PURCHASE AND SALE AGREEMENT BETWEEN ANADARKO GATHERING COMPANY AND ANADARKO ENERGY SERVICES COMPANY AS SELLER AND DCP MIDSTREAM PARTNERS, LP AS PURCHASER Executed on March 7, 2007
EXECUTION
COPY
BETWEEN
ANADARKO
GATHERING COMPANY AND
ANADARKO
ENERGY SERVICES COMPANY
AS
SELLER
AND
AS
PURCHASER
Executed
on March 7, 2007
TABLE
OF CONTENTS
|
ARTICLE
1 PURCHASE AND SALE
|
1
|
|
|
Section
1.1
|
Purchase
and Sale.
|
1
|
|
Section
1.2
|
Assets.
|
1
|
|
Section
1.3
|
Excluded
Assets.
|
2
|
|
Section
1.4
|
Effective
Time; Proration of Costs and Revenues.
|
3
|
|
Section
1.5
|
Delivery
and Maintenance of Records.
|
4
|
|
|
||
|
ARTICLE
2 PURCHASE PRICE
|
5
|
|
|
Section
2.1
|
Purchase
Price.
|
5
|
|
Section
2.2
|
Adjustments
to Purchase Price.
|
5
|
|
Section
2.3
|
Allocation
of Purchase Price for Tax Purposes.
|
6
|
|
Section
2.4
|
Deposit.
|
6
|
|
|
||
|
ARTICLE
3 TITLE MATTERS
|
7
|
|
|
Section
3.1
|
Seller’s
Title.
|
7
|
|
Section
3.3
|
[RESERVED]
|
7
|
|
Section
3.4
|
[RESERVED]
|
7
|
|
Section
3.6
|
[RESERVED]
|
8
|
|
Section
3.7
|
Government
Approvals Respecting Assets.
|
8
|
|
ARTICLE
4 ENVIRONMENTAL MATTERS
|
8
|
|
|
Section
4.1
|
[RESERVED]
|
8
|
|
Section
4.2
|
NORM,
Wastes and Other Substances.
|
8
|
|
Section
4.3
|
Inspection
Indemnity.
|
8
|
|
|
||
|
ARTICLE
5 REPRESENTATIONS AND WARRANTIES OF SELLER
|
9
|
|
|
Section
5.1
|
Generally.
|
9
|
|
Section
5.2
|
Existence
and Qualification.
|
9
|
|
Section
5.3
|
Power.
|
9
|
|
Section
5.4
|
Authorization
and Enforceability.
|
9
|
|
Section
5.5
|
No
Conflicts.
|
10
|
|
Section
5.6
|
Liability
for Brokers’ Fees.
|
10
|
|
Section
5.7
|
Litigation.
|
10
|
|
Section
5.8
|
Taxes
and Assessments.
|
10
|
|
Section
5.10
|
Contracts.
|
11
|
|
Section
5.11
|
[RESERVED]
|
11
|
|
Section
5.12
|
Governmental
Authorizations.
|
11
|
|
Section
5.13
|
Preference
Rights and Transfer Requirements.
|
12
|
|
Section
5.14
|
[RESERVED]
|
12
|
|
Section
5.17
|
Condemnation.
|
12
|
|
Section
5.18
|
Bankruptcy.
|
12
|
|
Section
5.19
|
NGA.
|
13
|
|
Section
5.20
|
Investment
Company.
|
13
|
|
ARTICLE
6 REPRESENTATIONS AND WARRANTIES OF PURCHASER
|
13
|
|
|
Section
6.1
|
Existence
and Qualification.
|
13
|
|
Section
6.2
|
Power.
|
13
|
|
Section
6.3
|
Authorization
and Enforceability.
|
13
|
|
Section
6.4
|
No
Conflicts.
|
13
|
Page
i
TABLE
OF CONTENTS
|
Section
6.5
|
Liability
for Brokers’ Fees.
|
14
|
|
Section
6.6
|
Litigation.
|
14
|
|
Section
6.7
|
Financing.
|
14
|
|
Section
6.8
|
[RESERVED]
|
14
|
|
Section
6.9
|
Limitation.
|
14
|
|
Section
6.10
|
SEC
Disclosure.
|
15
|
|
Section
6.11
|
Bankruptcy.
|
15
|
|
ARTICLE
7 COVENANTS OF THE PARTIES
|
15
|
|
|
Section
7.1
|
Access.
|
15
|
|
Section
7.2
|
Government
Reviews.
|
15
|
|
Section
7.3
|
Notification
of Breaches.
|
16
|
|
Section
7.4
|
Operatorship.
|
16
|
|
Section
7.5
|
Public
Announcements.
|
16
|
|
Section
7.6
|
Operation
of Business.
|
17
|
|
Section
7.8
|
Preference
Rights and Transfer Requirements.
|
17
|
|
Section
7.9
|
Tax
Matters.
|
17
|
|
Section
7.10
|
Further
Assurances.
|
18
|
|
Section
7.13
|
Transition
Services Agreement.
|
18
|
|
ARTICLE
8 CONDITIONS TO CLOSING
|
19
|
|
|
Section
8.1
|
Conditions
of Seller to Closing.
|
19
|
|
Section
8.2
|
Conditions
of Purchaser to Closing.
|
20
|
|
|
||
|
ARTICLE
9 CLOSING
|
20
|
|
|
Section
9.1
|
Time
and Place of Closing.
|
20
|
|
Section
9.2
|
Obligations
of Seller at Closing.
|
21
|
|
Section
9.3
|
Obligations
of Purchaser at Closing.
|
21
|
|
Section
9.4
|
Closing
Payment & Post-Closing Purchase Price Adjustments.
|
21
|
|
ARTICLE
10 TERMINATION
|
23
|
|
|
Section
10.1
|
Termination.
|
23
|
|
Section
10.2
|
Effect
of Termination.
|
23
|
|
Section
10.3
|
Distribution
of Deposit Upon Termination.
|
23
|
|
ARTICLE
11 POST-CLOSING OBLIGATIONS; INDEMNIFICATION; LIMITATIONS; DISCLAIMERS
AND
WAIVERS
|
24
|
|
|
Section
11.1
|
Receipts.
|
24
|
|
Section
11.2
|
Expenses.
|
24
|
|
Section
11.3
|
Assumed
Seller Obligations.
|
24
|
|
Section
11.4
|
Indemnities.
|
25
|
|
Section
11.5
|
Indemnification
Actions.
|
27
|
|
Section
11.6
|
Release.
|
28
|
|
Section
11.7
|
Limitation
on Actions.
|
28
|
|
Section
11.8
|
Disclaimers.
|
29
|
|
Section
11.9
|
Waiver
of Trade Practices Acts.
|
30
|
|
Section
11.10
|
Recording.
|
30
|
|
ARTICLE
12 MISCELLANEOUS
|
31
|
|
|
Section
12.1
|
Counterparts.
|
31
|
|
Section
12.2
|
Notice.
|
31
|
Page
ii
TABLE
OF CONTENTS
|
Section
12.3
|
Sales
or Use Tax Recording Fees and Similar Taxes and Fees.
|
32
|
|
Section
12.4
|
Expenses.
|
32
|
|
Section
12.5
|
Change
of Name.
|
32
|
|
Section
12.6
|
Replacement
of Bonds, Letters of Credit and Guarantees.
|
32
|
|
Section
12.7
|
Governing
Law and Venue.
|
33
|
|
Section
12.8
|
Captions.
|
33
|
|
Section
12.9
|
Waivers.
|
33
|
|
Section
12.10
|
Assignment.
|
33
|
|
Section
12.11
|
Entire
Agreement.
|
33
|
|
Section
12.12
|
Amendment.
|
33
|
|
Section
12.13
|
No
Third-Party Beneficiaries.
|
34
|
|
Section
12.14
|
References.
|
34
|
|
Section
12.15
|
Construction.
|
34
|
|
Section
12.16
|
Limitation
on Damages
|
35
|
|
Section
12.17
|
Conspicuousness.
|
35
|
|
Section
12.18
|
Severability.
|
35
|
|
Section
12.19
|
Time
of Essence.
|
35
|
Page
iii
EXHIBITS
| Exhibit “A” |
System
|
| Exhibit “B” |
Conveyance
|
SCHEDULES
| Schedule 1.2(a) |
Contracts
|
| Schedule 1.2(b) |
Surface
Contracts
|
| Schedule 1.2(c) |
Equipment
|
| Schedule 1.3(e) |
Excluded
Items
|
| Schedule 2.3 |
Allocation
of Purchase Price
for Tax Purposes
|
| Schedule 5.7(a) |
Litigation
|
| Schedule 5.7(b) |
Notice
of Non-Compliance
|
| Schedule 5.8 |
Taxes
and Assessments
|
| Schedule 5.9 |
Compliance
with Laws
|
| Schedule 5.10(a) |
Contract
Matters
|
| Schedule 5.10(b) |
Certain
Contracts
|
| Schedule 5.12 |
Governmental
Authorizations
|
| Schedule 5.13 |
Preference
Rights and Transfer Requirements
|
| Schedule 5.15 |
Outstanding
Capital Commitments
|
| Schedule 5.16 |
Imbalances
|
| Schedule 7.6 |
Operation
of Business
|
| Schedule 7.12 |
Non-UCI
Compressors
|
| Schedule 8.1(i) |
Certain
Transfer Requirements
|
Page
iv
DEFINITIONS
“Adjusted
Purchase Price” shall mean the Purchase Price after calculating and applying the
adjustments set forth in Section
2.2.
“Adjustment
Period” has the meaning set forth in Section
2.2(a).
“AES”
has
the meaning set forth in the preamble.
"AFE"
means authority for expenditure.
“Affiliates”
with respect to any Person, means any person that directly or indirectly
controls, is controlled by or is under common control with such
Person.
“AGC”
has
the meaning set forth in the preamble.
“Agreed
Interest Rate” means simple interest calculated at the rate of six percent (6%)
per annum.
“Agreement”
means this Purchase and Sale Agreement.
“Assets”
has the meaning set forth in Section
1.2.
“Assumed
Seller Obligations” has the meaning set forth in Section
11.3.
“Business
Day” means each calendar day except Saturdays, Sundays, and Federal
holidays.
“Claim”
or “Claims” has the meaning set forth in Section
11.4(a).
“Claim
Notice” has the meaning set forth in Section
11.5(b).
“Closing”
has the meaning set forth in Section
9.1(a).
“Closing
Date” has the meaning set forth in Section
9.1(b).
“Closing
Payment” has the meaning set forth in Section
9.4(a).
“Code”
has the meaning set forth in Section
2.3.
“Confidentiality
Agreement” has the meaning set forth in Section
7.1.
“Contracts”
has the meaning set forth in Section
1.2(a).
“Conveyance”
has the meaning set forth in Section
3.1(b).
“Defensible
Title” means that title of Seller with respect to the Real Property Interests,
except for and subject to Permitted Encumbrances (as defined in the Conveyance),
is free and clear of liens, encumbrances, obligations, security interests,
irregularities, pledges, or other defects.
“Deposit”
has the meaning set forth in Section
2.4.
Page
v
"DTPA"
has the meaning set forth in Section
11.9(a).
“Effective
Time” has the meaning set forth in Section
1.4(a).
“Environmental
Laws” means, as the same may have been amended, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601 et
seq.;
the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et
seq.;
the
Federal Water Pollution Control Act, 33 U.S.C. § 1251 et
seq.;
the
Clean Air Act, 42 U.S.C. § 7401 et
seq.
the
Hazardous Materials Transportation Act, 49 U.S.C. § 1471 et
seq.;
the
Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution
Act, 33 U.S.C. § 2701 et
seq.;
the
Emergency Planning and Community Xxxxx-xx-Xxxx Xxx, 00 X.X.X. § 00000
et
seq.;
the
Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et
seq.;
the
Occupational Safety and Health Act, 29 U.S.C. § 651 et
seq.;
the
Atomic Energy Act, 42 U.S.C. § 2011 et
seq.;
and
all applicable related law, whether local, state, territorial, or national,
of
any Governmental Body having jurisdiction over the property in question
addressing pollution or protection of human health, safety, natural resources
or
the environment and all regulations implementing the foregoing.
“Environmental
Liabilities” shall mean any and all environmental response costs (including
costs of remediation), damages, natural resource damages, settlements,
consulting fees, expenses, penalties, fines, orphan share, prejudgment and
post-judgment interest, court costs, attorneys’ fees, and other liabilities
incurred or imposed (i) pursuant to any order, notice of responsibility,
directive (including requirements embodied in Environmental Laws), injunction,
judgment or similar act (including settlements) by any Governmental Body or
court of competent jurisdiction to the extent arising out of any violation
of,
or remedial obligation under, any Environmental Laws which are attributable
to
the ownership or operation of the Assets prior to the Effective Time or (ii)
pursuant to any claim or cause of action by a Governmental Body or other Person
for personal injury, property damage, damage to natural resources, remediation
or response costs to the extent arising out of any violation of, or any
remediation obligation under, any Environmental Laws which is attributable
to
the ownership or operation of the Assets prior to the Effective Time.
“Equipment”
has the meaning set forth in Section
1.2(c).
“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
“Excluded
Assets” has the meaning set forth in Section
1.3.
“EXCO
PSA” shall have the meaning set forth in Section
8.1(e).
“Governmental
Authorizations” has the meaning set forth in Section
5.12.
“Governmental
Body” or “Governmental Bodies” means any federal, state, local, municipal, or
other governments; any governmental, regulatory or administrative agency,
commission, body or other authority exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power; and any court or governmental tribunal.
"HSR
Act"
means the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976.
Page
vi
“Hydrocarbons”
means oil, gas, condensate and other gaseous and liquid hydrocarbons or any
combination thereof and sulphur extracted from hydrocarbons.
“Imbalance”
or “Imbalances” means over-deliveries or under-deliveries with respect to
Hydrocarbons allocated to the Assets.
“Indemnified
Party” has the meaning set forth in Section
11.5(a).
“Indemnifying
Party” has the meaning set forth in Section
11.5(a).
“Indemnity
Claim” has the meaning set forth in Section
11.5(b).
“Laws”
means all statutes, laws, rules, regulations, ordinances, orders, and codes
of
Governmental Bodies.
“Material
Adverse Effect” means any effect that is adverse to the ownership, operation or
value of the Assets, taken as a whole, and as currently operated, that has
a
value of ten percent (10%) or greater of the Purchase Price; provided, however,
that “Material Adverse Effect” shall not include (i) any effect resulting from
entering into this Agreement or the announcement of the transactions
contemplated by this Agreement, (ii) any effect resulting from changes in
general market, economic, financial or political conditions or any outbreak
of
hostilities or war, (iii) any effect that affects the Hydrocarbon exploration,
production, development, processing, gathering and/or transportation industry
generally (including changes in commodity prices or general market prices in
the
Hydrocarbon exploration, production, development, processing, gathering and/or
transportation industry generally), and (iv) any effect resulting from a change
in Laws or regulatory policies.
"NORM"
means naturally occurring radioactive material.
“Person”
means any individual, firm, corporation, partnership, limited liability company,
joint venture, association, trust, unincorporated organization, Governmental
Body or any other entity.
"Personal
Property Leases" has the meaning set forth in Section
5.10(iv).
“Pipelines”
has the meaning set forth in Section
1.2(f).
“Preference
Right” means any right or agreement that enables any Person to purchase or
acquire any Asset or any interest therein or portion thereof as a result of
or
in connection with (i) the sale, assignment or other transfer of any Asset
or
any interest therein or portion thereof or (ii) the execution or delivery of
this Agreement or the consummation or performance of the terms and conditions
contemplated by this Agreement.
“Property
Costs” has the meaning set forth in Section
1.4(b).
“Purchase
Price” has the meaning set forth in Section
2.1.
“Purchaser”
has the meaning set forth in the preamble.
"Purchaser
Indemnitees" shall mean Purchaser and Purchaser’s Affiliates and each of their
respective officers, directors, employees, agents, representatives, insurers,
successors and permitted assigns.
Page
vii
“Real
Property Interests” shall mean the easements, rights-of-way, surface leases and
fee interests in real property identified on Schedule
1.2(b).
“Records”
has the meaning set forth in Section
1.2(h).
“REGARDLESS
OF FAULT” has the meaning set forth in Section
11.4(a).
“Retained
Obligations” shall mean Claims arising out of or related to:
| (a) |
the
Excluded Assets;
|
| (b) |
Property
Costs with respect to periods prior to the Effective Time; provided
that
with respect to ad valorem, property and similar Taxes imposed upon
or
arising from the Assets, the period shall not include periods on
and after
January 1 of the year in which the Closing Date
occurs;
|
| (c) |
Taxes
related to the Assets, including any Taxes for which Seller is liable
as a
successor or transferee for all periods prior to the Effective
Time,
but excluding (i) ad valorem, property and similar Taxes imposed
upon or
arising from the Assets and (ii) sales or transfer taxes resulting
from
the transfer of the Assets to Purchaser;
and
|
| (d) |
any
liabilities of Seller (i) with respect to employees of Seller arising
under any “employee benefit plan” (as defined in Section 3(3) of ERISA)
that is sponsored by, contributed to, or maintained by, Seller, or
(ii)
arising under ERISA for which Purchaser may have any liability under
ERISA
solely as a result of the consummation of the transaction contemplated
by
this Agreement.
|
“Seller”
has the meaning set forth in the preamble.
"Seller
Indemnitees" shall mean Seller and Seller’s Affiliates and each of their
respective officers, directors, employees, agents, representatives, insurers,
successors and permitted assigns.
“Surface
Contracts” has the meaning set forth in Section
1.2(b).
“System”
shall mean the natural gas gathering system and appurtenances thereto that
is
depicted in the map attached as
Exhibit A.
Notwithstanding anything to the contrary, the System shall not include any
pipelines, equipment or other properties that are located upstream of the inlet
flange of the meters where Hydrocarbons are delivered into the pipelines
consisting of such natural gas gathering system.
“Tax
Allocated Value” has the meaning set forth in Section
2.3.
“Taxes”
means all federal, state, local, and foreign income, profits, franchise, sales,
use, ad valorem, property, severance, production, excise, stamp, documentary,
real property transfer or gain, gross receipts, goods and services,
registration, capital, transfer, or withholding taxes or other governmental
fees
or charges imposed by any taxing authority, including any interest, penalties
or
additional amounts which may be imposed with respect thereto.
Page
viii
“Tax
Returns” has the meaning set forth in Section
5.8.
“Transfer
Requirement” means any consent, approval, authorization or permit of, or filing
with or notification to, any Person which is required to be obtained, made
or
complied with for or in connection with any sale, assignment or transfer of
any
Asset or any interest therein, other than any consent of, notice to, filing
with, or other action by Governmental Bodies in connection with the sale or
conveyance of Surface Contracts or interests therein, if they are not required
prior to the assignment of such Surface Contracts or interests or they are
customarily obtained subsequent to the sale or conveyance (including consents
from state agencies).
“Transition
Services Agreement” shall have the meaning set forth in Section
7.13.
Page
ix
This
Agreement is executed on March 7, 2007, by and between ANADARKO GATHERING
COMPANY,
a
Delaware corporation (“AGC”), and ANADARKO ENERGY SERVICES COMPANY, a Delaware
corporation (“AES”; AGC and AES collectively called “Seller”),
and DCP MIDSTREAM PARTNERS, LP, a Delaware limited partnership
(“Purchaser”).
RECITALS
A. Seller
owns various natural gas gathering pipeline properties, either of record or
beneficially, more fully described in the exhibits hereto.
B. Seller
desires to sell, transfer and assign to Purchaser, and Purchaser desires to
acquire from Seller, the properties and rights of Seller hereafter described,
in
the manner and upon the terms and conditions hereafter set forth.
C. Capitalized
terms used herein shall have the meanings ascribed to them in this Agreement
as
such terms are identified and/or defined in the preceding Definitions section
hereof.
NOW,
THEREFORE, in consideration of the premises and of the mutual promises,
representations, warranties, covenants, conditions and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound
by the terms hereof, agree as follows:
ARTICLE
1
PURCHASE
AND SALE
Section
1.1Purchase
and Sale.
At
the
Closing, and upon the terms and subject to the conditions of this Agreement,
Seller agrees to sell, transfer, assign and convey the Assets to Purchaser,
and
Purchaser agrees to purchase, accept and pay for the Assets and to assume
certain obligations attributable to the Assets.
Section
1.2Assets.
As
used
herein, the term “Assets” means, subject to the terms and conditions of this
Agreement, all of Seller’s and, with respect to Sections
1.2(c),
(d)
and
(f)
only,
Seller’s and its Affiliates’, right, title, interest and estate, real or
personal, recorded or unrecorded, movable or immovable, tangible or intangible,
in and to the following (but excluding the Excluded Assets):
(a) All
contracts, agreements and instruments identified on Schedule
1.2(a)
(“Contracts”);
(b) All
easements, permits, licenses, servitudes, rights-of-way, surface leases, fee
interests in real property and other surface rights appurtenant to, and used
or
held for use primarily in connection with the System, including those identified
on Schedule
1.2(b) (“Surface
Contracts”);
Page
1 of
36
(c) All
equipment, machinery, fixtures and other tangible personal property and
improvements located on the System or used or held for use primarily in
connection with the operation of the System, including those identified on
Schedule
1.2(c)
(“Equipment”);
(d) Computers
and other personal property used in connection with the operation of the System
that are located in field offices; and laptops, tools, and spare parts used
in
connection with operation of the System that are in the possession of
employees;
(e) All
rights of Seller under or pursuant to all warranties, representations and
guarantees made by suppliers, manufacturers and contractors (other than
Affiliates of Seller) to the extent relating to products sold, or services
provided, to Seller to the extent used or held for use in connection with or
affecting any of the Assets;
(f) All
pipelines, gathering systems and appurtenances thereto being part of the System
or used, or held for use, primarily in connection with the operation of the
System (“Pipelines”);
(g) All
Hydrocarbon linefill and Hydrocarbons existing within the Pipelines from and
after the Effective Time; and
(h) All
land
files; gas contract files; gas gathering and processing files; abstracts; title
opinions; land surveys; maps; engineering data and reports; and other books,
records, data, files, and accounting records, regardless of whether paper or
electronic media, in each case to the extent related primarily to the Assets,
or
used or held for use primarily in connection with the maintenance or operation
thereof, but excluding (i) any books, records, data, files, maps and accounting
records to the extent disclosure or transfer is restricted by third-party
agreement or applicable Law and the necessary consents to transfer are not
obtained pursuant to Section
7.8,
(ii)
computer or communications software or intellectual property (including tapes,
codes, data and program documentation and all tangible manifestations and
technical information relating thereto), (iii) attorney-client privileged
communications and work product of Seller’s legal counsel (other than title
opinions), (iv) reserve studies and evaluations, and (v) records relating to
the
negotiation and consummation of the sale of the Assets (subject to such
exclusions, the “Records”); provided, however, that Seller may retain the
originals of such Records as Seller has determined may be required for
litigation, tax, accounting, and auditing purposes and provide Purchaser with
copies thereof at Purchaser’s cost until such purpose no longer reasonably
exists; and then Seller shall promptly deliver such records to the address
then
provided by Purchaser.
Section
1.3Excluded
Assets.
Notwithstanding
the foregoing, the Assets shall not include, and there is excepted, reserved
and
excluded from the purchase and sale contemplated hereby (collectively, the
“Excluded Assets”):
(a) all
corporate, financial, income and franchise tax and legal records of Seller
that
relate to Seller’s business generally (whether or not relating to the Assets),
and all books, records and files to the extent that the same relate to the
Excluded Assets and those records retained by Seller pursuant to Section
1.2(h)
and
copies of any other Records retained by Seller pursuant to Section
1.5;
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(b) all
geological and geophysical data (including all seismic data, including
reprocessed data) and all logs, interpretive data, technical evaluations,
technical outputs, reserve estimates and economic estimates;
(c) all
rights to any refund of Taxes or other costs or expenses borne by Seller or
Seller’s predecessors in interest and title attributable to periods prior to the
Effective Time;
(d) Seller’s
area-wide bonds, permits and licenses or other permits, licenses or
authorizations used in the conduct of Seller’s business generally;
(e) those
items listed in Schedule
1.3(e);
(f) all
trade
credits, account receivables, note receivables, and other receivables
attributable to the Assets with respect to any period of time prior to the
Effective Time;
(g) all
right, title and interest of Seller in and to vehicles used in connection with
the Assets;
(h) all
rights, titles, claims and interests of Seller or any Affiliate of Seller (i)
to
or under any policy or agreement of insurance or any insurance proceeds; except
to the extent Purchaser assumes liability for a Claim for which Seller is
insured, and (ii) to or under any bond or bond proceeds;
(i) any
patent, patent application, logo, service xxxx, copyright, trade name or
trademark of or associated with Seller or any Affiliate of Seller or any
business of Seller or of any Affiliate of Seller; and
(j) any
pipelines, equipment or other properties that are located upstream of the inlet
flange of the meters where Hydrocarbons are delivered into the
Pipelines.
Section
1.4Effective
Time; Proration of Costs and Revenues.
(a) Subject
to Section 1.5,
possession of the Assets shall be transferred from Seller to Purchaser at the
Closing, but, if Closing occurs, certain financial benefits and burdens of
the
Assets shall be transferred effective as of 7:00 A.M., local time, where the
respective Assets are located, on May 1, 2007 (the “Effective Time”), as
described below.
(b) Purchaser
shall be entitled to all Hydrocarbon linefill and Hydrocarbons from or
attributable to the Assets at and after the Effective Time (and all products
and
proceeds attributable thereto), and to all other income, proceeds, receipts
and
credits earned with respect to the Assets at or after the Effective Time, and
shall be responsible for (and entitled to any refunds with respect to) all
Property Costs incurred at and after the Effective Time (or, with respect to
ad
valorem, property and similar Taxes imposed upon or arising from the Assets,
for
the period from and after January 1, 2007). Seller shall be entitled to
Hydrocarbons from or attributable to the Assets prior to the Effective Time
(and
all products and proceeds attributable thereto), and to all other income,
proceeds, receipts and credits earned with respect to the Assets prior to the
Effective Time, and shall be responsible for (and entitled to any refunds with
respect to) all Property Costs incurred prior to the Effective Time (other
than
with respect to ad valorem, property and similar Taxes imposed upon or arising
from the Assets and attributable to the period on or after January 1, 2007
but
prior to the Effective Time, which Taxes constitute a Property Cost that
Purchaser shall assume and be liable to pay, and entitled to any refunds with
respect thereto). “Earned” and "incurred”, as used in this Agreement, shall be
interpreted in accordance with generally accepted accounting principles.
“Property
Costs”
means
all costs attributable to the ownership and operation of the Assets (including
without limitation (a) ad valorem, property and similar Taxes based upon or
measured by the ownership or operation of the Assets, but excluding any other
Taxes, (b) Imbalances, and (c) obligations to make any payments owing to third
parties that (i) arise under a contract or agreement or (ii) relate to amounts
held in suspense) and capital expenditures incurred in the ownership and
operation of the Assets, but excluding without limitation liabilities, losses,
costs, and expenses attributable to (i) Claims for personal injury or death,
or
property damage or to the extent based on a violation of any Law, (ii)
obligations to dismantle, abandon and salvage facilities, and (iii) obligations
to remediate any contamination of groundwater, surface water, soil, Equipment
or
Pipelines under applicable Environmental Laws, all of which are addressed in
Article
11.
For
purposes of this Section
1.4,
determination of whether Property Costs are attributable to the period before
or
after the Effective Time shall be based on when services are rendered, when
the
goods are delivered, or when the work is performed. For clarification, the
date
an item or work is ordered is not the date of a pre-Effective Time transaction
for settlement purposes, but rather the date on which the item ordered is
delivered to the job site, or the date on which the work ordered is performed,
shall be the relevant date. For purposes of allocating Hydrocarbons (and
accounts receivable with respect thereto), under this Section
1.4,
Hydrocarbons shall be deemed to be “from or attributable to” the Assets when
they pass through the delivery point sales meters on the Pipelines. Seller
shall
utilize reasonable interpolative procedures to arrive at an allocation of
Hydrocarbon production when exact meter readings or gauging and strapping data
is not available. Seller shall provide to Purchaser, no later than three (3)
Business Days prior to Closing, all data necessary to support any estimated
allocation, for purposes of establishing the adjustment to the Purchase Price
pursuant to Section
2.2
hereof
that will be used to determine the Closing Payment (as defined in Section
9.4(a)).
Taxes,
right-of-way fees and other Property Costs that are paid periodically shall
be
prorated based on the number of days in the applicable period falling before
and
the number of days in the applicable period falling at or after the Effective
Time (or, in the case of ad valorem, property and similar Taxes, January 1,
2007). In each case, Purchaser shall be responsible for the portion allocated
to
the period at and after the Effective Time (or, in the case of ad valorem,
property and similar Taxes, January 1, 2007) and Seller shall be responsible
for
the portion allocated to the period before the Effective Time (or, in the case
of ad valorem, property and similar Taxes, January 1, 2007).
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Section
1.5Delivery
and Maintenance of Records.
(a) Seller,
at Purchaser’s cost, shall use reasonable efforts to deliver the Records (FOB
Seller's office) to the office designated in writing by Purchaser within sixty
(60) days following Closing. Seller may retain original Records of those items
as set forth in Section
1.2(h)
and/or
copies of any Records. If Seller elects to retain original files, Purchaser
will
be provided with copies of same, at Seller’s cost.
(b) Purchaser,
for a period of seven (7) years following Closing, will (i) retain the Records,
(ii) provide Seller, its Affiliates, and its and their officers, employees
and
representatives with access to the Records during normal business hours for
review and copying at Seller’s expense, and (iii) provide Seller, its
Affiliates, and its and their officers, employees and representatives with
access, during normal business hours, to materials received or produced after
Closing relating to any Indemnity Claim made under Section
11.4
of this
Agreement for review and copying at Seller’s expense.
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ARTICLE
2
PURCHASE
PRICE
Section
2.1 Purchase
Price.
The
purchase price for the Assets (the “Purchase Price”) shall be $180,250,000
adjusted as provided in Section
2.2.
Section
2.2 Adjustments
to Purchase Price.
The
Purchase Price for the Assets shall be adjusted as follows with all such amounts
being determined in accordance with generally accepted accounting
principles:
(a) Reduced
by the aggregate amount of the following proceeds received by Seller between
the
Effective Time and the Closing Date (with the period between the Effective
Time
and the Closing Date referred to as the “Adjustment Period”): (i) proceeds from
the sale of Hydrocarbons (net of any gathering, processing and transportation
costs and any Hydrocarbon severance, sales or excise Taxes not reimbursed to
Seller by the purchaser of Hydrocarbons) attributable to the Assets during
the
Adjustment Period, and (ii) other proceeds earned with respect to the Assets
during the Adjustment Period;
(b) Increased
by the fair market value of merchantable Hydrocarbons stored in tanks (but
excluding Hydrocarbon linefill located in Pipelines and volumes of liquid
Hydrocarbons located in tanks along the Pipelines that are below the minimum
required to operate such tanks) attributable to the ownership and operation
of
the Assets that belong to Seller as of the Effective Time;
(c) Increased
or reduced as agreed upon in writing by Seller and Purchaser;
(d) Increased
by the amount of all Property Costs and other costs attributable to the
ownership and operation of the Assets which are paid by Seller and incurred
at
or after the Effective Time, except any Property Costs and other such costs
already deducted in the determination of proceeds in Section
2.2(a);
and
(e) Decreased
by an amount equal to the amount of any ad valorem, property and similar Taxes
assessed against or pertaining to the Assets for periods after January 1 through
the Effective Time with respect to the calendar year in which Closing
occurs.
Each
adjustment made pursuant to Sections
2.2(a) and
(b)
shall
serve to satisfy, up to the amount of the adjustment, Purchaser’s entitlement
under Section
1.4
to
Hydrocarbons attributable to the Assets during the Adjustment Period, and to
the
value of other income, proceeds, receipts and credits earned with respect to
the
Assets during the Adjustment Period, and as such, Purchaser shall not have
any
separate rights to receive any Hydrocarbons or income, proceeds, receipts and
credits with respect to which a downward adjustment has been made. Similarly,
the adjustment described in Section
2.2(d)
shall
serve to satisfy, up to the amount of the adjustment, Purchaser’s obligation
under Section
1.4
to pay
Property Costs and other costs attributable to the ownership and operation
of
the Assets which are incurred during the Adjustment Period, and as such,
Purchaser shall not be separately obligated to pay for any Property Costs or
other such costs with respect to which an upward adjustment has been made.
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The
Purchase Price, adjusted as set forth in Sections
(a) through (e),
less
the Deposit, shall be increased by simple interest thereon from the Effective
Time to the Closing Date, with all interest computed at the Agreed Interest
Rate.
A
final
settlement of the adjustments set forth in Sections
2.2 (a), (b), (c) and (e),
shall
be made in accordance with Section
9.4(b).
Notwithstanding anything to the contrary, Property Costs shall also be estimated
and adjusted under Sections
2.2(d) and 9.4(b),
but
shall remain subject to Section
11.2
and
indemnification under Section
11.4.
Section
2.3 Allocation
of Purchase Price for Tax Purposes.
Concurrent
with the execution of this Agreement, Purchaser and Seller will agree upon
an
allocation of the unadjusted Purchase Price among the Assets, in compliance
with
the principles of Section 1060 of the Internal Revenue Code of 1986, as amended
(the “Code”), and the Treasury regulations thereunder. Such allocation of value
shall be attached to this Agreement as Schedule
2.3 for
purposes of Internal Revenue Service Form 8594. The “Tax Allocated Value” for
any Asset equals the portion of the unadjusted Purchase Price allocated to
such
Asset on Schedule
2.3,
increased or reduced as described in this Article
2.
Any
such adjustments to the Purchase Price shall be applied on a pro rata basis
to
the amounts set forth on Schedule
2.3
for all
Assets. After Seller and Purchaser have agreed on the Tax Allocated Values
for
the Assets, Seller will be deemed to have accepted such Tax Allocated Values
for
purposes of this Agreement and the transactions contemplated hereby, but
otherwise makes no representation or warranty as to the accuracy of such values.
Seller and Purchaser agree (i) that the Tax Allocated Values shall be used
by
Seller and Purchaser as the basis for reporting asset values and other items
for
purposes of all federal, state, and local Tax Returns, including without
limitation Internal Revenue Service Form 8594 and (ii) that neither they nor
their Affiliates will take positions inconsistent with the Tax Allocated Values
in notices to Governmental Bodies or in audit or other proceedings with respect
to Taxes.
Section
2.4 Deposit.
Concurrently
with the execution of this Agreement, Purchaser has paid to Seller an xxxxxxx
money deposit in an amount equal to five percent (5%) of the Purchase Price
(the
"Deposit"). If the Closing occurs, the Deposit with simple interest accruing
thereon from the date hereof to the date immediately preceding the Effective
Time computed at the Agreed Interest Rate shall be returned to Purchaser by
Seller on the Closing Date following the receipt by Seller of the Closing
Payment, or if the Closing does not occur, shall be otherwise distributed in
accordance with the terms of this Agreement.
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ARTICLE
3
TITLE
MATTERS
Section
3.1 Seller’s
Title.
(a)
Except
for the special warranty of title referenced in Section
3.1(b),
Seller
makes no warranty or representation, express, implied, statutory or otherwise,
with respect to Seller’s title to any of the Assets and Purchaser hereby
acknowledges and agrees that Purchaser’s sole remedy for any defect of title
shall be pursuant to the special warranty of title contained in the Conveyance
referenced in Section
3.1(b).
(b) The
conveyance to be delivered by Seller to Purchaser shall be substantially in
the
form of Exhibit
B
hereto
(the “Conveyance”) and contain a special warranty of Defensible Title by,
through and under Seller and its Affiliates but not otherwise, but shall
otherwise be without warranty of title of any kind, express, implied or
statutory or otherwise.
(c) Purchaser
shall not be entitled to protection under Seller’s special warranty of title in
the Conveyance against any matter that would cause Seller not to have Defensible
Title that is disclosed in writing to Purchaser or of which Purchaser has actual
knowledge prior to the date hereof.
(d) Notwithstanding
anything herein provided to the contrary, if any title defect results from
any
matter which could also result in the breach of any representation or warranty
of Seller set forth in Article
5,
then
Purchaser shall only be entitled to assert such matter as a breach of Seller’s
special warranty of title contained in the Conveyance to the extent not
prohibited by Section
3.1(c),
but
shall be precluded from also asserting such matter as the basis of the breach
of
any such representation or warranty of Seller set forth in Article
5.
Section
3.2 [RESERVED]
Section
3.3 [RESERVED]
Section
3.4 [RESERVED]
Section
3.5 Casualty
or Condemnation Loss.
(a) Subject
to the provisions of Section
3.5(b),
Purchaser shall assume all risk of loss with respect to, and any change in
the
condition of the Assets from the Effective Time until Closing and the
depreciation of personal property due to ordinary wear and tear.
(b) Subject
to the provisions of Sections
8.1(f)
and
8.2(e)
hereof,
if, after the date of this Agreement but prior to the Closing Date, any portion
of the Assets is destroyed by fire or other casualty or is taken in condemnation
or under right of eminent domain, and the loss as a result of such individual
casualty or taking is less than seven and one-half percent (7.5%) of
the
unadjusted Purchase Price, Purchaser shall nevertheless be required to close
and
Seller shall elect by written notice to Purchaser prior to Closing either (i)
to
cause the Assets affected by any casualty or taking to be repaired or restored
to at least its condition prior to such casualty, at Seller’s sole cost, which
repair or restoration may take place after Closing so long as Seller and
Purchaser have agreed on a reasonable time period in which to complete such
repairs and restoration and Seller executes an access agreement in form and
substance reasonably acceptable to Purchaser and Seller, or (ii) to indemnify
Purchaser through a document reasonably acceptable to Seller and Purchaser
against any costs or expenses that Purchaser reasonably incurs to repair the
Assets subject to any casualty or taking. In each case, Seller shall retain
all
rights to insurance and other claims against third parties with respect to
the
casualty or taking except to the extent the parties otherwise agree in
writing.
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Section
3.6 [RESERVED]
Section
3.7 Government
Approvals Respecting Assets.
(a) Federal
and State Approvals.
With
respect to consents and approvals customarily obtained from Governmental Bodies
after closing in transactions of this nature, Purchaser, within thirty (30)
days
after Closing, shall file for approval with the applicable Governmental Bodies
all assignment documents and other state and federal transfer documents required
to effectuate the transfer of the Assets. Purchaser further agrees promptly
after Closing to take all other actions reasonably required of it by federal
or
state agencies having jurisdiction to obtain all requisite regulatory approvals
with respect to this transaction, and to use its reasonable commercial efforts
to obtain the approval by such federal or state agencies, as applicable, of
Seller’s assignment documents requiring federal or state approval in order for
Purchaser to be recognized by the federal or state agencies as the owner of
the
Assets. Purchaser shall provide Seller with approved copies of the assignment
documents and other state and federal transfer documents, as soon as they are
available.
ARTICLE
4
ENVIRONMENTAL
MATTERS
Section
4.1 [RESERVED]
Section
4.2 NORM,
Wastes and Other Substances.
Purchaser
acknowledges that the Assets have been used for the gathering and transportation
of Hydrocarbons and that there may be petroleum, produced water, wastes, or
other substances or materials located in, on or under the System or associated
with the Assets. Equipment and sites included in the Assets may contain
asbestos, hazardous substances, or NORM. NORM may affix or attach itself to
the
inside of pipes, materials, and equipment as scale, or in other forms. The
pipes, materials, and equipment included in the Assets may contain NORM and
other wastes or hazardous substances. NORM containing material and/or other
wastes or hazardous substances may have come in contact with various
environmental media, including without limitation, water, soils or sediment.
Special procedures may be required for the assessment, remediation, removal,
transportation, or disposal of environmental media, wastes, asbestos, hazardous
substances, and NORM from the Assets.
Section
4.3 Inspection
Indemnity.
PURCHASER
HEREBY AGREES TO DEFEND, INDEMNIFY, RELEASE, PROTECT, SAVE AND HOLD HARMLESS
THE
SELLER INDEMNITEES FROM AND AGAINST ANY AND ALL LOSSES AND CLAIMS ARISING OUT
OF
OR RELATING TO ANY DUE DILIGENCE ACTIVITY CONDUCTED BY PURCHASER OR ITS AGENTS,
WHETHER BEFORE OR AFTER THE EXECUTION OF THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, ANY LOSSES RESULTING, IN WHOLE OR IN PART, FROM THE NEGLIGENCE
OR
STRICT LIABILITY OF SELLER, BUT EXCLUDING ANY LOSSES TO THE EXTENT CAUSED BY
THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A SELLER INDEMNITEE.
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ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF SELLER
Section
5.1 Generally.
(a)
Any
representation or warranty qualified “to the knowledge of Seller” or “to
Seller’s knowledge” or with any similar knowledge qualification is limited to
matters within the actual knowledge of (i) the officers of Seller and its
Affiliates or (ii) the employees of Seller who have responsibility for the
Assets and who have the following titles: Antioch Operations Manager and
Midstream Commercial Regional Manager. “Actual knowledge” for purposes of this
Agreement means information actually personally known by such officers or
employees.
(b)
Inclusion of a matter on a Schedule in relation to a representation or warranty
which addresses matters having a Material Adverse Effect shall not be deemed
an
indication that such matter does, or may, have a Material Adverse Effect.
Likewise, the inclusion of a matter on a Schedule in relation to a
representation or warranty shall not be deemed an indication that such matter
necessarily would, or may, breach such representation or warranty absent its
inclusion on such Schedule. Matters may be disclosed on a Schedule to this
Agreement for purposes of information only.
(c)
Subject to the foregoing provisions of this Section
5.1,
the
disclaimers and waivers contained in Sections
11.8
and
11.9
and the
other terms and conditions of this Agreement, Seller represents and warrants
to
Purchaser the matters set out in Sections
5.2
through
5.20.
Section
5.2 Existence
and Qualification.
Each
of
AGC and AES is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified to do
business as a foreign corporation where the Assets are located, except where
the
failure to so qualify would not have a Material Adverse Effect.
Section
5.3 Power.
Each
of
AGC and AES has the corporate power to enter into and perform this Agreement
and
consummate the transactions contemplated by this Agreement.
Section
5.4 Authorization
and Enforceability.
The
execution, delivery and performance of this Agreement, and the performance
of
the transactions contemplated hereby, have been duly and validly authorized
by
all necessary corporate action on the part of Seller. This Agreement has been
duly executed and delivered by Seller (and all documents required hereunder
to
be executed and delivered by Seller at Closing will be duly executed and
delivered by Seller) and this Agreement constitutes, and at the Closing such
documents will constitute, the valid and binding obligations of Seller,
enforceable against Seller in accordance with their terms except as such
enforceability may be limited by applicable bankruptcy or other similar laws
affecting the rights and remedies of creditors generally as well as to general
principles of equity (regardless of whether such enforceability is considered
in
a proceeding in equity or at law).
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Section
5.5 No
Conflicts.
To
Seller’s knowledge, subject to compliance with the Preference Rights and
Transfer Requirements set forth in Schedule
5.13,
the
execution, delivery and performance of this Agreement by Seller, and the
transactions contemplated by this Agreement will not (i) violate any provision
of the certificate of incorporation or bylaws of Seller, (ii) result in default
(with due notice or lapse of time or both) or the creation of any lien or
encumbrance or give rise to any right of termination, cancellation or
acceleration under any of the terms, conditions or provisions of any note,
bond,
mortgage, indenture, license or agreement to which Seller is a party or which
affect the Assets, (iii) violate any judgment, order, ruling, or decree
applicable to Seller as a party in interest, (iv) violate any Laws applicable
to
Seller or any of the Assets, except for (a) rights to consent by, required
notices to, filings with, approval or authorizations of, or other actions by
any
Governmental Body where the same are not required prior to the assignment of
the
related Asset or they are customarily obtained subsequent to the sale or
conveyance thereof and (b) any matters described in clauses (ii), (iii) or
(iv)
above which would not have a Material Adverse Effect.
Section
5.6 Liability
for Brokers’ Fees.
Purchaser
shall not directly or indirectly have any responsibility, liability or expense,
as a result of undertakings or agreements of Seller, for brokerage fees,
finder’s fees, agent’s commissions or other similar forms of compensation in
connection with this Agreement or any agreement or transaction contemplated
hereby.
Section
5.7 Litigation.
Except
as
set forth in: (a) Schedule
5.7(a),
to
Seller’s knowledge, no investigation, proceeding, action, suit, or other legal
proceeding of any kind or nature before any Governmental Body or arbitrator
(including any take-or-pay claims) which could have a Material Adverse Effect
is
pending or, to Seller’s knowledge, threatened to which Seller is a party and
which relates to the Assets; and (b) Schedule
5.7(b),
to
Seller’s knowledge, no notice in writing from any Governmental Body which could
have a Material Adverse Effect has been received by Seller claiming any
violation of or noncompliance with any Law with respect to the Assets (including
any such Law concerning the conservation of natural resources).
Section
5.8 Taxes
and Assessments.
With
respect to all Taxes related to the Assets, to the knowledge of Seller, (a)
all
reports, returns, statements (including estimated reports, returns or
statements), and other similar filings (the “Tax Returns”) relating to the
Assets required to be filed by Seller with respect to such Taxes have been
timely filed with the appropriate Governmental Body in all jurisdictions in
which such Tax Returns are required to be filed, (b) such Tax Returns are true
and correct in all material respects, and (c) all Taxes reported on such Tax
Returns have been paid, except those being contested in good faith.
To
Seller’s knowledge, with respect to all Taxes related to the Assets, except as
set forth on Schedule
5.8,
(i)
there are not currently in effect any extension or waiver of any statute of
limitations of any jurisdiction regarding the assessment or collection of any
such Tax; (ii) there are no administrative proceedings or lawsuits pending
against the Assets or Seller by any taxing authority; and (iii) there are no
Tax
liens on any of the Assets except for liens for Taxes not yet due.
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Section
5.9 Compliance
with Laws.
Except
as
disclosed on Schedule
5.9,
to the
knowledge of Seller, the Assets are, and the operation of the Assets is, in
compliance with the provisions and requirements of all Laws of all Governmental
Bodies having jurisdiction with respect to the Assets, or the ownership,
operation, development, maintenance, or use of any thereof, except where the
failure to so comply would not have a Material Adverse Effect. Notwithstanding
the foregoing, Seller makes no representation or warranty, express or implied,
under this Section relating to any Environmental Liabilities or Environmental
Law.
Section
5.10 Contracts.
Except
as
disclosed on Schedule
5.10(a),
to the
knowledge of Seller, Seller has paid its share of all costs payable by it under
the contracts and agreements described in Schedule
1.2(a), and
Seller has not received as of the date hereof written notice of termination
or
breach thereof. Seller is in compliance with all Contracts listed on
Schedule 1.2(a)
except
as disclosed on Schedule
5.10(a)
and
except such non-compliance as would not, individually or the aggregate, have
a
Material Adverse Effect. To Seller's knowledge, Schedule
5.10(b)
sets
forth all of the following contracts and agreements to which any of the Assets
are bound as of the date hereof or Closing:
(i) any
agreement with any Affiliate of Seller;
(ii) 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;
(iii) any
tax
partnership agreement of or binding upon Seller affecting any of the Assets;
and
(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.
Section
5.11 [RESERVED]
Section
5.12 Governmental
Authorizations.
To
Seller’s knowledge, except as disclosed on Schedule
5.12,
Seller
has obtained and is maintaining all federal, state and local governmental
licenses, permits, franchises, orders, exemptions, variances, waivers,
authorizations, certificates, consents, rights, privileges and applications
therefor (the “Governmental Authorizations”) that are presently necessary or
required for the ownership and operation of the Assets as currently owned and
operated, the loss of which would, individually or in the aggregate, have a
Material Adverse Effect. To the knowledge of Seller, except as disclosed in
Schedule
5.7(a),
Schedule
5.7(b)
or
Schedule
5.12
and
except as would not, individually or in the aggregate, have a Material Adverse
Effect, (i) Seller has operated the Assets in accordance with the conditions
and
provisions of such Governmental Authorizations, and (ii) no written notices
of
violation have been received by Seller, and no proceedings are pending or,
to
Seller’s knowledge, threatened in writing that might result in any modification,
revocation, termination or suspension of any such Governmental Authorizations
or
which would require any corrective or remediation action by Seller.
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Section
5.13 Preference
Rights and Transfer Requirements.
To
Seller’s knowledge, none of the Assets, or any portion thereof, is subject to
any Preference Right or Transfer Requirement which may be applicable to the
transactions contemplated by this Agreement, except for (i) Preference Rights
and Transfer Requirements contained in easements, rights-of-way or equipment
leases and (ii) Preference Rights and Transfer Requirements as are set forth
on
Schedule
5.13.
Section
5.14 [RESERVED]
Section
5.15 Outstanding
Capital Commitments.
As
of the
date hereof, there are no outstanding AFEs or other commitments to make capital
expenditures which are binding on the Assets and which Seller reasonably
anticipates will individually require expenditures by the owner of the Assets
after the Closing Date in excess of $75,000 other than those shown on
Schedule
5.15.
Section
5.16 Imbalances.
To
Seller’s knowledge, Schedule
5.16
accurately sets forth in all material respects all of Seller’s Imbalances as of
January 1, 2007 arising with respect to the Assets and, except as disclosed
in
Schedule
5.16,
as of
January 1, 2007, (i) no Person is entitled to receive any material portion
of
the Seller’s Hydrocarbons attributable to the Assets or to receive material cash
or other payments to “balance” any disproportionate allocation of Hydrocarbons
attributable to the Assets under any gas processing or dehydration agreement,
gas gathering and transportation agreements, gas purchase agreement, or other
agreements, whether similar or dissimilar, (ii) Seller is not obligated to
deliver any material quantities of gas or to pay any material penalties or
other
amounts, in connection with the violation of any of the terms of any gas
contract or other agreement with shippers with respect to the Assets, and (iii)
Seller is not obligated to pay any material penalties or other material payments
under any gas transportation or other agreement as a result of the delivery
of
quantities of gas in excess of the contract requirements.
Section
5.17 Condemnation.
To
Seller’s knowledge, there is no actual or threatened taking (whether permanent,
temporary, whole or partial) of any part of the Assets by reason of condemnation
or the threat of condemnation.
Section
5.18 Bankruptcy.
To
Seller’s knowledge, there are no bankruptcy, reorganization, or similar
arrangement proceedings pending, being contemplated by or threatened against
Seller or any Affiliate of Seller.
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Section
5.19 NGA.
No
consent is required in connection with the transaction contemplated hereby
under
the Natural Gas Policy Act of 1978, as amended. Seller is not an interstate
pipeline company within the meaning of the Natural Gas Act of 1938.
Section
5.20 Investment
Company.
Seller
is
not an investment company or a company controlled by an investment company
within the meaning of the Investment Company Act of 1940, as
amended.
ARTICLE
6
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
represents and warrants to Seller the following:
Section
6.1 Existence
and Qualification.
Purchaser
is a limited partnership duly formed, validly existing and in good standing
under the laws of the state of Delaware; and Purchaser is duly qualified to
do
business as a foreign limited partnership in every jurisdiction in which it
is
required to qualify in order to conduct its business except where the failure
to
so qualify would not have a material adverse effect on Purchaser or its
properties; and Purchaser is duly qualified to do business as a foreign limited
partnership in the respective jurisdictions where the Assets are
located.
Section
6.2 Power.
Purchaser
has the limited partnership power to enter into and perform this Agreement
and
consummate the transactions contemplated by this Agreement.
Section
6.3 Authorization
and Enforceability.
The
execution, delivery and performance of this Agreement, and the performance
of
the transaction contemplated hereby, have been duly and validly authorized
by
all necessary limited partnership action on the part of Purchaser. This
Agreement has been duly executed and delivered by Purchaser (and all documents
required hereunder to be executed and delivered by Purchaser at Closing will
be
duly executed and delivered by Purchaser) and this Agreement constitutes, and
at
the Closing such documents will constitute, the valid and binding obligations
of
Purchaser, enforceable in accordance with their terms except as such
enforceability may be limited by applicable bankruptcy or other similar laws
affecting the rights and remedies of creditors generally as well as to general
principles of equity (regardless of whether such enforceability is considered
in
a proceeding in equity or at law).
Section
6.4 No
Conflicts.
The
execution, delivery and performance of this Agreement by Purchaser, and the
transactions contemplated by this Agreement will not (i) violate any provision
of the limited partnership agreement or other governing documents of Purchaser,
(ii) result in a default (with due notice or lapse of time or both) or the
creation of any lien or encumbrance or give rise to any right of termination,
cancellation or acceleration under any of the terms, conditions or provisions
of
any note, bond, mortgage, indenture, license or agreement to which Purchaser
is
a party, (iii) violate any judgment, order, ruling, or regulation applicable
to
Purchaser as a party in interest, or (iv) violate any Law applicable to
Purchaser or any of its assets, or (v) require any filing with, notification
of
or consent, approval or authorization of any Governmental Body or authority,
except any matters described in clauses (ii), (iii), (iv) or (v) above which
would not have a material adverse effect on Purchaser or the transactions
contemplated hereby.
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Section
6.5 Liability
for Brokers’ Fees.
Seller
shall not directly or indirectly have any responsibility, liability or expense,
as a result of undertakings or agreements of Purchaser, for brokerage fees,
finder’s fees, agent’s commissions or other similar forms of compensation in
connection with this Agreement or any agreement or transaction contemplated
hereby.
Section
6.6 Litigation.
There
are
no actions, suits or proceedings pending, or to the actual knowledge of
Purchaser’s officers, threatened in writing before any Governmental Body against
Purchaser or any Affiliate of Purchaser which are reasonably likely to impair
materially Purchaser’s ability to perform its obligations under this
Agreement.
Section
6.7 Financing.
As
of
Closing, Purchaser will have sufficient cash, available lines of credit or
other
sources of immediately available funds (in United States dollars) to enable
it
to pay the Closing Payment to Seller at the Closing.
Section
6.8 [RESERVED]
Section
6.9 Limitation.
Except
for the representations and warranties expressly made by Seller in Article
5 of
this
Agreement, or confirmed in any certificate furnished or to be furnished to
Purchaser pursuant to this Agreement, Purchaser represents and acknowledges
that
(i) there are no representations or warranties, express, statutory or implied,
as to the Assets or prospects thereof, and (ii) Purchaser has not relied upon
any oral or written information provided by Seller. Without limiting the
generality of the foregoing, Purchaser represents and acknowledges that Seller
has made and will make no representation or warranty regarding any matter or
circumstance relating to Environmental Laws, Environmental Liabilities, the
release of materials into the environment or protection of human health, safety,
natural resources or the environment or any other environmental condition of
the
Assets. Purchaser further represents and acknowledges that it is knowledgeable
of the oil and gas business and of the usual and customary practices of owners
such as Seller and that it has had access to the Assets, the officers and
employees of Seller, and the books, records and files of Seller relating to
the
Assets, and in making the decision to enter into this Agreement and consummate
the transactions contemplated hereby, Purchaser has relied solely on the basis
of its own independent due diligence investigation of the Assets.
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Section
6.10 SEC
Disclosure.
Purchaser
is acquiring the Assets for its own account for use in its trade or business,
and not with a view toward or for sale associated with any distribution thereof,
nor with any present intention of making a distribution thereof within the
meaning of the Securities Act of 1933, as amended and applicable state
securities laws.
Section
6.11 Bankruptcy.
There
are
no bankruptcy, reorganization or receivership proceedings pending against,
being
contemplated by, or threatened against Purchaser.
ARTICLE
7
COVENANTS
OF THE PARTIES
Section
7.1 Access.
Between
the date of execution of this Agreement and continuing until ten (10) Business
Days prior to the Closing Date, Seller will give Purchaser and its
representatives access to the Assets and access to the Records in Seller’s
possession, for the purpose of conducting an investigation of the Assets, but
only to the extent that Seller may do so without violating any obligations
to
any third party and to the extent that Seller has authority to grant such access
without breaching any restriction binding on Seller. Notwithstanding anything
to
the contrary contained herein, Purchaser shall not conduct any environmental
assessment of the Assets from the date hereof through the Closing Date and
shall
not have access to the Assets for such purpose. Any access by Purchaser under
this Section
7.1
shall be
limited to Seller’s normal business hours, and any weekends and after hours
requested by Purchaser that can be reasonably accommodated by Seller, and
Purchaser’s investigation shall be conducted in a manner that minimizes
interference with the operation of the Assets. All information obtained by
Purchaser and its representatives under this Section shall be subject to the
terms of Section
11.4(b)(vi)
and the
terms of that certain confidentiality agreement between Anadarko Petroleum
Corporation and Purchaser dated December 1, 2006, as amended (the
"Confidentiality Agreement").
Section
7.2 Government
Reviews.
Seller
and Purchaser shall in a timely manner (a) make all required filings, if any,
with and prepare applications to and conduct negotiations with, each
governmental agency as to which such filings, applications or negotiations
are
necessary or appropriate in the consummation of the transactions contemplated
hereby specifically including but not limited to the HSR Act, (b) provide such
information as each may reasonably request to make such filings, prepare such
applications and conduct such negotiations, and (c) request early termination
or
waiver of any applicable waiting period under the HSR Act. Each party shall
cooperate with and use all commercially reasonable efforts to assist the other
with respect to such filings, applications and negotiations.
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Section
7.3 Notification
of Breaches.
Until
the
Closing,
(a) Purchaser
shall notify Seller promptly after Purchaser obtains actual knowledge that
any
representation or warranty of Seller or Purchaser contained in this Agreement
is
untrue in any material respect or will be untrue in any material respect as
of
the Closing Date or that any covenant or agreement to be performed or observed
by Seller prior to or on the Closing Date has not been so performed or observed
in any material respect.
(b) Seller
shall notify Purchaser promptly after Seller obtains actual knowledge that
any
representation or warranty of Seller or Purchaser contained in this Agreement
is
untrue in any material respect or will be untrue in any material respect as
of
the Closing Date or that any covenant or agreement to be performed or observed
by Purchaser prior to or on the Closing Date has not been so performed or
observed in any material respect.
(c) If
any of
Purchaser’s or Seller’s representations or warranties is untrue or shall become
untrue in any material respect between the date of execution of this Agreement
and the Closing Date, or if any of Purchaser’s or Seller’s covenants or
agreements to be performed or observed prior to or on the Closing Date shall
not
have been so performed or observed in any material respect, but if such breach
of representation, warranty, covenant or agreement shall (if curable) be cured
by the Closing (or, if the Closing does not occur, by the date set forth in
Section
10.1),
then
such breach shall be considered not to have occurred for all purposes of this
Agreement.
Section
7.4 Operatorship.
(a) Seller
will prepare and Seller and Purchaser will execute on the Closing Date all
assignments necessary to convey to Purchaser all Surface Contracts in the form
as prescribed by the applicable Governmental Body and otherwise acceptable
to
Purchaser and Seller.
(b) Purchaser
shall, promptly following Closing, file all appropriate forms and declarations
or bonds with federal and state agencies relative to its assumption of
operatorship. Seller shall execute and deliver to Purchaser and Purchaser shall
promptly file the appropriate forms with the applicable regulatory agency
transferring operatorship of such Assets to Purchaser.
Section
7.5 Public
Announcements.
Until
the
Closing, neither party shall make any press release or other public announcement
regarding the existence of this Agreement, the contents hereof or the
transactions contemplated hereby without the prior written consent of the other;
provided, however, the foregoing shall not restrict disclosures by Purchaser
or
Seller which are required by applicable securities or other laws or regulations
or the applicable rules of any stock exchange having jurisdiction over the
disclosing party or its Affiliates; and provided, further, that Purchaser may
disclose the existence and contents of this Agreement and the transactions
contemplated hereby to the Standard & Poor’s and Xxxxx’x rating agencies
(provided that such agencies are obligated to keep such information
confidential). At or within 60 days after Closing, the content of any press
release or public announcement shall be subject to the prior review and
reasonable approval of Seller and Purchaser.
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Section
7.6 Operation
of Business.
Except
as
set forth on Schedule
7.6,
until
the Closing, Seller (i) will operate its business in the ordinary course,
consistent with past practices, (ii) will not, without the prior written consent
of Purchaser, which consent shall not be unreasonably withheld, commit to any
operation, or series of related operations, reasonably anticipated by Seller
to
require future capital expenditures by Seller or Buyer in respect of the Assets
in excess of $150,000.00, or make any capital expenditures in excess of
$150,000.00, or terminate, materially amend, execute or extend any material
agreements affecting the Assets, (iii) will maintain insurance coverage on
the
Assets presently furnished by nonaffiliated third parties in the amounts and
of
the types presently in force, (iv) will use commercially reasonable efforts
to
maintain in full force and effect all Contracts and Surface Contracts, (v)
will
maintain all material governmental permits and approvals affecting the Assets,
(vi) will not transfer, sell, hypothecate, encumber or otherwise dispose of
any
material Assets except for sales and dispositions of Hydrocarbons and Equipment
made in the ordinary course of business consistent with past practices, and
(vii) will not commit to do any of the foregoing. Purchaser’s approval of any
action restricted by this Section
7.6
shall be
considered granted within ten (10) days (unless a shorter time is reasonably
required by the circumstances and such shorter time is specified in Seller’s
written notice) of Seller’s notice to Purchaser requesting such consent unless
Purchaser notifies Seller to the contrary in writing during that period. In
the
event of an emergency, Seller may take such action as a prudent operator would
take and shall notify Purchaser of such action promptly thereafter.
Section
7.7 [RESERVED]
Section
7.8 Preference
Rights and Transfer Requirements.
Purchaser’s
purchase of the Assets is expressly subject to all validly existing and
applicable Preference Rights and Transfer Requirements. Prior to the Closing
Date, Seller shall initiate all procedures which in Seller’s good faith judgment
are reasonably required to comply with or obtain the waiver of all Preference
Rights and Transfer Requirements set forth in Schedule
5.13
with
respect to the transactions contemplated by this Agreement. Seller shall not
be
obligated to pay any consideration to (or incur any cost or expense for the
benefit of) the holder of any Preference Right or Transfer Requirement in order
to obtain the waiver thereof or compliance therewith.
Section
7.9 Tax
Matters.
(a) Subject
to the provisions of Section
12.3,
Seller
shall be responsible for all Taxes related to the Assets (other than ad valorem,
property, severance and similar Taxes based upon or measured by the ownership
or
operation of the Assets which are addressed in
Section 1.4)
attributable to any period of time at or prior to the Closing Date, and
Purchaser shall be responsible for all such Taxes related to the Assets
attributable to any period of time after the Closing Date. Regardless of which
party is responsible, Seller shall handle payment to the appropriate
Governmental Body of all Taxes with respect to the Assets which are required
to
be paid prior to Closing (and shall file all Tax Returns with respect to such
Taxes). If requested by Purchaser, Seller will assist Purchaser with preparation
of all ad valorem and property Tax Returns due on or before December 31, 2007
(including any extensions requested) to the extent such Tax Returns relate
or
are attributable to the period occurring before the Closing Date. Seller shall
deliver to Purchaser within thirty (30) days of filing copies of all Tax Returns
filed by Seller after the Closing Date relating to the Assets and any supporting
documentation provided by Seller to taxing authorities, excluding Tax Returns
related to income tax, franchise tax, or other similar Taxes.
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(b) So
long
as it does not delay the Closing,
Purchaser agrees to cooperate (at no cost or liability to Purchaser) with Seller
so that Seller’s transfer of the Assets to Purchaser shall, at Seller’s
election, be accomplished in a manner enabling the transfer to qualify as a
part
of a like-kind exchange of property by Seller within the meaning of Section
1031
of the Code. If Seller so notifies Purchaser of this election, Purchaser shall
reasonably cooperate with Seller to effect such like-kind exchange, which
cooperation shall include, without limitation, taking such actions as Seller
reasonably requests in order to pay the Purchase Price in a manner which enables
such transfer to qualify as part of a like-kind exchange of property within
the
meaning of Section 1031 of the Code, and Purchaser agrees that Seller may assign
its rights (but not its obligations) under this Agreement to a qualified
intermediary as defined in Treasury Regulations Section 1.1031(k) - 1(g)(4)(iii)
under United States Treasury Regulations, to qualify the transfer of the
Purchase Price as a part of a like-kind exchange of property within the meaning
of Section 1031 of the Code. Any assignment of this
Agreement
to
a
qualified intermediary shall not release Seller
from
any
of its liabilities or obligations to Purchaser under this
Agreement.
Seller
shall
be
solely responsible to designate and obtain exchange property and to otherwise
comply with Section
1031
of
the Code.
The
rights of the Parties
shall
not
be affected by any determination that the transaction does not qualify
as
a like-kind exchange.
Section
7.10 Further
Assurances.
After
Closing, Seller and Purchaser each agrees to take such further actions and
to
execute, acknowledge and deliver all such further documents as are reasonably
requested by the other party for carrying out the purposes of this Agreement
or
of any document delivered pursuant to this Agreement.
Section
7.11 [RESERVED]
Section
7.12 Non-UCI
Compressors. Prior
to
Closing, Seller shall purchase at its cost all leased compressors identified
on
Schedule 7.12.
Said
purchased compressors shall be included in the Assets.
Section
7.13 Transition
Services Agreement.
Between
the date hereof and the Closing Date, each of Seller and Purchaser shall use
its
reasonable efforts to negotiate in good faith a form of transition services
agreement on terms that are mutually acceptable to Seller and Purchaser to
be
executed at Closing by Seller and Purchaser (the “Transition Services
Agreement”).
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ARTICLE
8
CONDITIONS
TO CLOSING
Section
8.1 Conditions
of Seller to Closing.
The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject, at the option of Seller, to the satisfaction on or prior
to Closing of each of the following conditions:
(a) Representations.
The
representations and warranties of Purchaser set forth in Article
6
shall be
true and correct in all material respects (other than those representations
and
warranties of Purchaser that are qualified by materiality, which shall be true
and correct in all respects) as of the Closing Date as though made on and as
of
the Closing Date;
(b) Performance.
Purchaser shall have performed and observed, in all material respects, all
covenants and agreements to be performed or observed by it under this Agreement
prior to or on the Closing Date;
(c) Pending
Litigation.
No
suit, action or other proceeding by a third party (including any Governmental
Body) seeking to restrain, enjoin or otherwise prohibit the consummation of
the
transactions contemplated by this Agreement shall be pending before any
Governmental Body;
(d) Deliveries.
Purchaser shall have delivered to Seller duly executed counterparts of the
Conveyance and the other documents and certificates to be delivered by Purchaser
under Section
9.3;
(e) EXCO
PSA.
The
transactions contemplated by that certain Purchase and Sale Agreement dated
February 1, 2007 (the “EXCO PSA”), by and among Anadarko Petroleum Corporation,
Anadarko E&P Company LP, Xxxxxx Petroleum Corporation and Xxxx-XxXxx Oil
& Gas Onshore LP, as “Seller,” and EXCO Resources, Inc. as “Purchaser,”
shall have been consummated.
(f) Casualty
or Condemnation.
The
aggregate losses from casualties to the Assets and takings of Assets under
right
of eminent domain shall be less than seven and one-half percent (7.5%) of the
unadjusted Purchase Price;
(g) Payment.
Purchaser shall have paid the Closing Payment;
(h) HSR
Act.
Any
waiting period applicable to the consummation of the transaction contemplated
by
this Agreement under the HSR Act shall have lapsed or terminated (by early
termination or otherwise); and
(i) Transfer
Requirements.
All
Transfer Requirements that are necessary to transfer the Surface Contracts
and
Contracts listed on Schedule
8.1(i)
shall
have been obtained.
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Section
8.2 Conditions
of Purchaser to Closing.
The
obligations of Purchaser to consummate the transactions contemplated by this
Agreement are subject, at the option of Purchaser, to the satisfaction on or
prior to Closing of each of the following conditions:
(a) Representations.
The
representations and warranties of Seller set forth in Article
5
shall be
true and correct in all material respects as of the Closing Date as though
made
on and as of the Closing Date (other than representations and warranties that
refer to a specified date which need only be true and correct on and as of
such
specified date), without giving effect to the words “material” or “Material
Adverse Effect” or other similar exceptions or qualifiers; provided,
however,
that in the event of a breach of a representation or warranty, the condition
set
forth in this Section
8.2(a)
shall be
deemed satisfied unless the effect of all such breaches of representations
and
warranties taken together result in a Material Adverse Effect;
(b) Performance.
Seller
shall have performed and observed, in all material respects, all covenants
and
agreements to be performed or observed by it under this Agreement prior to
or on
the Closing Date;
(c) Pending
Litigation.
No
suit, action or other proceeding by a third party (including any Governmental
Body) seeking to restrain, enjoin or otherwise prohibit the consummation of
the
transactions contemplated by this Agreement shall be pending before any
Governmental Body;
(d)
Deliveries.
Seller
shall have delivered to Purchaser duly executed counterparts of the Conveyance
and the other documents and certificates to be delivered by Seller under
Section
9.2;
(e)
Casualty
or Condemnation.
The
aggregate losses from casualties to the Assets and takings of Assets under
right
of eminent domain shall be less than seven and one-half percent (7.5%) of the
unadjusted Purchase Price;
(f)
HSR
Act.
Any
waiting period applicable to the consummation of the transaction contemplated
by
this Agreement under the HSR Act shall have lapsed or terminated (by early
termination or otherwise);
(g)
Transfer
Requirements.
All
Transfer Requirements that are necessary to transfer the Surface Contracts
and
Contracts listed on Schedule
8.1(i)
shall
have been obtained; and
(h)
EXCO
PSA.
The
transactions contemplated by the EXCO PSA shall have been
consummated.
ARTICLE
9
CLOSING
Section
9.1 Time
and Place of Closing.
(a) Consummation
of the purchase and sale transaction as contemplated by this Agreement (the
“Closing”), shall, unless otherwise agreed to in writing by Purchaser and
Seller, take place at the offices of Fulbright & Xxxxxxxx L.L.P., 0000
XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, at 10:00 a.m., local time, on May 9,
2007
or if all conditions in Article
8
to be
satisfied prior to Closing have not yet been satisfied or waived, as soon
thereafter as such conditions have been satisfied or waived, subject to the
rights of the parties under Article
10.
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(b) The
date
on which the Closing occurs is herein referred to as the “Closing
Date.”
Section
9.2 Obligations
of Seller at Closing.
At
the
Closing, upon the terms and subject to the conditions of this Agreement, Seller
shall deliver or cause to be delivered to Purchaser, the following:
(a) the
Conveyance, in sufficient duplicate originals to allow recording in all
appropriate jurisdictions and offices, duly executed by Seller;
(b) a
certificate duly executed by an authorized corporate officer of Seller, dated
as
of Closing, certifying on behalf of Seller that the conditions set forth in
Sections
8.2(a)
and
8.2(b)
have
been fulfilled;
(c) one
(1)
original legal opinion of Seller's Associate General Counsel dated as of the
Closing regarding the due authorization, execution, delivery and performance
by
Seller of this Agreement and the transactions contemplated hereby in form and
substance reasonably satisfactory to Purchaser;
(d) one
(1)
original executed statement described in Treasury Regulation §1.1445-2(b)(2)
certifying that Seller is not a foreign person within the meaning of the Code;
and
(e) the
Transition Services Agreement, duly executed by Seller.
Section
9.3 Obligations
of Purchaser at Closing.
At
the
Closing, upon the terms and subject to the conditions of this Agreement,
Purchaser shall deliver or cause to be delivered to Seller, the
following:
(a) a
wire
transfer of the Closing Payment in same-day funds;
(b) the
Conveyance, duly executed by Purchaser;
(c) a
certificate by an authorized corporate officer of Purchaser, dated as of
Closing, certifying on behalf of Purchaser that the conditions set forth in
Sections
8.1(a)
and
8.1(b)
have
been fulfilled;
(d) a
legal
opinion of counsel to Purchaser dated as of the Closing regarding the due
authorization, execution, delivery and performance by Purchaser of this
Agreement and the transactions contemplated hereby in form and substance
reasonably satisfactory to Seller; and
(e) the
Transition Services Agreement, duly executed by Purchaser.
Section
9.4 Closing
Payment & Post-Closing Purchase Price Adjustments.
(a) Not
later
than three (3) Business Days prior to the Closing Date, Seller shall prepare
and
deliver to Purchaser, based upon the best information available to Seller,
a
preliminary settlement statement estimating the Adjusted Purchase Price after
giving effect to all Purchase Price adjustments provided for in this Agreement.
The estimate delivered in accordance with this Section
9.4(a)
shall
constitute the dollar amount to be paid by Purchaser to Seller at the Closing
(the “Closing Payment”).
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(b) As
soon
as reasonably practicable after the Closing but not later than one hundred
and
twenty (120) days following the Closing Date, Seller shall prepare and deliver
to Purchaser a statement setting forth the final calculation of the Adjusted
Purchase Price and showing the calculation of each adjustment, based, to the
extent possible, on actual credits, charges, receipts and other items before
and
after the Effective Time and taking into account all adjustments provided for
in
this Agreement. Seller shall at Purchaser’s request supply reasonable
documentation available to support any credit, charge, receipt or other item.
As
soon as reasonably practicable but not later than the 45th day following receipt
of Seller’s statement hereunder, Purchaser shall deliver to Seller a written
report containing any changes that Purchaser proposes be made to such statement.
The parties shall undertake to agree on the final statement of the Adjusted
Purchase Price no later than one hundred eighty (180) days after the Closing
Date. In the event that the parties cannot reach agreement within such period
of
time, either party may refer the remaining matters in dispute for arbitration
to
KPMG LLP, or such other nationally-recognized independent accounting firm as
may
be accepted by Purchaser and Seller, for review, arbitration and final
determination. The accounting firm shall conduct the arbitration proceedings
in
Houston, Texas in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, to the extent such rules do not conflict
with
the terms of this Section
9.4.
The
accounting firm’s determination shall be made within thirty (30) days after
submission of the matters in dispute and shall be final and binding on both
parties, without right of appeal. In determining the proper amount of any
adjustment to the Purchase Price, the accounting firm shall not increase the
Purchase Price more than the increase proposed by Seller nor decrease the
Purchase Price more than the decrease proposed by Purchaser, as applicable.
The
accounting firm shall act as an expert for the limited purpose of determining
the specific disputed matters submitted by either party and may not award
damages or penalties to either party with respect to any matter. Seller and
Purchaser shall each bear its own legal fees and other costs of presenting
its
case. Each party shall bear one-half of the costs and expenses of the accounting
firm. Within ten (10) Business Days after the date on which the parties or
the
accounting firm, as applicable, finally determines the disputed matters, (x)
Purchaser shall pay to Seller the amount by which the Adjusted Purchase Price
exceeds the Closing Payment or (y) Seller shall pay to Purchaser the amount
by
which the Closing Payment exceeds the Adjusted Purchase Price, as applicable.
Any post-Closing payment pursuant to this Section
9.4(b)
shall
bear interest at the Agreed Interest Rate from the Closing Date to the date
both
Purchaser and Seller have executed the final settlement statement.
(c) All
payments made or to be made hereunder to Seller shall be by electronic transfer
of immediately available funds to the account of Anadarko Petroleum Corporation,
Account No. 0000000 at JPMorgan Chase, Chicago, Illinois, ABA No. 000000000,
for
the credit of Seller or to such other bank and account as may be specified
by
Seller in writing. All payments made or to be made hereunder to Purchaser shall
be by electronic transfer of immediately available funds to a bank and account
specified by Purchaser in writing to Seller.
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ARTICLE
10
TERMINATION
Section
10.1 Termination.
Unless
terminated earlier pursuant to other provisions provided herein, this Agreement
may be terminated at any time prior to Closing: (i) by the mutual prior written
consent of Seller and Purchaser; or (ii) by Seller, if Closing has not occurred
on or before July 9, 2007, other than due to default by Seller, or by Purchaser,
if Closing has not occurred on or before July 9, 2007, other than due to default
by Purchaser.
Section
10.2 Effect
of Termination.
If
this
Agreement is terminated pursuant to Section
10.1,
this
Agreement shall become void and of no further force or effect (except for the
provisions of Sections
5.6, 6.5, 7.5, 11.4(b)(vi), 11.5, 11.8, 11.9, 12.2, 12.4, and
12.7
through
12.19 of
this
Agreement all of which shall continue in full force and effect) and Seller
shall
be free immediately to enjoy all rights of ownership of the Assets and to sell,
transfer, encumber or otherwise dispose of the Assets to any party without
any
restriction under this Agreement. Notwithstanding anything to the contrary
in
this Agreement, the termination of this Agreement under Section
10.1(ii)
shall
not relieve any party from liability for any willful or negligent failure to
perform or observe in any material respect any of its agreements or covenants
contained herein which are to be performed or observed at or prior to Closing.
In the event this Agreement terminates under Section
10.1(ii)
because
a party has willfully or negligently failed to perform or observe in any
material respect any of its agreements or covenants contained herein which
are
to be performed at or prior to Closing, then the other party shall be entitled
to all remedies available at law or in equity and shall be entitled to recover
court costs and attorneys’ fees in addition to any other relief to which such
party may be entitled.
Section
10.3 Distribution
of Deposit Upon Termination.
(a) If
Seller
terminates this Agreement (i) because Purchaser has failed to comply with
any provision of Section
8.1(a), (b) or (d);
or
(ii) as the result of any material default or breach by Purchaser of
Purchaser's obligations hereunder, then Seller may retain the Deposit as
liquidated damages, free of any claims by Purchaser or any other Person with
respect thereto. It is expressly stipulated by the parties that the actual
amount of damages resulting from such a termination would be difficult if not
impossible to determine accurately because of the unique nature of this
Agreement, the unique nature of the Assets, the uncertainties of applicable
commodity markets and differences of opinion with respect to such matters,
and
that the liquidated damages provided for herein are a reasonable estimate by
the
parties of such damages.
(b) If
this
Agreement is terminated for any reason other than the reasons set forth in
Section 10.3(a),
then
within ten (10) days Seller shall deliver the Deposit with simple interest
thereon accruing from the date of this Agreement to the date of repayment
computed at the Agreed Interest Rate to Purchaser, free of any claims by Seller
or any other Person with respect thereto.
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(c) Notwithstanding
anything to the contrary in this Agreement, Purchaser shall not be entitled
to
receive interest on the Deposit if the Deposit is retained by Seller for a
reason set forth in Section 10.3(a).
ARTICLE
11
POST-CLOSING
OBLIGATIONS; INDEMNIFICATION;
LIMITATIONS;
DISCLAIMERS AND WAIVERS
Section
11.1 Receipts.
Except
as
otherwise provided in this Agreement, any Hydrocarbons attributable to the
Assets (and all products and proceeds attributable thereto) and any other
income, proceeds, receipts and credits attributable to the Assets which are
not
reflected in the adjustments to the Purchase Price following the final
adjustment pursuant to Section
9.4(b)
shall be
treated as follows: (a) all Hydrocarbons attributable to the Assets (and all
products and proceeds attributable thereto) and all other income, proceeds,
receipts and credits earned with respect to the Assets to which Purchaser is
entitled under Section
1.4
shall be
the sole property and entitlement of Purchaser, and, to the extent received
by
Seller, Seller shall fully disclose, account for and remit the same promptly
to
Purchaser, and (b) all Hydrocarbons attributable to the Assets (and all products
and proceeds attributable thereto) and all other income, proceeds, receipts
and
credits earned with respect to the Assets to which Seller is entitled under
Section
1.4
shall be
the sole property and entitlement of Seller and, to the extent received by
Purchaser, Purchaser shall fully disclose, account for and remit the same
promptly to Seller.
Section
11.2 Expenses.
Except
as
otherwise provided in this Agreement, any Property Costs which are not reflected
in the adjustments to the Purchase Price following the final adjustment pursuant
to Section
9.4(b)
shall be
treated as follows: (a) all Property Costs for which Seller is responsible
under
Section
1.4
shall be
the sole obligation of Seller and Seller shall promptly pay, or if paid by
Purchaser, promptly reimburse Purchaser for and hold Purchaser harmless from
and
against same; and (b) all Property Costs for which Purchaser is responsible
under Section
1.4
shall be
the sole obligation of Purchaser and Purchaser shall promptly pay, or if paid
by
Seller, promptly reimburse Seller for and hold Seller harmless from and against
same. Seller is entitled to resolve all joint interest audits and other audits
of Property Costs covering periods for which Seller is in whole or in part
responsible, provided that Seller shall not agree to any adjustments to
previously assessed costs for which Purchaser is liable without the prior
written consent of Purchaser, such consent not to be unreasonably withheld.
Seller shall provide Purchaser with a copy of all applicable audit reports
and
written audit agreements received by Seller and relating to periods for which
Purchaser is partially responsible.
Section
11.3 Assumed
Seller Obligations.
Without
limiting Purchaser’s rights to indemnity under this Article
11,
upon
Closing Purchaser shall assume and hereby agrees to fulfill, perform, pay and
discharge (or cause to be fulfilled, performed, paid or discharged) all of
the
obligations and liabilities of Seller, known or unknown, with respect to the
Assets, regardless of whether such obligations or liabilities arose prior to,
on
or after the Effective Time, including but not limited to obligations to (i)
dismantle, salvage and remove any equipment, structures, materials, platforms,
flowlines, and property of whatever kind related to or associated with
operations and activities conducted on the Assets or otherwise pursuant to
the
Assets, (ii) clean up, restore and/or remediate the premises covered by or
related to the Assets in accordance with applicable agreements and Laws, and
(iii) perform all obligations applicable to or imposed by or under the Surface
Contracts or the Contracts, or as required by applicable Laws (all of said
obligations and liabilities, subject to the exclusions below, herein being
referred to as the “Assumed Seller Obligations”); provided, however, that
Purchaser does not accrue any rights or assume any obligations or liabilities
of
Seller to the extent that they are:
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(i) attributable
to or arise out of the Excluded Assets; or
(ii) the
continuing responsibility of the Seller under Sections
11.1
and
11.2
or
matters for which Seller is required to indemnify Purchaser under Section
11.4(c).
Section
11.4 Indemnities.
(a) Definitions.
“Claim”
or “Claims” means, unless specifically provided otherwise, all claims
(including, but not limited to, those for damage to property, bodily injury
and
death, personal injury, illness, disease, maintenance, cure, loss of parental
and spousal consortium, wrongful death, loss of support, and wrongful
termination of employment), damages, liabilities, losses, demands, liens,
encumbrances, fines, penalties, causes of action of any kind (including actions
for indirect, consequential, punitive and exemplary damages), obligations,
costs
(including payment of all reasonable attorneys’ fees and costs of litigation),
judgments, interest, and awards or amounts, of any kind or character, whether
under judicial proceedings, administrative proceedings, investigation by a
Governmental Body or otherwise, or conditions in the premises of or attributable
to any Person or Persons or any party or parties, breach of representation
or
warranty (expressed or implied), under any theory of tort, contract, breach
of
contract (including any Claims which arise by reason of indemnification or
assumption of liability contained in other contracts entered into by an
Indemnified Party hereunder), at law or in equity, under statute, or otherwise,
arising out of, or incident to or in connection with this Agreement or the
ownership or operation of the Assets, including but not limited to Claims which
arise out of or are directly or indirectly connected with vessels and/or the
ownership, possession, management, xxxxxxx, maintenance, supply, operation
(including, but not limited to, ingress, egress, loading and unloading
operations) or navigation of any vessel.
The
phrase “REGARDLESS
OF FAULT”
means
WITHOUT
REGARD TO THE CAUSE OR CAUSES OF ANY CLAIM, INCLUDING, WITHOUT LIMITATION,
EVEN
THOUGH A CLAIM IS CAUSED IN WHOLE OR IN PART BY:
THE
NEGLIGENCE (WHETHER SOLE, JOINT, CONCURRENT, COMPARATIVE, CONTRIBUTORY, ACTIVE,
PASSIVE, GROSS, OR OTHERWISE), WILLFUL MISCONDUCT, STRICT LIABILITY, OR OTHER
FAULT OF PURCHASER INDEMNITEES, SELLER INDEMNITEES, INVITEES AND/OR THIRD
PARTIES; AND/OR
A
PRE-EXISTING DEFECT, WHETHER PATENT OR LATENT, OF THE PREMISES OF PURCHASER’S
PROPERTY OR SELLER’S PROPERTY (INCLUDING WITHOUT LIMITATION THE ASSETS),
INVITEES AND/OR THIRD PARTIES; AND/OR
THE
UNSEAWORTHINESS OF ANY VESSEL OR UNAIRWORTHINESS OF ANY AIRCRAFT OF A PARTY
WHETHER CHARTERED, OWNED, OR PROVIDED BY PURCHASER INDEMNITEES, SELLER
INDEMNITEES, INVITEES AND/OR THIRD PARTIES.
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(b) Purchaser
Indemnity Obligation.
Subject
only to Section 11.4(c), upon Closing Purchaser shall be responsible for and
indemnify, defend, release and hold harmless Seller Indemnitees from and against
all Claims caused by, arising out of or resulting from:
(i) the
Assumed Seller Obligations, REGARDLESS
OF FAULT;
(ii) the
ownership, use or operation of the Assets after the Effective Time, REGARDLESS
OF FAULT;
(iii) Purchaser’s
breach of any of Purchaser’s covenants or agreements contained in Article
7,
REGARDLESS
OF FAULT;
(iv) any
breach of any representation or warranty made by Purchaser contained in
Article
6 of
this
Agreement or confirmed in the certificate delivered by Purchaser at Closing
pursuant to Section
9.3(c);
(v) with
respect to the Assets, Environmental Laws, Environmental Liabilities,
the
release of materials into the environment or protection of human health, safety,
natural resources or the environment, or any other environmental condition
of
the Assets,
REGARDLESS
OF FAULT; and
(vi) Purchaser
Indemnitees’ access under Section
4.1,
Section
7.1,
or
otherwise, to the Assets, the Records and other related activities or
information prior to the Closing, REGARDLESS
OF FAULT except to the extent caused by the gross negligence or willful
misconduct of a Seller Indemnitee.
Notwithstanding
anything to the contrary contained herein, Purchaser shall have no
indemnification obligation with respect to any Claim under Section
11.4(b)(i),
(ii)
or
(v)
to the
extent such Claim results from physical actions taken by a Seller Indemnitee
after the Closing Date on or directly affecting the System or the real property
associated therewith.
(c) Seller
Indemnity Obligation.
Subject
to the limitations contained in Section 11.7, upon Closing Seller shall be
responsible for and indemnify, defend and hold harmless Purchaser against and
from all Claims caused by, arising out of or resulting
from:
(i) the
Retained Obligations;
(ii) Seller’s
breach of any of its covenants or agreements contained in Article
7;
and
(iii) any
breach of any representation or warranty made by Seller contained in
Article
5 of
this
Agreement or confirmed in the certificate delivered by Seller at Closing
pursuant to Section
9.2(b),
without
giving effect to the words “material” or “Material Adverse Effect” or other
similar exceptions or qualifiers.
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(d) Additional
Provisions.
It
is the
intention of the parties that this Article
11
shall
govern the allocation of risks and liabilities between Purchaser and Seller
except to the extent that it is expressly stated (whether elsewhere in this
Article
11
or in
some other Article hereof) that the provisions of such other Article (or part
thereof) shall control over the terms of all or part of this Article
11.
Notwithstanding
anything to the contrary contained in this Agreement, this Section
11.4
contains
the parties’ exclusive remedy against each other with respect to breaches of the
representations, warranties, covenants and agreements of the parties contained
in Articles
5, 6
and
Sections
7.1,
7.2,
7.3,
7.4,
7.5
and
7.6
and the
affirmations of such representations, warranties, covenants and agreements
contained in the certificate delivered by each party at Closing pursuant to
Sections
9.2(b) or
9.3(c),
as
applicable.
Section
11.5 Indemnification
Actions.
All
claims for indemnification under Section
11.4
shall be
asserted and resolved as follows:
(a) For
purposes of this Article
11,
the
term “Indemnifying Party” shall mean the party or parties having an obligation
to indemnify another party or parties pursuant to the terms of this Agreement.
The term “Indemnified Party” shall mean the party or parties having the right to
be indemnified by another party or parties pursuant to the terms of this
Agreement.
(b) To
make a
claim for indemnification (“Indemnity Claim”) under Section
11.4,
an
Indemnified Party shall notify the Indemnifying Party in writing of its
Indemnity Claim, including the specific details of and specific basis under
this
Agreement for its Indemnity Claim (the “Claim Notice”). The Indemnified Party
shall provide its Claim Notice promptly after the Indemnified Party has actual
knowledge of the Claim for which it seeks indemnification and shall enclose
a
copy of all papers (if any) served with respect to the Claim; provided that
the
failure of any Indemnified Party to give notice of a Claim as provided in this
Section
11.5
shall
not relieve the Indemnifying Party of its obligations under Section
11.4
except
to the extent such failure results in insufficient time being available to
permit the Indemnifying Party to effectively defend against the Claim or
otherwise prejudices the Indemnifying Party’s ability to defend against the
Claim. In the event that the Indemnity Claim is based upon an inaccuracy or
breach of a representation, warranty, covenant or agreement, the Claim Notice
shall specify the representation, warranty, covenant or agreement which was
inaccurate or breached.
(c) The
Indemnifying Party shall have thirty (30) days from its receipt of the Claim
Notice to notify the Indemnified Party whether it admits or denies its liability
to defend the Indemnified Party against the relevant Claim at the sole cost
and
expense of the Indemnifying Party. The Indemnified Party is authorized, prior
to
and during such 30-day period, to file any motion, answer or other pleading
that
it shall deem necessary or appropriate to protect its interests or those of
the
Indemnifying Party and that it reasonably believes is not prejudicial to the
Indemnifying Party.
(d) If
the
Indemnifying Party admits its liability to indemnify the Indemnified Party,
it
shall have the right and obligation to diligently defend, at its sole cost
and
expense, the Claim. The Indemnifying Party shall have full control of such
defense and proceedings, including any compromise or settlement thereof. If
requested by the Indemnifying Party, the Indemnified Party agrees to cooperate
in contesting any Claim which the Indemnifying Party elects to contest. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Claim controlled by the Indemnifying Party pursuant to this Section
11.5(d).
An
Indemnifying Party shall not, without the written consent of the Indemnified
Party, (i) settle any Claim or consent to the entry of any judgment with respect
thereto which does not include an unconditional written release of the
Indemnified Party from all liability in respect of such Claim, or (ii) settle
any Claim or consent to the entry of any judgment with respect thereto in any
manner that may materially and adversely affect the Indemnified Party (other
than as a result of money damages covered by the indemnity).
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(e) If
the
Indemnifying Party does not admit its liability to indemnify the Indemnified
Party or admits its liability but fails to diligently prosecute or settle the
Claim, then the Indemnified Party shall have the right to defend against the
Claim at the sole cost and expense of the Indemnifying Party, with counsel
of
the Indemnified Party’s choosing, subject to the right of the Indemnifying Party
to admit its liability and assume the defense of the Claim at any time prior
to
settlement or final determination thereof. If the Indemnifying Party has not
yet
admitted its liability for a Claim, the Indemnified Party shall send written
notice to the Indemnifying Party of any proposed settlement and the Indemnifying
Party shall have the option for ten (10) Business Days following receipt of
such
notice to (i) admit in writing its liability to indemnify the Indemnified Party
from and against the Claim and (ii) if liability is so admitted, reject, in
its
reasonable judgment, the proposed settlement.
Section
11.6 Release.
(a) UPON
CLOSING, PURCHASER RELEASES, REMISES AND FOREVER DISCHARGES SELLER INDEMNITEES
FROM ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, WHETHER
NOW EXISTING OR ARISING IN THE FUTURE, CONTINGENT OR
OTHERWISE,
WHICH PURCHASER MIGHT NOW OR SUBSEQUENTLY MAY HAVE AGAINST SELLER INDEMNITEES,
RELATING DIRECTLY OR INDIRECTLY TO THE ASSETS, THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION CLAIMS ARISING OUT OF OR INCIDENT TO ENVIRONMENTAL
LAWS, ENVIRONMENTAL LIABILITIES, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT
OR PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE
ENVIRONMENT,
INCLUDING, WITHOUT LIMITATION, RIGHTS TO CONTRIBUTION UNDER THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT OF 1980, AS AMENDED,
REGARDLESS OF FAULT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOREGOING
RELEASE SHALL NOT APPLY: (A) TO ANY PHYSICAL ACTIONS TAKEN BY A SELLER
INDEMNITEE AFTER THE CLOSING DATE ON OR DIRECTLY AFFECTING THE SYSTEM OR THE
REAL PROPERTY ASSOCIATED THEREWITH OR (B) TO THE EXTENT THAT PURCHASER IS
INDEMNIFIED FOR SUCH MATTER UNDER SECTION 11.4(c).
(b) Purchaser
covenants and agrees that it will not attempt to avoid the effect of the release
made by it hereinabove by later arguing that at the time of the release it
did
not fully appreciate the extent of any such Claims, including without
limitation, environmental Claims.
Section
11.7 Limitation
on Actions.
(a) The
representations and warranties of the parties in Articles
5
and
6
shall terminate
six (6) months after the Closing Date. All covenants and agreements shall
survive indefinitely. Representations and warranties shall be of no further
force and effect after the date of their expiration, provided that there shall
be no termination of any bona fide Claim asserted pursuant to this Agreement
with respect to the breach of such a representation or warranty on or before
its
expiration date.
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(b) Seller
shall not have any liability for any indemnification under Section
11.4(c)(iii)
until
and unless the aggregate amount of the liability for all Claims for which Claim
Notices are delivered by Purchaser exceeds ten percent (10%) of the Purchase
Price, and then only to the extent such damages exceed such ten percent (10%)
of
the Purchase Price. The adjustments to the Purchase Price under Section
2.2
and any
payments in respect thereof shall not be limited by this Section.
(c) Notwithstanding
anything to the contrary contained elsewhere in this Agreement, Seller shall
not
be required to indemnify Purchaser for aggregate damages in excess of an amount
equal to twenty five percent (25%) of the final Adjusted Purchase
Price.
Section
11.8 Disclaimers.
(a) EXCEPT
AS AND TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE 5 OF THIS AGREEMENT, OR
CONFIRMED IN THE CERTIFICATE OF SELLER TO BE DELIVERED PURSUANT TO SECTION
9.2(b), OR IN THE CONVEYANCE, (I) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS, STATUTORY OR IMPLIED, AND (II) SELLER EXPRESSLY DISCLAIMS ALL LIABILITY
AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION
MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO PURCHASER OR ANY OF ITS
AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING,
WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY
HAVE
BEEN PROVIDED TO PURCHASER BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT,
CONSULTANT, REPRESENTATIVE OR ADVISOR OF SELLER OR ANY OF ITS
AFFILIATES).
(b) EXCEPT
AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 5 OF THIS AGREEMENT, OR CONFIRMED
IN THE CERTIFICATE OF SELLER TO BE DELIVERED PURSUANT TO SECTION 9.2(b), OR
IN
THE CONVEYANCE, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER
EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR
IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS, (II) THE CONTENTS, CHARACTER
OR
NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING
CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO
THE
ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF PETROLEUM SUBSTANCES
IN
OR FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR FUTURE
REVENUES GENERATED BY THE ASSETS, (V) THE PRODUCTION OF HYDROCARBONS FROM THE
ASSETS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN
OR
MARKETABILITY OF THE ASSETS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY
DESCRIPTIVE MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY
THIRD PARTIES, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN
MADE
AVAILABLE OR COMMUNICATED TO PURCHASER OR ITS AFFILIATES, OR ITS OR THEIR
EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR
PRESENTATION RELATING THERETO, AND FURTHER DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY
EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT
PURCHASER SHALL BE DEEMED TO BE OBTAINING THE ASSETS IN THEIR PRESENT STATUS,
CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND THAT
PURCHASER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS
APPROPRIATE, OR (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT
OR
TRADEMARK INFRINGEMENT.
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(c) SELLER
HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER
OR
CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, ENVIRONMENTAL LIABILITIES, THE
RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH,
SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL
CONDITION OF THE ASSETS, AND NOTHING IN THIS AGREEMENT OR OTHERWISE SHALL BE
CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND PURCHASER SHALL BE DEEMED
TO
BE TAKING THE ASSETS “AS IS” AND “WHERE IS” FOR PURPOSES OF THEIR ENVIRONMENTAL
CONDITION.
Section
11.9 Waiver
of Trade Practices Acts.
(a) It
is the
intention of the parties that Purchaser's rights and remedies with respect
to
this transaction and with respect to all acts or practices of Seller, past,
present or future, in connection with this transaction shall be governed by
legal principles other than the Texas Deceptive Trade Practices--Consumer
Protection Act, Tex. Bus. & Com. Code Xxx. § 17.41 et
seq.
(the
"DTPA"). As such, Purchaser hereby waives the applicability of the DTPA to
this
transaction and any and all duties, rights or remedies that might be imposed
by
the DTPA, whether such duties, rights and remedies are applied directly by
the
DTPA itself or indirectly in connection with other statutes; provided,
however,
Purchaser does not waive § 17.555 of the DTPA. Purchaser acknowledges,
represents and warrants that it is purchasing the goods and/or services covered
by this Agreement for commercial or business use; that it has assets of $5
million or more according to its most recent financial statement prepared in
accordance with generally accepted accounting principles; that it has knowledge
and experience in financial and business matters that enable it to evaluate
the
merits and risks of a transaction such as this; and that it is not in a
significantly disparate bargaining position with Seller.
(b) Purchaser
expressly recognizes that the price for which Seller has agreed to perform
its
obligations under this Agreement has been predicated upon the inapplicability
of
the DTPA and this waiver of the DTPA. Purchaser further recognizes that Seller,
in determining to proceed with the entering into of this Agreement, has
expressly relied on this waiver and the inapplicability of the
DTPA.
Section
11.10 Recording.
As
soon
as practicable after Closing, Purchaser shall record the Conveyance in the
appropriate counties and provide Seller with copies of all recorded or approved
instruments.
The
conveyance in the form attached as Exhibit
B
is
intended to convey all of the Assets being conveyed pursuant to this Agreement.
Specific portions of the Assets that are leased from, or require the approval
to
transfer by, a governmental entity are conveyed under the Conveyance and also
are described and covered other separate assignments made by Seller to Purchaser
on officially approved forms, or forms acceptable to such entity, in sufficient
multiple originals to satisfy applicable statutory and regulatory requirements.
The
interests conveyed by such separate assignments are the same, and not in
addition to, the interests conveyed in the Conveyance attached as Exhibit B.
Further, such assignments shall be deemed to contain the special warranty of
title of Seller and all of the exceptions, reservations, rights, titles, power
and privileges set forth herein and in the Conveyance as fully and only to
the
extent as though they were set forth in each such separate
assignment.
Page
30
of 36
ARTICLE
12
MISCELLANEOUS
Section
12.1 Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original instrument, but all such counterparts together shall constitute but
one
agreement.
Section
12.2 Notice.
All
notices which are required or may be given pursuant to this Agreement shall
be
sufficient in all respects if given in writing and delivered personally, by
telecopy or by registered or certified mail, postage prepaid, as
follows:
| If to Seller: |
Anadarko
Gathering Company
Anadarko
Energy Services Company
0000
Xxxx Xxxxxxx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Attention:
Transactions Manager, Business Development
Telephone:
(000)000-0000
Telecopy:
(000)000-0000
|
| With a copy to: |
Anadarko
Petroleum Corporation
0000
Xxxx Xxxxxxx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Attention: Associate
General Counsel
Oil,
Gas and Minerals
Telephone:
(000)000-0000
Telecopy:
(000)000-0000
|
| If to Purchaser: |
000
00xx
Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxx,
Vice
President Business Development
Telephone:
(000) 000-0000
Telecopy:
(000) 000-0000
|
Page
31
of 36
| With a copy to: |
000
00xx
Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention:
General Counsel
Telephone:
(000) 000-0000
Telecopy:
(000) 000-0000
|
Either
party may change its address for notice by notice to the other in the manner
set
forth above. All notices shall be deemed to have been duly given at the time
of
receipt by the party to which such notice is addressed.
Section
12.3 Sales
or Use Tax Recording Fees and Similar Taxes and Fees.
Purchaser
shall bear any sales, use, excise, real property transfer, documentary, stamp
or
transfer Taxes, recording fees and similar Taxes and fees incurred and imposed
upon, or with respect to, the transactions contemplated hereby.
Seller and Purchaser shall jointly determine sales tax, if any, that is due
in
connection with the transactions consistent with the allocation of value
determined under Section
2.3.
Purchaser agrees to pay any such tax to Seller at Closing. If
such transactions are exempt from any such taxes or fees upon the filing of
an appropriate certificate or other evidence of exemption, Purchaser will timely
furnish to Seller such certificate or evidence.
Section
12.4 Expenses.
Except
as
provided in Section
12.3,
all
expenses incurred by Seller in connection with or related to the authorization,
preparation or execution of this Agreement, the Conveyance delivered hereunder
and the Exhibits and Schedules hereto and thereto, and all other matters related
to the Closing, including without limitation, all fees and expenses of counsel,
accountants and financial advisers employed by Seller, shall be borne solely
and
entirely by Seller, and all such expenses incurred by Purchaser shall be borne
solely and entirely by Purchaser.
Section
12.5 Change
of Name.
As
promptly as practicable, but in any case within thirty (30) days after the
Closing Date, Purchaser shall eliminate the names “Anadarko Petroleum
Corporation”, “Anadarko” and any variants thereof from the Assets acquired
pursuant to this Agreement and, except with respect to such grace period for
eliminating existing usage, shall have no right to use any logos, trademarks
or
trade names belonging to Seller or any of its Affiliates.
Section
12.6 Replacement
of Bonds, Letters of Credit and Guarantees.
The
parties understand that none of the bonds, letters of credit and guarantees,
if
any, posted by Seller with Governmental Bodies and relating to the Assets may
be
transferable to Purchaser. Promptly following Closing, Purchaser shall obtain,
or cause to be obtained in the name of Purchaser, replacements for such bonds,
letters of credit and guarantees, to the extent such replacements are necessary
to permit the cancellation of the bonds, letters of credit and guarantees posted
by Seller or to consummate the transactions contemplated by this
Agreement.
Page
32
of 36
Section
12.7 Governing
Law and Venue.
THIS
AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES SHALL BE GOVERNED BY
AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD
TO
PRINCIPLES OF CONFLICTS OF LAWS OTHERWISE APPLICABLE TO SUCH DETERMINATIONS.
JURISDICTION AND VENUE WITH RESPECT TO ANY DISPUTES ARISING HEREUNDER SHALL
BE
PROPER ONLY IN XXXXXX COUNTY, TEXAS.
Section
12.8 Captions.
The
captions in this Agreement are for convenience only and shall not be considered
a part of or affect the construction or interpretation of any provision of
this
Agreement.
Section
12.9 Waivers.
Any
failure by any party or parties to comply with any of its or their obligations,
agreements or conditions herein contained may be waived in writing, but not
in
any other manner, by the party or parties to whom such compliance is owed.
No
waiver of, or consent to a change in, any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of, or consent to a change in,
other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
Section
12.10 Assignment.
No
party
shall assign all or any part of this Agreement, nor shall any party assign
or
delegate any of its rights or duties hereunder, without the prior written
consent of the other party and any assignment or delegation made without such
consent shall be void; provided, however, that Purchaser may assign its rights
and duties hereunder to a wholly-owned subsidiary of Purchaser without obtaining
the prior written consent of Seller, provided that no such assignment shall
relieve Purchaser from any of its duties, obligations or liabilities hereunder.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
Section
12.11 Entire
Agreement.
The
Confidentiality Agreement, this Agreement and the Exhibits and Schedules
attached hereto, and the documents to be executed hereunder constitute the
entire agreement between the parties pertaining to the subject matter hereof,
and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties pertaining to the subject
matter hereof.
Section
12.12 Amendment.
(a) This
Agreement may be amended or modified only by an agreement in writing executed
by
both parties.
(b) No
waiver
of any right under this Agreement shall be binding unless executed in writing
by
the party to be bound thereby.
Page
33
of 36
Section
12.13 No
Third-Party Beneficiaries.
Nothing
in this Agreement shall entitle any Person other than Purchaser and Seller
to
any Claims, remedy or right of any kind, except as to those rights expressly
provided to Seller Indemnitees and Purchaser Indemnitees (provided, however,
any
claim for indemnity hereunder on behalf of a Seller Indemnitee or a Purchaser
Indemnitee must be made and administered by a party to this
Agreement).
Section
12.14 References.
In
this
Agreement:
(a) References
to any gender includes a reference to all other genders;
(b) References
to the singular includes the plural, and vice versa;
(c) Reference
to any Article or Section means an Article or Section of this Agreement;
(d) Reference
to any Exhibit or Schedule means an Exhibit or Schedule to this Agreement,
all
of which are incorporated into and made a part of this Agreement;
(e) Unless
expressly provided to the contrary, “hereunder”, “hereof’, “herein” and words of
similar import are references to this Agreement as a whole and not any
particular Section or other provision of this Agreement;
(f) “Include”
and “including” or any variation thereof shall mean include or including without
limiting the generality of the description preceding such term;
(g) Whenever
the parties have agreed that a matter under this Agreement is subject to any
approval or consent of the other party, such approval or consent shall not
be
unreasonably withheld, delayed or conditioned; and
(h) Reference
to “day” or “days” in this Agreement shall refer to calendar days unless
otherwise stated.
Section
12.15 Construction.
Purchaser
is a party capable of making such investigation, inspection, review and
evaluation of the Assets as a prudent purchaser would deem appropriate under
the
circumstances including with respect to all matters relating to the Assets,
their value, operation and suitability. Each of Seller and Purchaser has had
substantial input into the drafting and preparation of this Agreement and has
had the opportunity to exercise business discretion in relation to the
negotiation of the details of the transactions contemplated hereby. This
Agreement is the result of arm’s-length negotiations from equal bargaining
positions. In the event of a dispute over the meaning or application of this
Agreement, it shall be construed fairly and reasonably and neither more strongly
for nor against either party.
Page
34
of 36
Section
12.16 Limitation
on Damages
Notwithstanding
any other provision contained elsewhere in this Agreement to the contrary,
the
parties acknowledge that this Agreement does not authorize one party (or any
of
such party’s Indemnitees) to xxx for or collect its or their punitive damages
from the other party to this Agreement, or its own (or any of its Indemnitee’s)
consequential or indirect damages in connection with this Agreement and the
transactions contemplated hereby and each party expressly waives for itself
and
on behalf of its Affiliates and each of their respective Indemnitees, any and
all Claims it may have against the other party for its own such damages in
connection with this Agreement and the transactions contemplated
hereby.
Section
12.17 Conspicuousness.
The
parties agree that provisions in this Agreement in "bold" type satisfy any
requirements of the "express negligence rule" and any other requirements at
law
or in equity that provisions be conspicuously marked or
highlighted.
Section
12.18 Severability.
If
any
term or other provisions of this Agreement is held invalid, illegal or incapable
of being enforced under any rule of law, all other conditions and provisions
of
this Agreement shall nevertheless remain in full force and effect so long as
the
economic or legal substance of the transactions contemplated hereby is not
affected in a materially adverse manner with respect to either
party.
Section
12.19 Time
of Essence.
Time
is
of the essence in this Agreement. If the date specified in this Agreement for
giving any notice or taking any action is not a Business Day (or if the period
during which any notice is required to be given or any action taken expires
on a
date which is not a Business Day), then the date for giving such notice or
taking such action (and the expiration date of such period during which notice
is required to be given or action taken) shall be the next day which is a
Business Day.
[SIGNATURES
BEGIN ON THE FOLLOWING PAGE]
Page
35
of 36
IN
WITNESS WHEREOF, this Agreement has been signed by each of the parties hereto
on
the date first above written.
|
SELLER:
ANADARKO GATHERING
COMPANY
|
PURCHASER:
By: DCP Midstream GP, LP,
Its
General Partner
By:
DCP Midstream GP, LLC,
Its
General Partner
|
||
|
/s/ Xxxxxx
X. Xxxxxx
|
/s/ Xxxx
X. Xxxxx
|
||
|
|
|
||
|
Xxxxxx
X. Xxxxxx
Vice
President, Corporate Development
|
Xxxx
X. Xxxxx
Vice President |
ANADARKO
ENERGY SERVICES COMPANY
|
/s/ Xxxxxx
X. Xxxxxx
|
|||
|
|
|||
|
Xxxxxx
X. Xxxxxx
Vice
President, Corporate Development
|
Page
36 of 36
