PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is dated the 12th day
of January, 1999, by and between EVERGREEN RESOURCES, INC., a Colorado
corporation, with an office at 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000 (hereinafter referred to as "Buyer") and CIS OIL & GAS, INC., a Kansas
corporation, with an office 000 X. 00xx Xxxxxx , Xxxxxxx, Xxxxxx 00000
(hereinafter referred to as "Seller").
RECITALS:
A. Seller desires to sell, assign and convey to Buyer and Buyer desires
to purchase and accept all of Seller's oil and gas properties and related
interests located in the Raton Basin of Colorado.
B. The parties have reached agreement regarding such sale and purchase.
NOW, THEREFORE, for valuable consideration and the mutual covenants and
agreements herein contained, Seller and Buyer agree as follows:
ARTICLE 1. DEFINITIONS
1. Definitions: In this Agreement, capitalized terms have the meanings
provided in this Article, unless expressly provided otherwise in other
Articles. (All defined terms include both the singular and the plural. All
references to Articles refer to Articles in this Agreement, and all Exhibits
refer to Exhibits attached to and made a part of this Agreement.)
1.1 "AAA" has the meaning set forth in Article 14.10.
1.2 "Accounting Referee" has the meaning set forth in Article 6.5.
1.3 "Alleged Title Defect" means a Title Defect (as hereinafter defined)
which is asserted by Buyer in accordance with Article 4.2.
1.4 "Assignment and Xxxx of Sale" means a document in the form of
Exhibit "D".
1.5 "Claim" or "Claims" means any and all claims, demands, suits, causes
of action, losses, damages, liabilities, fines, penalties and costs (including
attorneys' fees and costs of litigation) which are brought by or owed to a
Third Party (as hereinafter defined).
1.6 "Close" or "Closing" means the consummation of the transfer of title
to the Properties (as hereinafter defined) to Buyer, including execution and
delivery of all documents provided herein.
1.7 "Closing Date" means a mutually agreeable date on or before January
19, 1999, or such other earlier date as may be mutually agreed upon by the
parties.
1.8 "Defensible Title" means, as to the Properties, such title held by
Seller that, subject to and except for the Permitted Encumbrances (as
hereinafter defined):
(a) entitles Seller to receive not less than the "Net Revenue
Interests" set forth in Exhibit "A-1" of all oil, gas and associated liquid
and gaseous hydrocarbons produced, saved and marketed from the Properties;
(b) obligates Seller to bear costs and expenses relating to the
ownership, operation, maintenance and repair of the xxxxx and facilities
located on or attributable to the Properties in an amount not greater than the
"Working Interests" set forth in Exhibit "A-1", unless there is a
corresponding increase in the Net Revenue Interests; and
(c) is free and clear of liens, encumbrances and encroachments.
1.9 "Effective Time" means December 31, 1998, at 11:59 p.m., local time
where the Properties are located.
1.10 "Environmental Claims" means all Claims for pollution or
environmental damages of any kind, including without limitation, those
relating to: (a) remediation and/or clean-up thereof, (b) damage to and/or
loss of any property or resource, and/or (c) injury or death of any person(s)
whomsoever; including without limitation, Claims relating to breach and/or
violation of Environmental Laws, common law causes of action such as
negligence, gross negligence, strict liability, nuisance or trespass, or fault
imposed by statute, rule, regulation or otherwise, Claims relating to
asbestos, NORM (as hereinafter defined) or other potentially hazardous
substances, all costs associated with remediation and clean up, and fines and
penalties associated with any of the foregoing.
1.11 "Environmental Laws" means all laws, statutes, ordinances,
permits, orders, judgments, rules or regulations which are promulgated, issued
or enacted by a governmental entity or tribal authority having appropriate
jurisdiction that, (a) relate to the prevention of pollution or environmental
damage, (b) the remediation of pollution or environmental damage, or (c) the
protection of the environment generally; including without limitation, the
Clean Air Act, as amended, the Clean Water Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
the Federal Water Pollution Control Act, as amended, the Resource Conservation
and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended,
the Toxic Substance and Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Hazardous and the Solid Waste
Amendments Act of 1984, as amended, and the Oil Pollution Act of 1990, as
amended.
1.12 "Letters-in-Lieu" means a document in the form of Exhibit "F".
1.13 "Non-Foreign Affidavit" means a document in the form of Exhibit
"H".
1.14 "Permitted Encumbrances" means:
(a) Royalties, overriding royalties, production payments,
reversionary interests, convertible interests, net profits interests, division
orders and similar burdens which are of record as of the date hereof,
encumbering the Properties to the extent the net cumulative effect of such
burdens do not, as of Closing, operate to reduce the Net Revenue Interests of
the Properties to less than the Net Revenue Interests set forth in Exhibit
"A-1";
(b) Preferential purchase rights and consents to assignment and
similar contractual provisions encumbering the Properties with respect to
which, prior to Closing, (i) waivers or consents are obtained from the
appropriate parties, or (ii) the appropriate time period for asserting such
rights have expired without an exercise of such rights;
(c) Easements, rights-of-way, servitudes, surface leases,
sub-surface leases, grazing rights, logging rights, canals, ditches,
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reservoirs, pipelines, utility lines, telephone lines, power lines, railways,
streets, roads, alleys, highways and structures on, over and through the
Properties, to the extent such rights, interests or structures do not
materially interfere with the operation of the Properties;
(d) The terms and conditions of all leases, agreements, contracts
and instruments associated with, attributable to or encumbering the
Properties;
(e) Liens for taxes or assessments not yet due or not yet
delinquent or, if delinquent, that are being contested by Seller in good faith
in the normal course of business;
(f) Liens of operators relating to obligations not yet due or not
yet delinquent or, if delinquent, that are being contested by Seller in good
faith in the normal course of business.
1.15 "Properties" means all of Seller's ownership interest in and to the
following properties (real, personal or mixed) and rights (contractual or
otherwise) which intended to include all of Seller's interests within the
Raton Basin, Colorado and specifically, without limiting the foregoing, the
following:
(a) The oil and gas leasehold interests, working interests, net
revenue interests, fee interests, mineral interests, royalty interests and
overriding royalty interests which are expressly described in Exhibit "A-1";
(b) All of the presently existing and valid unitization and
pooling agreements and units (including all units formed by voluntary
agreement and those formed under the rules, regulations, orders or other
official acts of any governmental entity having appropriate jurisdiction) to
the extent they relate to any of the interests which are expressly described
in Exhibit "A-1";
(c) All of the presently existing and valid oil sales contracts,
casinghead gas sales contracts, gas sales contracts, processing contracts,
gathering contracts, transportation contracts, easements, rights-of-way,
servitudes, surface leases and other contracts to the extent they relate to
any of the interests which are expressly described in Exhibit "A-1", and to
the extent described on Exhibit "B"; and
(d) All of the personal property and improvements, including
without limitation, xxxxx (whether producing, plugged and abandoned, shut-in,
injection or water supply), tanks, boilers, buildings, fixtures, machinery,
equipment, pipelines, utility lines, power lines, telephone lines, telegraph
lines, roads and other appurtenances, to the extent the same are situated upon
and/or used or held for use by Seller solely in connection with the ownership,
operation, maintenance and repair of the interests which are expressly
described in Exhibit "A-1", subject to the reservations stated below.
1.16 "Records" means all of the Seller's books, records and files
related to the Properties, excluding, however: all previous offers and
economic analyses associated with the purchase, sale or exchange of the
Properties, proprietary information, interpretive information, internal
communications, personnel information, tax information, information covered by
a non-disclosure obligation and information covered by a legal privilege.
1.17 "Title Defect" means any lien, encumbrance, encroachment or defect
associated with Seller's title to the Properties (excluding Permitted
Encumbrances) that would cause Seller not to have Defensible Title.
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ARTICLE 2. TRANSFER OF THE PROPERTIES; OTHER AGREEMENTS
2.1 Sale and Purchase. On the Closing Date, effective as of the
Effective Time and upon the terms and conditions herein set forth, Seller
agrees to sell and assign the Properties to Buyer and Buyer agrees to buy and
accept the Properties.
2.2 Termination of Other Agreements. Upon Closing, the following
agreements between or affecting the parties shall be deemed terminated and
cancelled, and all obligations of either party thereunder shall be deemed
fully and finally discharged:
a. Development Agreement between Buyer and Seller dated as of June
1, 1998.
b. Purchase and Sale Agreement (Gathering System), between Seller
and Primero Gas Marketing Company, an affiliate of Buyer, dated June 1, 1998,
as amended.
c. Purchase and Sale Agreement (Long's Canyon) between Buyer and
Seller, dated June 1, 1998.
2.3 Assumption of Other Agreements. Upon Closing, Buyer shall assume,
as of the Effective Time, the position of Seller under the following contracts
and will thereafter be responsible for the performance of Seller's obligations
thereunder and be entitled to the rights of Seller thereunder:
a. Gas Purchase and Sale Agreement between Buyer and Seller and
Primero Gas Marketing Company, dated August 7, 1998.
b. Model Form Operating Agreement designating Evergreen Operating
Corp., as Operator, with respect to the Properties.
ARTICLE 3. PURCHASE PRICE
3.1 Consideration and Purchase Price. The total consideration, subject
to adjustments as set forth herein, paid to Seller by Buyer for the Properties
shall be as follows:
a. 450,000 shares of common stock of Evergreen Resources, Inc.
That stock shall initially be restricted at Closing (within the meaning of
federal securities laws). Buyer shall use its commercially reasonable efforts
to cause the registration of that stock with any firm commitment registration
in connection with any registration undertaken by Buyer after Closing;
provided, Buyer makes no representations as to when, if ever, such stock shall
be registered, or whether such stock will be excluded from the registration as
a result of underwriter cutbacks;
b. $250,000.00, in cash or other immediately available funds which
shall be due and payable at Closing to the extent that such sum has not been
advanced to Seller prior to Closing; and,
c. The assumption of and the responsibility to pay the debts and
accounts payable of Seller described on Schedule 3.1, attached hereto and made
a part hereof.
ARTICLE 4. TITLE REVIEW
4.1 Review of Title Records. Seller shall make available to Buyer
Records in Seller's possession relating to title to the Properties. Buyer
shall be entitled to review said title Records. Buyer shall have the right to
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reasonably request copies of any and all such title Records.
4.2 Adjustment of Purchase Price for Increases or Decreases in Interests
Assigned. As soon as reasonably practicable after Buyer's review of the title
Records, Buyer shall notify Seller of any Properties which are subject to
Alleged Title Defect(s). Notice of Alleged Title Defect(s) shall include a
description and full explanation (including any and all supporting
documentation) of each Alleged Title Defect being claimed and a value which
Buyer in good faith attributes to each said Alleged Title Defect. With
respect to Alleged Title Defect(s), Seller may undertake to satisfy some, all
or none of those raised by Buyer at Seller's sole cost and expense. Buyer and
Seller shall meet prior to the Closing Date in an attempt to mutually agree on
a proposed resolution with respect to any Alleged Title Defect(s) which by
such time have not been agreed between the parties. Buyer or Seller shall have
the right to terminate this Agreement on the Closing Date if the value
attributable to Alleged Title Defect(s) which remain uncured as of the Closing
Date exceeds more than 10% of the unadjusted Purchase Price (using the closing
price of Evergreen Resources, Inc., common stock, as of the date hereof).
Upon Closing, Buyer shall be deemed to have waived all title defects not
raised and resolved before Closing, and there shall be no post-closing
adjustment for any such waived title defects; provided, however, the foregoing
shall not apply to any title defects arising as a result of any breach of
Seller's special warranty of title.
ARTICLE 5. ACCOUNTING
5.1 Revenues, Expenses and Capital Expenditures. All merchantable oil
and natural gas liquid hydrocarbons stored in tanks and vessels on the
Properties will be gauged to the bottom of the flange by Seller or the
operator of the Properties as of the Effective Time, and Seller shall be
entitled to the proceeds of such oil and natural gas liquid hydrocarbons so
gauged when sold. Buyer shall be entitled to witness said tank gauging.
These proceeds shall be settled in the accounting settlement described below.
Oil and other liquid hydrocarbons in treating equipment, separation equipment
and tanks below pipeline connections as of the Effective Time shall not be
considered to be merchantable and shall become the property of Buyer. All
revenues attributable to the operation of the Properties prior to the
Effective Time shall be owned by and for the account of Seller. Seller shall
be entitled to all operating revenues and related accounts receivable arising
in the ordinary course of business attributable to the Properties and shall be
responsible for all operating expenses and related accounts payable arising
in the ordinary course of business attributable to the Properties, in each
case to the extent they relate to the time prior to the Effective Time. Buyer
shall be entitled to all operating revenues and related accounts receivable
arising in the ordinary course of business attributable to the Properties and
responsible for the payment of all operating expenses and related accounts
payable arising in the ordinary course of business attributable to the
Properties, in each case to the extent they relate to time after the Effective
Time. The actual amounts or values associated with the above shall be
accounted for in the Final Accounting Settlement. Buyer shall assume
Seller's suspense funds associated with the acquired Properties as of the
Effective Time, and these funds shall be accounted for in the Final Accounting
Settlement.
5.2 Taxes. All taxes and assessments, including without limitation,
excise taxes, ad valorem taxes and any other federal, state, local or tribal
taxes or assessments attributable to the ownership or operation of the
Properties prior to the Effective Time shall remain Seller's responsibility,
and all deductions, credits and refunds pertaining to the aforementioned taxes
and assessments, no matter when received, shall belong to Seller; provided
however, it is understood that the actual discharge of Seller's responsibility
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for those taxes shall be pursuant to Buyer's assumptions under Section 3.1,
c., above. All taxes and assessments, including without limitation, excise
taxes, ad valorem taxes and any other federal, state, local or tribal taxes
and assessments attributable to the ownership or operation of the Properties
after the Effective Time (excluding income taxes from the Effective Time
through the Closing) shall be Buyer's responsibility, and all deductions,
credits and refunds pertaining to the aforementioned taxes and assessments, no
matter when received, shall belong to Buyer. The actual amounts or values
associated with the above, if any, shall be accounted for in the Final
Accounting Settlement. The parties agree that the transaction contemplated
herein is an occasional sale of assets by Seller in which Seller does not
trade in the ordinary course of its business. Accordingly, the parties will
take commercially reasonable actions to establish the occasional sale
exemption from any sales tax associated with the transaction contemplated
herein. Notwithstanding the foregoing, Buyer shall be solely responsible for
all transfer, sales, use or similar taxes resulting from or associated with
the transaction contemplated under this Agreement.
5.3 Obligations and Credits. All prepaid insurance premiums, utility
charges, taxes, rentals and any other prepaids applicable to periods of time
after the Effective Time, if any, and attributable to the Properties shall be
reimbursed to Seller by Buyer; and accrued payables applicable to periods of
time prior to the Effective Time, if any, and attributable to the Properties
shall be the responsibility of Seller. The actual amounts or values
associated with the above shall be accounted for in the Final Accounting
Settlement.
5.4 Miscellaneous Accounting. In addition to the items set forth in
Articles 5.1 through 5.3, any other amounts due between Buyer and Seller
related to the ownership or operation of the Properties shall be accounted for
in the Final Accounting Settlement.
5.5 Final Accounting Settlement. If Closing occurs subsequent to the
Effective Time, this Article 5.5 shall apply. As soon as reasonably
practicable, but in no event later than ninety (90) Days after Closing, Seller
shall deliver to Buyer a post-closing statement setting forth a detailed final
calculation of all post-closing adjustments applicable to the period between
the Effective Time and the Closing ("Final Accounting Settlement"). As soon
as reasonably practicable, but in no event later than thirty (30) Days after
Buyer receives the post-closing statement, Buyer shall deliver to Seller a
written report containing any changes Buyer proposes to be made to such
statement. If Buyer fails to deliver a report to Seller containing changes
Buyer proposes to be made to the post-closing statement, the post-closing
statement delivered by Seller shall be deemed to be true and correct and
binding on and non-appealable by the parties. As soon as reasonably
practicable, but in no event later than fifteen (15) Days after Seller
receives Buyer's proposed changes to the post-closing statement, the parties
shall meet and undertake to agree on the final post-closing adjustments. If
the parties fail to agree on the final post-closing adjustments within such
fifteen (15) Day period, the disputed items shall be resolved by submitting
the same to a firm of independent nationally recognized accountants mutually
acceptable to the parties (the "Accounting Referee"). The Accounting Referee
shall resolve the dispute(s) regarding the Final Accounting Settlement within
thirty (30) Days after having the relevant materials submitted for review.
The decision of the Accounting Referee shall be binding and non-appealable by
the parties. The fees and expenses associated with the Accounting Referee
shall be borne equally by Buyer and Seller. The date upon which all amounts
associated with the Final Accounting Settlement are agreed to by the parties,
whether by decision of the Accounting Referee or otherwise, shall be herein
called the "Final Settlement Date." Any amounts owed by either party to the
other as a result of such final post-closing adjustments shall be paid within
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five (5) Business Days after the Final Settlement Date.
5.6 Post-Final Accounting Settlement. Any revenues received or costs
and expenses paid by Buyer after the Final Accounting Settlement which are
attributable to the ownership or operation of the Properties prior to the
Effective Time shall be billed or reimbursed to Seller, as appropriate. Any
revenues received or costs and expenses paid by Seller after the Final
Accounting Settlement which are attributable to the ownership or operation of
the Properties after the Effective Time, and not expressly reserved by Seller,
shall be billed or reimbursed to Buyer, as appropriate.
ARTICLE 6. INDEMNITIES
6.1 Opportunity for Review. Each party represents that it has had an
adequate opportunity to review the following indemnity and release provisions,
including the opportunity to submit the same to legal counsel for review and
comment. Based upon the foregoing representation, the parties agree to the
provisions set forth below.
6.2 Seller's Indemnity Obligation. Seller shall, subject to the
limitations set forth below, release Buyer from and shall fully protect,
indemnify and defend Buyer, its officers, agents, employees and Affiliates and
hold them harmless from and against any and all Claims relating to, arising
out of, or connected, directly or indirectly, with the ownership or operation
of the Properties, or any part thereof, pertaining to the period of time prior
to the Closing Date; including without limitation, Environmental Claims and
Claims relating to (a) injury or death of any person or persons whomsoever,
(b) damages to or loss of any property or resources, (c) common law causes of
action such as negligence, gross negligence, strict liability, nuisance or
trespass, or (d) fault imposed by statute, rule, regulation or otherwise. The
indemnity obligation and release provided herein shall apply regardless of
cause or of any negligent acts or omissions of Buyer, its officers, agents,
employees and Affiliates, but shall not apply to any matters being assumed by
Buyer under the provisions of Section 3.1, c, or under Section 2.3.
6.3 Buyer's Indemnity Obligation. Buyer shall release Seller from and
shall fully protect, indemnify and defend Seller, its officers, agents,
employees and Affiliates and hold them harmless from and against any and all
Claims relating to, arising out of, or connected, directly or indirectly, with
the ownership or operation of the Properties, or any part thereof, pertaining
to the period of time at and after the Closing Date, no matter when asserted;
including without limitation, Environmental Claims and Claims relating to (a)
injury or death of any person or persons whomsoever, (b) damages to or loss of
any property or resources, (c) common law causes of action such as negligence,
gross negligence, strict liability, nuisance or trespass, or (d) fault imposed
by statute, rule, regulation or otherwise. The indemnity obligation and
release provided herein shall not apply to Claims arising from or related to
acts or omissions, or conditions or circumstances occurring or existing before
Closing.
ARTICLE 7. WARRANTY OF TITLE
7.1 Special Warranty of Title. Seller shall warrant and defend the title
to the Properties conveyed to Buyer against every person whomsoever lawfully
claiming the Properties or any part thereof by, through or under Seller, but
not otherwise.
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ARTICLE 8. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer that to the best of Seller's
knowledge on the date hereof and as of the Closing Date:
8.1 Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State
of Kansas and has all requisite corporate power and authority to own and lease
the Properties. Seller is duly licensed or qualified to do business as a
foreign corporation and is in good standing in all jurisdictions in which the
Properties are located.
8.2 Corporate Authority; Authorization of Agreement. Seller has all
requisite corporate power and authority to execute and deliver this Agreement,
to consummate the transactions contemplated herein and to perform all of the
terms and conditions to be performed by it as provided for in this Agreement.
The execution and delivery of this Agreement by Seller, the performance by
Seller of all of the terms and conditions to be performed by it and the
consummation of the transactions contemplated herein have been duly authorized
and approved by all necessary corporate action. This Agreement has been duly
executed and delivered by Seller and constitutes the valid and binding
obligation of Seller, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency or
other Laws relating to or affecting the enforcement of creditors' rights and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
8.3 No Violations. The execution and delivery of this Agreement by
Seller does not, and the fulfillment and compliance with the terms and
conditions hereof and the consummation of the transactions contemplated
herein, will not:
(a) Conflict with or require the consent of any person or entity
under any of the terms, conditions or provisions of the certificate of
incorporation or bylaws of Seller;
(b) Violate any provision of, or require any filing, consent or
approval under any Law applicable to or binding upon Seller (assuming receipt
of all consents and approvals of governmental entities or tribal authorities
customarily obtained subsequent to the transfers of title);
(c) Conflict with, result in a breach of, constitute a default
under or constitute an event that with notice or lapse of time, or both, would
constitute a default under, accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under, (i) any mortgage, indenture, loan, credit agreement or other agreement,
evidencing indebtedness for borrowed money to which Seller is a party or by
which Seller is bound or (ii) any order, judgment or decree of any
governmental entity or tribal authority; or
(d) Result in the creation or imposition of any lien or encumbrance
upon the Properties.
8.4 Absence of Certain Changes. Between the date of execution of this
Agreement and the Closing Date, there has not been without Buyer's prior
written consent:
(a) A sale, lease or other disposition of the Properties;
(b) A mortgage, pledge or grant of a lien or security interest in
any of the Properties; or
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(c) A contract or commitment to do any of the foregoing.
8.5 Litigation. Except as disclosed on Exhibit "C" attached hereto and
incorporated herein by reference, there is no action, suit or proceeding
pending against Seller which could have a material adverse effect on the value
or operation of the Properties or that could prevent the consummation of the
transaction contemplated by this Agreement.
8.6 Bankruptcy. There are no bankruptcy, reorganization or receivership
proceedings pending, being contemplated by, or threatened against Seller.
8.7 Brokers. Seller has incurred no obligation or liability, contingent
or otherwise, for brokers' or finders' fees in respect of the matters provided
for in this Agreement.
8.8 Third Party Rights. Except for the Permitted Encumbrances, there
are no existing agreements, options, commitments or rights with, to or in any
third party to acquire any interests of Seller in any portion of the
Properties. Further, Seller does not require any consent or approval of
third-parties or governmental agencies to enter this Agreement or to
consummate the transactions contemplated herein other than approvals that are
ordinarily obtained after Closing.
8.9 Reversionary Interests. None of the Properties are subject to any
reversionary rights in any other person which would reduce the interests
specified on Exhibits A and A-1 following the date hereof, except as expressly
specified on Exhibits A and A-1, and except as may be asserted under that
certain farmout agreement dated January 10, 1996.
ARTICLE 9. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Seller that to the best of Buyer's
knowledge on the date hereof and as of the Closing Date:
9.1 Organization and Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the State
of Colorado and has all requisite corporate power and authority to own and
lease the Properties. Buyer is duly licensed or qualified to do business as a
foreign corporation and is in good standing in all jurisdictions in which the
Properties are located.
9.2 Corporate Authority; Authorization of Agreement. Buyer has all
requisite corporate power and authority to execute and deliver this Agreement,
to consummate the transactions contemplated herein and to perform all the
terms and conditions to be performed by it as provided for in this Agreement.
The execution and delivery of this Agreement by Buyer, the performance by
Buyer of all the terms and conditions to be performed by it and the
consummation of the transactions contemplated herein have been duly authorized
and approved by all necessary corporate action. This Agreement has been duly
executed and delivered by Buyer and constitutes the valid and binding
obligation of Buyer, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency or
other Laws relating to or affecting the enforcement of creditors' rights and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
9.3 No Violations. The execution and delivery of this Agreement by
Buyer does not, and the fulfillment and compliance with the terms and
conditions hereof and the consummation of the transactions contemplated
herein, will not:
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(a) Conflict with or require the consent of any person or entity
under any of the terms, conditions or provisions of the certificate of
incorporation or bylaws of Buyer;
(b) Violate any provision of, or require any filing, consent or
approval under any Law applicable to or binding upon Buyer; or
(c) Conflict with, result in a breach of, constitute a default
under or constitute an event that with notice or lapse of time, or both, would
constitute a default under, accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under, (i) any mortgage, indenture, loan, credit agreement or other agreement
evidencing indebtedness for borrowed money to which Buyer is a party or by
which Buyer is bound, or (ii) any order, judgment or decree of any
governmental entity or tribal authority.
ARTICLE 10. ADDITIONAL AGREEMENTS
10.1 Covenants of Seller. From the date hereof until Closing, without
first obtaining the consent of Buyer, Seller will not:
(a) waive any right of material value relating to the Properties;
(b) convey, encumber, mortgage, pledge or dispose of any of the
Properties;
(c) enter into, modify or terminate any contracts pertaining to
the Properties; or
(d) contract or commit itself to do any of the foregoing.
10.2 Records. Within thirty (30) Days after Closing (except as provided
below), Seller shall furnish to Buyer all Records which are maintained by
Seller; provided however, Seller shall be entitled to retain copies of any or
all such Records.
ARTICLE 11. CONDITIONS PRECEDENT TO CLOSING
11.1 Conditions Precedent to Seller's Obligation to Close. Seller shall
be obligated to consummate the sale of the Properties as contemplated by this
Agreement on the Closing Date, provided the following conditions precedent
have been satisfied or have been waived by Seller:
11.1.1 All representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and as of
Closing as though such representations and warranties were made at and as of
such time; and
11.1.2 Buyer shall have complied in all material respects with
all obligations and conditions contained in this Agreement to be performed or
complied with by Buyer on or prior to the Closing.
11.2 Conditions Precedent to Buyer's Obligation to Close. Buyer shall
be obligated to consummate the purchase of the Properties as contemplated by
this Agreement on the Closing Date, provided the following conditions
precedent have been satisfied or have been waived by Buyer:
11.2.1 All representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects at and as of
Closing as though such representations and warranties were made at and as of
such time; and
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11.2.2 Seller shall have complied in all material respects with
all obligations and conditions contained in this Agreement to be performed or
complied with by Seller on or prior to the Closing.
11.3 Conditions Precedent to Obligation of Each Party. The parties
shall be obligated to consummate the sale and purchase of the Properties as
contemplated in this Agreement on the Closing Date, provided the following
conditions precedent have been satisfied or have been waived:
11.3.1 No suit, action or other proceedings shall be pending
before any court or governmental entity in which it is sought by a person or
entity other than the parties hereto or any of their Affiliates, officers,
directors, or employees to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by this Agreement, or to obtain
substantial damages in connection with the transaction contemplated herein,
nor shall there be any investigation by a governmental entity pending which
might result in any such suit, action or other proceedings seeking to
restrain, enjoin or otherwise prohibit the consummation of the transaction
contemplated by this Agreement;
11.3.2 All consents and approvals, if any, whether required
contractually or by applicable federal, state, local or tribal Law, or
otherwise necessary for the execution, delivery and performance of this
Agreement by Seller (except for consents and approvals of governmental
entities or tribal authorities customarily obtained subsequent to the transfer
of title) shall have been obtained and delivered to Buyer by the Closing and
shall not have been withdrawn or revoked.
ARTICLE 12. TERMINATION
12.1 Grounds for Termination. This Agreement may be terminated at any
time prior to Closing:
12.1.1 By the mutual written agreement of Seller and Buyer;
12.1.2 By either Seller or Buyer if the consummation of the
transactions contemplated herein would violate any nonappealable final order,
decree or judgment of any governmental entity having appropriate jurisdiction
enjoining or awarding substantial damages in connection with the consummation
of the transactions contemplated herein;
12.1.3 By either Seller or Buyer if Closing shall not have
occurred by January 31, 1999; provided a party may not terminate this
Agreement if at the time of the termination that party is in default of any of
its obligations, agreements or covenants hereunder.
12.2 Effect of Termination. If this Agreement is terminated in
accordance with Article 12.1, such termination shall be without liability of
any party to this Agreement or any officer, director, Affiliate, or employee
of such party.
ARTICLE 13. THE CLOSING
13.1 Closing. Prior to the Closing Date, Buyer shall provide Seller
with a Closing statement setting forth the adjusted Purchase Price. Closing
shall be held in Buyer's office at 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000, or any other location as mutually agreed in writing by Seller
and Buyer.
13.2 Obligations of Seller at Closing. At the Closing, Seller shall
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deliver to Buyer, unless waived by Buyer, the following:
13.2.1 A document conveying all of Seller's right, title and
interests in and to the Properties substantially in the form of the Assignment
and Xxxx of Sale attached hereto as Exhibit "D";
13.2.2 Evidence that all consents and approvals prerequisite to
the sale and conveyance of the Properties (except for consents and approvals
of governmental entities or tribal authorities customarily obtained subsequent
to the transfer of title) have been obtained, as well as evidence of waiver or
lapse of any unexercised preferential purchase rights applicable to the
Properties;
13.2.3 A Certificate executed by Seller certifying as to the
matters specified in Articles 11.2.1 and 11.2.2 above substantially in the
form of Exhibit "E";
13.2.4 Letters-in-Lieu of division orders or transfer orders
executed by Seller substantially in the form of Exhibit "F";
13.2.5 A Non-Foreign Affidavit executed by Seller substantially in
the form of Exhibit "H"; and
13.2.6 Such other instruments as necessary to carry out Seller's
obligations under this Agreement.
13.3 Obligations of Buyer at Closing. At the Closing, Buyer shall
deliver to Seller, unless waived by Seller, the following:
13.3.1 The Assignment and Xxxx of Sale, executed and properly
acknowledged, referred to in Article 13.2.1;
13.3.2 The consideration in the amount and forms specified in
Article 3;
13.3.3 A Certificate executed by Buyer certifying as to the
matters specified in Articles 11.1.1 and 11.1.2 substantially in the form of
Exhibit "E";
13.3.4 Letters-in-Lieu of division orders or transfer orders
executed by Buyer substantially in the form of Exhibit "F";
13.3.5 Such other instruments as necessary to carry out Buyer's
obligations under this Agreement.
ARTICLE 14. MISCELLANEOUS
14.1 Notices. All notices and other communications required, permitted
or desired to be given hereunder must be in writing and sent by U.S. mail,
properly addressed as shown below, and with all postage and other charges
fully prepaid or by hand delivery or by facsimile transmission. Date of
service by mail and hand delivery is the date on which such notice is received
by the addressee and by facsimile is the date sent (as evidenced by fax
machine confirmation of receipt), or if such date is not on a Business Day,
then on the next date which is a Business Day. Each party may change its
address by notifying the other party in writing.
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If to Buyer: Evergreen Resources, Inc.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to Seller: CIS Oil & Gas, Inc.
000 X. 00xx
Xxxxxxx, XX 00000
Fax:
14.2 Further Assurances. From and after Closing, at the request of
Seller but without further consideration, Buyer will execute and deliver or
use reasonable efforts to cause to be executed and delivered such other
instruments of conveyance and take such other actions as Seller reasonably may
request to more effectively put Seller in possession of any property which was
not intended by the parties to be conveyed by Buyer. From and after Closing,
at the request of Buyer but without further consideration, Seller shall
execute and deliver or use reasonable efforts to cause to be executed and
delivered such other instruments of conveyance and take such other actions as
Buyer reasonably may request to more effectively put Buyer in possession of
the Properties. If any of the Properties are incorrectly described, the
description shall be corrected upon proof of the proper description.
14.3 Survival of Representations and Warranties. The representations
and warranties contained in this Agreement, and all covenants, indemnities and
agreements contained herein shall expressly survive Closing and the delivery
of the Properties.
14.4 Amendments and Severability. No amendments or other changes to
this Agreement shall be effective or binding on either of the parties unless
the same shall be in writing and signed by both Seller and Buyer. The
invalidity of any one or more provisions of this Agreement shall not affect
the validity of this Agreement as a whole, and in case of any such invalidity,
this Agreement shall be construed as if the invalid provision had not been
included herein.
14.5 Successors and Assigns. This Agreement shall not be assigned,
either in whole or in part, without the express written consent of the
non-assigning party. The terms, covenants and conditions contained in this
Agreement shall be binding upon and shall inure to the benefit of Seller and
Buyer and their respective successors and assigns, and such terms, covenants
and conditions shall be covenants running with the land and with each
subsequent transfer or assignment of the Properties.
14.6 Governing Law. This Agreement shall be governed by and construed
under the Laws of the State of Colorado, excluding any choice of law rules
which may direct the application of the Laws of another jurisdiction.
14.7 Public Announcements. Neither Seller nor Buyer (including any of
its affiliates in either case) shall issue a public statement or press release
with respect to the transaction contemplated herein (including the price and
other terms) without the prior written consent of the other party, except as
required by Law or listing agreement with a national security exchange and
then only after prior consultation with the other party.
14.8 Not to be Construed Against Drafter. The parties acknowledge that
they have had an adequate opportunity to review each and every provision
contained in this Agreement and to submit the same to legal counsel for review
and comment. Based on said review and consultation, the parties agree with
each and every term contained in this Agreement. Based on the foregoing, the
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parties agree that the rule of construction that a contract be construed
against the drafter, if any, shall not be applied in the interpretation and
construction of this Agreement.
14.9 Entire Agreement. This Agreement supersedes all prior and
contemporaneous negotiations, understandings, letters of intent and agreements
(whether oral or written) between the parties relating to the Properties and
constitutes the entire understanding and agreement between the parties with
respect to the sale and purchase of the Properties.
14.10 Arbitration. Any dispute arising under this Agreement
("Arbitrable Dispute") shall be referred to and resolved by binding
arbitration in Denver, Colorado, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The hearing shall be commenced
within thirty (30) Days after the selection of the arbitrator. The parties
and the arbitrator shall proceed diligently and in good faith in order that
the arbitral award shall be made as promptly as possible. The interpretation,
construction and effect of this Agreement shall be governed by the Laws of
Colorado, and to the maximum extent allowed by law, in all arbitration
proceedings the Laws of Colorado shall be applied, without regard to any
conflicts of laws principles. All statutes of limitation and of repose that
would otherwise be applicable shall apply to any arbitration proceeding. The
tribunal shall not have the authority to grant or award indirect or
consequential damages, punitive damages or exemplary damages.
14.11 Execution in Counterparts. This Agreement may be executed in
counterparts, which shall when taken together constitute one (1) valid and
binding agreement.
The parties have executed this Agreement on the day and year first set
forth above.
EVERGREEN RESOURCES, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
CIS OIL & GAS, INC.
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: President
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