EXHIBIT 10.1
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ASSET PURCHASE AGREEMENT
by and among the
SOUTHERN UTE INDIAN TRIBE
doing business as Red Willow Production Company
and
CONTANGO OIL & GAS COMPANY
Dated as of January 28, 2002
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT dated as of January 28, 2002 (this
"Agreement"), is entered into by and among the Southern Ute Indian Tribe, a
federally recognized Indian tribe organized under the Indian Reorganization Act
of 1934, doing business as Red Willow Production Company ("Seller") and Contango
Oil & Gas Company, a Delaware corporation ("Buyer") (collectively, the
"Parties").
RECITALS
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, all of Seller's oil and gas interests and related assets identified
in Exhibits "X," "X" and "C" attached hereto and made a part hereof, all on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
Section 1.1 Assets. On the terms and subject to the conditions set forth
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in this Agreement, at the Closing (as defined herein in Section 6.1) Seller
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agrees to sell, transfer and assign to Buyer, and Buyer shall purchase and
receive, all of Seller's right, title and interest in and to the following
tangible and intangible assets:
(a) Leases. The oil and gas leases described in Exhibit "A" and the
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lands covered thereby (the "Leases");
(b) Xxxxx. All oil and/or gas xxxxx, equipment, machinery, tanks,
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pipelines and other appurtenances and all other tangible property located
thereon, thereunder or associated therewith or used in connection with the
ownership or operation of the Leases and the production of oil and/or gas
therefrom, including, without limitation, all xxxxx, whether producing,
operating, shut-in or temporarily abandoned, located on the lands covered by the
Leases described in Exhibit "B" (the "Xxxxx");
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(c) Contracts. The agreements described in Exhibit "C" (the
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"Contracts"), to the extent such agreements relate to the Leases; and
(d) Other Assets. All tangible and intangible assets of Seller
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necessary to or used primarily in connection with the Leases, Xxxxx and
Contracts, whether presently existing or arising hereafter, including without
limitation, any and all rights arising under or relating to the Exploration and
Operations Agreements described in Exhibit "C" (the "Other Assets").
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Leases and Xxxxx together with the Contracts and Other Assets collectively
hereinafter referred to as the "Assets."
Section 1.2 Excluded Assets. The Assets do not include (the "Excluded
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Assets"), and Seller shall not sell, transfer or assign to Buyer, and Buyer
shall not acquire, or make any payments or otherwise discharge any liability or
obligation of Seller relating to, any of the following:
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(a) accounts receivable relating to any operation or ownership of the
Assets prior to the Effective Time (as defined in Section 6.1 herein);
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(b) oil and liquid hydrocarbon inventories in tanks above the
pipeline connections as of the Effective Time; and
(c) gas produced through designated sales meters prior to the
Effective Time.
Section 1.3 Purchase Price. As consideration for the sale of the Assets,
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the aggregate purchase price to be paid by Buyer to Seller shall be Six Million
Nine Hundred Ninety-Four Thousand Five Hundred Eighty-Eight Dollars ($6,994,588)
(the "Purchase Price"), subject to adjustment as set forth in Section 1.4
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herein, payable by wire transfer of immediately available funds to a bank
account designated by Seller.
Section 1.4 Adjustments to Purchase Price. Notice of any adjustments to
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the portion of the Purchase Price otherwise payable at the Closing (as defined
in Section 6.1 herein) shall be delivered, as between the Parties, no later than
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two (2) business days prior to the Closing in order to be considered at the
Closing. Any notice of adjustment not timely provided, together with any other
adjustment will be made in the final adjustment as set forth in Section 6.5
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herein. The Purchase Price shall be adjusted as follows:
(a) The Purchase Price shall be increased by the following:
(1) an amount equal to paid ad valorem, property, production,
excise, severance and similar taxes and assessments based upon or measured by
the ownership of the Assets that are attributable to the period of time from and
after the Effective Time, which amounts shall, to the extent not actually
assessed, be computed based on such taxes and assessments for the preceding tax
year (such amount to be prorated for the period of Seller's and Buyer's
ownership before and from and after the Effective Time); and
(2) an amount equal to all expenses attributable to the
Assets that are paid by or on behalf of Seller that are, in accordance with
generally accepted accounting principles, attributable to the period from and
after the Effective Time.
(b) The Purchase Price shall be reduced by the following:
(1) the amount of the proceeds received by Seller
attributable to the Assets that are, in accordance with generally accepted
accounting principles, attributable to the period of time from and after the
Effective Time;
(2) an amount equal to unpaid ad valorem, property,
production, excise, severance and similar taxes and assessments based upon or
measured by the ownership of the Assets that are attributable to the period of
time prior to the Effective Time, which amounts shall, to the extent not
actually assessed, be computed based on such taxes and assessments for the
preceding tax year (such amount to be prorated for the period of Seller's and
Buyer's ownership before and after the Effective Time); and
(3) an amount equal to all expenses attributable to the
Assets that are paid by or on behalf of Buyer that are, in accordance with
generally accepted accounting principles, attributable to any period prior to
the Effective Time.
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Section 1.5 Assumption of Liabilities. As additional consideration for
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the sale of the Assets, if the Closing occurs, Buyer shall assume the following
obligations and liabilities ("Assumed Liabilities"):
(a) all obligations and liabilities relating to the ownership or use
of the Assets that arise and are attributable to occurrences from and after the
Effective Time (except for (1) any liability or obligation that arises under
contracts or agreements, or that arises from or is the subject of a breach by
Seller of any of its covenants, representations or warranties hereunder, none of
which shall be Assumed Liabilities; and (2) any payment obligation associated
with an agreement for the supply of materials, goods or services, which shall be
an Assumed Liability only to the extent that such materials, goods or services
with respect to which such payment is due is received by Buyer and relates to
operation of the Assets from and after the Effective Time);
(b) all obligations and liabilities relating to the ownership or use
of the Assets that arise from and after the Effective Time for site reclamation
and plugging and abandonment of all Xxxxx. Buyer recognizes and specifically
assumes the obligation to properly plug and abandon all Xxxxx and remove all
personal property associated with the Assets when appropriate;
(c) all obligations and liabilities (including, without limitation,
all liabilities and obligations under present and future federal, state and
local laws relating to the protection of health or the environment) in respect
of the condition of the Assets as of the Closing relating to such Assets
(including, without limitation, conditions resulting from, and remediation of,
Environmental Matters occurring on or before the Closing), other than any
condition that is the subject of a breach by Seller of any of its
representations and warranties under this Agreement.
(d) all lease operating expenses for the Jaboncillo and Mesquite
Creek xxxxx from and after the Effective Time.
As used herein, the term "Environmental Matters" shall mean any pollution,
contamination, degradation, damage or injury, caused by, related to or arising
from or in connection with the generation, use, handling, treatment,
remediation, storage, transportation, disposal, discharge, release or emission
of any Hazardous Materials by, in, on or underlying the Assets. As used in the
preceding definition, "Hazardous Materials" means any asbestos material,
pollutants, contaminants, hazardous, corrosive or toxic substances, special
waste or waste of any kind, and any other material or substance the storage,
manufacture, disposal, treatment, generation, use, transportation, remediation
or release into the environment of which is prohibited, controlled, regulated or
licensed under Environmental Laws. As used herein, "Environmental Laws" means
all laws, statutes, ordinances, rules, regulations, orders or determinations of
any governmental authority pertaining to human health or protection of the
environment in effect now or in the future in the jurisdictions in which the
respective Lease or lands pooled or unitized with such Lease are located.
Section 1.6 Retained Liabilities. Seller shall retain, and Buyer shall
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not acquire or make any payments or otherwise discharge any liability or
obligation of Seller not specifically enumerated as an Assumed Liability at
Section 1.5 herein ("Retained Liabilities") including the following:
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(a) all liabilities and obligations relating to or arising out of
personal injury claims and accounts payable affecting the ownership of the
Assets that arose prior to, or are attributable to the period of time or acts or
omissions prior to, the Effective Time (other than those liabilities and
obligations referred to in clauses (b) and (c) of the definition of Assumed
Liabilities);
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(b) those liabilities and obligations that result in a credit or
payment to Seller under Section 6.5 herein;
(c) all liabilities and obligations incurred in violation of, or
arising out of or that are the subject matter of a breach of, the covenants,
representations or warranties of Seller under this Agreement;
(d) all liabilities and obligations under contracts and agreements to
which the Assets are subject on the date of this Agreement other than the
Contracts;
(e) all liabilities and obligations that result from a breach by
Seller with respect to the Assets as regards preferential rights, consents to
assign and/or notices of transfers.
(f) all liabilities and obligations incurred for capital expenditures
for the Jaboncillo, Mesquite Creek, Libre 8, Libre 10, and Libre 11 xxxxx
through the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents, warrants and covenants to Buyer that:
Section 2.1 Organization. Seller is a federally recognized Indian tribe
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organized under the Indian Reorganization Act of 1934. Seller has the power and
authority to own its properties and to carry on its business as now conducted
and to enter into and to carry out the terms of this Agreement.
Section 2.2 Authorization. Seller has the requisite power and authority,
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to execute, deliver and perform its obligations under this Agreement. The
execution, delivery and performance by Seller of this Agreement has been duly
authorized by all necessary action of Seller, and no other act or proceeding on
the part of Seller or its members is necessary to authorize the execution,
delivery or performance by Seller of this Agreement.
Section 2.3 Purchased Assets; Defensible Title. Seller owns Defensible
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Title (as such term is defined below) to all of the Assets. Seller represents
that, to the best of Seller's knowledge, Seller has the right to convey, and
Seller will have conveyed, and Seller warrants that Buyer will be vested with,
Defensible Title to the Assets. "Defensible Title" shall mean, with respect to
Seller, such title, free and clear of all liens and encumbrances and defects,
other than the Contracts, as will (a) entitle Buyer to receive a percentage of
the oil and gas produced and saved from the Xxxxx that is not less than the net
revenue interest of Seller shown on Exhibit "B," without reduction throughout
the productive life of the Xxxxx except as set forth in Exhibit "B," and (b)
obligate Buyer to bear and pay a portion of the costs and expenses of operating
the Xxxxx that is not greater than the working interest of Seller shown on
Exhibit "B," without increase throughout the productive life of the Xxxxx except
as set forth in Exhibit "B."
Section 2.4 Consents and Approvals. To the best of Seller's knowledge, no
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consent, approval, order or authorization of, or registration, declaration or
filing with, any Person is required to be made or obtained by Seller in
connection with the authorization, execution, delivery and performance by Seller
of this Agreement and the transactions contemplated hereby, other than those set
forth on Schedule 2.4, which will be obtained as soon as practicable following
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the date hereof, but in any event prior to the Closing.
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Section 2.5 No Violation. The execution, delivery and performance by
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Seller of this Agreement and the consummation of the transactions contemplated
herein (a) will not result in the breach of any of the terms or conditions of,
or constitute a default under, or in any manner release any party thereto from
any obligation under, any mortgage, note, bond, indenture, contract, agreement,
license or other instrument or obligation of any kind or nature by which Seller
may be bound or affected; (b) to the best of Seller's knowledge will not violate
any law, order, writ, injunction, rule, regulation, statute or decree of any
court, administrative agency, or Governmental Authority (as defined in Section
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7.2 hereof); (c) will not result in the creation or imposition of any liens,
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mortgages, charges, security interests, pledges or other encumbrances or adverse
claims ("Liens") upon any of the Assets; or (d) will not violate any provision
of the organizational documents of Seller.
Section 2.6 Litigation. To the best of Seller's knowledge, there are no
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claims, counterclaims, actions, suits, orders, proceedings (arbitration or
otherwise) or investigations pending or threatened against or involving Seller
or the Assets, or relating to the transactions contemplated hereby, at law or in
equity in any court or agency, or before or by any Governmental Authority or
arbitral tribunal that, if granted, could be reasonably expected to have a
Materially Adverse Affect (as hereinafter defined). "Materially Adverse Effect"
shall mean a material adverse effect on the prospects, value, use, operation or
ownership of the Assets.
Section 2.7 No Brokers or Finders. Seller has not retained any broker or
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finder, made any statement or representation to any Person which would entitle
such Person to, or agreed to pay, any broker's, finder's or similar fees or
commissions in connection with the transactions contemplated by this Agreement.
Section 2.8 Contracts; Leases. Complete and correct copies of the
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Contracts and Leases have been furnished to Buyer. To the best of Seller's
knowledge, Seller is not in default under any order, judgment, Contract, Lease,
license or instrument, which default or potential default might reasonably be
expected to have a Materially Adverse Effect. To the best of Seller's knowledge,
all of the Contracts and Leases are in full force and effect, and Seller is not
in default or material breach and no event has occurred which, with the giving
of notice or the passage of time or both, would constitute a default by Seller
under any Contracts or Leases. Schedule 2.8(a) identifies all of those Contracts
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and Leases that may not be assigned to Buyer without the consent, approval,
notification or waiver of any Person. Schedule 2.8(b) identifies those Contracts
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and Leases that are subject to a preferential right to purchase obligation.
Seller has obtained or will obtain as soon as practicable following the date
hereof (but in any event prior to the Closing) such consents, approvals and
waivers of the preferential right to purchase provisions.
Section 2.9 Environmental Matters. To Seller's knowledge, there are no
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notices, claims, suits, actions or proceedings (including government
investigations and audits) now pending or threatened against Seller relating to
Environmental Matters with respect to any of the Assets, and Seller is not aware
of any reasonable basis for believing that any such claims for Environmental
Matters may be asserted against Seller with respect to the Assets.
Section 2.10 Disclosure. No representation, warranty or statement made by
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Seller in this Agreement or any of the exhibits or schedules hereto contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. To the knowledge of Seller, there is no material fact that has not
been disclosed to Buyer that might reasonably be expected to have a Materially
Adverse Effect on the Assets or Seller's ability to consummate the transactions
contemplated hereby.
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Section 2.11 Condition of the Assets. EXCEPT AS EXPRESSLY PROVIDED IN
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THIS AGREEMENT TO THE CONTRARY, BUYER UNDERSTANDS AND AGREES THAT THE ASSETS ARE
SOLD "AS IS" AND "WHERE IS," WITH ALL FAULTS AND DEFECTS, WITHOUT COVENANT,
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED; AND WITHOUT LIMITATION OF THE
GENERALITY OF THE IMMEDIATELY PRECEDING CLAUSE, SELLER EXPRESSLY DISCLAIMS ANY
IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, QUALITY,
CONDITION OR MERCHANTABILITY OF THE ASSETS.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents, warrants and covenants to Seller that:
Section 3.1 Corporate Organization. Buyer is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 3.2 Authorization. The execution and delivery of this
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Agreement, the performance by Buyer of its obligations hereunder and the
consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary organizational action and no other act or proceeding
on the part of Buyer is necessary. Buyer has full power and authority to enter
into, execute and deliver this Agreement and to perform its obligations
hereunder.
Section 3.3 No Violation. The execution, delivery and performance by
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Buyer of this Agreement and the consummation of the transactions contemplated
herein do not and will not: (a) result in the breach of any of the terms or
conditions of, or constitute a default under, or in any manner release any party
thereto from any obligation under, any mortgage, note, bond, indenture,
contract, agreement, license or other instrument or obligation of any kind or
nature by which Buyer may be bound or affected; (b) violate any law, order,
writ, injunction, rule, regulation, statute or decree of any court,
administrative agency, or Governmental Authority; or (c) violate any provision
of the Certificate of Incorporation or by-laws of Buyer.
Section 3.4 Consents and Approvals. No consent, approval or
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authorization of, or declaration, filing or registration with, any Person is
required to be made or obtained by Buyer in connection with the execution and
delivery of this Agreement by Buyer, the performance by Buyer of its obligations
hereunder, and the consummation by it of the transactions contemplated hereby.
Section 3.5 No Brokers or Finders. Buyer has not retained any broker or
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finder, made any statement or representation to any Person which would entitle
such Person to, or agreed to pay, any broker's, finder's or similar fees or
commissions in connection with transactions contemplated by this Agreement.
Section 3.6 Knowledge of the Business. Buyer is directly and actively
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engaged in the business of exploration for and production of oil and gas. Buyer
is a sophisticated investor in oil and gas properties and has knowledge and
expertise in financial and business matters relating to the evaluation and
purchase of producing oil and gas properties. Buyer is acquiring the interests
to be conveyed herein for investment purposes and not for distribution in
violation of any applicable securities laws.
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ARTICLE IV
INDEMNIFICATION
Section 4.1 Indemnification by Seller. If the Closing occurs, Seller
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hereby agrees to indemnify, defend and save Buyer and its officers, directors,
employees, agents and Affiliates (all or each, a "Buyer Indemnified Party")
harmless from and against (a) any and all liabilities (whether contingent, fixed
or unfixed, liquidated or unliquidated, or otherwise), obligations,
deficiencies, demands, claims, suits, actions, or causes of action, assessments,
losses, costs, expenses, interest, fines, penalties, and damages (including
reasonable fees and expenses of attorneys, accountants and other experts)
(individually and collectively, the "Losses") suffered, sustained or incurred by
any Buyer Indemnified Party relating to, resulting from, arising out of or
otherwise by virtue of any misrepresentation or breach of the representations or
warranties of Seller contained in this Agreement or in any exhibit or schedule
hereto; (b) the failure of Seller to perform any of its covenants or obligations
contained in this Agreement; (c) the liabilities and obligations (other than
Assumed Liabilities) relating to or arising out of the ownership of the Assets
and attributable to any act, omission, occurrence or event occurring prior to
the Effective Time; and (d) any and all Losses arising directly or indirectly
out of the Retained Liabilities.
Section 4.2 Indemnification by Buyer. If the Closing occurs, Buyer
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agrees to indemnify, defend and save Seller and its Affiliates, and their
respective officers, directors, employees and agents (each, a "Seller
Indemnified Party") forever harmless from and against any and all Losses
sustained or incurred by any Seller Indemnified Party relating to, resulting
from, arising out of or otherwise by virtue of: (a) any misrepresentation in or
breach of the representations and warranties of Buyer contained in this
Agreement or in any schedule or exhibit hereto; (b) the failure of Buyer to
perform any of its covenants or obligations contained in this Agreement or in
any exhibit or schedule hereto; (c) the liabilities and obligations (other than
Retained Liabilities) relating to or arising out of ownership of the Assets and
attributable to any act, omission, occurrence or event occurring after the
Effective Time; (d) all liabilities and obligations (including, without
limitation, all liabilities and obligations under present and future federal,
state and local laws relating to the protection of health or the environment) in
respect of Environmental Matters occurring before or after the Closing, other
than any condition that is the subject of a breach by Seller or its
representations and warranties under this Agreement and (e) all Assumed
Liabilities.
Section 4.3 Indemnification Procedure. Any party seeking indemnification
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pursuant to this Article IV shall promptly provide written notice of any claim
to the party from which it seeks indemnification within a reasonable period of
time. The indemnifying Person, if it so elects, shall assume and control the
defense thereof (and shall consult with the indemnified person with respect
thereto), including the employment of counsel reasonably satisfactory to the
indemnified person within ten (10) business days after receipt of the notice
with respect thereto, and the payment of all necessary expenses; provided that
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as a condition precedent to the indemnifying person's right to assume control of
such defense, it must first enter into an agreement with the indemnified person
(in form and substance reasonably satisfactory to the indemnified person)
pursuant to which the indemnifying person agrees to be fully responsible for all
losses relating to such claim and unconditionally guarantees the payment and
performance of any liability or obligation which may arise with respect to such
claim or the facts giving rise to such claim for indemnification; provided
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further that the indemnifying person shall not have the right to assume control
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of such defense if the claim which the indemnifying person seeks to assume
control of (i) seeks non-monetary relief or (ii) involves criminal or quasi-
criminal allegations; and provided further that (i) the indemnifying person
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shall not consent to the imposition of any injunction against the indemnified
person without the written consent of the indemnified person, (ii) the
indemnifying person shall permit the indemnified person to participate in such
conduct or settlement through counsel chosen by the indemnified person, but the
fees and expenses of such counsel shall be
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borne by the indemnified person (except as provided below), and (iii) upon a
final determination of such action, suit or proceeding, the indemnifying person
shall promptly reimburse to the full extent required under this Article IV the
indemnified person for the full amount of any Loss resulting from such action,
suit or proceeding and all reasonable and related expenses incurred by the
indemnified person, other than fees and expenses of counsel for the indemnified
person incurred after the assumption of the conduct and control of such action,
suit or proceeding by the indemnifying person (except as provided below). If the
indemnifying person is permitted to assume and control the defense and elects to
do so, the indemnified person shall have the right to employ counsel separate
from counsel employed by the indemnifying person in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
employed by the indemnified person shall be at the expense of the indemnified
person unless (i) the employment thereof has been specifically authorized by the
indemnifying person in writing, (ii) the indemnifying person has been advised by
counsel that a reasonable likelihood exists of a conflict of interest between
the indemnifying person and the indemnified person, (iii) the indemnifying
person has failed to assume the defense and employ counsel; or (iv) the
indemnified person has reasonably determined that an adverse outcome could have
a material adverse effect on its business reputation or could reasonably be
expected to have a materially adverse precedential effect; in which case the
fees and expenses of the indemnified person's counsel shall be paid by the
indemnifying person. In the event the indemnifying person fails to elect to
defend such claim in accordance with the foregoing, then the indemnified person
may elect, but shall not be required, to defend against or settle such claim as
it sees fit, provided that any settlement of such claim shall require the
consent of the indemnifying person, which consent shall not be unreasonably
withheld.
Section 4.4 Failure to Give Timely Notice. A failure by an indemnified
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person to give timely, complete or accurate notice as provided in Section 4.3
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will not affect the rights or obligations of any party hereunder except and only
to the extent that such failure results in actual prejudice to the indemnifying
person.
ARTICLE V
CLOSING CONDITIONS
Section 5.1 Buyer's Conditions to Closing. The obligation of Buyer to
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proceed with the Closing contemplated hereby is subject to the satisfaction on
or prior to the Closing of all of the following conditions:
(a) Representations and Warranties. The representations and
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warranties of Seller contained in Article II of this Agreement shall be true and
correct in all material respects with respect to the Assets.
(b) Board Approval. Buyer shall have received authorization to
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acquire the Assets from its Board of Directors.
(c) Due Diligence. Buyer shall have reviewed and approved all
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documents and information, including title and production records, for the
Assets relating thereto.
ARTICLE VI
CLOSING
Section 6.1 Closing. The transactions that are the subject of this
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Agreement shall be consummated at the offices of Buyer in Houston, Texas as soon
as possible but no later than March 8,
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2002 or such other date as the parties may designate from time to time (the
"Closing"). The ownership of the Assets shall be transferred from Seller to
Buyer at the Closing but effective as of 7:00 a.m., Central Time, January 1,
2002 (the "Effective Time").
Section 6.2 Deliveries by Seller. At the Closing, pursuant to this
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Agreement, Seller shall execute and deliver to Buyer: (i) an Assignment and Xxxx
of Sale in the form attached hereto as Schedule 6.2(a) and an Assignment of
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Operating Rights and Xxxx of Sale in the form attached hereto as Schedule 6.2(b)
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transferring to Buyer the Assets; and (ii) such other documents and instruments
as Buyer may reasonably require. All such other documents and instruments
delivered to Buyer, as applicable, shall be in form and substance reasonably
satisfactory to Buyer.
Section 6.3 Deliveries by Buyer. At the Closing, Buyer shall deliver to
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Seller: (i) a wire transfer of immediately available funds for the Purchase
Price (as set forth in Section 1.3 hereof) and (ii) such other documents and
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instruments as Seller may reasonably require in order to effectuate the
transactions which are the subject of this Agreement. All documents and
instruments delivered to Seller shall be in form and substance reasonably
satisfactory to Seller.
Section 6.4 Further Assurances. From time to time after the Closing, and
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without further consideration, the Parties shall execute such further documents
and perform such further acts as may be necessary to transfer and convey the
Assets to Buyer, on the terms contained herein, and to otherwise comply with the
terms of this Agreement and consummate the transactions contemplated hereby.
Section 6.5 Post Closing Adjustments. Within 90 days after the Closing,
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Seller and Buyer shall jointly prepare a final accounting statement for the
gross revenue, if any, received by Seller for hydrocarbons and liquid
hydrocarbon inventory produced from the Assets from and after the Effective
Time, less reasonable and documented expenses incurred by the Seller for the
period of time from and after the Effective Time and attributable to the
operation of the Assets or sale of such hydrocarbons and liquid hydrocarbon
inventory following the Effective Time. The Parties shall have 30 days following
completion of such accounting to agree as to its accuracy. Following such
agreement, Seller or Buyer, as the case may be, shall promptly pay to the other
such sum as may be found due. Nothing in this Section 6.5 is intended to limit
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any right of Seller or Buyer to assert a claim for reimbursement after the final
accounting with respect to the Closing.
Section 6.6 Failure to Close. If the Closing does not occur on or
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before the scheduled closing date as set forth hereunder, either party may
terminate this Agreement by giving written notice to the other party.
Thereafter, neither party shall have any further obligations to the other
hereunder, other than any obligations and liabilities arising prior to such
termination and those obligations that by their terms survive the termination of
this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Notices. All notices, reports, records or other
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communications that are required or permitted to be given to the Parties under
this Agreement shall be sufficient in all respects if given in writing and
delivered in person, by telecopy, by overnight courier or by registered or
certified mail, postage prepaid, return receipt requested, to the receiving
party at the following address:
If to Seller: Southern Ute Indian Tribe, doing business as
Red Willow Production Company
0000 Xxxx Xxxxxx
0
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telecopier: 970.375.2216
Phone: 000.000.0000
If to Buyer: Contango Oil & Gas Company
0000 Xxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Peak
Telecopier: 713.960.1065
Phone: 000.000.0000
or such other address as such party may have given to the other party by notice
pursuant to this Section 7.1. Notice shall be deemed given on (i) the date such
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notice is personally delivered, (ii) three (3) days after the mailing if sent by
Certified or Registered Mail, (iii) one (1) day after the date of delivery to
the overnight courier if sent by overnight courier, or (iv) the next succeeding
day after transmission by facsimile.
Section 7.2 General Definitions. For the purposes of this Agreement, the
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following terms have the meaning set forth below:
"Affiliate" with respect to any party, any Person directly or indirectly
controlling, controlled by, or under common control with such party, and any
officer, director or executive employee of such party and includes any past or
present Affiliate of any such Person.
"Governmental Authority" means any federal, state, provincial, local,
governmental, judicial, public, quasi-public or administrative authority or
agency.
"Person" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated association,
corporation, other entity or any Governmental Authority.
Section 7.3 Entire Agreement. The Schedules and Exhibits attached to this
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Agreement shall be deemed to be an integral part of this Agreement. This
Agreement, including the Schedules and Exhibits, set forth the entire
understanding of the Parties with respect to the subject matter hereof and may
be modified only by instruments signed by both of the Parties hereto.
Section 7.4 Counterparts. This Agreement may be executed via facsimile in
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 7.5 Third Parties. Nothing in this Agreement, express or
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implied, is intended to confer any right or remedy under or by reason of this
Agreement on any Person other than the Parties hereto and their respective
heirs, representatives, successors and assigns, nor is anything set forth herein
intended to affect or discharge the obligation or liability of any third persons
to any party to this Agreement, nor shall any provision give any third party any
right of subrogation or action over against any party to this Agreement.
Section 7.6 Expenses. Each of the Parties shall pay all costs and
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expenses incurred or to be incurred by it in negotiating and preparing this
Agreement and in closing and carrying out the transactions contemplated by
hereunder, including, without limitation, legal and accounting fees and
expenses.
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Section 7.7 Waiver. No failure of any party to exercise any right or
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remedy given such party under this Agreement or otherwise available to such
party or to insist upon strict compliance by any other party with its
obligations hereunder, and no custom or practice of the Parties in variance with
the terms hereof, shall constitute a waiver of any party's right to demand exact
compliance with the terms hereof, unless such waiver is set forth in writing and
executed by such party.
Section 7.8 Survival. All representations, warranties, indemnifications
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and rights to set off of the Parties hereto contained in or arising out of this
Agreement or otherwise in connection herewith shall survive the Closing
hereunder and shall continue in effect until the expiration of all applicable
statute of limitations (including any extensions of said statute). Unless a
specified period is set forth in this Agreement (in which event such specified
period will control), all covenants contained in this Agreement will survive the
Closing and remain in effect indefinitely.
Section 7.9 Governing Law; Jurisdiction. This Agreement shall be
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construed and governed in accordance with the laws of the State of Texas without
regard to the principles of conflicting laws. Any action to enforce, or which
arises out of or relates in any way to, any of the provisions of this Agreement
shall be brought and prosecuted solely in the Texas state courts or the Federal
district courts located in Xxxxxx County, Texas.
Section 7.10 Assignment. No party may assign its rights or delegate its
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obligations hereunder without the consent of the other party. Subject to the
foregoing, this Agreement shall inure to the benefit of and be binding upon the
Parties hereto and their respective heirs, successors and assigns.
Section 7.11 Confidentiality. Buyer and Seller acknowledge that all
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information furnished or disclosed pursuant hereto must remain confidential.
Buyer and Seller must mutually approve all press releases. Buyer may disclose
such information only to its subsidiaries or Affiliates, agents, advisors or
representatives who have need to know such information and who have agreed in
writing, prior to being given access to such information, to be bound by the
terms of this Section 7.11.
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Section 7.12 Severability. If any term or other provision of this
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Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms 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 any adverse
manner to any party. Upon any binding determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible and in an acceptable manner, to the
end that the transaction hereby may be contemplated to the extent possible.
Section 7.13 DTPA. Each party hereby certifies to the other that it is
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not a "Consumer" within the meaning of the Texas Deceptive Trade Practices -
Consumer Protection Act, Subchapter E of Chapter 17, Section 17.41, et. Seq. of
the Texas Business and Commerce Code, as amended (the "DTPA"). The Parties
covenant, for themselves and for an on behalf of any successors and assigns,
that if the DTPA is applicable, (a) the Parties are "business consumers"
thereunder and (b) each party hereby waives and releases all of its rights and
remedies thereunder (other than Section 17.555, Texas Business and Commercial
Code) as applicable to the other party and its successors and (c) each party
shall defend and indemnify the other party from and against any and all claims,
demands or causes of action of or by that party or any successor or any of its
Affiliates based in whole or in part on the DTPA, arising out of or in
connection with the transaction set forth in this Agreement.
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Section 7.14 No Additional Approvals. Seller certifies to Buyer that the
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Tribal Council of Seller has approved the transaction set forth in this
Agreement and Buyer and Seller further certify that, to the best of their
knowledge, no other approvals are required or necessary, including any approvals
pursuant to 00 Xxxxxx Xxxxxx Code Section 1 et seq. (the "Code"). Seller
covenants, for itself and for and on behalf of any successors and assigns, that
if any such approval is required or applicable (a) Seller shall promptly obtain
such approval, (b) Seller hereby waives and releases all of its rights or
remedies pursuant to the Code, (c) Seller covenants and agrees not to assert
against Buyer that any such approval or consent is required or necessary, and
(d) Seller shall defend and indemnify Buyer from and against any and all Losses
based in whole or in part on the Code arising out of or in connection with the
transaction set forth in this Agreement.
Section 7.15 Headings. The subject headings of paragraphs and
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subparagraphs of this Agreement are included for purposes of convenience only
and shall not affect the construction or interpretation of any of its
provisions.
Section 7.16 Construction. Where specific language is used to clarify by
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example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement
shall be deemed to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied against any party.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
SELLER:
SOUTHERN UTE INDIAN TRIBE,
doing business as Red Willow Production Company
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Chairman
BUYER:
CONTANGO OIL & GAS COMPANY,
a Delaware corporation
By: /s/ XXXXXXX X. PEAK
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Xxxxxxx X. Peak
President and Chief Executive Officer
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