1(a), unless Seller obtains
the prior written consent of Buyer to act otherwise, Seller will use good-faith efforts within
the constraints of applicable agreements not to (i) convey or dispose of any part of the Assets
(other than replacement of equipment or sale of oil, gas, and other liquid products produced
from the Assets in the ordinary course of business), or (ii) enter into any new contracts that
are not in the ordinary course of Seller’s business as owner and operator of the Assets.
(c) Notices of Claims. Seller shall promptly notify Buyer, if, between the date of
execution of this Agreement and the Closing Date, Seller receives written notice of any claim,
suit, action or other proceeding or written notice of any material default under any Material
Agreement.
(d) Compliance with Laws. During the period from the date of execution of this
Agreement to the Closing Date, Seller shall use good faith efforts to comply in all material
respects with all applicable statutes, ordinances, rules, regulations and orders relating to the
Assets.
(e) Xxxx-Xxxxx-Xxxxxx Act. Promptly following the execution of this Agreement and
no later than seven (7) business days thereafter, the Parties will file any notification and
report forms and related material that they may be required to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice under the
Xxxx-Xxxxx-Xxxxxx Act, will join in a request for early termination under the Xxxx-Xxxxx-Xxxxxx
Act, will use their best efforts to obtain such early termination, and will make any further
filings pursuant thereto that may be necessary in connection therewith. Buyer shall pay the
filing fee and all other fees required to be paid in connection with any such filings.
8.2 Covenants and Agreements of Buyer. Buyer covenants and agrees with Seller that:
(a) Corporate Status. Buyer shall maintain its status as a Colorado limited
liability company from the date hereof until the Final Settlement Date to assure that it will
not be under any material corporate, legal or contractual restriction that would prohibit or
delay the timely consummation of the Transaction.
(b) Replacement Bonds and Instruments. At Closing, Buyer shall provide evidence
that it has in place appropriate surety instruments and bonds as required by applicable
governmental agencies for Buyer to own and operate the Assets.
8.3 Covenants and Agreements of the Parties.
(a) Prior Confidentiality Agreement. The terms of this Section 8.3 supersede and
replace that certain Confidentiality and Non-Disclosure Agreement dated July 19, 2010, between
Seller and Buyer’s affiliate, Anadarko Petroleum Corporation, which agreement is hereby
terminated.
(b) Confidentiality. All data and information, whether written or oral, obtained
from Seller in connection with this Transaction, whether before or after the
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execution of this Agreement, and data and information generated from Seller’s data and
information by Buyer in connection with the Transaction (collectively, the “Information”), is
deemed by the Parties to be confidential and proprietary to Seller. Until the Closing (and for
a period of two (2) years from the date of this Agreement if Closing should not occur for any
reason), except as required by law, Buyer and its directors, officers, employees, agents and
representatives will hold in strict confidence the terms of this Agreement and all Information,
except any Information which: (1) at the time of disclosure to Buyer by Seller is in the public
domain; (2) after disclosure to Buyer by Seller becomes part of the public domain by publication
or otherwise, except by breach of this commitment by Buyer; (3) Buyer can establish by competent
proof was rightfully in its possession at the time of disclosure to Buyer by Seller; (4) Buyer
rightfully receives from third parties free of any obligation of confidence; (5) is disclosed to
Buyer’s consultants, investors and lenders and those engaged by Buyer to operate the Assets who
similarly agree in writing to protect the confidentiality of such Information and agree to use
such Information only for their due diligence evaluation of the Assets; or (6) is developed
independently by Buyer, provided that the person or persons developing the data shall not have
had access to the Information, or (7) is required to be disclosed in law, order, or rule
including a rule of any stock exchange. Buyer shall be responsible for the breach of these
confidentiality obligations by its directors, officers, employees, agents, representatives,
consultants, investors and lenders.
(c) Return of Information. If the Transaction does not close on or before the
Closing Date for reasons other than Seller’s wrongful breach of this Agreement under
circumstances where Buyer is, but for such breach, ready to close, if Seller so requests at any
time, Buyer shall (i) return to Seller all copies of the Information in possession of Buyer;
(ii) not utilize or permit utilization of the Information to compete with Seller; and (iii)
destroy any and all notes, reports, studies or analyses based on or generated when incorporating
or analyzing the Information. The terms of Sections 8.3(a)-(c) shall survive termination of
this Agreement.
(d) Injunctive Relief. Buyer agrees that Seller may not have an adequate remedy at
law if Buyer violates any of the terms of Sections 8.3(a)-(c). In such event, the Parties agree
that Seller will have the right, in addition to any other it may have, to seek injunctive relief
to restrain any breach or threatened breach of the terms of Sections 8.3(a)-(c), and/or to
obtain specific enforcement of such terms.
ARTICLE IX
TAX MATTERS
TAX MATTERS
9.1 Apportionment of Tax Liability. “Taxes” shall mean all ad valorem, property,
excise, net proceeds, and all other taxes and similar obligations assessed against the Assets or
based upon or measured by the ownership or operation of the Assets other than income, franchise or
similar taxes. All Taxes based on or attributable to the ownership or operation of the Assets
shall be deemed attributable to the period during which such Taxes are accrue. With respect to the
Assets, all Taxes shall be prorated between Buyer and Seller as of the Effective Date for all
taxable periods that include the Effective Date. Accordingly, for the purpose of apportioning the
liability for Taxes and the resulting Purchase Price adjustment pursuant to Section 2.2 at Closing
or pursuant to Section 13.1 in the Final Settlement Statement (if such adjustment is needed), (i)
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Buyer shall be responsible for all Taxes related to the Assets that are attributable to the
period of time after the Effective Date and (ii) Seller shall be responsible for all Taxes related
to the Assets that are attributable to the period of time prior to the Effective Date.
9.2 Apportionment of Taxes/Purchase Price Adjustment. Consistent with Section 9.1,
and based on the best current information available as of Closing, the pro-ration of Taxes shall be
made between the Parties as an adjustment to the Purchase Price pursuant to Section 2.2 and Section
13.1 and that pro-ration shall deemed to be a final settlement between the Parties with respect to
Taxes.
9.3 Tax Reports and Returns. Seller agrees to file all tax returns and reports
required to be filed by Seller, applicable to the ownership or operation of the Assets, for all
Taxes related to the Assets attributable to the period of time before the Closing Date. Buyer
agrees to file all tax returns and reports applicable to ownership or operation of the Assets for
all Taxes related to the period of time on and after the Closing Date. The Parties will cooperate
with each other after the Closing Date in connection with audits and other proceedings with respect
to any Taxes relating to the Assets.
9.4 Sales Taxes. Buyer shall be liable for and shall indemnify Seller for, any sales
and use taxes, conveyance, transfer and recording fees and real estate transfer stamps or taxes
(including any related interest, penalties or legal costs) that may be imposed on any transfer of
the Assets pursuant to this Agreement. If required by applicable law, Seller shall, in accordance
with applicable law, calculate and remit any sales or similar taxes that are required to be paid as
a result of the transfer of the Assets to Buyer and Buyer shall promptly reimburse Seller therefor.
If Seller receives notice that any sales and/or use taxes are due, Seller shall promptly forward
such notice to Buyer for handling.
9.5 Federal Tax Reporting. Buyer and Seller will cooperate to comply with all
procedural requirements of Section 1060 of the Code and the regulations promulgated thereunder.
Buyer and Seller agree that they will not take any tax position inconsistent with any allocations
made pursuant to this Agreement; provided, however, that (i) Buyer’s cost for the Assets may differ
from the total amount allocated thereunder to reflect Buyer’s capitalized transaction costs so
allocated, and (ii) Seller’s amount realized on the sale of the Assets may differ from the total
amount so allocated to reflect Seller’s transaction costs that reduce the amount realized.
ARTICLE X
CONDITIONS PRECEDENT TO CLOSING
CONDITIONS PRECEDENT TO CLOSING
10.1 Seller’s Conditions Precedent. The obligations of Seller at the Closing are
subject to the satisfaction or waiver at or prior to the Closing of the following conditions
precedent:
(a) All representations and warranties of Buyer contained in this Agreement are true in all
material respects (considering the Transaction as a whole) at and as of the Closing in accordance
with their terms as if such representations and warranties were remade at and as of the Closing,
and Buyer has performed and satisfied all covenants and agreements required by
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this Agreement to be performed and satisfied by Buyer at or prior to the Closing in all
material respects and Buyer shall deliver a certificate to Seller confirming the foregoing;
(b) No order has been entered by any court or governmental agency having jurisdiction over the
Parties or the subject matter of this Agreement that restrains or prohibits the Transaction and
that remains in effect at the time of Closing;
(c) The aggregate of Environmental Defect Adjustments does not exceed five percent (5%) of the
Purchase Price; and
(d) All applicable waiting periods (and any extensions thereof) under the Xxxx-Xxxxx Xxxxxx
Act shall have expired or otherwise been terminated.
10.2 Buyer’s Conditions Precedent. The obligations of Buyer at the Closing are
subject to the satisfaction or waiver at or prior to the Closing of the following conditions
precedent:
(a) All representations and warranties of Seller contained in this Agreement are true in all
material respects (considering the Transaction as a whole) at and as of the Closing in accordance
with their terms as if such representations and warranties were remade at and as of the Closing,
and Seller has performed and satisfied all covenants and agreements required by this Agreement to
be performed and satisfied by Seller at or prior to the Closing in all material respects and Seller
shall deliver a certificate to Buyer confirming the foregoing;
(b) No order has been entered by any court or governmental agency having jurisdiction over the
Parties or the subject matter of this Agreement that restrains or prohibits the Transaction and
that remains in effect at the time of Closing;
(c) The aggregate of Environmental Defect Adjustments does not exceed five percent (5%) of the
Purchase Price; and
(d) All applicable waiting periods (and any extensions thereof) under the Xxxx-Xxxxx Xxxxxx
Act shall have expired or otherwise been terminated.
ARTICLE XI
RIGHT OF TERMINATION
RIGHT OF TERMINATION
11.1 Termination. This Agreement may be terminated in accordance with the following
provisions:
(a) by mutual written consent of Seller and Buyer;
(b) in accordance with Sections 4.2 or 4.3 of this Agreement;
(c) by either Seller or Buyer if the Closing has not occurred within 60 days of the date of
this Agreement (the “Termination Date”); provided, however, that this right to terminate this
Agreement shall not be available to any Party whose breach of this Agreement or
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whose Affiliate’s breach of this Agreement has been the cause of, or resulted in, the failure
of the Closing to occur on or before such date;
(d) by either Seller or Buyer if a governmental entity shall have issued an order or taken any
other action, in each case permanently restraining, enjoining, or otherwise prohibiting the
transactions contemplated by this Agreement;
(e) by Seller if Seller’s conditions set forth in Section 10.1 are not satisfied through no
fault of Seller, or are not waived by Seller, as of the Closing Date (as defined in Section 12.1,
below); and
(f) by Buyer if Buyer’s conditions set forth in Section 10.2 are not satisfied through no
fault of Buyer, or are not waived by Buyer, as of the Closing Date.
11.2 Termination Pursuant to Section 11.1. If Buyer or either Seller terminates this
Agreement pursuant to Section 11.1 in the absence of a breach by the other Party, neither Buyer nor
Seller shall have any liability to the other Party for termination of this Agreement, other than
Buyer’s obligations set forth in Section 3.3.
11.3 Limitation on Damages. Buyer and Seller expressly waive any and all rights to
consequential, special, incidental, punitive, or exemplary damages and loss of profits resulting
from a breach of this Agreement.
ARTICLE XII
CLOSING
CLOSING
12.1 Date of Closing. The “Closing” will be held on the earlier of: (i) February 28,
2011; or (ii) another date mutually agreed by Buyer and Seller (the earlier of (i) and (ii) the
“Closing Date”)).
12.2 Time and Place of Closing. The Closing shall be held at the offices of Seller in
Denver, Colorado beginning at 9:00 a.m., or at such other time and place as Buyer and Seller may
agree in writing.
12.3 Closing Obligations. At Closing, the following events shall occur, each being a
condition precedent to the others and each being deemed to have occurred simultaneously with the
others:
(a) Seller shall execute, acknowledge and deliver to Buyer, an Assignment, Xxxx of Sale and
Conveyance substantially in the form attached as Exhibit F, and any applicable governmental
assignment forms, conveying the Assets to Buyer as of the Effective Date;
(b) Seller and Buyer shall have previously executed and delivered the Preliminary Settlement
Statement under Section 2.2(a);
(c) Buyer shall deliver the Closing Amount to the account at a bank designated by Seller by
wire transfer in immediately available funds, or by such other method as agreed to by the Parties;
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(d) Buyer shall deliver to Seller the Officer’s Certificate dated as of the Closing Date, in
form and substance similar to in Exhibit G;
(e) Seller shall deliver to Buyer the Officer’s Certificate dated as of the Closing Date, in
form and substance similar to in Exhibit H;
(f) Seller shall execute and deliver to Buyer a Certificate of non-foreign status
substantially in the form attached as Exhibit I;
(g) Buyer shall provide evidence that it has provided replacement instruments as set forth in
Section 8.2(b);
(h) Buyer shall deliver all required change of operator and similar notices required by
federal, state and local laws;
(i) Buyer shall execute a surface lease in favor of Buyer covering the Third Creek Property to
Buyer in a form reasonably acceptable to the Parties;
(j) Seller and Buyer will enter into a License Agreement substantially in the form of Exhibit
K, granting Buyer the right to operate the Gathering Systems and facilities associated therewith to
the extent that no Easement is conveyed to Buyer under this Agreement providing such right and
subject to the terms of such license;
(k) Buyer and Seller shall enter into an Access Agreement substantially in the form of Exhibit
L, granting Seller the right to access the sites of the Aristocrat Remediation Project, the 100
Lateral Remediation Project, the Xxxx Remediation Project, the Comanche Creek Remediation Project
and the Xxxx Remediation Project for purposes of environmental remediation and access to Seller’s
oil and gas xxxxx;
(l) Buyer and Seller shall enter into the Royalty Information Agreement substantially in the
form of Exhibit M;
(m) Buyer and Seller shall execute the Partial Assignment and Assumption Agreement related to
the Development Agreements substantially in the form of Schedule 1.2(i);
(n) Buyer and Seller shall execute the Partial Assignment and Assumption Agreement related to
the NGL Exchange Agreement and the NGL Purchase Agreement substantially in the form of Schedule
1.2(j);
(o) Buyer and Seller shall execute the Transition Services Agreement in the form attached as
Exhibit N; and
(p) Seller and Buyer shall take such other actions and deliver such other documents as are
contemplated by this Agreement.
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ARTICLE XIII
POST-CLOSING OBLIGATIONS
POST-CLOSING OBLIGATIONS
13.1 Post-Closing Adjustments.
(a) Final Settlement Statement. No later than 120 days after Closing, Seller will
prepare and deliver to Buyer, in accordance with customary industry accounting practices, the
final settlement statement (the “Final Settlement Statement”) setting forth (i) each adjustment
or payment that was not finally determined as of the Closing, (ii) showing the calculation of
such adjustment and, (iii) the final purchase price (the “Final Purchase Price”). No later than
30 days after receipt of Seller’s proposed Final Settlement Statement, Buyer shall deliver to
Seller a written report containing any changes that Buyer proposes to make to the Final
Settlement Statement. Unless otherwise agreed at the time, Buyer’s failure to deliver to Seller
a written report detailing proposed changes to the Final Settlement Statement by that date shall
be deemed an acceptance by Buyer of the Final Settlement Statement as submitted by Seller. The
Parties shall agree with respect to the changes proposed by Buyer, if any, no later than 45 days
after receipt of Seller’s proposed Final Settlement Statement. The date upon which such
agreement is reached or upon which the Final Purchase Price is established shall be herein
called the “Final Settlement Date.” If the Final Purchase Price is more than the Closing
Amount, Buyer shall pay Seller the amount of such difference. If the Final Purchase Price is
less than the Closing Amount, Seller shall pay to Buyer the amount of such difference. Any
payment by a Party shall be made by wire transfer of immediately available funds within five (5)
business days of the Final Settlement Date. Any adjustments requiring additional payment by
either Buyer or Seller shall also be made in the same manner.
(b) Dispute Resolution. If the Parties are unable to resolve a dispute as to the
Final Purchase Price by 75 days after Buyer’s receipt of Seller’s proposed Final Settlement
Statement, the Parties shall submit the dispute to binding arbitration to be conducted pursuant
to Section 14.5(d).
13.2 Records. Seller agrees to make the Records available for pick up by Buyer as
soon as is reasonably practical, but in any event on or before 10 business days after Closing.
Seller may retain copies of the Records and Seller shall have the right to review and copy the
Records during standard business hours upon reasonable notice for a period of two (2) years after
Closing. Buyer agrees that the Records will be maintained in compliance with all applicable laws
governing document retention. Buyer will not destroy or otherwise dispose of Records after
Closing, unless Buyer first gives Seller reasonable notice and an opportunity to copy the Records
to be destroyed. The Parties acknowledge and agree that Seller shall provide to Buyer the Records
as they are currently maintained by Seller and Seller shall not have any obligation to manipulate
electronic data or otherwise supply to Buyer the Records in a format not currently maintained by
Seller; neither shall Buyer, in allowing Seller to copy the Records post Closing, be obligated to
manipulate electronic data or otherwise supply Seller the Records in a format not then maintained
by Buyer. The Records shall not include (i) documents subject to legal privilege (such as the
attorney-client privilege or work product doctrine) or unaffiliated third party contractual
restrictions on disclosure or transfer, unless such documents are necessary for Buyer (in Buyer’s
sole reasonable discretion) to accurately evaluate the Assets and the requisite
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permissions have been secured, (ii) Seller’s general corporate books, records and files, even
if containing references to the Assets, (iii) interpretative or subjective data, (iv) personnel
information, (v) income tax information not related to the Assets, (vi) records relating to the
sale of the Assets, including proposals received from and records of negotiations with third
parties and economic analyses associated therewith, and information relating to litigation and
claims retained by Seller, and (vii) any books, records or files constituting “Excluded Assets.”
13.3 Proceeds and Invoices For Property Expenses Received After the Final Settlement
Date. After the Final Settlement Date, those Proceeds attributable to the Assets received by a
Party, or invoices for Property Expenses, or invoices paid by one Party for or on behalf of the
other Party which were not already included as a Purchase Price adjustment, shall be settled
consistent with the terms of this Agreement.
13.4 Further Assurances. From time to time after Closing, Seller and Buyer shall each
execute, acknowledge and deliver to the other such further instruments and take such other action
as may be reasonably requested in order to accomplish more effectively the purposes of the
Transaction.
ARTICLE XIV
ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION
ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION
14.1 Buyer’s Assumption of Liabilities and Obligations. Upon Closing and subject to
the provisions of Sections 5.3(c), 13.3, 14.3 and 14.4, and except for Retained Liabilities, Buyer
agrees to assume and pay, perform, fulfill and discharge of all claims, costs, expenses,
liabilities and obligations accruing or relating to (i) the Assets, (ii) the Material Agreements,
(iii) the Assumed Environmental Liabilities, (iv) the owning, developing, operating or maintaining
of the Assets or the transporting, processing and marketing of hydrocarbons through the Assets
including, without limitation, Capital Projects listed on Exhibit E, the obligation to remove or
decommission the Gathering Systems and the Ft. Xxxxxx Plant, as well as any associated reclamation
obligations related thereto, and (v) obligations incurred by Seller in the normal course of
business (collectively, the “Assumed Liabilities”); provided, however, for purposes of
clarification and avoidance of doubt, Buyer shall assume the obligation to remove or decommission
the Gathering Systems and the Ft. Xxxxxx Plant, as well as any associated reclamation obligations
related thereto (collectively “Decommissioning Obligations”) irrespective of whether the obligation
or requirement to perform, fulfill and/or discharge Decommissioning Obligations arose before or
after the Closing Date. Notwithstanding the foregoing, and subject to the provisions of Sections
4.1, 5.3(a)-(c), 13.3, 14.3 and 14.4, Buyer does not assume and will not be obligated for any of
the following liabilities or obligations (collectively, the “Excluded Liabilities”): (u) any
liabilities or obligations of Seller to the extent related to any Excluded Assets, (v) all
obligations and liabilities for the payment of Property Expenses and Taxes related to the Assets
that are attributable to the period of time before the Effective Date, (w) any liabilities or
obligations of Seller for any breach or default by Seller under a Material Agreement prior to the
Effective Date, or any event prior to the Effective Date (except as otherwise provided herein), (x)
any liabilities or obligations arising from any violation of Law by Seller prior to the Effective
Date (except with respect to any Assumed Liabilities), (y) any liabilities or obligations arising
from any lawsuit arising from an incident which occurred prior to the Effective Date, or (z) any
criminal fines or penalties imposed by a governmental
29
entity resulting either from an investigation or proceeding before a governmental entity
regarding events, facts, circumstances, or acts which occurred or failed to occur prior to the
Effective Date or resulting from fraud or intentional misconduct by Seller prior to the Effective
Date. The Excluded Liabilities set forth in subparagraph (w) above shall become Assumed
Liabilities at the end of the period set forth in Section 14.4(c).
14.2 Seller’s Retention of Liabilities and Obligations. Upon Closing and subject to
the provisions of Sections 5.3(a), 13.3, 14.3 and 14.4, Seller retains all claims, costs, expenses,
liabilities and obligations accruing or relating to (i) the Retained Environmental Liabilities;
(ii) any injury, death or casualty occurring on or attributable to the Assets prior to the
Effective Date; and (iii) the Excluded Liabilities (collectively, the “Retained Liabilities”). By
retaining any pre-Effective Date liabilities or obligations in Articles V and XIV, Seller does not
intend to, and shall not be deemed to have admitted to any third party, any liability for the
period of time prior to the Effective Date.
14.3 Indemnification. For the purposes of this Article XIV, “Loss” or “Losses” shall
mean any actual losses, costs, expenses (including court costs, reasonable fees and expenses of
attorneys, technical experts and expert witnesses and the cost of investigation), liabilities,
damages, demands, suits, claims, and sanctions of every kind and character (including civil fines)
arising from, related directly or indirectly or reasonably incident to matters indemnified against;
excluding however any special, consequential, punitive or exemplary damages, loss of profits
incurred by a Party hereto or Loss incurred as a result of the indemnified Party indemnifying a
third party.
After the Closing, the Parties shall indemnify each other as follows:
(a) Seller’s Indemnification of Buyer. Seller assumes all risk, liability,
obligation and Losses in connection with, and shall indemnify, save and hold harmless Buyer, its
officers, directors, employees and agents, from and against all Losses which arise from or in
connection with (i) the Retained Liabilities (ii) any matter for which Seller has agreed to
indemnify Buyer under this Agreement, and (iii) any breach of representations, warranties,
covenants, or agreements by Seller under this Agreement.
(b) Buyer’s Indemnification of Seller. Buyer assumes all risk, liability,
obligation and Losses in connection with, and Buyer shall indemnify, save and hold harmless
Seller, its officers, directors, employees and agents, from and against all Losses which arise
from or in connection with (i) the Assumed Liabilities, (ii) any matter for which Buyer has
agreed to indemnify Seller under this Agreement, and (iii) any breach of representations,
warranties, covenants, or agreements by Buyer under this Agreement.
(c) Release. Buyer shall be deemed to have released Seller at the Closing from any
Losses for which Buyer has agreed to indemnify Seller hereunder, and Seller shall be deemed to
have released Buyer at the Closing from any Losses for which Seller has agreed to indemnify
Buyer hereunder.
14.4 Limitation on Seller’s Indemnity Obligations. The provisions of this Section
14.4 shall not apply to Retained Liabilities or to Seller’s indemnification of Buyer for Retained
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Environmental Liabilities, which shall be governed by the provisions of Article V (except as
specifically provided in Article V). With respect to all other claims for indemnification made by
Buyer, the following limitations shall apply:
(a) Threshold. If the Loss that is the subject of a Claim (as defined in Section
14.5(c)) for indemnification by Buyer does not exceed a $50,000 threshold per event or
circumstance, or if the Loss is not an actual Loss already incurred by Buyer, then Buyer shall
not be entitled to indemnification from Seller for such Loss, and Buyer shall be deemed to have
released Seller from all liabilities and obligations with respect to such Claim and/or Loss.
(b) Deductible. If Buyer delivers one or more valid Claims for indemnity made
under Section 14.3, and if the aggregate of the actual Losses exceeding the threshold of $50,000
per Loss, exceeds $500,000, then Buyer may proceed to make such a claim pursuant to the
provisions of Section 14.5, provided, however that Seller will be liable only for the portion of
the claim exceeding $500,000 in the aggregate (which is a deductible, not a threshold) and in no
event shall Seller’s aggregate liability under this Section exceed in total, a maximum of thirty
percent (30%) of the Purchase Price.
(c) Time. As a condition precedent to Seller’s obligation to indemnify Buyer,
Buyer must deliver a written Claim Notice (as defined in Section 14.5(b)) to Seller on or before
twelve (12) months from Closing at 5:00 p.m. Mountain Time.
14.5 Procedure. The indemnifications contained in Section 14.3 shall be implemented
as follows:
(a) Coverage. Such indemnity shall extend to all Losses suffered or incurred by
the indemnified Party.
(b) Claim Notice. The Party seeking indemnification under the terms of this
Agreement (“Indemnified Party”) shall submit a written “Claim Notice” to the other Party
(“Indemnifying Party”) which, to be effective, must state: (i) the amount of each payment
claimed by an Indemnified Party to be owing, (ii) the basis for such claim, with supporting
documentation, and (iii) a list identifying to the extent reasonably possible each separate item
of Loss for which payment is so claimed. The amount claimed shall be paid by the Indemnifying
Party to the extent required herein within 30 days after receipt of the Claim Notice, or after
the amount of such payment has been finally established, whichever last occurs; provided,
however, that any objection to the Claim Notice by the Indemnifying Party must be provided to
the Indemnified Party within 15 days of receipt of the Claim Notice and any undisputed portion
of the Claim paid within 30 days of receipt of the Claim Notice, or the Indemnifying Party
waives its right to protest the Claim.
(c) Information. Within 60 days after the Indemnified Party receives notice of a
claim or legal action that may result in a Loss for which indemnification may be sought under
this Agreement (a “Claim”), the Indemnified Party shall give written notice of such Claim to the
Indemnifying Party. If the Indemnifying Party or its counsel so requests, the Indemnified Party
shall furnish the Indemnifying Party with copies of all pleadings and other
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information with respect to such Claim. At the election of the Indemnifying Party made
within 60 days after receipt of such notice, the Indemnified Party shall permit the Indemnifying
Party to assume control of such Claim (to the extent only that such Claim, legal action or other
matter relates to a Loss for which the Indemnifying Party is liable), including the
determination of all appropriate actions, the negotiation of settlements on behalf of the
Indemnified Party, and the conduct of litigation through attorneys of the Indemnifying Party’s
choice. No settlement of a Claim can result in any liability or cost to the Indemnified Party
for which it is entitled to be indemnified hereunder without its consent. If the Indemnifying
Party elects to assume control, (i) any expense incurred by the Indemnified Party thereafter for
investigation or defense of the matter shall be borne by the Indemnified Party, and (ii) the
Indemnified Party shall give all reasonable information and assistance, other than pecuniary,
that the Indemnifying Party shall deem necessary to the proper defense of such Claim, legal
action, or other matter. In the absence of such an election to assume control by the
Indemnifying Party, the Indemnified Party will use its best efforts to defend, at the
Indemnifying Party’s expense, any claim, legal action or other matter to which such other
Party’s indemnification under this Article 14 applies until the Indemnifying Party assumes such
defense, and, if the Indemnifying Party fails to assume such defense within the time period
provided above, settle the same in the Indemnified Party’s reasonable discretion at the
Indemnifying Party’s expense. If such a Claim requires immediate action, the Parties agree to
cooperate in good faith to take appropriate action so as not to jeopardize defense of such Claim
or either Party’s position with respect to such Claim.
(d) Disputes. The Parties agrees to resolve all disputes arising under this
Agreement (“Disputes”) by submission to binding arbitration in Denver, Colorado, such
arbitration to be conducted as follows: The arbitration proceeding shall be governed by
Colorado law and shall be conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (“AAA”), with discovery to be conducted in accordance with the
Federal Rules of Civil Procedure, and with any disputes over the scope of discovery to be
determined by the Arbitrators. The arbitration shall be before a three-person panel of neutral
arbitrators, consisting of one person picked by each side, and the two arbitrators so selected
picking the third (with the panel so picked being the “Arbitrators”). Parties will endeavor to
select arbitrators with experience in oil and gas transactions and midstream operations in the
oil and gas industry. The Arbitrators shall conduct a hearing no later than 60 days after
submission of the matter to arbitration, and render a written decision within 30 days of the
hearing. At the hearing, the Parties shall present such evidence and witnesses as they may
choose, with or without counsel. Adherence to formal rules of evidence shall not be required
but the arbitration panel shall consider any evidence and testimony that it determines to be
relevant, in accordance with procedures that it determines to be appropriate. Any award entered
in the arbitration shall be made by a written opinion stating the reasons and basis for the
award made and any payment due pursuant to the arbitration shall be made within fifteen (15)
days of the Arbitrators’ decision. The final decision may be filed in a court of competent
jurisdiction and may be enforced by any Party as a final judgment of such court. Each Party
shall bear its own costs and expenses of the arbitration, provided, however, that the costs of
employing the arbitrators shall be borne fifty percent (50%) by the Seller and fifty percent
(50%) by the Buyer.
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14.6 No Insurance; Subrogation. The indemnifications provided in this Agreement shall
not be construed as a form of insurance. Buyer and Seller hereby waive for themselves, their
successors or assigns, including, without limitation, any insurers, any rights to subrogation for
Losses for which each of them is respectively liable or against which each respectively indemnifies
the other, and, if required by applicable policies, Buyer and Seller shall obtain waiver of such
subrogation from their respective insurers.
14.7 Reservation as to Non-Parties. Nothing herein is intended to limit or otherwise
waive any recourse Buyer or Seller may have against any non-party for any obligations or
liabilities that may be incurred with respect to the Assets.
ARTICLE XV
MISCELLANEOUS
MISCELLANEOUS
15.1 Expenses. Except as otherwise specifically provided, all fees, costs and
expenses incurred by Buyer or Seller in negotiating this Agreement or in consummating the
Transaction shall be paid by the Party incurring the same, including without limitation,
engineering, land, title, legal and accounting fees, costs and expenses.
15.2 Notices. All notices and communications required or permitted under this
Agreement shall be in writing and addressed as set forth below. Any communication or delivery
hereunder shall be deemed to have been duly made and the receiving Party charged with notice (i) if
personally delivered, when received, (ii) if sent by telecopy or facsimile transmission, the next
following business day after it is received, (iii) if mailed, five (5) business days after mailing,
certified mail, return receipt requested, or (iv) if sent by overnight courier, one business day
after sending. All notices shall be addressed as follows:
If to Seller:
Encana Oil & Gas (USA) Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx, 00000
Attention: Vice President, U.S. Midstream
Telephone: 000-000-0000
Fax: 000-000-0000
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx, 00000
Attention: Vice President, U.S. Midstream
Telephone: 000-000-0000
Fax: 000-000-0000
With required copy to:
Encana Oil & Gas (USA) Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx, 00000
Attention: General Counsel
Telephone: 000-000-0000
Fax: 000-000-0000
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx, 00000
Attention: General Counsel
Telephone: 000-000-0000
Fax: 000-000-0000
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If to Buyer:
Xxxx-XxXxx Gathering LLC
c/o Western Gas Holdings, LP
0000 Xxxx Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: President and CEO
Telephone: 000-000-0000
Fax: 000-000-0000
c/o Western Gas Holdings, LP
0000 Xxxx Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: President and CEO
Telephone: 000-000-0000
Fax: 000-000-0000
With required copy to:
Western Gas Holdings, LP
0000 Xxxx Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: 000-000-0000
Fax: 000-000-0000
0000 Xxxx Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: 000-000-0000
Fax: 000-000-0000
Any Party may, by written notice so delivered to the other Party, change the address or individual
to which delivery shall thereafter be made.
15.3 Amendments. This Agreement may not be amended nor any rights hereunder waived
except by an instrument in writing signed by the Party to be charged with such amendment or waiver
and delivered by such Party to the Party claiming the benefit of such amendment or waiver.
15.4 Assignment. A Party shall not assign all or any portion of its rights or
delegate all or any portion of its duties hereunder unless it continues to remain liable for the
performance of its obligations hereunder. In the event Buyer assigns substantially all of the
Assets to an affiliate, the obligations of Buyer hereunder shall also be assigned to such
affiliate. Buyer may not assign the benefits of any of Seller’s indemnity obligations contained in
this Agreement except to an affiliate of Buyer (provided that all rights and obligations be fully
assigned to such affiliate), and any permitted assignment to an unaffiliated entity of Buyer shall
not include such benefits. No such assignment or obligation shall increase the burden on Seller or
impose any duty on Seller to communicate with or report to any transferee, and Seller may continue
to look to Buyer for all purposes under this Agreement.
15.5 Announcements. Seller and Buyer shall consult with each other with regard to all
press releases and other announcements issued on or after the date of execution of this Agreement
concerning this Agreement or the Transaction and, except as may be required by applicable laws or
the applicable rules and regulations of any governmental agency, financing entity or stock
exchange, Buyer or Seller shall not issue any such press release or other publicity without the
prior written consent of the other Party, which consent shall not be unreasonably withheld.
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15.6 Counterparts/Fax Signatures. This Agreement may be executed by Buyer and Seller
in any number of counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same instrument. Facsimile signatures shall be
considered binding.
15.7 Governing Law. This Agreement and the Transaction and any arbitration or dispute
resolution conducted pursuant hereto shall be construed in accordance with, and governed by, the
laws of the State of Colorado without reference to the conflict of laws principles thereof.
15.8 Entire Agreement. This Agreement constitutes the entire understanding between
the Parties with respect to the subject matter hereof, superseding all negotiations, prior
discussions and prior agreements and understandings relating to such subject matter.
15.9 Knowledge. The knowledge of a Party shall mean for purposes of this Agreement,
the actual, conscious knowledge of the Party at the time the assertion regarding knowledge is made.
If the Party is a corporation or other entity other than a natural person, knowledge of such Party
shall mean that the actual, conscious knowledge must be on the part of the person having
supervising management authority over the matters to which such knowledge pertains.
15.11 Survival. The representations, warranties, covenants and agreements set forth
in this Agreement shall not survive Closing, except that the representations set forth in Sections
6.1 through 6.8 and Sections 6.11, 6.12, and 6.13, as well as Sections 7.1 through 7.8, shall
survive for a period of twelve (12) months following Closing.
15.12 No Third-Party Beneficiaries. This Agreement is intended to benefit only the
Parties hereto and their respective permitted successors and assigns.
15.13 Parent Guaranty. The performance of Buyer’s rights and obligations under this
Agreement shall be guaranteed by Parent for the benefit of Seller.
(signatures on following page)
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The Parties have executed this Agreement on the dates set forth below, effective as of the
Effective Date.
SELLER: Encana Oil & Gas (USA) Inc. |
||||
By: | /s/ Xxx Xxxxxxxxx | Date: January 14, 2011 | ||
Name: | Xxx Xxxxxxxxx | |||
Title: | Vice President, Finance | |||
BUYER: Xxxx-XxXxx Gathering LLC |
||||
By: | /s/ Xxxxxxxx X. Xxxx | Date: January 14, 2011 | ||
Name: | Xxxxxxxx X. Xxxx | |||
Title: | Senior Vice President and Chief Financial Officer | |||
Western Gas Partners, LP, by Western Gas Holdings, LLC,
its general partner |
||||
By: | /s/ Xxxxxxxx X. Xxxx | Date: January 14, 2011 | ||
Name: | Xxxxxxxx X. Xxxx | |||
Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
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