ASSET PURCHASE AGREEMENT
BETWEEN
AMERICAN RIVERS OIL COMPANY,
a Wyoming corporation
AND
TRINITY ENERGY CORPORATION,
a Colorado corporation
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into this 4th day of June,
1998 by and between AMERICAN RIVERS OIL COMPANY, a Wyoming corporation
("Seller") and TRINITY ENERGY CORPORATION, a Colorado corporation (the
"Purchaser").
BACKGROUND
Seller is the owner of certain assets which Seller desires to sell and transfer
to Purchaser and Purchaser desires to purchase and receive from Seller for the
consideration and upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the promises and of the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
Section 1. Transfer of Assets. Upon and subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to transfer, convey and assign to
Purchaser on the date provided in Section 2 hereof, free and clear of all liens
and pledges of every kind, character, and description whatsoever, and Purchaser
agrees to purchase and acquire from Seller on the said date, the Interests (as
"Interests" are defined in Section 1.1 of this Agreement).
1.1 Interests Defined. As used herein, the term "Interests" means the aggregate
of all right, title and interest owned by Seller in, to and under the following:
(a) The oil, gas and mineral leases and the operating rights, mineral interests,
royalty interests, overriding royalty interests, payments out of production and
interests in or under unit agreements described in Exhibit A (the "Leases"),
insofar as the Leases cover and relate to the lands and depths also described in
Exhibit A (the "Land");
(b) All other contracts, (including but not limited to operating agreements, gas
purchase contracts and crude oil purchase contracts) agreements, leases,
licenses, permits, easements and orders in any way relating to the Leases or the
Land, the operations conducted or to be conducted thereon, or the production,
treatment, sale or disposal of hydrocarbons or water produced therefrom or
attributable thereto;
(c) All xxxxx (including, without limitation, disposal, supply or injection
xxxxx), personal property, fixtures (including, without limitation, plants,
gathering systems, pipelines, compressors and dehydration and other treatment
facilities), equipment (including, without limitation, inventory and supplies)
and improvements as of the date of execution of this Agreement and as of the
Closing Date located on the Leases or the Land, or upon lands pooled or unitized
therewith, or upon lands covered by said agreements, licenses or easements, or
used or obtained in connection therewith or with the operation or maintenance
thereof or with the production, treatment, sale or disposal of hydrocarbons or
water produced therefrom or attributable thereto, and all original books, files,
seismic records and tapes (to the extent Seller may convey ownership or rights
concerning the use of same), other records and information of Seller (including
without limitation all land, geological geophysical and accounting files and
records) pertaining in any way to the Interests.
1.2 Limited Assumption of Liabilities. Buyer shall assume and discharge as they
become due, the liabilities and obligations accruing from and subsequent to the
Closing Date pursuant to the Leases, the contracts, agreements, leases,
licenses, permits, easements and orders, and the xxxxx, all as more fully
defined at Section 1.1 as the Interests, and no others, excluding any such
liability arising due to the nonfeasance or malfeasance of Seller, or due to a
breach of such instruments by Seller prior to Closing.
Section 2. The Closing. The sale and purchase provided in this Agreement shall
be consummated at a closing to be held at the offices of Xxxxxxxx & Rice,
Denver, Colorado at 9:00 A.M., local time, on the 4th day of June, 1998, or at
such other place, time, and date as the parties hereto shall mutually agree
upon. The date and event of the sale and purchase are, respectively, hereinafter
referred to as the "Closing Date" and the "Closing."
Section 3. Payment of Consideration.
3.1 Basic Amount. The purchase price for the Interests, subject to adjustment as
provided in this section, shall be Nine Hundred Thousand Dollars ($900,000.)
(the "Purchase Price"), which shall be paid to Seller on the Closing Date in
immediately available funds.
3.2 Adjustments in Purchase Price. The Purchase Price shall be decreased by an
amount equal to the proceeds received by the Seller for the sale of hydrocarbons
produced and sold from the oil and gas properties owned by the Seller since the
chart changing, which occurred on or about March 1, 1998, net of all applicable
taxes and royalties not reimbursed to the Seller by a purchaser of such
hydrocarbons. The adjustment shall be made by check on or before August 4, 1998
3.3 Allocation of Purchase Price. The Purchase Price shall be allocated as set
forth in Schedule 3.3 attached hereto.
3.4 Closing Statement. Seller shall deliver to Purchaser not less than two
business days before the Closing Date a statement in the form attached hereto as
Exhibit 3.4 (the "Closing Statement") setting forth the adjustments to the
Purchase Price provided in Section 3.2. The Closing Statement shall be prepared
in accordance with customary accounting principles used in the oil and gas
industry.
Section 4. Closing Documents.
4.1 Documents to be Delivered by the Seller. Seller agrees to deliver to the
Purchaser at the Closing the following which shall be in form and substance
satisfactory to Purchaser and its counsel:
A. Such bills of sale, deeds, assignments, and executed counterparts of
assignment and assumption agreements, as shall be reasonably necessary, to
transfer to Purchaser all of the Interests, together with written consents of
all parties whose consent to such assignment is required.
B. A certificate executed by Seller pursuant to Section 10.12 of this Agreement;
C. All of the Seller's books and records and other data relating to the
Interests:
D. A copy, certified as of the date of the Closing by the Secretary of the
Seller, of the resolutions of the Seller's Board of Directors and the Seller's
shareholders, respectively, authorizing the execution, delivery and performance
of this Agreement and the related documents; and
E. Incumbency certificates, dated the date of Closing, executed by the Secretary
of the Seller, which shall certify by name and title and bear the signature of
the officers of the Seller, respectively, authorized to sign this Agreement and
the related documents.
4.2 Documents to be Delivered by Purchaser. Purchaser agrees to deliver to
Seller at the Closing the following documents which shall be in form and
substance satisfactory to the Seller, and its counsel:
A. The Purchase Price;
B. A certificate by Purchaser pursuant to Section 11.2 of this Agreement;
C. A copy, certified as of the date of Closing by the Secretary of Purchaser, of
the resolutions of the Purchaser's Board of Directors, authorizing the
execution, delivery and performance of this Agreement and the related documents;
and
D. An incumbency certificate, dated the date of the Closing, executed by the
Secretary of Purchaser, which shall certify by name and title and bear the
signature of the officers of Purchaser authorized to sign this Agreement and the
related documents.
Section 5. Access to Properties and Records. From and after the date of this
Agreement, Seller shall afford to the officers, attorneys, accountants, and
other authorized representatives of Purchaser free and full access to the xxxxx,
equipment, properties, books and records of the Seller relating to the Interests
in order that Purchaser may have full opportunity to make whatever investigation
it shall desire of the Interests, provided that the investigation shall not
unreasonably interfere with the operations of the Seller.
Section 6. Representations and Warranties of Seller. Seller represents and
warrants unto Purchaser that as of the date hereof:
6.1 Due Organization. Seller is a corporation duly organized and in good
standing under the laws of the State of Wyoming. Seller has the power to own its
properties and assets and to carry on its business as now conducted, and is duly
qualified to do business and is in good standing in every jurisdiction in which
the nature of its business makes proper qualification necessary.
6.2 Authority. Seller has full corporate power and authority to execute and
deliver this Agreement and to perform all of its obligations hereunder in
accordance with the terms hereof; all necessary corporate action to authorize
this Agreement and the consummation of the transactions contemplated hereby on
the part of Seller has been duly and effectively taken, including without
limitation, the approval thereof by the Board of Directors of Seller; and this
Agreement constitutes the valid and binding obligation of Seller enforceable in
accordance with its terms.
6.3 Intentionally left blank.
6.4 Real Estate and Mineral Leases. Seller has good and marketable title to the
Interests. The Seller is, to the extent described in Schedules 6.4 and 6.5,
lessee or holder under the real estate leases, oil and gas leases, including but
not limited to leases included within all drilling pools and units,
rights-of-way and easements which are included among the Interests, all of which
real estate leases, oil and gas leases, rights-of-way and easements are
described on Schedule 6.4. The Seller now enjoys and on the Closing Date will
enjoy quiet and undisturbed possession under each of said leases, rights-of-way
and easements to the extent described in Schedule 6.4 and 6.5. The Seller is
vested with good and marketable title to each of said real estate leases, oil
and gas leases, rights-of-way and easements.
6.5 Xxxxx. Schedule 6.5 contains a true, correct and complete list of all oil
and gas xxxxx in which the Seller has an interest which are among the Interests,
including the percentage and type of interest therein.
6.6 Intentionally left blank.
6.7 Physical Condition of Operating Interests. All of the owned and leased real
estate included in the Interests and the structures erected thereon and all of
the owned and leased tangible personal property included in the Interests are
accepted by Buyer as is. Seller makes no representations as to the condition of
the equipment and fixtures.
6.8 Intentionally left blank.
6.9 Intentionally left blank.
6.10 Processing, Sale and Transportation of Production. Except as described in
Schedule 6.10, the Seller has not produced or sold gas subject to balancing
rights of third parties (including without limitation other owners of interests
in the Land and purchasers of production therefrom) or subject to balancing
duties under governmental requirements, and the Seller is not obligated by
virtue of any prepayment made under any production sales contract or any other
contract containing a take-or-pay clause, or under any similar arrangement, to
deliver oil, gas or other minerals produced from or allocated to any of the
Interests at any time after the Effective Time without receiving full payment
therefor at the time of delivery. Except as described in Schedule 6.10, the
Seller has not collected any proceeds from the sale of hydrocarbons produced
from the Interests which are subject to refund. Except as set forth in Schedule
6.10, proceeds from the sale of oil, gas and natural gas liquids from the
Interests are being received by the Seller in a timely manner and are not being
held in suspense for any reason. Seller has described in Schedule 6.10 and made
available to Purchaser for examination all contracts and agreements (other than
routine division orders terminable by the Seller upon less than sixty (60) days'
notice) pursuant to which hydrocarbons produced from the Interests are treated,
compressed, sold, transported, processed or otherwise disposed of or marketed.
Except as disclosed in Schedule 6.10, no person has any call upon, option to
purchase or similar rights with respect to the Interests or to the production
therefrom.
6.11 Environmental Matters. Except as disclosed in Schedule 6.11, the Seller, to
the best of Seller's knowledge, with respect to its respective ownership or
operation of the Interests (i) is currently in compliance with all applicable
environmental laws, (ii) has not materially violated any applicable
environmental law in effect prior to the date hereof, (iii) is unaware of any
present requirements of any applicable environmental law which is due to be
imposed which will increase its cost of complying with the environmental laws.
As used in this Agreement, the terms (i) "Environmental Laws" include but are
not limited to any federal, state or local law, statute, charter or ordinance,
and any rule, regulation, binding interpretation, binding policy, permit, order,
court order or consent decree issued pursuant to any of the foregoing, which
pertains to, governs or otherwise regulates any of the following activities,
including without limitation (a) the emission, discharge, release or spilling of
any substance into the air, surface water, groundwater, soil or substrata; (b)
the manufacturing, processing, sale, generation, treatment, storage, disposal,
labeling or other management of any waste, hazardous substance or hazardous
waste, and (ii) "Hazardous Substance" and "Hazardous Waste," include any
substance defined as such by an applicable environmental law.
6.12 Regulatory Jurisdiction. Neither the ownership nor the operation of the
Interests by the Seller is currently subject to certificate authority or rate
regulation under the Natural Gas Act or the Natural Gas Policy Act as an
interstate pipeline, natural gas company, marketing affiliate or other federally
jurisdictional entity, nor subject to certificate authority or rate regulation
under the applicable law of the State of Colorado as a public utility.
6.13 No Adverse Changes. Except as set forth on Schedule 6.13 hereto, since
March 1, 1998, there has not been:
(a) any mortgage or pledge of, or creation of any lien, pledge, charge, security
interest or encumbrance respecting the Interests, except for liens of current
property taxes not yet due and payable;
(b) any damage, theft, destruction or casualty loss, whether or not covered by
insurance, adversely affecting the Interests;
(c) any sale, lease, transfer or assignment of the Interests;
(d) any loss, waiver or release of any material rights of the Seller with
respect to the Interests, whether or not in the ordinary course of business or
consistent with past practice;
(e) the negotiation or execution of any arrangement, agreement or understanding
with respect to the Interests to which the Seller is a party which cannot be
terminated on notice of thirty days or less without cost or penalty; and
(f) any other transaction, contract or commitment entered into by the Seller
with respect to the Interests otherwise than in the ordinary course of business.
6.14 Claims or Litigation. Except as disclosed in Schedule 6.14, there is
neither any suit, action, claim, investigation or other proceeding pending or
threatened before any court or governmental agency, board, department,
commission, bureau, or instrumentality (including but not limited to any
federal, state, local or foreign governmental agency or body concerned with the
control of foreign exchange, energy, environmental protection or pollution
control, franchising or other distribution arrangements, antitrust or trade
regulation, civil rights, labor or discrimination, safety or health, zoning or
land use), against the Seller or, to the best knowledge and belief of Seller,
any state of facts existing which could give rise to any such proceedings; and
Seller is not in violation of any order, decree or judgment of any court or
arbitration tribunal or governmental board, department, commission, bureau,
instrumentality or agency which would adversely affect the Interests.
6.15 Compliance with Laws. The Seller has complied in all material respects with
all applicable laws, statutes, rules and regulations and orders of federal,
state, local and foreign governments and governmental agencies applicable to it
and its business, assets, properties and operations and no claim of violation
(or basis therefor) of any such laws or regulations exists on the date hereof.
6.16 Intentionally left blank.
6.17 Intentionally left blank.
6.18 Consents and Approvals. Except as set forth on Schedule 6.18 hereto, there
are no authorizations, consents, approvals or notices required to be obtained or
given by the Seller or waiting periods required to expire, in order that the
Interests be transferred to Purchaser and otherwise that this Agreement and the
transactions provided for herein may be consummated by Seller.
6.19 Disclosure. The Seller has disclosed all material facts relating to the
Interests of which Seller, its officers and/or directors has knowledge including
business conditions (financial and otherwise) and operations of the Seller in
this Agreement (including the Schedules hereto). Neither this Agreement nor any
other document, certificate, exhibit, statement, or schedule furnished or to be
furnished by or on behalf of the Seller to Purchaser in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact of which Seller, its officers and/or directors has knowledge,
or omits or will omit to state a material fact of which Seller, its officers
and/or directors has knowledge, necessary to make the factual statements
contained therein, in light of the circumstances under which made, not
misleading.
6.20 Conflicts. The execution and delivery of this Agreement by Seller does not,
and the consummation of the transactions contemplated by this Agreement shall
not, (a) violate or be in conflict with, or require the consent of any person or
entity under any provision of the governing documents of the Seller, (b)
conflict with, result in a breach of, or constitute a default (or an event that
with the lapse of time or notice, or both would constitute a default) under any
agreement or instrument to which Seller is a party, (c) violate any provision of
or require any consent, authorization or approval under any judgment, decree,
judicial or administrative order, award, writ, injunction, statute, rule or
regulation applicable to Seller, or (d) result in the creation of any lien,
charge or encumbrance on any of the Interests.
6.21 Enforceability. This Agreement has been duly executed and delivered by
Seller and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, reorganization or moratorium statutes, or other similar laws
affecting the rights of creditors generally or equitable principles
(collectively, "Equitable Limitations"). At the Closing all documents and
instruments required hereunder to be executed and delivered by Seller shall be
duly executed and delivered and shall constitute its legal, valid and binding
obligations enforceable in accordance with their terms, except as enforceability
may be limited by Equitable Limitations.
Section 7. Representations and Warranties of Purchaser. Purchaser represents and
warrants unto Seller that:
7.1 Due Organization. Purchaser is a corporation duly organized and existing and
in good standing under the laws of the State of Colorado.
7.2 Authorization. Purchaser has full power, in accordance with law, to execute
and perform this Agreement, and such execution and performance does not conflict
with any charter or bylaw provision of the Purchaser or with any contract to
which Purchaser is a party, or to which it is subject. The Board of Directors of
the Purchaser has authorized, or before the Closing shall have authorized, this
Agreement, the transactions contemplated herein, and their execution by the
Purchaser.
7.3 Enforceability. This Agreement has been duly executed and delivered on
behalf of Purchaser, and constitutes a legal, valid and binding obligation of it
enforceable in accordance with its terms, except as enforceability may be
limited by Equitable Limitations. At the Closing all documents required
hereunder to be executed and delivered by Purchaser shall be duly executed and
delivered and shall constitute legal, valid and binding obligations of Purchaser
enforceable in accordance with their terms, except as enforceability may be
limited by Equitable Limitations.
7.4 Conflicts. The execution and delivery of this Agreement by the Purchaser
does not, and the consummation of the transactions contemplated by this
Agreement shall not, (a) violate or be in conflict with, or require the consent
of any person or entity under any provision of the Purchaser's Certificate of
Incorporation, bylaws or other governing documents, (b) conflict with, result in
a breach of, constitute a default (or an event that with the lapse of time or
notice, or both, would constitute a default) under any agreement or instrument
to which Purchaser is a party or is bound, or (c) violate any provision of or
require any consent, authorization or approval under any judgment, decree,
judicial or administrative order, award, writ, injunction, statute, rule or
regulation applicable to Purchaser.
7.5 Available Funds. Purchaser will have available at Closing sufficient funds
to enable Purchaser to pay in full the Purchase Price, as adjusted, in
immediately available funds.
Section 8. Survival of Representations and Warranties. The liability of Seller
and Purchaser under each of their respective representations and warranties
contained in this Agreement shall survive the Closing and execution and delivery
of the assignments contemplated hereunder, subject to the limitations contained
in Section 11.1; provided, however, that notwithstanding any other provisions of
this Agreement, representations and warranties made with respect to taxes shall
survive throughout the applicable statute of limitations period(s) for such
taxes. No investigation, verification, or approval by any party hereto or by
anyone on behalf of any of such parties shall limit or affect Purchaser's right
to rely upon the representations, warranties, covenants and agreements of Seller
set forth in this Agreement.
Section 9. Additional Agreements of the Parties.
9.1 Examination of Title; Title Defects.
From the date hereof to the Closing Date, Seller shall provide Purchaser full
opportunity to examine the Interests, including but not limited to examining the
following to the extent that such materials are in the possession of or
available to Seller:
(a) All title opinions and reports pertaining to the Interests;
(b) All abstracts of title and status reports pertaining to the Interests;
(c) All documents comprising the Interests, prior conveyances of interests
therein or interests created thereby, unitization, communitization, pooling and
operating agreements, division and transfer orders, mortgages, deeds of trust,
security agreements, financing statements and other instruments of encumbrance,
together with all other contracts and documents affecting the title to or the
value of the Interests;
(d) All spacing, pooling, unitization, exception, allowable and other orders of
any local, state or Federal court, agency, commission or other regulatory
authority in any way relating to the Interests or the operation thereof;
(e) The payment of delay rentals, shut-in royalties, royalties and other
payments due under the Interests;
(f) The payment of ad valorem, property, business and occupation, production,
severance and similar taxes and assessments based on or measured by the
ownership of property or the production or removal of hydrocarbons or the
receipt of proceeds therefrom attributable to the interests;
(g) All ownership maps and surveys relating to the Interests and the lands
affected thereby;
(h) All lease records, production records and data sheets relating to the
Interests and to bonuses, delay rentals, shut-in royalties and royalties payable
thereunder;
(i) All division and transfer orders and all purchase, sale, gathering,
processing, exchange, transportation and similar agreements relating to the
sale, treatment, transportation or marketing of production from the Interests;
(j) All bonds, insurance policies, leases, permits, easements, licenses, salt
water disposal agreements, gas balancing agreements, pumping or pumper's
agreements and other agreements in any way relating to the Interests or the
operation thereof;
(k) All records relating to the inventory of all personal property and fixtures
included in the Interests;
(l) All records pertaining to the billing for and payment of costs and expenses
attributable to the Interests;
(m) All regulatory filings relating to the Interests, including without
limitation, all applications and determinations under the Natural Gas Policy Act
of 1978 ("NGPA"); and
(n) All other records, files, reports and documents in Seller's possession
pertaining to the Interests as Purchaser reasonably may request.
A "Title Defect" shall be deemed to include any lien, claim, defect, encumbrance
or deficiency such that the Seller does not have good and marketable title to a
particular item of the Interests, or such that the net revenue interests of the
Seller are otherwise less than, or the working or cost bearing interests of the
Seller are otherwise more than those set forth in Exhibit A, provided, no
Permitted Encumbrance shall constitute a Title Defect. "Permitted Encumbrances"
are, except as otherwise provided herein, comprised of (i) matters described
without material omission in Exhibits and Schedules attached hereto, (ii)
royalties, overriding royalties, production payments and other burdens on
production which do not reduce the net revenue interest of an item of the
Interests to less than the interests set forth in Exhibit A, (iii) liens for
taxes, labor and materials where payment is not due, (iv) regulatory authority
of governmental agencies not presently or previously violated, easements,
surface leases and rights, plat restrictions, contractual burdens and similar
encumbrances, provided that they do not detract from the value or increase the
cost of operation of any item of the Interests, and (v) regulatory filings with
and consents by regulatory authority if they are customarily obtained subsequent
to the sale or conveyance.
9.2 Environmental Audit; Environmental Defects. Purchaser may at its sole cost
and discretion perform, or may have a third party perform prior to Closing, an
environmental audit of the Interests to determine if there exist any conditions
attributable to the Interests which violate any laws, rules, orders, regulations
or statutes of any Federal, state, local or provincial agency with respect to
any waste material or hazardous substances on or included with the Interests or
the presence, disposal, release or threatened release of waste material or
hazardous substance from the Interests into the atmosphere or into or upon land
or any water course or body of water including ground water ("Environmental
Defect"). The results of any environmental audit will be provided to Seller.
9.3 Notification of Defects. Purchaser shall from time to time upon discovery,
but in no event later than three (3) days prior to Closing, notify Seller in
writing of any Title Defects or Environmental Defects discovered by Purchaser
with respect to the Interests. If Purchaser's title examination and/or
environmental audit reveal items of the Interests having an aggregate diminution
in value due to Title Defects and/or Environmental Defects of five percent (5%)
or more of the adjusted Purchase Price due at Closing, then, if such defect(s)
are not cured to the reasonable satisfaction of Purchaser prior to the Closing
Date, Purchaser shall have the right to terminate this Agreement in its
entirety.
9.4 Delivery of Books and Records. Seller shall deliver to Purchaser, as soon as
practicable after the Closing Date (but in no event more than thirty (30) days
after the Closing Date), all original, unrestricted books, files, records and
other information of Seller (including, without limitation, all land,
geological, geophysical and applicable accounting files, records and other
material) relating to the Interests, or copies thereof at Purchaser's expense.
For a period of three (3) years after the Closing Date, Purchaser shall permit
Seller reasonable access to such files and records.
9.5 Transfer of Operations. Seller shall use all reasonable efforts to cause the
Purchaser, its successors and assigns, to be and remain the designated operator
under applicable contracts and regulatory orders of all Xxxxx, units and
properties included in the Interests.
9.6 Insurance and Bonds. Seller will, at its expense, maintain in full force and
effect until the Closing Date, all policies of insurance and all surety and
other bonds to which the Seller is a party with respect to the Interests. To
Seller's knowledge, such policies provide adequate coverage in adequate amounts
to insure the Interests in accordance with practices in the industry.
9.7 Further Assurances. From time to time (whether at or after Closing), as and
when requested by the other, Seller and Purchaser or their successors or assigns
will execute, acknowledge and deliver all such instruments and documents and
take such other action as such parties may reasonably deem necessary or
desirable in order to more effectively consummate the transactions contemplated
hereby and to transfer to Purchaser the Interests.
9.8 Condemnation, Casualty Loss or Claims. If, after the execution of this
Agreement, and prior to the Closing Date, any item of the Interests is damaged
or destroyed by fire or other casualty, is taken under the right of eminent
domain, or proceedings for such purposes are pending or threatened, or if any
item of the Interests is made the subject of any pending or threatened suit,
action or other proceeding before any court or governmental agency, then the
existence of such a circumstance shall be treated as if the item of the
Interests affected thereby were subject to a Title Defect; provided, if
Purchaser shall elect to waive such defects affected by damage, destruction or
other casualty, or taken under eminent domain, then all sums paid to Seller by
reason of the damage, destruction or taking of such item of the Interests, and
all of the right, title and interest of the Seller in and to any unpaid awards
or other payments from third parties, and any claims, causes of action or
demands against third parties, arising out of such damage, destruction, taking
or pending or threatened taking, shall be assets of the Seller included within
the Interests to which Purchaser shall be entitled. Prior to the Closing Date,
Seller shall not voluntarily compromise, settle or adjust any such rights to
awards or other payments, or any such claims, causes of action or demands
without the prior written consent of Purchaser.
9.9 Consents, Preferential Rights to Purchase. Promptly after execution hereof
the Seller will proceed diligently to solicit any consents to the transfers
contemplated hereby which are required to be obtained from third parties and
will give all notices required by existing contracts with respect to
preferential rights to purchase on the part of third parties and to obtain
waivers of such preferential rights. Properties subject to Preferential Rights
are listed on Schedule 9.9. Any item of the Interests which requires the consent
of a third party for transfer where such consent cannot be obtained prior to the
Closing Date (other than routine consents required in connection with Federal,
state and Indian leases), or which is subject to a preferential right to
purchase which has not expired and has not been waived prior to the Closing
Date, may, at Purchaser's option, be treated as an excluded interest, and the
Purchase Price shall be adjusted downward by the agreed values of each such
items of the Interests. The form of notice to preferential rights holders, if
any are required, is attached hereto and made a part hereof as part of Schedule
9.9. Promptly upon receipt of any written communication from a preferential
rights holder or a party whose consent is required, in response to the Seller's
said notices, Seller shall give notice thereof by forwarding such responses by
facsimile transmission to Purchaser at Trinity Energy Corporation, Attention:
Xxxx Xxxxxxx, fax number (000) 000-0000 and to Xxxxxxxx, German and Xxxxx, P.C.,
fax number (000) 000-0000, Attention: Xxxxxx X. Xxxxxxxx.
Section 9.10 Release of Claims. Seller, on behalf of itself and its officers,
directors, successors and assigns, upon the transfer of the Interests to
Purchaser by having closed the sale of the Interests hereunder, shall be deemed
conclusively to have released Purchaser and waived any and all claims, suits,
actions, causes of action or any other claims of any nature whatsoever against
Purchaser arising from or related to Purchaser's operation of the Interests
prior to Closing, including but not limited to those claims set forth in the
letters of Seller's legal counsel to Purchaser dated April 15, 1998 and April
21, 1998, copies of which letters are attached hereto as Schedule 9.10.
Section 10. Conditions to Obligations of Purchaser. The obligations of Purchaser
under this Agreement are, at the option of Purchaser, subject to the conditions
that, at or prior to the Closing Date:
10.1 Execution of Agreement. This Agreement shall have been signed by Seller
obligating and committing Seller to sell to Purchaser all of the Interests, and
Seller shall at the Closing on the Closing Date deliver to Purchaser all of the
items in Section 4.1 of this Agreement and Seller shall in addition fully comply
with the terms and provisions hereof, it being understood and agreed that the
obligation of Purchaser to purchase the Interests is conditioned upon
performance hereunder by Seller.
10.2 Compliance. All of the terms, covenants, and conditions of this Agreement
to be complied with or performed by Seller at or before the Closing Date shall
have been duly complied with and performed.
10.3. Accuracy of Representations and Warranties. The representations and
warranties of Seller set forth in Section 6 hereof shall be true on and as of
the Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date. The provisions of this
paragraph shall be self executing, and Seller, by having closed the sale of the
Interests hereunder, shall be deemed conclusively to have certified at Closing
that all such representations and warranties were true on and as of the Closing
Date.
10.4. No Adverse Effect. The Interests shall not have been materially adversely
affected as a result of any fire, accident, or other casualty or any act of God
or the public enemy, unless they shall have been protected and fully covered by
insurance.
10.5. No Adverse Change. There shall have been no changes in the Interests since
the execution of this Agreement, other than changes in the ordinary course of
business that do not have a materially adverse effect on the value of the
Interests.
10.6. Intentionally left blank.
10.7 Authorizations. All authorizations, approvals, and consents of any
governmental authority or agency necessary in connection with the sale and
transfer of the Interests to Purchaser or for the continued operation of the
Interests in the manner in which the Interests are now conducted after such
transfer, shall have been secured.
10.8 Consents. Seller shall have received all consents, permissions, novations
and approvals by third parties necessary for the sale and transfer of the
Interests.
10.9 Litigation. No action or proceeding shall have been instituted or
threatened to set aside the transactions provided for herein or to enjoin or
prevent the consummation thereof.
10.10 Preferential Rights. With respect to all Interests which are subject to a
preferential purchase right, either (a) such preferential purchase rights shall
have been waived or terminated by the holders thereof or lapsed in accordance
with their terms, or (b) the Seller shall have received notice that the holder
of such preferential purchase rights intends to exercise such preferential
purchase rights.
10.11 Intentionally left blank.
10.12 Certificate. Seller shall have executed and delivered to Purchaser on the
Closing Date a certificate, dated that date, to the effect of each of the
provisions of Paragraphs 10.1 through 10.10 of this Section.
Section 11. Conditions to Obligations of Seller. The obligations of Seller under
this Agreement are, at the option of Seller, subject to the condition that, at
or before the Closing Date:
11.1 Compliance. All the terms, conditions, and covenants of this Agreement to
be complied with and performed by Purchaser at or before the Closing Date shall
have been duly complied with and performed.
11.2 Certificate. Purchaser shall have executed and delivered to Seller on the
Closing Date a certificate, dated that date, to the effect of each of the
provisions of this Section.
Section 12. Indemnification by Seller.
A. Seller shall defend, indemnify and hold Purchaser harmless from and against
any and all claims, liabilities, damages, losses and expenses, including
reasonable attorneys' fees and expenses and costs of suit, (i) arising out of
any and all inaccurate representations and out of any and all breaches of
covenants and warranties and stipulations and agreements and certifications made
by or on behalf of Seller, in this Agreement or in any document required to be
delivered hereunder, including without limitation any schedule or exhibit
attached hereto, and (ii) arising out of or resulting from any occurrence prior
to the Closing Date and not disclosed herein or in documents required to be
delivered hereunder, including without limitation any schedule or exhibit
attached hereto. Notwithstanding the foregoing, Seller shall not have any
obligation to indemnify Purchaser in connection with any loss, liability or
damage caused, wholly or in part, by Purchaser or its affiliates after the
Closing, or arising from the ownership or operation of the Interests after the
Closing by Purchaser, any of their affiliates or any other party or the
operation of the Interests by Purchaser prior to the Closing.
B. Notwithstanding anything to the contrary contained in this Agreement, Seller
shall have no liability for any misrepresentation or breach of warranty under
this Agreement to the extent that: (i) the breach of warranty or the falsity of
the representation upon which such liability would be based is disclosed in any
of the contracts and documents referred to in this Agreement, in the schedules
attached hereto or in any other contracts, documents, records or other
instruments made available to Purchaser, or (ii) such liability is based upon a
claim, assessment or deficiency for federal, state and/or local income or
franchise taxes which arise from adjustments which have the effect only of
shifting income, credits and/or deductions from one fiscal period to another.
C. Notwithstanding anything to the contrary contained in this Agreement, there
shall be excluded from the sale, transfer, conveyance and assignment
contemplated hereunder, any debt, liability or obligation of, or claim against,
Seller.
Section 13. Indemnification by Purchaser. Purchaser shall defend, indemnify and
save Seller harmless from and against (a) any and all claims, liabilities,
damages, losses and expenses, including reasonable attorneys' fees and expenses
and costs of suit (collectively, "Losses"), arising out of any and all
inaccurate representations and out of any and all breaches of covenants and
warranties and stipulations and agreements and certifications made by or on
behalf of Purchaser in this Agreement or in any document delivered hereunder,
and (b) any Losses suffered or incurred by Seller arising from the ownership or
operation of the Interests after the Closing Date by Purchaser or any of its
affiliates.
Section 14. Intentionally left blank.
Section 15. Intentionally left blank.
Section 16. Arbitration.
16.1 Binding Arbitration. On the request of any party hereto, whether made
before or after the institution of any legal proceeding, any action, dispute,
claim or controversy of any kind now existing or hereafter arising between any
of the parties hereto in any way arising out of, pertaining to or in connection
with this Agreement (a "Dispute") shall be resolved by binding arbitration in
accordance with the terms hereof. Any party may, by summary proceedings, bring
an action in court to compel arbitration of any Dispute.
16.2 Governing Rules. Any arbitration shall be administered by the American
Arbitration Association (the "AAA") in accordance with the terms of this
Section, the Commercial Arbitration Rules of the AAA, and, to the maximum extent
applicable, the Federal Arbitration Act. Judgment on any award rendered by an
arbitrator may be entered in any court having jurisdiction.
16.3 Arbitrators. Any arbitration shall be conducted before one arbitrator. The
arbitrator shall be a practicing attorney licensed to practice in the State of
Colorado who is knowledgeable in the subject matter of the Dispute selected by
agreement between the parties hereto. If the parties cannot agree on an
arbitrator within 30 days after the request for an arbitration, then any party
may request the AAA to select an arbitrator. The arbitrator may engage
engineers, accountants or other consultants that the arbitrator deems necessary
to render a conclusion in the arbitration proceeding.
16.4 Conduct of Arbitration. To the maximum extent practicable, an arbitration
proceeding hereunder shall be concluded within 180 days of the filing of the
Dispute with the AAA. Arbitration proceedings shall be conducted in Denver,
Colorado. The arbitrator shall be empowered to impose sanctions and to take such
other actions as the arbitrator deems necessary to the same extent a judge could
impose sanctions or take such other actions pursuant to the Federal Rules of
Civil Procedure and applicable law. At the conclusion of any arbitration
proceeding, the arbitrator shall make specific written findings of fact and
conclusions of law. The arbitrator shall have the power to award recovery of all
costs and fees but not punitive damages to the prevailing party. Each party
agrees to keep all Disputes and arbitration proceedings strictly confidential
except for disclosure of information required by applicable law.
16.5 Costs of Arbitration. All fees of the arbitrator and any engineer,
accountant or other consultant engaged by the arbitrator, shall be paid by
Purchaser and Seller equally unless otherwise awarded by the arbitrator.
Section 17. Expenses. Seller shall pay its own expenses and costs, including,
without limitation, all counsel fees and transfer taxes, and Purchaser shall pay
its expenses and costs in connection with this Agreement and the transactions
contemplated hereby, including any recording costs.
Section 18. Notice. "Notice" means any notice, demand, request, or other
communication or document to be provided under this Agreement to a party to this
Agreement. The Notice shall be in writing and shall be given to the party at its
address or telecopy number set forth below or such other address or telecopy
number as the party may later specify for that purpose by notice to the other
party. Each Notice shall, for all purposes, be deemed given and received:
A. If given by telecopy, when the telecopy is transmitted to the party's
telecopy number specified below and confirmation of complete receipt is received
by that transmitting party during normal business hours or on the next business
day if not confirmed during normal business hours;
B. If hand delivered to a party against receipted copy, when the copy of the
notice is receipted;
C. If given by a nationally recognized and reputable overnight delivery service,
the day on which the notice is actually received by the party; or
D. If given by any other means or if given by certified mail, return receipt
requested, postage prepaid, two (2) business days after it is posted with the
United States Postal Service, at the address of the party specified below:
If to Seller:
American Rivers Oil Company
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telecopy: 303/832-2404
Attention: Xxxxxxx Xxxxx
With a copy to:
Xxxxxxx X. Xxxxxxx, Esquire
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Telecopy: 303/444-1063
If to Purchaser:
Trinity Energy Corporation
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
With a copy to:
Xxxxxx X. Xxxxxxxx, Esquire
Xxxxxxxx, German & Xxxxx, P.C.
00xx Xxxxx
Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Telecopy No.: (000) 000-0000
If any Notice is sent by telecopy, the transmitting party may as a courtesy send
a duplicate copy of the Notice to the other party by regular mail. In all
events, however, any Notice sent by telecopy transmission shall govern all
matters dealing with delivery of the Notice, including the date on which the
Notice is deemed to have been received by the other party.
The provisions above governing the date on which a Notice is deemed to have been
received by a party to this Agreement shall mean and refer to the date on which
a party to this Agreement, and not its counsel or other recipient to which a
copy of the Notice may be sent, is deemed to have received the Notice.
If Notice is tendered under the provisions of this Agreement and is refused by
the intended recipient of the Notice, the Notice shall nonetheless be considered
to have been given and shall be effective as of the date provided in this
Agreement.
Section 19. Miscellaneous
19.1. Broker's Fees - Seller's Indemnification. Seller shall indemnify Purchaser
against, and hold it harmless from, any and all liabilities, including, without
limitation, counsel fees and other costs of defending against liabilities for a
brokerage commission, to any person, firm, or corporation for any brokerage
commission or finder's fee in connection with any of the transactions
contemplated by this Agreement, arising out of acts by the Seller.
19.2. Broker's Fees - Purchaser's Indemnification. Purchaser shall indemnify the
Seller against, and hold it harmless from, any and all liabilities, including,
without limitation, counsel fees and other costs of defending against
liabilities for a brokerage commission, to any person, firm, or corporation for
any brokerage commission or finder's fee in connection with any of the
transactions contemplated by this Agreement, arising out of acts by Purchaser.
19.3 Integration. This instrument contains the entire agreement between the
parties hereto with respect to the transaction contemplated hereby and shall not
be changed or terminated except by written amendment signed by the parties
hereto. Neither party has made any representations to the other except as set
forth in this Agreement or in the schedules hereto.
19.4 Exhibits and Schedules. All exhibits and schedules referred to herein are
attached hereto and by this reference made a part hereof.
19.5 Counterparts. This Agreement may be executed in any number of counterparts,
and all counterparts executed by Purchaser and Seller together shall constitute
one and the same agreement, and it shall not be necessary for Purchaser and
Seller to execute the same counterpart hereof.
19.6 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, no assignment by any party shall relieve such party of any of its
obligations hereunder.
19.7 Section Headings. The section headings contained in this Agreement are for
convenient reference only and shall not in any way affect the meaning or
interpretation of this Agreement.
19.8 Superseding Effect. This Agreement supersedes any prior agreement and
understanding between the parties with respect to the subject matter of this
Agreement.
19.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts made and performed entirely therein.
19.10 Waivers. No party's rights hereunder will be deemed waived except by a
writing signed by such party. Without limitation, the occurrence of the Closing
shall not be deemed a waiver of any party's rights except its right to refuse to
close.
19.11 Intentionally left blank.
19.12 Construction. This Agreement shall not be construed against the party
preparing it, but shall be construed as if both parties prepared this Agreement.
This Agreement is not intended to confer any rights or remedies upon any other
persons who or which are not parties hereto.
19.13 Assignment. Neither Seller nor Purchaser may assign its rights or delegate
its duties or obligations arising under this Agreement, in whole or in part, by
operation of law or otherwise, before Closing, without the prior written consent
of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
ATTEST: SELLER:
AMERICAN RIVERS OIL COMPANY
By: /s/ Xxx Xxxxx By: /s/ Xxxxxxx Xxxxx
Secretary President
ATTEST: PURCHASER:
TRINITY ENERGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/
Assistant Secretary President
