EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
AMONG
DEVON ENERGY PRODUCTION COMPANY, L.P.
AND
DEVON LOUISIANA CORPORATION,
AS SELLER
AND
KCS RESOURCES, INC.
AS BUYER
DATED
FEBRUARY 22, 2005
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION............................................. 1
1.1 Defined Terms............................................ 1
1.2 References............................................... 12
1.3 Articles................................................. 12
1.4 Number and Gender........................................ 12
ARTICLE II
PURCHASE AND SALE.......................................................... 13
2.1 Purchase and Sale........................................ 13
2.2 Excluded Assets.......................................... 14
2.3 Revenues and Expenses.................................... 14
ARTICLE III
PURCHASE PRICE............................................................. 15
3.1 Purchase Price........................................... 15
3.2 Deposit.................................................. 15
3.3 Adjustments to Purchase Price............................ 15
3.4 Adjustment Methodology................................... 17
3.5 Preliminary Settlement Statement......................... 17
3.6 Final Settlement Statement............................... 17
3.7 Disputes................................................. 18
3.8 Allocation of Purchase Price / Allocated Values.......... 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER................................... 18
4.1 Organization, Existence.................................. 18
4.2 Authorization............................................ 19
4.3 No Conflicts............................................. 19
4.4 Consents................................................. 19
4.5 Bankruptcy............................................... 19
4.6 Foreign Person........................................... 19
4.7 Litigation............................................... 19
4.8 Material Contracts....................................... 20
4.9 No Violation of Laws..................................... 20
4.10 Preferential Rights and Contracts........................ 21
4.11 Royalties, Etc........................................... 21
4.12 Personal Property........................................ 21
4.13 Imbalances............................................... 21
4.14 Current Commitments...................................... 21
4.15 Environmental............................................ 21
4.16 Production Taxes......................................... 23
4.17 Employees................................................ 23
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4.18 Brokers Fees............................................. 23
4.19 Governmental Permits..................................... 23
ARTICLE V
BUYER'S REPRESENTATIONS AND WARRANTIES..................................... 23
5.1 Organization; Existence.................................. 23
5.2 Authorization............................................ 24
5.3 No Conflicts............................................. 24
5.4 Consents................................................. 24
5.5 Bankruptcy............................................... 24
5.6 Litigation............................................... 24
5.7 Financing................................................ 24
5.8 Regulatory............................................... 25
5.9 Broker's Fees............................................ 25
ARTICLE VI
CERTAIN AGREEMENTS......................................................... 25
6.1 Conduct of Business...................................... 25
6.2 Successor Operator....................................... 26
6.3 HSR Act.................................................. 27
6.4 Governmental Bonds....................................... 27
6.5 Record Retention......................................... 27
6.6 Notifications............................................ 28
ARTICLE VII
BUYER'S CONDITIONS TO CLOSING.............................................. 28
7.1 Representations.......................................... 28
7.2 Performance.............................................. 28
7.3 No Legal Proceedings..................................... 28
7.4 Title Defects and Environmental Defects.................. 28
7.5 HSR Act.................................................. 28
ARTICLE VIII
SELLER'S CONDITIONS TO CLOSING............................................. 28
8.1 Representations.......................................... 28
8.2 Performance.............................................. 29
8.3 No Legal Proceedings..................................... 29
8.4 Title Defects and Environmental Defects.................. 29
8.5 HSR Act.................................................. 29
ARTICLE IX
CLOSING.................................................................... 29
9.1 Date of Closing.......................................... 29
9.2 Place of Closing......................................... 29
9.3 Closing Obligations...................................... 29
9.4 Records.................................................. 30
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ARTICLE X
EMPLOYEE MATTERS........................................................... 31
10.1 Employees and Contract Personnel......................... 31
10.2 Seller's Employee Benefit Plans.......................... 31
10.3 No Third Party Rights.................................... 31
ARTICLE XI
ACCESS/DISCLAIMERS......................................................... 31
11.1 Access................................................... 31
11.2 Confidentiality.......................................... 33
11.3 Disclaimers.............................................. 33
ARTICLE XII
TITLE MATTERS; CASUALTIES; TRANSFER RESTRICTIONS........................... 35
12.1 Seller's Title........................................... 35
12.2 Notice of Title Defects; Defect Adjustments.............. 36
12.3 Casualty or Condemnation Loss............................ 39
12.4 Preferential Purchase Rights and Consents to Assign...... 41
ARTICLE XIII
ENVIRONMENTAL MATTERS...................................................... 42
13.1 Environmental Defects.................................... 42
13.2 NORM, Wastes and Other Substances........................ 44
ARTICLE XIV
ASSUMPTION; SURVIVAL, INDEMNIFICATION...................................... 44
14.1 Assumption by Buyer...................................... 44
14.2 Indemnities of Seller.................................... 45
14.3 Indemnities of Buyer..................................... 46
14.4 Limitation on Liability.................................. 46
14.5 Express Negligence....................................... 46
14.6 Exclusive Remedy......................................... 47
14.7 Indemnification Procedures............................... 47
14.8 Survival................................................. 49
14.9 Waiver of Right to Rescission............................ 49
14.10 Insurance, Taxes......................................... 49
14.11 Non-Compensatory Damages................................. 49
14.12 Cooperation by Buyer - Retained Litigation............... 50
14.13 Disclaimer of Application of Anti-Indemnity Statutes..... 50
ARTICLE XV
TERMINATION, DEFAULT AND REMEDIES.......................................... 50
15.1 Right of Termination..................................... 50
15.2 Effect of Termination.................................... 51
15.3 Return of Documentation and Confidentiality.............. 51
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ARTICLE XVI
MISCELLANEOUS.............................................................. 51
16.1 Exhibits................................................. 51
16.2 Expenses and Taxes....................................... 51
16.3 Assignment............................................... 52
16.4 Preparation of Agreement................................. 52
16.5 Publicity................................................ 52
16.6 Notices.................................................. 52
16.7 Removal of Name.......................................... 53
16.8 Further Cooperation...................................... 53
16.9 Filings, Notices and Certain Governmental Approvals...... 53
16.10 Entire Agreement; Conflicts.............................. 54
16.11 Parties in Interest...................................... 54
16.12 Amendment................................................ 54
16.13 Waiver; Rights Cumulative................................ 54
16.14 Governing Law; Jurisdiction, Venue; Jury Waiver.......... 55
16.15 Severability............................................. 55
16.16 Counterparts............................................. 55
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LIST OF EXHIBITS AND SCHEDULES
Exhibits
--------
Exhibit A Properties (Leases, Lands, Units, Xxxxx, Locations, Permitted Encumbrances)
Exhibit A-1 Designated Units
Exhibit A-2 Xxxxx
Exhibit A-3 Leases and Lands
Exhibit B Form of Assignment and Xxxx of Sale
Exhibit C Title Indemnity Agreement
Exhibit D Access Agreement
Schedules
Schedule 3.8 Allocated Values
Schedule 4.4 Consents
Schedule 4.7 Litigation
Schedule 4.8 Material Contracts
Schedule 4.9 Violation of Laws
Schedule 4.10 Preferential Rights
Schedule 4.13 Imbalances
Schedule 4.14 Current Commitments
Schedule 4.15 Environmental
Schedule 4.16 Production Taxes
Schedule 14.1 Retained Litigation
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (as may be amended, restated,
supplemented or otherwise modified from time to time, this "Agreement") is
executed as of this 22nd day of February, 2005, and is among Devon Energy
Production Company, L.P., an Oklahoma limited partnership ("DEPC") and Devon
Louisiana Corporation, a Louisiana corporation ("DLC") (DEPC and DLC are
sometimes individually and collectively referred to as "Seller") and KCS
Resources, Inc.("Buyer").
RECITALS
Seller desires to sell and convey, and Buyer desires to purchase and pay
for, the Assets (as defined hereinafter) effective as of the Effective Time (as
defined hereinafter).
NOW, THEREFORE, for and in consideration of the mutual promises contained
herein, the benefits to be derived by each party hereunder, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 DEFINED TERMS.
In addition to the terms defined in the introductory paragraph and the Recitals
of this Agreement, for purposes hereof, the following expressions and terms
shall have the meanings set forth in this Article I, unless the context
otherwise requires:
"Access Agreement" shall have the meaning set forth in Article 13.1(b).
"Accounting Arbitrator" shall have the meaning set forth in Article 3.7.
"Adjusted Purchase Price" shall have the meaning set forth in Article 3.3.
"AFE" shall have the meaning set forth in Article 4.14.
"Affected Well" shall have the meaning set forth in Article 12.2(g)(v).
"Affiliate" shall mean any Person that, directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, another Person. The term "control" and its derivatives with
respect to any Person means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" shall have the meaning set forth in the first paragraph
herein.
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"Allocated Value" means, with respect to any Asset, the amount set forth
on Exhibit A under the column "Allocated Value" for such Asset.
"Applicable Contracts" means all Contracts by which the Properties and
other Assets are bound or that primarily relate to the Properties or other
Assets and (in each case) that will be binding on the Assets or Buyer after the
Closing, including, without limitation; farmin and farmout agreements;
bottomhole agreements; crude oil, condensate, and natural gas purchase and sale,
gathering, transportation, and marketing agreements; hydrocarbon storage
agreements; acreage contribution agreements; operating agreements; balancing
agreements; pooling declarations or agreements; unitization agreements;
processing agreements; saltwater disposal agreements; facilities or equipment
leases; crossing agreements; letters of no objection; platform use agreements;
production handling agreements; and other similar contracts and agreements,
owned by Seller and primarily related to the Properties or other Assets, but
exclusive of any master service agreements.
"Assets" shall have the meaning set forth in Article 2.1.
"Assignment" means the Assignment and Xxxx of Sale from Seller to Buyer,
pertaining to the Assets, substantially in the form attached to this Agreement
as Exhibit B.
"Assumed Obligations" shall have the meaning set forth in Article 14.1.
"BLM" shall mean the Bureau of Land Management.
"Bond" shall have the meaning set forth in Article 6.4.
"Buyer" shall have the meaning set forth in the first paragraph herein.
"Buyer Indemnified Parties" shall have the meaning set forth in Article
14.2.
"Buyer's Indemnity Time Limit" shall have the meaning set forth in Article
14.4
"Buyer's Representatives" shall have the meaning set forth in Article
11.1(a).
"Claim" shall have the meaning set forth in Article 14.7(b).
"Claim Notice" shall have the meaning set forth in Article 14.7(b).
"Closing" shall have the meaning set forth in Article 9.1.
"Closing Date" shall have the meaning set forth in Article 9.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement dated January 10, 2005, between Seller and Buyer.
"Contaminant" means any contaminant, waste, pollutant, petroleum waste,
used oil, hazardous or toxic substance or waste (as such terms are defined in
Environmental Laws), and
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any other substances that are regulated by any Governmental Authority under any
Environmental Laws when present in amounts, concentrations or conditions
requiring action under Environmental Laws.
"Contract" means any written or oral contract, agreement, agreement
regarding indebtedness, indenture, debenture, note, bond, loan, collective
bargaining agreement, lease, mortgage, franchise, license agreement, purchase
order, binding bid, commitment, letter of credit or any other legally binding
arrangement, excluding, however, any Lease, easement, right-of-way, permit or
other instrument creating or evidencing an interest in the Assets or a real or
immovable property related to or used in connection with the operations of any
Assets.
"Contract Personnel" means Persons and independent contractors retained by
Seller to maintain or operate the Properties.
"Cure Period" shall have the meaning set forth in Article 12.2(c).
"Customary Post Closing Consents" shall mean the consents and approvals
from Governmental Authorities for the assignment of the Assets to Buyer, that
are customarily obtained after the assignment of properties similar to the
Assets.
"Defective Support Property" shall have the meaning set forth in Article
12.2(g)(v).
"Defensible Title" shall mean (i) with respect to Seller's ownership of
any Property or any Designated Unit, a record title or title established by a
valid order of a Governmental Authority that:
(a) entitles Seller to receive not less than the Net Revenue
Interest shown in Exhibit A for such Property or Designated Unit
throughout the productive life of such Property or Designated Unit, except
for (i) decreases in connection with those operations in which Seller
elects with Buyer's prior consent to become a non-consenting co-owner,
(ii) decreases resulting from the establishment or amendment from and
after the date of this Agreement of a Unit approved by Buyer, (iii)
decreases required to allow other working interest owners to make up past
underproduction or pipelines to make up past under deliveries, but only
with respect to Imbalances set forth in Schedule 4.13, and (iv) as
otherwise stated in Exhibit A;
(b) obligates Seller to bear a Working Interest not greater than the
Working Interest shown in Exhibit A for such Property or Designated Unit
without increase throughout the productive life of such Property or
Designated Unit, except for (i) increases resulting from contribution
requirements with respect to defaulting co-owners under applicable
operating agreements, (ii) increases to the extent that they are
accompanied by at least a proportionate increase in Seller's Net Revenue
Interest, and (iii) as otherwise stated in Exhibit A; and
(c) is free and clear of all Encumbrances other than the Permitted
Encumbrances; and
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(ii) with respect to Seller's ownership of any Asset that is not a
Property or a Designated Unit, a record title that:
(a) is free from reasonable doubt as to all matters of law and fact
such that a reasonably prudent person, engaged in the ownership,
development and inspection of oil and gas properties or assets (including,
pipelines, plants, and measurement and treating facilities), with
knowledge of all the facts and appreciation of their legal significance,
would be willing to accept title to such property without reduction in
value of such property;
(b) obligates the Seller to bear no more than its proportionate
share of the costs of operating or using such Asset, taking into account
the ownership interests held by third parties, if any, in such Asset, and
(c) is free and clear of all Encumbrances other than the Permitted
Encumbrances.
"DEPC" shall have the meaning set forth in the first paragraph herein.
"Deposit" shall have the meaning set forth in Article 3.2.
"Designated Unit" shall be the units or Lands identified on Exhibit "A"
"Dispute Notice" shall have the meaning set forth in Article 3.6.
"DLC" shall have the meaning set forth in the first paragraph herein.
"DOJ" shall mean the Department of Justice.
"Effective Time" shall mean 7:00 a.m. (Central Standard Time) on January
1, 2005.
"Employees" means (i) all of Seller's employees actively employed in
connection with the Assets and (ii) all of Seller's employees on layoff, leave
of absence or temporary disability, excluding, however, in each case, the
Contract Personnel.
"Encumbrance" shall mean any lien, security interest, pledge, charge or
encumbrance.
"Environmental Arbitrator" shall have the meaning set forth in Article
13.1(e).
"Environmental Claim Date" shall have the meaning set forth in Article
13.1(a).
"Environmental Condition" shall mean (a) a condition existing on the date
of this Agreement or as of the Closing Date with respect to the air, soil,
subsurface, surface waters, ground waters and/or sediments that causes an Asset
(or Seller with respect to an Asset) not to be in compliance with any
Environmental Law or the environmental related terms of any Lease or Applicable
Contract, or (b) the existence as of the date of this Agreement or as of the
Closing Date of any Environmental Matter affecting or relating to any Asset that
requires a response or
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any remedial or corrective action under any Environmental Law or the terms of
any Lease or Applicable Contract.
"Environmental Defect" shall mean an Environmental Condition with respect
to an Asset.
"Environmental Defect Notice" shall have the meaning set forth in Article
13.1(a).
"Environmental Encumbrance" means an Encumbrance in favor of any
Governmental Authority or any Person for (i) any Environmental Liability, or
(ii) damages arising from, or costs incurred by any Governmental Authority or
Person in response to, a Release or threatened Release of a Contaminant into the
environment.
"Environmental Laws" means all applicable federal, state, and local laws
in effect as of the date of this Agreement, including common law, relating to
the protection of the public health, welfare, and the environment, including,
without limitation, those laws relating to the storage, handling, and use of
chemicals and other Hazardous Substances, those relating to the generation,
processing, treatment, storage, transportation, disposal, or other management
thereof and the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Sections 9601 et. seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et. seq.), the
Clean Water Act (33 U.S.C. Sections 466 et. seq.), the Safe Drinking Water Act
(14 U.S.C. Sections 1401-1450), the Hazardous Materials Transportation Act (49
U.S.C. Sections 1801 et. seq.), the Toxic Substance Control Act (15 U.S.C.
Sections 2601-2629), the Clean Air Act (42 U.S.C. Section 7401 et. seq.) as
amended, and the Clean Air Act Amendments of 1990, and all state and local
environmental laws.
"Environmental Liabilities" means any and all reasonable costs (including
remedial, removal, response, abatement, cleanup, investigative, and/or
monitoring costs), damages, liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), settlements, expenses (including charges and
assessments, and expenses and costs of investigating, preparing or defending any
action or proceeding), liens, penalties, fines, taxes, prejudgment and post
judgment interest, court costs and reasonable attorneys' fees incurred or
imposed in connection with any Environmental Matter or any Environmental Law,
including, without limitation, any of the foregoing which are incurred or
imposed (i) pursuant to any agreement, order, notice of responsibility,
directive (including requirements embodied in Environmental Laws), injunction,
judgment or similar documents (including settlements) attributable to or arising
out of or under Environmental Laws, or (ii) pursuant to any claim by a
Governmental Authority or other entity or any Person for personal injury,
property damage, remediation or response costs arising out of or attributable to
any Environmental Matter.
"Environmental Matters" means matters (i) resulting from or attributable
to actual, threatened, or alleged Releases, (ii) otherwise resulting from or
attributable to the manufacture, generation, processing, distribution, use,
treatment, storage, disposal, transport, or handling of Contaminants or (iii)
otherwise relating to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
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"Excluded Assets" shall mean (a) all of Seller's corporate minute books,
financial records, and other business records that relate to Seller's business
generally (including the ownership and operation of the Assets); (b) all trade
credits, all accounts, receivables and all other proceeds, income or revenues
attributable to the Assets with respect to any period of time prior to the
Effective Time; (c) all claims and causes of action of Seller arising under or
with respect to any Contracts that are attributable to periods of time prior to
the Effective Time (including claims for adjustments or refunds); (d) all rights
and interests of Seller (A) under any policy or agreement of insurance or
indemnity, (B) under any bond or (C) to any insurance or condemnation proceeds
or awards arising, in each case, from acts, omissions or events, or damage to or
destruction of property; (e) all Hydrocarbons produced and sold from the
Properties with respect to all periods prior to the Effective Time; (f) all
claims of Seller for refunds of or loss carry forwards with respect to (A)
production or any other taxes attributable to any period prior to the Effective
Time, (B) income or franchise taxes or (C) any taxes attributable to the
Excluded Assets; (g) all personal computers and associated peripherals and all
radio and telephone equipment; (h) all of Seller's proprietary computer
software, patents, trade secrets, copyrights, names, trademarks, logos and other
intellectual property; (i) all documents and instruments of Seller that may be
protected by an attorney-client privilege; (j) all seismic and related or other
data that cannot be disclosed or transferred to Buyer as a result of
confidentiality arrangements under agreements or restricted licenses with Third
Parties; (k) all audit rights arising under any of the Applicable Contracts or
otherwise with respect to any period prior to the Effective Time or to any of
the Excluded Assets, except for any Imbalances; (l) all geophysical, and other
seismic and related technical data and information primarily relating to
properties other than the Properties; (m) documents prepared or received by
Seller with respect to (A) lists of prospective purchasers for such transactions
compiled by Seller, (B) bids submitted by other prospective purchasers of the
Assets, (C) analyses by Seller of any bids submitted by any prospective
purchaser, (D) correspondence between or among Seller, its respective
representatives, and any prospective purchaser other than Buyer and (E)
correspondence between Seller or any of its respective representatives with
respect to any of the bids, the prospective purchasers, or the transactions
contemplated in this Agreement; (n) any offices, office leases or personal
property located on such sites which are not directly related to any one or more
of the Assets; and (o) all of Seller's employee benefit plans, including all
rights and assets related thereto.
"Final Price" shall have the meaning set forth in Article 3.6.
"Final Settlement Statement" shall have the meaning set forth in Article
3.6.
"FTC" shall mean the Federal Trade Commission.
"Governmental Authority" shall mean any federal, state, local, municipal,
tribal or other government; any governmental, regulatory or administrative
agency, commission, body or other authority exercising or entitled to exercise
any administrative, executive, judicial, legislative, belief, regulatory or
taxing authority or power; and any court or governmental tribunal, including any
tribal authority having or asserting jurisdiction.
"Governmental Permits" has the meaning set forth in Article 4.19.
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"Hazardous Substances" shall mean any pollutants, contaminants, toxics or
hazardous or extremely hazardous substances, materials, wastes, constituents,
compounds or chemicals that are regulated by, or may form the basis of liability
under, any Environmental Laws, including NORM and Contaminants.
"HSR Act" shall mean the Xxxx Xxxxx Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Hydrocarbons" means oil and gas and other hydrocarbons produced or
processed in association therewith.
"Imbalance" means (i) any imbalance at the wellhead between the amount of
Hydrocarbons produced from a Well and allocable to the interests of Seller
therein and the shares of production from the relevant Well to which Seller is
entitled and (ii) any marketing imbalance between the quantity of Hydrocarbons
required to be delivered by Seller under any Contract relating to the purchase
and sale, gathering, transportation, storage, processing, or marketing of
Hydrocarbons and the quantity of Hydrocarbons actually delivered by Seller
pursuant to the relevant Contract, together with any appurtenant rights and
obligations concerning future in-kind and/or cash balancing at the wellhead and
production balancing at the delivery point into the relevant sale, gathering,
transportation, storage, or processing facility."Individual Environmental
Threshold"" shall have the meaning set forth in Article 13.1(a).
"Interim Period" shall mean that period of time commencing with the
Effective Time and ending at 7:00 a.m. (Central Standard Time) on the Closing
Date.
"Knowledge" shall mean ( the actual knowledge following reasonable inquiry
of an Officer or Employee of the Person in question who is familiar with such
Person's business, assets and operations.
"Lands" shall have the meaning set forth in Article 2.1(a).
"Law" shall mean any applicable statute, law, rule, regulation, ordinance,
order, code, ruling, writ, injunction, decree or other official act of or by any
Governmental Authority.
"Leases" shall have the meaning set forth in Article 2.1(a).
"Liabilities" shall mean any and all claims, causes of actions, payments,
charges, judgments, assessments, liabilities, losses, damages, penalties, fines
or costs and expenses, including any attorneys' fees, legal or other expenses
incurred in connection therewith and including liabilities, costs, losses and
damages for personal injury or death or property damage.
"Location" shall have the meaning set forth in Article 2.1.
"Material Adverse Effect" shall mean an event or circumstance that,
individually or in the aggregate, results in a material adverse effect on the
ownership, operations, or value of the Assets, taken as a whole and as currently
operated as of the date of this Agreement or a material adverse effect on the
ability of Seller to consummate the transactions contemplated by this Agreement;
provided, however, that none of the following shall deem to constitute a
Material
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Adverse Effect: (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 in the area in which the Assets are located, the United
States or worldwide, or any outbreak of hostilities or war, (iii) any effect
resulting from a change in Laws from and after the date of this Agreement; (iv)
any changes in the prices of Hydrocarbons; and (v) natural declines in well
performance.
"MMS" shall mean the Minerals Management Service.
"Material Contracts" shall have the meaning set forth in Article 4.8.
"Net Revenue Interest" means, with respect to any Property, the interest
in and to all Hydrocarbons produced, saved, and sold from or allocated to such
Property, after giving effect to all royalties, overriding royalties, production
payments, carried interests, net profits interests, reversionary interests, and
other burdens upon, measured by, or payable out of production therefrom.
"NORM" shall mean naturally occurring radioactive material.
"Operating Expenses" shall have the meaning set forth in Article 2.3.
"Permitted Encumbrances" shall mean:
(a) lessor's royalties, non-participating royalties, overriding
royalties, reversionary interests, and similar burdens upon, measured by, or
payable out of production if the net cumulative effect of such burdens does not
operate to reduce the Net Revenue Interest of Seller in any Property to an
amount less than the Net Revenue Interest set forth on Exhibit A for such
Property and do not obligate Seller to bear a Working Interest for such Property
in any amount greater than the Working Interest set forth on Exhibit A for such
Property (unless the Net Revenue Interest for such Asset is greater than the Net
Revenue Interest set forth on Exhibit A in the same proportion as any increase
in such Working Interest);
(b) those preferential rights to purchase, required third party
consents to assignments and similar restrictions or rights of third parties
listed in Schedule 4.10;
(c) liens for taxes or assessments of Governmental Authorities which
are not yet due or delinquent or, if delinquent, that are being contested in
good faith in the normal course of business and listed in Schedule 4.10;
(d) Customary Post-Closing Consents, to the extent actually
obtained;
(e) conventional rights of reassignment requiring Seller to reassign
interests in any Lease to a Third Party, or to give notice to the holder of such
rights, prior to surrendering, abandoning or releasing a Lease;
(f) such Title Defects as Buyer may have specifically waived in a
writing executed by an officer of Buyer;
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(g) all applicable Laws, and rights reserved to or vested in any
Governmental Authority (i) to control or regulate any Asset in any manner; (ii)
by the terms of any right, power, franchise, grant, license, or permit, or by
any provision of Law, to terminate such right, power, franchise grant, license,
or permit or to purchase, condemn, expropriate, or recapture or to designate a
purchaser of any of the Assets; (iii) to use such property in a manner which
does not materially impair the use of such property for the purposes for which
it is currently owned and operated and (iv) to enforce any obligations or duties
affecting the Assets to any Governmental Authority, with respect to any
franchise, grant, license, or permit;
(h) rights of a common owner of any interest in rights-of-way or
easements currently held by Seller and such common owner as tenants in common or
through common ownership;
(i) easements, conditions, covenants, restrictions, servitudes,
permits, rights-of-way, surface leases and other rights in the Assets for the
purpose of surface operations, roads, alleys, highways, railways, pipelines,
transmission lines, transportation lines, distribution lines, power lines,
telephone lines, and removal of timber, grazing, logging operations, canals,
ditches, reservoirs, and other like purposes, or for the joint or common use of
real estate, rights-of-way, facilities and equipment, to the extent any or all
of the foregoing do not materially impair the use of the Assets as currently
owned and operated;
(j) zoning and planning ordinances and municipal regulations;
(k) vendors, carriers, warehousemen's, repairmen's, mechanics,
workmen's, materialmen's, construction or other like liens arising by operation
of Law in the ordinary course of business or incident to the construction or
improvement of any property in respect of obligations which are not yet due or
which are being contested in good faith by appropriate proceedings by or on
behalf of Seller;
(l) liens created under leases and/or operating agreements or by
operation of Law in respect of obligations that are not yet due or that are
being contested in good faith by appropriate proceedings by or on behalf of
Seller;
(m) any encumbrance affecting the Assets which is expressly assumed,
bonded or paid by Buyer at or prior to Closing or which is discharged by Seller
at or prior to Closing;
(n) any matters referenced on Exhibit A and litigation described on
Schedule 4.7; ; and
(o) the Leases and all other liens, charges, encumbrances, Contracts
(including the Applicable Contracts), agreements, instruments, obligations,
defects, and irregularities affecting the Assets that individually or in the
aggregate are not such as to materially interfere with the operation or use of
any of the Assets (as currently owned and operated), do not reduce the Net
Revenue Interest of Seller in any Property to an amount less than the Net
Revenue Interest set forth on Exhibit A for such Property and do not obligate
Seller to bear a Working Interest for such Property in any amount greater than
the Working Interest set forth on Exhibit A for such Property (unless the Net
Revenue Interest for such Asset is greater
9
than the Net Revenue Interest set forth on Exhibit A in the same proportion as
any increase in such Working Interest).
"Person" shall mean any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, Governmental Authority or any other entity.
"Personal Property" shall have the meaning set forth in Article 2.1(g).
"Preliminary Settlement Statement" shall have the meaning set forth in
Article 3.5.
"Properties" shall have the meaning set forth in Article 2.1(c).
"Purchase Price" shall have the meaning set forth in Article 3.1.
"Records" shall have the meaning set forth in Article 2.1(i).
"Release" means any release, spill, emission, leaking, pumping, pouring,
emitting, emptying, injection, deposit, disposal, discharge, dispersal,
escaping, leaching, dumping (including the abandonment or discarding of barrels,
containers, and other closed receptacles containing any Contaminant), or
migration of a Contaminant into the environment or into or out of any Asset,
including, to the extent recognized by law as such, the movement of Contaminants
through or in the air, soil, surface water or groundwater of any Asset.
"Remediation" shall mean, with respect to an Environmental Condition, the
implementation and completion of any remedial, removal, response, construction,
closure, disposal or other corrective actions required under applicable
Environmental Laws or any applicable Lease or Contract to correct or remove such
Environmental Condition.
"Remediation Amount" shall mean, with respect to an Environmental
Condition, the present value as of the Closing Date (using an annual discount
rate of ten percent (10%)) of the cost (net to Seller's interest) of the
reasonable cost to accomplish a Remediation of such Environmental Condition.
"Seller" shall have the meaning set forth in the first paragraph of this
Agreement.
"Seller Indemnified Parties" shall have the meaning set forth in Article
14.3.
"Seller's Indemnity Cap" shall have the meaning set forth in Article 14.4.
"Survival Period" means the second anniversary of the Closing Date. ).
"Third Party" shall mean any Person other than a party to this Agreement
or an Affiliate of a party to this Agreement.
"Title Arbitrator" shall have the meaning set forth in Article 12.2(j).
"Title Benefit" shall mean any right, circumstance or condition that
operates (i) to increase the Net Revenue Interest of Seller in any Well (or the
specified zone(s) or formation(s)
10
therein, to the extent such zone(s) or formations in such Well are set out in
Schedule 3.8) above that shown for such Well in Exhibit A, to the extent the
same does not cause a greater than proportionate increase in Seller's Working
Interest therein above that shown in Exhibit A, or (ii) to decrease the Working
Interest of Seller in any Well (or the foregoing zone(s) or formation(s)
therein) below that shown for such Well (or the foregoing zone(s) or
formation(s) therein) in Exhibit A, to the extent the same causes a decrease in
Seller's Working Interest that is proportionately greater than the decrease in
Seller's Net Revenue Interest therein below that shown in Exhibit A.
"Title Benefit Amount" shall have the meaning set forth in Article
12.2(h).
"Title Benefit Notice" shall have the meaning set forth in Article
12.2(b).
"Title Claim Date" means five days prior to Closing.
"Title Defect" means (1) with respect to any Well or Designated Unit
described in Exhibit A that has a BPO Net Revenue or Working Interest that
varies from the applicable Net Revenue or Working Interest set out in Schedule
3.8 (in which case, Exhibit A shall be deemed to be amended to refer to the
interest set out in Schedule 3.8), (2) with respect to any Well or Designated
Unit described in Exhibit A that has an APO Net Revenue or Working Interest that
is not the same as the BPO Net Revenue or Working Interest for such Well or
Designated Unit (in which case, Exhibit A shall be deemed to be amended to refer
to the interest set out in Schedule 3.8), or (3) any lien, charge, Encumbrance,
defect, irregularity of title or other condition or matter that causes Seller
not to have Defensible Title in and to one or more of the Assets as of the
Effective Time; provided, however, that the following shall not be considered
Title Defects:
(i) defects in the chain of title consisting of the failure to
recite marital status in a document or omissions of successions of
heirship or estate proceedings, unless Buyer provides affirmative evidence
that such failure or omission has resulted in another Person's superior
claim of title to the relevant Asset;
(ii) defects arising out of lack of survey, unless a survey is
expressly required by applicable Laws;
(iii) defects arising out of lack of corporate or other entity
authorization unless Buyer provides affirmative evidence that such
corporate or other entity action was not authorized and results in another
Person's superior claim of title to the relevant Asset;
(iv) defects based on a gap occurring prior to January 1, 1993, in
Seller's chain of title as reflected in the BLM or MMS records as to
Leases covering federal lands or Hydrocarbons, the applicable agency or
office of a state as to Leases covering lands or Hydrocarbons owned by a
state, or in the applicable county or parish records as to all Leases,
unless such gap is affirmatively shown to exist in such records by an
abstract of title, title opinion or xxxxxxx'x title chain which documents
shall be included in a Title Defect Notice;
(v) defects that Seller is able to demonstrate by a written opinion
of counsel have been cured by applicable Laws of limitations or
prescription; and
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(vi) any Encumbrance or loss of title resulting solely from Seller's
operations or conduct of business after the Effective Time but only to the
extent such operations or conduct are in full compliance with the terms of
this Agreement.
"Title Defect Amount" shall have the meaning set forth in Article 12.2(g)
of this Agreement.
"Title Defect Notice" should have the meaning set forth in Article
12.2(a).
"Title Defect Property" shall have the meaning set forth in Article
12.2(a).
"Title Indemnity Agreement" shall have the meaning set forth in Article
12.2(d)(ii).
"Transaction Documents" means those documents executed pursuant to or in
connection with this Agreement.
"Treasury Regulations" means the regulations promulgated by the United
States Department of the Treasury pursuant to and in respect of provisions of
the Code. All references herein to sections of the Treasury Regulations shall
include any corresponding provision or provisions of succeeding, similar,
substitute, proposed or final Treasury Regulations.
"Unit" means any unit formed under state or federal law, any operator's
unit formed under any operating agreement, or any pooled or communitized area
recognized under state or federal law.
"Xxxxx" shall have the meaning set forth in Article 2.1(b).
"Working Interest" means, with respect to any Property, the interest in
and to such Property that is burdened with the obligation to bear and pay costs
and expenses of maintenance, development and operations on or in connection with
such Property, but without regard to the effect of any royalties, overriding
royalties, production payments, net profits interests and other similar burdens
upon, measured by, or payable out of production therefrom.
1.2 REFERENCES.
The words "hereby," "herein," "hereinabove," "hereinafter," "hereinbelow,"
"hereof," "hereto," "hereunder," and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
article, section, or provision of this Agreement. References in this Agreement
to articles, sections, exhibits, or schedules are to such articles, sections,
exhibits, or schedules of this Agreement unless otherwise specified.
1.3 ARTICLES.
This Agreement, for convenience only, has been divided into articles. The rights
and other legal relations of the parties hereto shall be determined from this
Agreement as an entirety and without regard to the aforesaid division into
articles and sections and without regard to headings prefixed to such articles.
1.4 NUMBER AND GENDER.
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Whenever the context requires, reference herein made to a single number shall be
understood to include the plural; and likewise, the plural shall be understood
to include the singular. Words denoting sex shall be construed to include the
masculine, feminine, and neuter, when such construction is appropriate; and
specific enumeration shall not exclude the general but shall be construed as
cumulative. Definitions of terms defined in the singular or plural shall be
equally applicable to the plural or singular, as applicable, unless otherwise
indicated.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE AND SALE.
Subject to the terms and conditions of this Agreement, Seller agrees to sell,
and Buyer agrees to purchase and pay for, all of Seller's right, title and
interest in and to the following (less and except for the Excluded Assets,
collectively, the "Assets"):
(a) the oil and gas leases more particularly described in Exhibit A,
subject to any depth restrictions described in Exhibit A (collectively, the
"Leases"), together with any and all other rights, titles, and interests of
Seller in and to (i) the leasehold estates created thereby, subject to any depth
restrictions described in Exhibit A and to the terms, conditions, covenants, and
obligations set forth in the Leases and/or Exhibit A and (ii) the lands covered
by the Leases or included in Units with which the Leases may have been pooled or
unitized, subject to any depth restrictions described in Exhibit A (the
"Lands"), including in each case, without limitation, fee interests, royalty
interests, overriding royalty interests, production payments, net profits
interests, carried interests, reversionary interests, and all other interests of
any kind or character;
(b) all oil and gas xxxxx located on the Leases and the Lands or on
other leases or lands with which the Leases and/or the Lands may have been
pooled or unitized (collectively and including the xxxxx set forth on Exhibit A,
the "Xxxxx"), and all Hydrocarbons produced therefrom or allocated thereto;
(c) Seller's interest in and to each future drilling location and
the associated zones or formations designated in Schedule 3.8 and identified
therein by a code "LOC" in the column with the heading "API", together with
Seller's interests in the Leases, Lands and Applicable Contracts associated
therewith (each such location and its associated zones or formations referred to
as a "Location") (the Leases, the Lands, the Locations and the Xxxxx being
collectively referred to as the "Properties");
(d) all rights and interests in, under, or derived from all
unitization and pooling agreements in effect with respect to the Properties and
the Units created thereby which accrue or are attributable to the interests of
Seller in the Properties;
(e) to the extent that they may be assigned, all Applicable
Contracts;
(f) to the extent that they may be assigned, all permits, licenses,
servitudes, easements, rights-of-way and other surface agreements to the extent
used primarily in connection with the ownership or operation of the Properties
or the Personal Property;
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(g) all equipment, machinery, fixtures, and other real, personal,
and mixed property, operational and nonoperational, known or unknown, located on
or used for the operation of the Properties or the other Assets described above
as of the Effective Time, including, without limitation, saltwater disposal
xxxxx, well equipment, casing, rods, tanks, boilers, buildings, tubing, pumps,
motors, fixtures, machinery, compression equipment, flow lines, pipelines,
gathering systems, processing and separation facilities, platforms, structures,
materials, and other items used in the operation thereof as of the Effective
Time (collectively, the "Personal Property");
(h) all Imbalances relating to the Properties or other Assets;
(i) all of the rights, titles, and interests of Seller in and to all
of the files, records, information, and data, whether written or electronically
stored, primarily relating to the Assets, including, without limitation: (i)
land and title records (including abstracts of title, title opinions, maps, and
title curative documents); (ii) contract files; (iii) correspondence; (iv)
operations, environmental, production, and accounting records, (v) geological,
geophysical, seismic and related data and information, (including maps and logs)
to the extent the transfer thereof is not restricted by obligations of Seller to
Third Parties under confidentiality or license agreements and (vi) facility and
Well records, but excluding any of the foregoing items to the extent that they
comprise the Excluded Assets ("Records").
2.2 EXCLUDED ASSETS.
Seller shall reserve and retain all of the Excluded Assets.
2.3 REVENUES AND EXPENSES.
Subject to the provisions hereof, Seller shall remain entitled to all of the
rights of ownership (including, without limitation, the right to all production,
proceeds of production and other proceeds) and shall remain responsible for all
Operating Expenses, in each case attributable to the Assets for the period of
time prior to the Effective Time. Subject to the provisions hereof, and subject
to the occurrence of the Closing, Buyer shall be entitled to all of the rights
of ownership (including, without limitation, the right to all production,
proceeds of production, and other proceeds), and shall be responsible for all
Operating Expenses, in each case, attributable to the Assets for the period of
time from and after the Effective Time. All Operating Expenses attributable to
the Assets, in each case that are: (i) incurred with respect to operations
conducted or production prior to the Effective Time shall be paid by or
allocated to Seller and (ii) incurred with respect to operations conducted or
production after the Effective Time shall be paid by or allocated to Buyer.
"Operating Expenses" means all operating expenses (including without limitation
costs of insurance and ad valorem, property, severance, production and similar
taxes based upon or measured by the ownership or operation of the Assets or the
production of Hydrocarbons therefrom, but excluding any other taxes) and capital
expenditures incurred in the ownership and operation of the Assets in the
ordinary course of business and, where applicable, in accordance with the
relevant operating or unit agreement, if any, and overhead costs charged to the
Assets under the relevant operating agreement or unit agreement, if any, but
excluding Liabilities attributable to (i) Liabilities for personal injury or
death, property damage or violation of any Law, (ii) obligations to plug Xxxxx,
dismantle or decommission facilities, close pits and restore the surface around
such Xxxxx, facilities and pits, (iii) Environmental Liabilities, including
obligations to Remediate any contamination of groundwater, surface water, soil,
14
sediments or Personal Property under applicable Environmental Laws, (iv)
obligations with respect to Imbalances, (v) obligations to pay working
interests, royalties, overriding royalties or other interest owners revenues or
proceeds attributable to sales of Hydrocarbons relating to the Properties,
including those held in suspense.
ARTICLE III
PURCHASE PRICE
3.1 PURCHASE PRICE.
The purchase price for the Assets shall be Dollars Ninety Four Million Seven
Hundred Thousand Dollars ($94,700,000) (the "Purchase Price"), payable in United
States currency by wire transfer in same day funds as and when provided in this
Agreement.
3.2 DEPOSIT.
(a) Concurrently with the execution of this Agreement by Buyer and Seller, Buyer
has deposited by wire transfer in same day funds into escrow with Seller the sum
of Five percent (5%) of the Purchase Price (the "Deposit"). The Deposit shall be
applied toward the Purchase Price at the Closing without any interest earned
thereon.
(b) If (i) all conditions precedent to the obligations of Buyer set
forth in Article VII have been met, and (ii) the transactions contemplated by
this Agreement are not consummated on or before the Closing Date because of: (A)
the failure of Buyer to materially perform one or more of its obligations
hereunder, or (B) the failure of any of Buyer's representations or warranties
hereunder to be true and correct in all material respects as of the Closing,
then, in such event, Seller shall have the right to terminate this Agreement and
to retain the Deposit as liquidated damages.
(c) If (i) this Agreement is terminated by the mutual written
agreement of Buyer and Seller, or (ii) the Closing does not occur on or before
the Closing Date for any reason other than as set forth in Article 3.2(b), then
Buyer shall be entitled to the delivery of the Deposit and Seller shall deliver
same upon Buyer's request, free of any claims by Seller with respect thereto.
Buyer and Seller shall thereupon have the rights and obligations set forth in
Article 15.2.
3.3 ADJUSTMENTS TO PURCHASE PRICE.
The Purchase Price shall be adjusted as follows, and the resulting amount shall
be herein called the "Adjusted Purchase Price":
(a) The Purchase Price shall be adjusted upward by Seller's share of
the following amounts (without duplication):
(i) an amount equal to the value of all marketable liquid
Hydrocarbons attributable to the Properties in storage or existing in stock
tanks, pipelines, plants and/or platforms (including inventory) as of the
Effective Time, the value to be based upon the contract price in effect as of
the Effective Time (or the market value, if there is no contract price, in
effect as of the Effective Time), less amounts payable as royalties, overriding
royalties, and other burdens upon, measured by, or payable out of such
production and less severance taxes payable or deducted (or to be deducted) by
the purchaser of such production;
15
(ii) an amount equal to all Operating Expenses and other costs
and expenses that are attributable to the Assets during the Interim Period, to
the extent paid before or after the Effective Time but prior to Closing,
including, without limitation, (A) bond and insurance premiums paid by or on
behalf of Seller during the Interim Period, (B) rentals and other lease
maintenance payments and (C) ad valorem, property, severance and production
taxes and any other taxes (exclusive of income taxes) based upon or measured by
the ownership of the Assets, the production of Hydrocarbons, or the receipt of
proceeds therefrom;
(iii) if Seller is the operator under a joint operating
agreement covering any of the Properties, an amount equal to the costs and
expenses paid by Seller on behalf of the other joint interest owners that are
attributable to the Interim Period;
(iv) Title Benefit Amounts as a result of any Title Benefits
for which the Title Benefit Amount has been determined prior to Closing;
(v) without duplication of any other amounts set forth in this
Article 3.3(a), the amount of all taxes prorated to Buyer but paid by Seller in
accordance with Article 16.2;
(vi) to the extent that Seller is under produced as shown with
respect to the net Imbalances set forth in Schedule 4.13, as complete and final
settlement of all Imbalances, the sum of FOUR DOLLARS AND SEVENTY-FIVE CENTS
($4.75)/MCF; and
(vii) any other amount provided for elsewhere in this
Agreement or otherwise agreed upon by Seller and Buyer.
(b) The Purchase Price shall be adjusted downward by Seller's share
of the following amounts (without duplication):
(i) an amount equal to all proceeds attributable to the sale
of Hydrocarbons produced from or allocable to the Assets during the Interim
Period, net of expenses (other than Operating Expenses) directly incurred in
earning or receiving such proceeds, and any sales, excise or similar Taxes in
connection therewith not reimbursed to Seller by a third party purchaser;
(ii) an amount equal to all proceeds from sales of
Hydrocarbons relating to the Properties and payable to owners of working
interests, royalties, overriding royalties and other similar interests (in each
case) that are held by Seller in suspense as of the Closing Date, including,
without limitation, royalty proceeds held in suspense;
(iii) an amount equal to all other proceeds received by Seller
(other than from the sale of Hydrocarbons produced from or allocable to the
Assets) to which Buyer is entitled pursuant to Article 2.3;
(iv) if Seller makes the election under Article 12.2(d)(i)
with respect to a Title Defect, the Title Defect Amount with respect to such
Title Defect if the Title Defect Amount has been determined prior to Closing;
16
(v) if Seller makes the election under Article 13.1(b)(i) with
respect to an Environmental Defect, the Remediation Amount with respect to such
Environmental Defect if the Remediation Amount has been determined prior to
Closing;
(vi) an amount determined pursuant to Article 12.2(d)(iii) or
Article 13.1(b)(iii) for any Properties and other Assets excluded from the
Assets pursuant to such Articles;
(vii) without duplication of any other amounts set forth in
this Article 3.3, the amount of all taxes prorated to Seller but payable by
Buyer in accordance with Article 16.2;
(viii) to the extent that Seller is overproduced as shown with
respect to the net Imbalances set forth in Schedule 4.13, as complete and final
settlement of all Imbalances, the sum of FOUR DOLLARS AND SEVENTY-FIVE CENTS
($4.75)/MCF; and
(ix) any other amount provided for elsewhere in this Agreement
or otherwise agreed upon by Seller and Buyer.
3.4 ADJUSTMENT METHODOLOGY.
When available, actual figures will be used for the adjustments to the Purchase
Price at the Closing. To the extent actual figures are not available, estimates
will be used subject to final adjustments in accordance with Article 3.6.
3.5 PRELIMINARY SETTLEMENT STATEMENT.
Not less than three (3) business days prior to the Closing, Seller shall prepare
and submit to Buyer for review a draft settlement statement (the "Preliminary
Settlement Statement") that shall set forth the Adjusted Purchase Price,
reflecting each adjustment made in accordance with this Agreement as of the date
of preparation of such Preliminary Settlement Statement and the calculation of
the adjustments used to determine such amount, together with the designation of
Seller's accounts for the wire transfers of funds as set forth in Article
9.3(b). Within two (2) business days of receipt of the Preliminary Settlement
Statement, Buyer will deliver to Seller a written report containing all then
known and quantified changes with the explanation therefor that Buyer proposes
to be made to the Preliminary Settlement Statement. The Preliminary Settlement
Statement, as agreed upon by the parties, will be used to adjust the Purchase
Price at Closing.
3.6 FINAL SETTLEMENT STATEMENT.
On or before ninety (90) days after the Closing Date, Buyer will prepare a
settlement statement (the "Final Settlement Statement") based upon actual income
and expenses during the Interim Period and which takes into account all known
adjustments to be made to the Purchase Price and shows the resulting adjustments
to the Purchase Price (the "Final Purchase Price"). As soon as practicable, and
in any event within thirty (30) days, after receipt of the Final Settlement
Statement, Seller shall return a written report containing any proposed changes
to such Settlement Statement and an explanation of any such changes and the
reasons therefor (a "Dispute Notice"). If the Final Price set forth in the Final
Settlement Statement is mutually agreed upon by Seller and Buyer, the Final
Settlement Statement and the Final Price shall be
17
final and binding on the parties hereto. Any difference in the Adjusted Purchase
Price as paid at Closing pursuant to the Preliminary Settlement Statement and
the Final Price shall be paid by the owing party within ten (10) days to the
owed party. All amounts paid pursuant to this Article 3.6 shall be delivered in
United States currency by wire transfer of immediately available funds to the
account specified in writing by the relevant party.
3.7 DISPUTES.
If Seller and Buyer are unable to resolve the matters addressed in the Dispute
Notice issued with respect to the Final Settlement Statement, each of Buyer and
Seller shall within fourteen (14) business days after the delivery of such
Dispute Notice, summarize its position with regard to such dispute in a written
document of twenty pages or less and submit such summaries to a person to be
mutually selected by Buyer and Seller (the "Accounting Arbitrator"), together
with the Dispute Notice, the Final Settlement Statement and any other
documentation such party may desire to submit. Within twenty (20) business days
after receiving the parties' respective submissions, the Accounting Arbitrator
shall render a decision choosing either Seller's position or Buyer's position
with respect to each matter addressed in any Dispute Notice, based on the
materials described above. Any decision rendered by the Accounting Arbitrator
pursuant hereto shall be final, conclusive and binding on Seller and Buyer and
will be enforceable against any of the parties in any court of competent
jurisdiction. The costs of such Accounting Arbitrators shall be borne one-half
by Buyer and one-half by Seller.
3.8 ALLOCATION OF PURCHASE PRICE / ALLOCATED VALUES.
Buyer and Seller agree that the unadjusted Purchase Price shall be allocated
among the Assets, in accordance with the principles of Section 1060 of the Code
and the Treasury Regulations, as set forth in Schedule 3.8 of this Agreement.
The "Allocated Value" for any Asset equals the portion of the unadjusted
Purchase Price allocated to such Asset on Schedule 3.8 and such Allocated Value
shall be used in calculating adjustments to the Purchase Price as provided
herein. Buyer and Seller agree (i) that the Allocated Values, as adjusted, shall
be used by Seller and Buyer 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 such Allocated Values
in notices to Governmental Authorities, in audit or other proceedings with
respect to taxes, in notices to preferential purchaser right holders, or in
other documents or notices relating to the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 ORGANIZATION, EXISTENCE.
DEPC is a limited partnership duly formed and validly existing under the laws of
the State of Oklahoma. DLC is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Louisiana. Seller has all
requisite power and authority to own and operate its property (including,
without limitation, its interests in the Assets) and to carry on its business as
now conducted. Seller is duly licensed or qualified to do business as a foreign
limited partnership or corporation, as applicable, and is in good standing in
all jurisdictions in which such qualification is required by Law, except where
the failure to qualify or be in good standing would not have a Material Adverse
Effect.
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4.2 AUTHORIZATION.
Seller has full power and authority to enter into and perform this Agreement and
the Transaction Documents to which it is a party and the transactions
contemplated herein and therein. The execution, delivery, and performance by
Seller of this Agreement have been duly and validly authorized and approved by
all necessary corporate or partnership action (as applicable) on the part of
Seller. This Agreement is, and the Transaction Documents to which each Seller is
a party when executed and delivered by such Seller will be, the valid and
binding obligation of such Seller and enforceable against such Seller in
accordance with their respective terms, subject to the effects of bankruptcy,
insolvency, reorganization, moratorium, and similar Laws, as well as to
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at Law).
4.3 NO CONFLICTS.
Subject to the receipt of the consents and approvals from Third Parties listed
in Schedules 4.4 and 4.10 in connection with the transactions contemplated
hereby, the execution, delivery, and performance by each Seller of this
Agreement and the consummation of the transactions contemplated herein will not
(i) conflict with or result in a breach of any provisions of the organizational
documents or other governing documents of either Seller, (ii) result in a
default or the creation of any Encumbrance or give rise to any right of
termination, cancellation, or acceleration under any of the terms, conditions,
or provisions of any Lease, Applicable Contract, note, bond, mortgage,
indenture, license, or other material agreement to which any Seller is a party
or by which any Seller or the Assets may be bound or (iii) violate any Law
applicable to any Seller or any of the Assets, except in the case of clauses
(ii) and (iii) where such default, Encumbrance, termination, cancellation,
acceleration or violation would not have a Material Adverse Effect.
4.4 CONSENTS.
Except (a) as set forth in Schedule 4.4, (b) for Customary Post-Closing
Consents, (c) under Contracts that are terminable by either by Seller or Buyer
upon not greater than sixty (60) days notice without payment of any fee, and (d)
preferential purchase rights and required consents set forth in Schedule 4.10,
there are no consents or other restrictions on assignment, including, but not
limited to, requirements for consents from Third Parties to any assignment (in
each case) that would be applicable in connection with the transfer of the
Assets or the consummation of the transactions contemplated by this Agreement by
Seller.
4.5 BANKRUPTCY.
There are no bankruptcy, reorganization or receivership proceedings pending,
being contemplated by or, to Seller's Knowledge, threatened against any Seller.
4.6 FOREIGN PERSON.
Neither Seller is a "foreign person" within the meaning of Section 1445 of the
Code.
4.7 LITIGATION.
Except as set forth in Schedule 4.7, there is no suit, action or litigation by
any Person by or before any Governmental Authority, and no legal, administrative
or arbitration proceedings, pending, or to Seller's Knowledge, threatened
against Seller or the Assets, that would have a Material Adverse Effect.
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4.8 MATERIAL CONTRACTS.
(a) Schedule 4.8 sets forth all Applicable Contracts of the type
described below (collectively, the "Material Contracts"):
(i) any Applicable Contract that can reasonably be expected to
result in aggregate payments by Seller of more than One Hundred Thousand Dollars
($100,000) during the current or any subsequent calendar year or Five Hundred
Thousand Dollars ($500,000) during the remaining term of such contract (in each
case, based solely on the terms thereof and without regard to any expected
increase in volumes or revenues);
(ii) any Applicable Contract that can reasonably be expected
to result in aggregate revenues to Seller of more than One Million Dollars
($1,000,000) during the current or any subsequent calendar year (based solely on
the terms thereof and without regard to any expected increase in volumes or
revenues);
(iii) any Applicable Contract that is not terminable without
penalty on sixty (60) days or less notice;
(iv) any indenture, mortgage, loan, credit or sale-leaseback
or any other Contract that can reasonably be expected to result in aggregate
payments by Seller of more than Five Hundred Thousand Dollars ($500,000) during
the remaining term of such instrument or Contract;
(v) any Applicable Contract that constitutes a lease under
which Seller is the lessor or the lessee of real or personal property, which
lease (A) cannot be terminated by Seller (or Buyer after the Closing) without
penalty upon sixty (60) days or less notice and (B) involves an annual base
rental of more than One Hundred Thousand Dollars ($100,000.00);
(vi) any Applicable Contract with any Affiliate of Seller that
will not be terminated prior to Closing; and
(vii) any Applicable Contract with any Affiliate of Seller
that will not be terminated prior to Closing.
(b) Except as set forth on Schedule 4.8 and except for such matters
that would not have a Material Adverse Effect, there exist no defaults under the
Material Contracts by Seller or, to Seller's Knowledge, by any other Person that
is a party to such Material Contracts, and no event has occurred that with
notice or lapse of time or both would constitute any default under any such
Contract by Seller or, to Seller's Knowledge, any other Person who is a party to
such Material Contract. Within three (3) days following the execution of this
Agreement, Seller will furnish to Buyer complete copies of each Material
Contract and all amendments or supplements thereto.
4.9 NO VIOLATION OF LAWS.
To Seller's Knowledge, except as set forth on Schedule 4.9, Seller has not
violated any applicable Laws with respect to the ownership or operation of the
Assets, except where such
20
violations would not have a Material Adverse Effect. This Article 4.9 does not
refer to or include any matters with respect to violations of Environmental
Laws, as such matters are addressed exclusively in Article 4.15.
4.10 PREFERENTIAL RIGHTS AND CONTRACTS.
Except as set forth in Schedule 4.10, there are no preferential rights to
purchase or required consents that are applicable to the transfer of the Assets
in connection with the transactions contemplated hereby.
4.11 ROYALTIES, ETC.
Except as would not have a Material Adverse Effect and except for such items
that are being held in suspense for which the Purchase Price is adjusted
pursuant to Article 3.3(b)(ii), Seller has paid all royalties, overriding
royalties and other burdens on production due by Seller with respect the
Properties, or if not paid, is contesting such royalties and other burdens in
good faith in the normal course of business. To Seller's Knowledge, there is no
claim or demand exceeding $20,000 for underpayment or non-payment of royalties
under an individual Lease.
4.12 PERSONAL PROPERTY.
To Seller's Knowledge, , all Personal Property constituting a part of the
Assets are in a state of repair so as to be adequate for normal operations,
except where such state of repair would not have a Material Adverse Effect.
4.13 IMBALANCES.
To Seller's Knowledge, Schedule 4.13 sets forth all Imbalances associated
with the Properties as of the Effective Time.
4.14 CURRENT COMMITMENTS.
Schedule 4.14 sets forth, as of the date of this Agreement, all authorities for
expenditures ("AFE's") relating to the Properties to drill or rework Xxxxx or
for other capital expenditures pursuant to any of the Material Contracts or any
applicable joint operating agreement for which all of the activities anticipated
in such AFE's or commitments have not been completed as of the date of execution
of this Agreement. Seller shall update and furnish to Buyer such Schedule 4.14
upon request but not more than twice prior to Closing.
4.15 ENVIRONMENTAL.
Seller represents to Buyer the following:
(a) with respect to the Assets, Seller has not entered into, or is
not subject to, any agreements, consents, orders, decrees, judgments, license or
permit conditions, or other directives of any Governmental Authority in
existence as of the date of this Agreement based on any Environmental Laws that
relate to the future use of any of the Assets and that require any change in the
present conditions of any of the Assets;
(b) except as set forth in Schedule 4.15, Seller has not received
written notice from any Person of any Release, disposal, event, condition,
circumstance, activity, practice or incident concerning any Lands, facility,
Asset or Property included in the Assets that: (i) interferes with or prevents
compliance by Seller with any Environmental Law or the terms of any license or
permit issued pursuant thereto; or (ii) gives rise to or results in any common
law or
21
other liability of Seller to any Person which, in the case of either clause (i)
or (ii) hereof, would have a Material Adverse Effect;
(c) to Seller's Knowledge, all material reports, studies, written
notices from environmental Governmental Authorities, tests, analyses, and other
documents specifically addressing environmental matters related to Seller's
ownership or operation of the Properties, which are in Seller's possession, have
been made available to Buyer;
(d) the operations of Seller comply in all material respects with
all applicable Environmental Laws, and Seller has obtained those permits,
licenses or approvals required by Environmental Laws and is in material
compliance with such permits, licenses or approvals;
(e) since January 1, 2002, Seller has not received any claims or
written inquiry or notice from any Person alleging that Seller is not now, or in
the past has not been, in compliance with any then-applicable Environmental
Laws;
(f) no Environmental Encumbrance has attached to any Asset;
(g) to the Knowledge of Seller, Seller has not caused or allowed a
Release of any Contaminant on, in, about, or from any Asset in a manner (i) that
is other than as allowed by Environmental Laws or (ii) so as to give rise to any
Environmental Liabilities;
(h) to the Knowledge of Seller, there are no facts, events or
conditions relating to any Asset, or any operations of any of Seller that give
rise to any Environmental Liabilities;
(i) to the Knowledge of Seller, Seller has not caused or allowed
Contaminants to migrate from any Asset upon or beneath any other properties,
except as permitted by Environmental Laws, or caused or allowed Contaminants to
migrate from other properties onto or beneath any Asset, except as permitted by
Environmental Laws;
(j) to the Knowledge of Seller, Seller has not generated, treated,
processed, stored, or handled Contaminants (or transported, disposed, or
arranged for disposal, reclamation, recycling, or sale of Contaminants from any
Asset to other properties) other than as allowed by Environmental Laws;
(k) to the Knowledge of Seller, Seller has not generated, treated,
processed, stored, or handled Contaminants (or transported, disposed, or
arranged for disposal, reclamation, recycling, or sale of Contaminants from any
Asset) under circumstances that give rise to Environmental Liabilities;
(l) to the Knowledge of Seller, Schedule 4.15 lists all material
permits issued by Governmental Authorities that are held by the Seller under any
Environmental Laws;
(m) to the Knowledge of Seller, Schedule 4.15 lists (i) all
underground storage tanks that exist under any Asset and (ii) any unlined pits
used for production operations or Hydrocarbon storage that are located on the
Lands covered by Leases;
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(n) Schedule 4.15 lists all environmental audit reports (or other
reports, or other documentation of studies, relating to any investigation of any
Environmental Matters or any potential or actual Environmental Liabilities)
prepared by, for or with respect to Seller or the Assets;
(o) none of the Assets consists of idle equipment with NORM readings
greater than 50 micro-roetegens (microR) per hour as measured with a calibrated
Xxxxxx Radioactivity Detection Meter; and
(p) Seller is not subject to any ongoing obligation under any
consent order, consent judgment, consent decree, court or administrative order,
decree, or judgment issued by any Governmental Authority or court regarding any
Environmental Matter or pertaining to any claim under OSHA.
4.16 PRODUCTION TAXES.
Except as disclosed in Schedule 4.16, during the period of Seller's ownership of
the Assets, all ad valorem, property, production, severance, and similar taxes
and assessments (including penalties and interest) based on or measured by the
ownership of the Assets, the production of Hydrocarbons, or the receipt of
proceeds therefrom that have become due and payable before the Effective Time
have been properly paid, other than taxes which have been contested in good
faith.
4.17 (NOT USED)
4.18 BROKERS FEES.
Seller has incurred no liability, contingent or otherwise, for brokers' or
finders' fees relating to the transactions contemplated by this Agreement for
which Buyer or any Affiliate of Buyer shall have any responsibility.
4.19 GOVERNMENTAL PERMITS.
Except as set forth on Schedule 4.19, Seller owns, holds or possesses all
material licenses, franchises, permits, privileges, immunities, concessions,
approvals and other authorizations from all Governmental Authorities which are
necessary to entitle each of them to own or lease, operate and use its assets
and to carry on and conduct its business substantially as currently conducted
(collectively, "Governmental Permits"). To the Knowledge of Seller, Seller has
fulfilled and performed its obligations under each of the Governmental Permits,
and no event has occurred or condition or state of facts exists which
constitutes or, after notice or lapse of time or both, would constitute a breach
or default under any such Governmental Permit or which permits or, after notice
or lapse of time or both, would permit revocation or termination of any such
Governmental Permit, and which would have a material adverse effect on the
Assets affected thereby.
ARTICLE V
BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Seller the following:
5.1 ORGANIZATION; EXISTENCE.
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Buyer is a Delaware corporation duly organized, validly existing, and in good
standing under the laws of the state of its formation and has all requisite
power and authority to own and operate its property and to carry on its business
as now conducted.
5.2 AUTHORIZATION.
Buyer has full corporate power and authority to enter into and perform this
Agreement and the Transaction Documents to which it is a party and the
transactions contemplated herein and therein. The execution, delivery, and
performance by Buyer of this Agreement have been duly and validly authorized and
approved by all necessary corporate or partnership action (as applicable) on the
part of Buyer. This Agreement is, and the Transaction Documents to which Buyer
is a party when executed and delivered by Seller will be, the valid and binding
obligation of Buyer and enforceable against Buyer in accordance with their
respective terms, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium, and similar laws, as well as to principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).
5.3 NO CONFLICTS.
The execution, delivery, and performance by Buyer of this Agreement and the
consummation of the transactions contemplated herein will not (i) conflict with
or result in a breach of any provisions of the organizational or other governing
documents of Buyer, (ii) result in a default 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 other agreement to which Buyer is a party
or by which Buyer or any of its property may be bound or (iii) violate any Law
or Order applicable to Buyer or any of its property, except in the case of
clauses (ii) and (iii) where such default, Encumbrance, termination,
cancellation, acceleration or violation would not have a material adverse effect
upon the ability of Buyer to consummate the transactions contemplated by this
Agreement.
5.4 CONSENTS.
There are no consents or other restrictions on assignment, including, but not
limited to, requirements for consents from Third Parties to any assignment (in
each case) that would be applicable in connection with the consummation of the
transactions contemplated by this Agreement by Buyer.
5.5 BANKRUPTCY.
There are no bankruptcy, reorganization or receivership proceedings pending,
being contemplated by or, to Buyer's knowledge, threatened against Buyer.
5.6 LITIGATION.
There is no suit, action, investigation or inquiry by any Person or by or before
any Governmental Authority, and no legal, administrative, or arbitration
proceedings pending, or to Buyer's knowledge, threatened against Buyer, or to
which Buyer is a party, that would have a material adverse effect upon the
ability of Buyer to consummate the transactions contemplated in this Agreement.
5.7 FINANCING.
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Buyer has, and shall have as of the Closing Date, sufficient funds with which to
pay the Purchase Price and consummate the transactions contemplated by this
Agreement.
5.8 REGULATORY.
Buyer is currently qualified, and shall continue to maintain its qualification,
to own and assume operatorship of federal and state oil, gas and mineral leases
in all jurisdictions (including the federal and state waters in the Gulf of
Mexico) where the Assets to be transferred to it are located, and the
consummation of the transactions contemplated in this Agreement will not cause
Buyer to be disqualified as such an owner or operator. To the extent required by
any applicable Laws, Buyer currently has, and will hereafter continue to
maintain, lease bonds, area-wide bonds or any other surety bonds as may be
required by, and in accordance with, all applicable Laws governing the ownership
and operation of such leases and will timely file any and all required reports
necessary for such operations with all Governmental Authorities having
jurisdiction over such operations.
5.9 INDEPENDENT EVALUATIONS
Buyer is sophisticated in the evaluation, purchase, ownership and operation of
oil and gas properties and related facilities. In making its decision to enter
into this Agreement and to consummate the transaction contemplated herein, Buyer
(a) has relied or shall rely solely on its own independent investigation and
evaluation of the Assets and the advice of its own legal, tax, economic,
environmental, engineering, geological and geophysical advisors and the express
provisions of this Agreement and not on any comments, statements, projections or
other materials made or given by any representatives or consultants or advisors
engaged by Seller, and (b) has satisfied or shall satisfy itself through its own
due diligence as to the environmental and physical condition of and contractual
arrangements and other matters affecting the Assets. Buyer has no knowledge of
any fact that results in the breach of any representation, warranty or covenant
of Seller given hereunder.
5.10 BROKER'S FEES.
Buyer has incurred no liability, contingent or otherwise, for brokers' or
finders' fees relating to the transactions contemplated by this Agreement for
which Seller or Seller's Affiliates shall have any responsibility.
5.11 ACCREDITED INVESTORS
Buyer is an "accredited investor," as such term is defined in Regulation D of
the Securities Act of 1933, as amended, and will acquire the Assets for its own
account and not with a view to a sale or distribution thereof in violation of
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, any applicable state blue sky Laws or any other applicable
securities Laws.
ARTICLE VI
CERTAIN AGREEMENTS
6.1 CONDUCT OF BUSINESS.
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Except as set forth in Schedule 6.1, Seller agrees that from and after the date
of execution of this Agreement until Closing, except as expressly contemplated
by this Agreement or as expressly consented to in writing by an officer of
Buyer, Seller shall:
(a) operate (or cause to be operated) the Assets in accordance with
Seller's usual, regular and ordinary manner consistent with past practice;
(b) maintain Seller's books of account and records relating to the
Assets in the usual, regular and ordinary manner, in accordance with Seller's
historical accounting practices;
(c) give written notice to Buyer as soon as is practicable of any
written notice received or given by Seller with respect to any alleged material
breach of any Lease or Material Contract;
(d) (i) not make any non-consent elections with respect to
operations affecting the Assets; provided further that with respect to any such
non-consent elections with respect to such operations, Seller may deliver notice
of same to Buyer and Buyer shall review and notify Seller in writing within
twenty-four (24) hours of receipt thereof whether it desires to consent or
non-consent such operations and if Buyer does not so timely respond to any such
notice, Buyer shall be deemed to have responded to same in the same manner as
Seller elects to vote with respect to such operation, and (ii) except emergency
operations, operations required under presently existing AFE's described on
Schedule 4.14 and operations undertaken to avoid any penalty provision of any
applicable agreement or order, not propose, agree to or commence any operations
on the Assets anticipated to cost (as to Seller's interest in the Assets) in
excess of $250,000 per operation; provided that with respect to emergency
operations, Seller shall notify Buyer of said emergency as soon as reasonably
practicable, and provided further that such respect to AFE's in excess of
$250,000 net to Seller's interest, Seller shall forward same to Buyer as soon as
reasonably practicable following receipt thereof and Buyer shall review and
respond to same in writing to Seller within twenty-four (24) hours of its
receipt thereof and if Buyer does not timely respond to any such AFE, Buyer
shall be deemed to have responded to same in the same manner as Seller elects to
vote;
(e) not enter into a Contract that if entered into prior to the date
of this Agreement, would be required to be listed in a schedule attached to this
Agreement, or materially amend or change the terms of any Contract applicable to
the Assets; and
(f) not transfer or relocate any equipment or Personal Property used
with respect to a Property to any other location.
Buyer acknowledges Seller owns undivided interests in certain of the properties
comprising the Assets that it is not the operator thereof, and Buyer agrees that
the acts or omissions of the other working interests owners (including the
operators) who are not Seller or any Affiliates of Seller shall not constitute a
breach of the provisions of this Article 6.1, nor shall any action required by a
vote of working interest owners constitute such a breach, so long as Seller has
voted its interest in a manner that complies with the provisions of this Article
6.1.
6.2 SUCCESSOR OPERATOR.
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While Buyer acknowledges that it desires to succeed Seller as operator of those
Assets or portions thereof that Seller may presently operate, Buyer acknowledges
and agrees that Seller cannot and does not covenant or warrant that Buyer shall
become successor operator of same since the Assets or portions thereof may be
subject to operating or other agreements that control the appointment of a
successor operator. Seller agrees, however, that as to the Assets it operates,
it shall use its commercially reasonable efforts to support the election or
appointment of Buyer as the successor operator effective as of the Closing and
further agrees that it shall designate and/or appoint by assignment, to the
extent legally possible, Buyer as successor operator effective as of the
Closing.
6.3 HSR ACT.
If applicable, within five (5) business days following the execution by Buyer
and Seller of this Agreement, Buyer and Seller will each prepare and
simultaneously file with the DOJ and the FTC the notification and report form
required for the transactions contemplated by this Agreement by the HSR Act, and
request early termination of the waiting period thereunder. Buyer and Seller
agree to respond promptly to any inquiries from the DOJ or the FTC concerning
such filings and to comply in all material respects with the filing requirements
of the HSR Act. Buyer and Seller shall cooperate with each other and, subject to
the terms of the Confidentiality Agreement, shall promptly furnish all
information to the other party that is necessary in connection with Buyer's and
Seller's compliance with the HSR Act. Buyer and Seller shall keep each other
fully advised with respect to any requests from or communications with the DOJ
or FTC concerning such filings and shall consult with each other with respect to
all responses thereto. Each of Seller and Buyer shall use its commercially
reasonable efforts to take all actions reasonably necessary and appropriate in
connection with any HSR Act filing to consummate the transactions consummated
hereby.
6.4 GOVERNMENTAL BONDS.
Buyer acknowledges that none of the bonds, letters of credit and guarantees, if
any, posted by Seller or its Affiliates with Governmental Authorities and
relating to the Assets (collectively, "Bonds") are transferable to Buyer. On or
before the Closing Date, and to the extent Buyer assumes the operatorship of the
affected properties, Buyer shall obtain, or cause to be obtained in the name of
Buyer or its designee, 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
and/or its Affiliates. In addition, at or prior to Closing, Buyer shall deliver
to Seller evidence of the posting of bonds or other security with all applicable
Governmental Authorities meeting the requirements of such authorities to own
and, where appropriate, operate, the Assets.
6.5 RECORD RETENTION.
Buyer, for a period of four (4) years (or seven (7) years for tax and accounting
records) following Closing, will (i) retain the Records in Buyer's business
records, (ii) provide Seller, its Affiliates, and its and their officers,
employees and representatives with access to the Records (to the extent that
Seller has not retained the original or a copy) 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 Article 14.2 of this
Agreement for review and copying at Seller's expense.
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6.6 NOTIFICATIONS.
Buyer will notify Seller promptly after Buyer reasonably concludes that any
representation or warranty of Seller contained in this Agreement is, becomes or
will be untrue in any material respect.
ARTICLE VII
BUYER'S CONDITIONS TO CLOSING
The obligations of Buyer to consummate the transactions provided for
herein are subject, at the option of Buyer, to the fulfillment on or prior to
the Closing of each of the following conditions:
7.1 REPRESENTATIONS.
The representations and warranties of Seller set forth in this Agreement shall
be true and correct in all material respects on and as of the Closing Date, with
the same force and effect as though such representations and warranties had been
made or given on and as of the Closing Date.
7.2 PERFORMANCE.
Seller shall have materially performed or complied with all obligations,
agreements, and covenants contained in this Agreement as to which performance or
compliance by Seller is required prior to or at the Closing Date so as to not
result in a Material Adverse Affect.
7.3 NO LEGAL PROCEEDINGS.
No material suit, action, or other proceeding shall be pending before any
Governmental Authority seeking to restrain, prohibit, enjoin, or declare
illegal, or seeking substantial damages in connection with, the transactions
contemplated by this Agreement.
7.4 TITLE DEFECTS AND ENVIRONMENTAL DEFECTS.
The sum of (i) all Title Defect Amounts less Title Benefit Amounts prior to the
Closing, plus (ii) all Remediation Amounts for Environmental Defects determined
under Article XIII prior to the Closing, shall be less than fifteen percent
(15%) of the Purchase Price.
7.5 HSR ACT.
If applicable, the waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired, notice
of early termination shall have been received, or a consent order issued (in
form and substance satisfactory to Seller) by or from applicable Governmental
Authorities.
ARTICLE VIII
SELLER'S CONDITIONS TO CLOSING
The obligations of Seller to consummate the transactions provided for
herein are subject, at the option of Seller, to the fulfillment on or prior to
the Closing of each of the following conditions precedent:
8.1 REPRESENTATIONS.
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The representations and warranties by Buyer set forth in this Agreement shall be
true and correct in all material respects on and as of the Closing Date, with
the same force and effect as though such representations and warranties had been
made or given on and as of the Closing Date.
8.2 PERFORMANCE.
Buyer shall have materially performed or complied with all obligations,
agreements, and covenants contained in this Agreement as to which performance or
compliance by Buyer is required prior to or at the Closing Date.
8.3 NO LEGAL PROCEEDINGS.
No material suit, action, or other proceeding shall be pending before any
Governmental Authority seeking to restrain, prohibit, or declare illegal, or
seeking substantial damages in connection with, the transactions contemplated by
this Agreement.
8.4 TITLE DEFECTS AND ENVIRONMENTAL DEFECTS.
The sum of (i) all Title Defect Amounts less Title Benefit Amounts prior to the
Closing, plus (ii) all Remediation Amounts for Environmental Defects determined
under Article XIII prior to the Closing, shall be less than ten percent (10%) of
the Purchase Price.
8.5 HSR ACT.
If applicable, the waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired, notice
of early termination shall have been received, or a consent order issued (in
form and substance satisfactory to Seller) by or from applicable Governmental
Authorities.
ARTICLE IX
CLOSING
9.1 DATE OF CLOSING.
Subject to the conditions stated in this Agreement, the sale by Seller and the
purchase by Buyer of the Assets pursuant to this Agreement (the "Closing") shall
occur on or before April 13, 2005, or such other date as Buyer and Seller may
agree upon in writing. The date of the Closing shall be the "Closing Date".
9.2 PLACE OF CLOSING.
The Closing shall be held at Seller's offices located at 00 X. Xxxxxxxx,
Xxxxxxxx Xxxx, Xxxxxxxx 00000.
9.3 CLOSING OBLIGATIONS.
At the Closing, the following documents shall be delivered and the following
events shall occur, the execution of each document and the occurrence of each
event being a condition precedent to the others and each being deemed to have
occurred simultaneously with the others:
(a) Each party Seller shall deliver to Buyer a certificate duly
executed by the Secretary or any Assistant Secretary of such Seller, dated as of
the Closing Date (i) attaching and certifying on behalf of Seller copies of the
resolutions of the Board of Directors or the Partners of such Seller, as
applicable, authorizing the execution, delivery and performance by Seller of
29
this Agreement and the transactions contemplated herein, and (ii) certifying on
behalf of such Seller the incumbency of each officer of such Seller executing
this Agreement or any document delivered by such Seller at Closing.
(b) Buyer shall deliver to Seller a certificate duly executed by the
Secretary or any Assistant Secretary of Buyer, dated as of the Closing Date (i)
attaching and certifying on behalf of Buyer copies of resolutions authorizing
the execution, delivery and performance by Buyer of this Agreement and the
transactions contemplated herein, and (ii) certifying on behalf of Buyer the
incumbency of each officer of Buyer executing on behalf of Buyer this Agreement
or any document delivered by Buyer at Closing.
(c) Seller and Buyer shall execute and deliver the Assignment, in
sufficient counterparts to facilitate recording in the applicable counties and
parishes in which the Assets are located or recordings are required to be made.
(d) Seller and Buyer shall execute and deliver assignments, on
appropriate forms, of interests in state and/or federal leases comprising the
Assets, if any.
(e) Seller and Buyer shall execute and deliver the Preliminary
Settlement Statement.
(f) Buyer shall deliver to Seller, to the accounts designated in the
Preliminary Settlement Statement, by direct bank or wire transfer in same day
funds, the Adjusted Purchase Price, after giving effect to the Deposit.
(g) Seller shall deliver on forms supplied by Buyer and reasonably
acceptable to Seller transfer orders or letters in lieu thereof directing all
purchasers of production or other payors to make payment to Buyer of proceeds
attributable to production from the Assets from and after the Effective Time,
for delivery by Buyer to the purchasers of production or payors.
(h) Seller shall deliver an executed statement described in Treasury
Regulation Section 1.1445-2(b)(2) certifying that Seller is not a foreign person
within the meaning of the Code.
(i) Subject to Article 6.2, to the extent applicable and required
under applicable Laws, for any state and/or federal lease included in the
Assets, Seller shall deliver designation of operator forms.
(j) Seller and Buyer shall execute and deliver any other agreements,
instruments or documents which are required by terms of this Agreement to be
executed and/or delivered at the Closing.
9.4 RECORDS.
In addition to the obligations set forth under Article 9.3 above, Seller shall
deliver to Buyer possession of the Records within five (5) days following
Seller's receipt of Buyer's request furnished at any time following the fifth
(5th) business day following the Closing.
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ARTICLE X
EMPLOYEE MATTERS
10.1 EMPLOYEES AND CONTRACT PERSONNEL.
Seller shall be solely responsible for all obligations owed to its Employees and
Contract Personnel as a result of the execution and performance of this
Agreement.
10.2 SELLER'S EMPLOYEE BENEFIT PLANS.
Seller has and shall retain sole responsibility for Seller's employee benefit
plans. Buyer shall not assume any responsibility for Seller's employee benefit
plans.
10.3 NO THIRD PARTY RIGHTS.
Seller and Buyer do not intend to create any third-party beneficiary rights
respecting any Employee or any Contract Personnel as a result of the provisions
herein and specifically hereby negate any such intention.
ARTICLE XI
ACCESS/DISCLAIMERS
11.1 ACCESS.
(a) From and after the date of execution of this Agreement and up to
and including the Closing Date (or date of early termination of this Agreement)
but subject to the other provisions of this Article XI and obtaining any
required consents of Third Parties, including Third Party operators of the
Assets (with respect to which consents Seller shall use commercially reasonable
efforts to obtain), Seller shall afford to Buyer and its officers, employees,
agents, accountants, attorneys, investment bankers and other authorized
representatives ("Buyer's Representatives") full access, during normal business
hours, to the Assets and all Records and other documents in Seller's or any
their respective Affiliates' possession relating primarily to the Assets. Seller
shall also make available to Buyer and Buyer's Representatives, upon reasonable
notice during normal business hours, Seller's personnel knowledgeable with
respect to the Assets in order that Buyer may make such diligence investigation
as Buyer considers necessary or appropriate. All investigations and due
diligence conducted by Buyer or any Buyer's Representative shall be conducted at
Buyer's sole cost, risk and expense and any conclusions made from any
examination done by Buyer or any Buyer's Representative shall result from
Buyer's own independent review and judgment.
(b) Buyer shall be entitled to conduct a Phase I environmental
property assessment with respect to the Assets. Seller or its designee shall
have the right to accompany Buyer and Buyer's Representatives whenever they are
on site on the Assets and also to collect split test samples if any are
collected. Notwithstanding anything herein to the contrary, Buyer shall not have
access to, and shall not be permitted to conduct any environmental due diligence
(including any Phase I environmental property assessments) with respect to any
Assets where Seller does not have the authority to grant access for such due
diligence (provided, however, Seller shall use its commercially reasonable
efforts to obtain permission from any Third Party to allow Buyer and Buyer's
Representatives such access). In the event that Buyer's Phase I
31
environmental property assessments identify actual or potential "recognized
environmental concerns", then Buyer may request Seller's permission to conduct
additional Phase II environmental property assessments. The additional Phase II
environmental property assessment procedures relating to any additional
investigation shall be submitted to Seller in a Phase II environmental property
assessment plan. Thereafter, Seller may, in its sole discretion, approve said
Phase II environmental property assessment plan, in whole or in part and Buyer
shall not have the right to conduct any activities set forth in such plan until
such time that Seller has approved such plan in writing. Any such approved Phase
II environmental property assessment plan shall be performed in accordance with
this Article XI and in compliance with all Laws. In the event Seller has not
timely approved a Phase II assessment plan acceptable to Buyer for one or more
properties, or Buyer is unable to enter one or more of the Properties in order
to conduct of Phase I or II assessment, then Buyer shall have the right to
exclude the affected Properties from sale and to adjust the Purchase Price.
(c) Buyer shall coordinate its environmental property assessments
and physical inspections of the Assets with Seller to minimize any inconvenience
to or interruption of the conduct of business by Seller. Buyer shall abide by
Seller's, and any Third Party operator's safety rules, regulations, and
operating policies while conducting its due diligence evaluation of the Assets
including any environmental or other inspection or assessment of the Assets.
Buyer hereby defends, indemnifies and holds harmless each of the operators of
the Assets and Seller Indemnified Parties from and against (i) except as
provided in clause (ii) below, any and all Liabilities arising out of, resulting
from or relating to any field visit, environmental property assessment, or other
due diligence activity conducted by Buyer or any Buyer's Representative with
respect to the Assets, REGARDLESS OF FAULT, EXCEPTING ONLY ANY SELLER
INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AND (ii) all
Liabilities for personal injury or property damage of any Seller Indemnified
Party to the extent same are caused by or result from any negligence or willful
misconduct of Buyer or Buyer's Consultants in conducting or performing the
activities on the Properties; provided, however, that Buyer shall not be
obligated to defend, indemnify or hold harmless any Seller Indemnified Party
under this clause (ii) for any Seller Indemnified Party's negligence or willful
misconduct.
(d) Buyer agrees to promptly provide Seller, but in no less than
five (5) days after receipt or creation, copies of all final reports and test
results, prepared by Buyer and/or any of Buyer's Representatives and which
contain data collected or generated from Buyer's due diligence with respect to
the Assets. Seller shall not be deemed by its receipt of said documents or
otherwise to have made representation or warranty, expressed, implied or
statutory, as to the condition to the Assets or to the accuracy of said
documents or the information contained therein.
(e) Upon completion of Buyer's due diligence, Buyer shall at its
sole cost and expense and without any cost or expense to Seller or its
Affiliates, (i) close all bore holes from its Phase I environmental property
assessment and any approved work with respect to a Phase II environmental
property assessment in accordance with recognized industry standards, (ii)
repair all damage done to the Assets in connection with Buyer's due diligence,
(iii) restore the Assets to the approximate same or better condition than it was
prior to commencement of Buyer's due diligence and (iv) remove all equipment,
tools or other property brought onto the Assets in connection with Buyer's due
diligence. Any disturbance to the Assets (including, without
32
limitation, the real property associated with such Assets) resulting from
Buyer's due diligence will be promptly corrected by Buyer.
(f) Upon request by Seller, Buyer shall provide evidence of
insurance reasonably satisfactory to Seller prior to entering the Assets.
11.2 CONFIDENTIALITY.
Buyer acknowledges that, pursuant to its right of access to the Records or the
Assets, Buyer will become privy to confidential and other information of Seller
and that such confidential information shall be held confidential by Buyer and
Buyer's Representatives in accordance with the terms of the Confidentiality
Agreement. If the Closing should occur, the foregoing confidentiality
restriction on Buyer, including the Confidentiality Agreement, shall terminate
(except as to (i) such portion of the Assets that are not conveyed to Buyer
pursuant to the provisions of this Agreement, and (ii) the Excluded Assets).
11.3 DISCLAIMERS.
(a) EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE 12.1
OR ARTICLE IV OF THIS AGREEMENT, (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 BUYER 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 BUYER 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 12.1 OR
ARTICLE IV OF THIS AGREEMENT, 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 REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR
ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE
ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS 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
INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY
SELLER OR THIRD PARTIES WITH RESPECT TO THE ASSETS, (VIII) ANY OTHER MATERIALS
OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO
33
BUYER 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 (IX) ANY
IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT.
EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THIS
AGREEMENT, SELLER FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS,
STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS,
FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS
OF ANY ASSETS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM
DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY
UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT BUYER 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 OR DEFECTS (KNOWN OR UNKNOWN, LATENT,
DISCOVERABLE OR UNDISCOVERABLE), AND THAT BUYER HAS MADE OR CAUSED TO BE MADE
SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE. WITH RESPECT TO ANY OF THE ASSETS
THAT ARE LOCATED IN LOUISIANA, BUYER ACKNOWLEDGES THAT THIS WAIVER HAS BEEN
EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT LIMITATION, A WAIVER OF
WARRANTY AGAINST REHIBITORY VICES ARISING UNDER LOUISIANA CIVIL CODE ARTICLES
2520 THROUGH 2548, INCLUSIVE.
(c) OTHER THAN THOSE REPRESENTATIONS SET FORTH IN ARTICLE 4.15,
SELLER HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY
MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, 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 SUBJECT TO BUYER'S RIGHTS UNDER ARTICLE XIII AND
ARTICLE XIV, BUYER SHALL BE DEEMED TO BE TAKING THE ASSETS "AS IS" AND "WHERE
IS" WITH ALL FAULTS FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT BUYER
HAS MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS BUYER DEEMS
APPROPRIATE.
(d) SELLER AND BUYER AGREE THAT, TO THE EXTENT REQUIRED BY
APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS ARTICLE 11.3 ARE "CONSPICUOUS" DISCLAIMERS FOR THE
PURPOSE OF ANY APPLICABLE LAW.
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ARTICLE XII
TITLE MATTERS; CASUALTIES; TRANSFER RESTRICTIONS
12.1 SELLER'S TITLE.
(a) General Disclaimer of Title Warranties and Representations.
Except for the special warranty of title as set forth in Article 12.1(b) and
without limiting Buyer's remedies for Title Defects set forth in this Article
XII, Seller makes no warranty or representation, express, implied, statutory or
otherwise, with respect to Seller's title to any of the Assets and Buyer hereby
acknowledges and agrees that Buyer's sole remedies for any defect of title,
including any Title Defect, with respect to any of the Assets shall be (i) as
set forth in Article 12.2 and (ii) pursuant to the special warranty of title set
forth in Article 12.1(b).
(b) Special Warranty of Title. If the Closing occurs, then effective
as of the Closing Date, Seller warrants Defensible Title to the Properties and
the other Assets unto Buyer against every Person whomsoever lawfully claiming or
to claim the same or any part thereof by, through or under Seller or its
Affiliates, but not otherwise, subject, however, to the Permitted Encumbrances;
provided, however, that, except with respect to any liability of Seller for any
claim asserted in writing by Buyer to Seller in accordance with Article 12.1(c)
on or before the expiration of the Survival Period for the Asset in question for
breach of such special warranty, such special warranty shall cease and terminate
at the end of such Survival Period. No warranty of title shall be contained in
the Assignment. Said special warranty of title shall be subject to the further
limitations and provisions of this Article XII.
(c) Recovery on Special Warranty.
(i) Buyer's Assertion of Title Warranty Breaches. Prior to
expiration of the Survival Period, Buyer shall furnish Seller a Title Defect
Notice meeting the requirements of Article 12.2(a) setting forth any matters
which Buyer intends to assert as a breach of Seller's special warranty in
Article 12.1(b). For all purposes of this Agreement, Buyer shall be deemed to
have waived, and Seller shall have no further liability for, any breach of
Seller's special warranty that Buyer fails to assert by a Title Defect Notice
given to Seller on or before the expiration of the Survival Period applicable to
the Assets in question. Seller shall have a reasonable opportunity, but not the
obligation, to cure any Title Defect asserted by Buyer pursuant to this Article
12.1(c)(i). Buyer agrees to reasonably cooperate with any attempt by Seller to
cure any such Title Defect.
(ii) Limitations on Special Warranty. For purposes of Seller's
special warranty of title, (a) the value of each Property shown in Schedule 3.8
and the other Assets shall be deemed to be the Allocated Value thereof, as
adjusted herein and (b) the value of each Designated Unit (less and except any
Well listed in Schedule 3.8 that is located in such Designated Unit) shall be
deemed to be the sum of the Allocated Values of the Locations located in such
Designated Unit. Recovery on Seller's special warranty of title shall be limited
to an amount (without any interest accruing thereon) equal to the reduction in
the Purchase Price to which Buyer would have been entitled had Buyer asserted
the Title Defect giving rise to such
35
breach of Seller's special warranty of title as a Title Defect prior to Closing
pursuant to Article 12.2.
12.2 NOTICE OF TITLE DEFECTS; DEFECT ADJUSTMENTS.
(a) Title Defect Notices. On or before the Title Claim Date, Buyer
must deliver claim notices to Seller meeting the requirements of this Article
12.2(a) (collectively the "Title Defect Notices" and individually a "Title
Defect Notice") setting forth any matters which, in Buyer's reasonable opinion,
constitute Title Defects and which Buyer intends to assert as a Title Defect
pursuant to this Article XII. For purposes of this Article 12.2, a Designated
Unit shall be deemed to be (i) a Property for purposes of the definitions of Net
Revenue Interest, Working Interest or Permitted Encumbrance, and (ii) an Asset
for purposes of the definition of Title Defect. For all purposes of this
Agreement and notwithstanding anything herein to the contrary, Buyer shall be
deemed to have waived, and Seller shall have no liability for, any Title Defect
which Buyer fails to assert as a Title Defect by a Title Defect Notice received
by Seller on or before the Title Claim Date; provided, however, that, for
purposes of Seller's special warranty to title under Article 12.1(b), such
waiver shall not apply to any matter that prior to the Title Claim Date, is
neither reflected of record nor discovered by any of Buyer's or any of its
Affiliate's employees or any title attorney, xxxxxxx or other title examiner
while conducting Buyer's due diligence with respect to the Assets. To be
effective, each Title Defect Notice shall be in writing, and shall include (i) a
description of the alleged Title Defect(s), (ii) the Properties and/or other
Assets affected by the Title Defect (each a "Title Defect Property"), (iii) the
Allocated Value of each Title Defect Property, (iv) supporting documents
reasonably necessary for Seller to verify the existence of the alleged Title
Defect(s), and (v) the amount by which Buyer reasonably believes the Allocated
Value of each Title Defect Property is reduced by the alleged Title Defect(s)
and the computations upon which Buyer's belief is based. To give Seller an
opportunity to commence reviewing and curing Title Defects, Buyer agrees to use
reasonable efforts to give Seller, on or before the end of each calendar week
prior to the Title Claim Date, written notice of all Title Defects discovered by
Buyer during the preceding period, which notice may be preliminary in nature and
supplemented, amended, corrected or withdrawn prior to the Title Claim Date.
(b) Title Benefit Notices. Seller shall have the right, but not the
obligation, to deliver to Buyer on or before the Title Claim Date with respect
to each Title Benefit a notice (a "Title Benefit Notice") including (i) a
description of the Title Benefit, (ii) the Property affected by the Title
Benefit, and (iii) the amount by which Seller reasonably believes the Allocated
Value is increased by the Title Benefit, and the computations upon which
Seller's belief is based. Except for purposes of defending against or paying any
claim that Seller has breached its special warranty of title under
Article 12.1(c)(ii), Seller shall be deemed to have waived all Title Benefits of
which it has not given notice on or before the Title Claim Date.
(c) Seller's Right to Cure. Seller shall have the right, but not the
obligation, to attempt, at its sole cost, to cure at any time prior to the Title
Claim Date (the "Cure Period"), any Title Defects of which it has been advised
by Buyer.
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(d) Remedies for Title Defects. Subject to Seller's continuing right
to dispute the existence of a Title Defect and/or the Title Defect Amount
asserted with respect thereto and subject to the rights of the parties pursuant
to Article 15.1(d), in the event that any Title Defect timely asserted by Buyer
in accordance with Article 12.2(a) is not waived in writing by Buyer or cured on
or before the Title Claim Date, Seller shall, at its sole option, elect to:
(i) Subject to the Individual Title Defect Threshold, reduce
the Purchase Price by an amount ("Title Defect Amount") determined pursuant to
Article 12.2(g) or 12.2(j) as being the value of such Title Defect;
(ii) indemnify Buyer against all Liability resulting from such
Title Defect pursuant to an indemnity agreement (the "Title Indemnity
Agreement") in the form attached hereto as Exhibit C;
(iii) retain the entirety of the Title Defect Property that is
subject to such Title Defect (or accept a reassignment of such property),
together with all associated Assets, in which event the Purchase Price shall be
reduced by an amount equal to the Allocated Value of such Title Defect Property
and such associated Assets; or
(iv) if applicable, terminate this Agreement pursuant to
Article 15.1(d).
(e) Remedies for Title Benefits. With respect to each Property
affected by Title Benefits reported under Article 12.2(b), the Purchase Price
shall be increased by an amount (the "Title Benefit Amount") equal to the
increase in the Allocated Value for such Well caused by such Title Benefits, as
determined pursuant to Article 12.2(j).
(f) Exclusive Remedy. Except for Seller's special warranty of title
under Article 12.1(b), Article 12.2(f) shall be the exclusive right and remedy
of Buyer with respect to Seller's failure to have Defensible Title with respect
to any Asset.
(g) Title Defect Amount. The Title Defect Amount resulting from a
Title Defect shall be the amount by which the Allocated Value of the affected
Title Defect Property is reduced as a result of the existence of such Title
Defect and shall be determined in accordance with the following terms and
conditions:
(i) if Buyer and Seller agree on the Title Defect Amount, then
that amount shall be the Title Defect Amount;
(ii) if the Title Defect is an Encumbrance that is undisputed
and liquidated in amount, then the Title Defect Amount shall be the amount
necessary to be paid to remove the Title Defect from the Title Defect Property;
(iii) if the Title Defect represents a discrepancy between (A)
the Net Revenue Interest for any Title Defect Property and (B) the Net Revenue
Interest stated in Exhibit A, then the Title Defect Amount shall be the product
of the Allocated Value of such Title Defect Property multiplied by a fraction,
the numerator of which is the Net Revenue Interest decrease and the denominator
of which is the Net Revenue Interest stated in Exhibit A;
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(iv) if the Title Defect represents an obligation or
Encumbrance upon or other defect in title to the Title Defect Property of a type
not described above, the Title Defect Amount shall be determined by taking into
account the Allocated Value of the Title Defect Property, the portion of the
Title Defect Property affected by the Title Defect, the legal effect of the
Title Defect, the potential economic effect of the Title Defect over the life of
the Title Defect Property, the values placed upon the Title Defect by Buyer and
Seller and such other reasonable factors as are necessary to make a proper
evaluation; provided, however, that if such Title Defect is reasonably capable
of being cured, the Title Defect Amount shall not be greater than the actual
cost and expense incurred to cure such Title Defect;
(v) If (A) a Title Defect Property is not a Well (or
specified zone(s) therein), (B) such Title Defect Property does not have an
Allocated Value, (C) the Title Defect with respect to such Title Defect Property
causes a loss of title to such Title Defect Property, and (D) the loss of such
title to such Title Defect Property will prevent the continued operation or
production of a Well (or one or more specified zone(s) therein) shown in Exhibit
A (such Well or the specified zone(s) therein being referred to as the "Affected
Well") and the other Assets are not capable of providing an alternative means to
support, in all material respects, the continued operation or production of the
Affected Well, then such Title Defect Property (a "Defective Support Property")
and such Affected Well shall collectively be considered a single Title Defect
Property for purposes of this Article XII; provided, however, that the Title
Defect Amount resulting from the Title Defect affecting such Defective Support
Property shall be the lesser of (1) the reasonable cost to replace such
Defective Support Property (not to exceed the fair market value of such
Defective Support Property in its depreciated condition as of the Effective
Date), if such Defective Support Property is reasonably capable of being
replaced, (2) the reasonable cost of providing an alternative means to support
in all material respects the continued operation or production of the Affected
Well, or (3) the Title Defect Amount that would otherwise be applicable to such
Title Defect under this Article XII.
(vi) the Title Defect Amount with respect to a Title Defect
Property shall be determined without duplication of any costs or losses included
in another Title Defect Amount hereunder; and
(vii) notwithstanding anything to the contrary in this Article
XII, the aggregate Title Defect Amounts attributable to the effects of all Title
Defects upon any Title Defect Property shall not exceed the Allocated Value of
the Title Defect Property.
(h) Title Benefit Amount. The Title Benefit Amount resulting from a
Title Benefit shall be determined in accordance with the following methodology,
terms and conditions:
(i) if Buyer and Seller agree on the Title Benefit Amount,
then that amount shall be the Title Benefit Amount; and
(ii) if the Title Benefit represents a discrepancy between (A)
the Net Revenue Interest for any Property (or the specified zone(s) therein) and
(B) the Net Revenue Interest stated in Exhibit A, then the Title Benefit Amount
shall be the product of the Allocated Value of the affected Property multiplied
by a fraction, the numerator of which is the Net
38
Revenue Interest increase and the denominator of which is the Net Revenue
Interest stated in Exhibit A.
(i) Title Thresholds. Notwithstanding anything to the contrary, in
no event shall there be any adjustments to the Purchase Price or other remedies
provided by Seller for any individual Title Defect for which the Title Defect
Amount does not exceed Fifty Thousand Dollars ($50,000) ("Individual Title
Defect Threshold"), after which point Buyer shall be entitled to an adjustment
to the Purchase Price or other remedies with respect to the entire Title Defect
Amount for the affected Assets; provided however, that there shall be no
Individual Title Defect Threshold attributable to Title Defects resulting from
clauses (1) or (2) within the definition of Title Defect.
(j) Title Dispute Resolution. Seller and Buyer shall attempt to
agree on all Title Defects, Title Benefits, Title Defect Amounts and Title
Benefit Amounts prior to Closing. If Seller and Buyer are unable to so agree by
Closing, the Title Defect Amounts and Title Benefit Amounts in dispute shall be
exclusively and finally resolved pursuant to this Article 12.2(j). There shall
be a single arbitrator, who shall be a title attorney with at least ten (10)
years experience in oil and gas titles involving properties in the regional area
in which the identified Title Defect Properties are located, as selected by
mutual agreement of Buyer and Seller within fifteen (15) days after the end of
the Cure Period, and absent such agreement, by the Houston office of the
American Arbitration Association (the "Title Arbitrator"). The arbitration
proceeding shall be held in Houston, Texas and shall be conducted 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 Article. The
Title Arbitrator's determination shall be made within twenty (20) days after
submission of the matters in dispute and shall be final and binding upon both
parties, without right of appeal. In making his determination, the Title
Arbitrator shall be bound by the rules set forth in Articles 12.2(g) and 12.2(j)
and, subject to the foregoing, may consider such other matters as in the opinion
of the Title Arbitrator are necessary to make a proper determination. The Title
Arbitrator, however, may not award the Buyer a greater Title Defect Amount than
the Title Defect Amount claimed by Buyer in its applicable Title Defect Notice
and may not award Seller a greater Title Benefit Amount than the Title Benefit
Amount claimed by Seller in its applicable Title Benefit Notice. The Title
Arbitrator shall act as an expert for the limited purpose of determining the
specific disputed Title Defect, Title Benefit, Title Defect Amounts and/or Title
Benefit Amounts submitted by Buyer or Seller as applicable, and may not award
damages, interest or penalties to either party with respect to any matter.
Seller and Buyer shall each bear its own legal fees and other costs of
presenting its case. Each of Seller and Buyer shall bear one-half of the costs
and expenses of the Title Arbitrator. To the extent that the award of the Title
Arbitrator with respect to any Title Defect Amount or Title Benefit Amount is
not taken into account as an adjustment to the Purchase Price pursuant to
Article 3.5 or Article 3.6, then within ten (10) days after the Title Arbitrator
delivers written notice to Buyer and Seller of his award with respect to a Title
Defect Amount or Title Benefit Amount, (i) Buyer shall pay to Seller the amount,
if any, so awarded by the Title Arbitrator to Seller and (ii) Seller shall pay
to Buyer the amount, if any, so awarded by the Title Arbitrator to Buyer.
12.3 CASUALTY OR CONDEMNATION LOSS.
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(a) Notwithstanding anything herein to the contrary, from and after
the Effective Time and subject to the occurrence of the Closing, Buyer shall
assume all risk of loss with respect to production of Hydrocarbons through
normal depletion (including watering out of any Well, collapsed casing or sand
infiltration of any Well) and the depreciation of personal property due to
ordinary wear and tear, in each case, with respect to the Assets.
(b) 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 exceeds ten percent (10%) of the Purchase
Price based on the Allocated Value of the affected Assets, Buyer shall
nevertheless be required to close and Seller shall elect by written notice to
Buyer prior to Closing either (i) to cause the Assets affected by such casualty
or taking to be repaired or restored to at least its condition prior to such
casualty or taking, at Seller's sole cost, as promptly as reasonably practicable
(which work may extend no longer than sixty (60) days after the Closing Date),
(ii) to indemnify Buyer through a document reasonably acceptable to Seller and
Buyer against any costs or expenses that Buyer reasonably incurs to repair the
Assets subject to such casualty or taking or (iii) to treat such casualty or
taking as a Title Defect with respect to the affected Asset or Assets under
Article 12.2. In each case, Seller shall retain all rights to insurance,
condemnation awards and other claims against third parties with respect to the
casualty or taking except to the extent the parties otherwise agree in writing.
(c) 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 to the
Assets as a result of such individual casualty or taking is ten percent (10%) or
less of the Purchase Price based on the Allocated Value of the affected Assets,
Buyer shall nevertheless be required to close and Seller, at Closing, shall pay
to Buyer all sums paid to Seller by Third Parties by reason of such casualty or
taking insofar as with respect to the Assets and shall assign, transfer and set
over to Buyer or subrogate Buyer to all of Seller's right, title and interest
(if any) in insurance claims, unpaid awards, and other rights against Third
Parties (excluding any Liabilities, other than insurance claims, of or against
any Seller Indemnified Parties) arising out of such casualty or taking insofar
as with respect to the Assets; provided, however, that Seller shall reserve and
retain (and Buyer shall assign to Seller) all rights, title, interests and
claims against Third Parties for the recovery of Seller's costs and expenses
incurred prior to the Closing in pursuing or asserting any such insurance claims
or other rights against third parties or in defending or asserting rights in
such condemnation or eminent domain action with respect to the Assets.
(d) If any action for condemnation or taking under right of eminent
domain is pending or threatened with respect to any Asset or portion thereof
after the date of this Agreement, but no taking of such Asset or portion thereof
occurs prior to the Closing Date, Buyer shall nevertheless be required to close
and Seller, at Closing, shall assign, transfer and set over to Buyer or
subrogate Buyer to all of Seller's right, title and interest (if any) in such
condemnation or eminent domain action, including any future awards therein,
insofar as they are attributable to the Assets threatened to be taken, except
that Seller shall reserve and retain (and Buyer shall assign to Seller) all
rights, titles, interests and claims against Third Parties for the recovery of
Seller's costs and expenses incurred prior to the Closing in defending or
asserting rights in such action with respect to the Assets.
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12.4 PREFERENTIAL PURCHASE RIGHTS AND CONSENTS TO ASSIGN.
(a) With respect to each preferential purchase right pertaining to an Asset and
the transactions contemplated hereby, Seller shall promptly following execution
of this Agreement, send to the holder of each such right a notice, in material
compliance with the contractual provisions applicable to such right. In
addition, promptly following execution of this Agreement, Seller shall send to
each holder of a right to consent to assignment pertaining to the Assets and the
transactions contemplated hereby a notice seeking such party's consent to the
transaction contemplated hereby. Seller shall contemporaneously furnish Buyer
with a copy of each of the foregoing notices and each reply by the Third
Parties.
(b) If, prior to the Closing, any holder of a preferential purchase
right notifies Seller that it intends to consummate the purchase of the Asset to
which its preferential purchase right applies, the exercise of such preferential
purchase right shall constitute a Title Defect, such Asset shall be excluded
from the Assets to be conveyed to Buyer to the extent of the interest affected
by the preferential purchase right, and the Purchase Price shall be reduced by
the Allocated Value of the relevant Asset allocable to such interest. Seller
shall be entitled to all proceeds paid by a party exercising a preferential
purchase right prior to the Closing. If such holder of such preferential
purchase right thereafter fails to consummate the purchase of the Asset covered
by such right on or before thirty (30) days following the Closing Date, then
Seller shall so notify Buyer, and Buyer shall purchase on or before ten (10)
business days following receipt of such notice, subject to Buyer's satisfaction
that such preferential right has been waived, such Asset from Seller, under the
terms of this Agreement for a price equal to the portion of the Purchase Price
previously allocated to it.
(c) If a preferential purchase right burdening any Asset is not
exercised, or the time for exercising such preferential purchase right has not
expired, prior to the Closing Date, then such Asset shall not be conveyed at
Closing. Upon receipt of the waiver of any such preferential right the Asset
shall be conveyed to Buyer.
(d) All Assets for which preferential purchase rights have been
waived, or as to which the period to exercise such right has expired prior to
the Closing, shall be sold to Buyer at the Closing pursuant to the provisions of
this Agreement.
(e) If Seller fails to obtain a consent prior to the Closing and
Buyer reasonably concludes that the failure to obtain such consent would cause
the assignment of such Asset to Buyer to be void or otherwise ineffective, then
the portion of the Asset subject to such failed consent shall constitute a Title
Defect, and Seller and Buyer shall have the rights and remedies set forth in
Article 12.2 with respect thereto.
(f) Anything in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any Lease, Contract or
other agreement or any claim or right or any benefit or obligation thereunder or
resulting therefrom if an assignment thereof, without the consent of a third
party thereto, would constitute a breach or violation thereof and such consent
has not been received as of the Closing. If such a consent is required and has
not been received or if an attempted assignment is ineffective, Seller shall
cooperate with the Buyer in any reasonable arrangement that (i) provides for
Buyer the benefits under any such Leases, Contracts or other agreements until
such time as the required consent is obtained or the
41
attempted assignment is effective, as the case may be, and (ii) requires Buyer
either to promptly make, on the Seller's behalf, any payments due under such
Lease, Contract or other agreement and attributable to the period after the
Effective Date or to promptly reimburse Seller for any such payments made by
Seller.
ARTICLE XIII
ENVIRONMENTAL MATTERS
13.1 ENVIRONMENTAL DEFECTS.
(a) Assertions of Environmental Defects. Buyer shall deliver claim
notices to Seller meeting the requirements of this Article 13.1(a) (collectively
the "Environmental Defect Notices" and individually an "Environmental Defect
Notice") for all Environmental Defects, not later than five (5) days prior to
Closing (the "Environmental Claim Date") setting forth any matters which, in
Buyer's reasonable opinion, constitute Environmental Defects and which Buyer
intends to assert as Environmental Defects pursuant to this Article 13.1. For
all purposes of this Agreement but subject to Buyer's remedy for a breach of
Seller's representation contained in Article 4.15, Buyer shall be deemed to have
waived any Environmental Defect which Buyer fails to assert as an Environmental
Defect by a Environmental Defect Notice received by Seller on or before the
Environmental Claim Date. To be effective, each Environmental Defect Notice
shall be in writing and shall include (i) a description of the matter
constituting the alleged Environmental Defect, (ii) a description of each Asset
(or portion thereof) that is affected by the alleged Environmental Defect, (iii)
Buyer's assertion of the Allocated Value of the portion of the Assets affected
by the alleged Environmental Defect, (iv) supporting documents reasonably
necessary for Seller to verify the existence of the alleged Environmental
Defect, and (v) a calculation of the Remediation Amount (itemized in reasonable
detail) that Buyer asserts is attributable to such alleged Environmental Defect.
Buyer's calculation of the Remediation Amount included in the Environmental
Defect Notice must describe in reasonable detail the Remediation proposed for
the Environmental Condition that gives rise to the asserted Environmental Defect
and identify all assumptions used by the Buyer in calculating the Remediation
Amount, including the standards that Buyer asserts must be met to comply with
Environmental Laws. Seller shall have the right, but not the obligation, to cure
any claimed Environmental Defect on or before Closing.
(b) Remedies for Environmental Defects. Subject to Seller's
continuing right to dispute the existence of a Environmental Defect and/or the
Remediation Amount asserted with respect thereto, in the event that any
Environmental Defect timely asserted by Buyer in accordance with Article 13.1(a)
is not waived in writing by Buyer or cured on or before Closing, Seller shall,
at its sole option, elect to:
(i) Subject to the Individual Environmental Threshold, reduce
the Purchase Price by the Remediation Amount;
(ii) assume responsibility for the Remediation of such
Environmental Defect;
42
(iii) retain the entirety of the Asset that is subject to such
Environmental Defect, together with all associated Assets, in which event the
Purchase Price shall be reduced by an amount equal to the Allocated Value of
such Asset and such associated Assets; or
(iv) if applicable, terminate this Agreement pursuant to
Article 15.1(d).
If Seller elects the option set forth in clause (i) above, Buyer shall be deemed
to have assumed responsibility for Remediation of such Environmental Defect and
such Environmental Defect and all Liabilities with respect thereto shall be
deemed to constitute Assumed Obligations. If Seller elects the option set forth
in clause (ii) above, Seller shall use reasonable efforts to implement such
Remediation in a manner which is consistent with the requirements of
Environmental Laws in a timely fashion for the type of Remediation that Seller
elects to undertake and shall have access to the affected Assets after the
Closing Date to implement and complete such Remediation in accordance with an
Access Agreement in substantially the form attached hereto as Exhibit D (the
"Access Agreement"). Seller will be deemed to have adequately completed the
Remediation required in the immediately preceding sentence upon receipt of a
certificate or approval from the applicable Governmental Authority that the
Remediation has been completed.
(c) Exclusive Remedy. Subject to Article 15.1(d) and Buyer's remedy
for a breach of Seller's representation contained in Article 4.15, Article
13.1(b) shall be the exclusive right and remedy of Buyer with respect to any
Environmental Defect.
(d) Environmental Threshold. Notwithstanding anything to the
contrary, in no event shall there be any adjustments to the Purchase Price or
other remedies provided by Seller for any individual Environmental Defect for
which the Remediation Amount does not exceed Sixty Thousand Dollars ($60,000)
("Individual Environmental Threshold"), after which point Buyer shall be
entitled to an adjustment to the Purchase Price or other remedies with respect
to the entire Environmental Defect for the affected Assets.
(e) Environmental Dispute Resolution. Seller and Buyer shall attempt
to agree on all Environmental Defects and Remediation Amounts prior to Closing.
If Seller and Buyer are unable to so agree, the Environmental Defects and/or
Remediation Amounts then in dispute shall be exclusively and finally resolved by
arbitration pursuant to this Article 13.1. There shall be a single arbitrator,
who shall be an environmental attorney with at least ten (10) years experience
in environmental matters involving oil and gas producing properties in the
regional area in which the affected Assets are located, as selected by mutual
agreement of Buyer and Seller within fifteen (15) days after the Closing Date,
and absent such agreement, by the Houston office of the American Arbitration
Association (the "Environmental Arbitrator"). The arbitration proceeding shall
be held in Houston, Texas and shall be conducted 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 Article. The
Environmental Arbitrator's determination shall be made within twenty (20) days
after submission of the matters in dispute and shall be final and binding upon
both parties, without right of appeal. In making his determination, the
Environmental Arbitrator shall be bound by the rules set forth in this Article
13.1 and, subject to the foregoing, may consider such other matters as in the
opinion of the Environmental Arbitrator
43
are necessary or helpful to make a proper determination. The Environmental
Arbitrator, however, may not award the Buyer a greater Remediation Amount than
the Remediation Amount claimed by Buyer in its applicable Environmental Defect
Notice. The Environmental Arbitrator shall act as an expert for the limited
purpose of determining the specific disputed Environmental Defects and/or
Remediation Amounts submitted by either party and may not award damages,
interest or penalties to either party with respect to any matter. Seller and
Buyer shall each bear its own legal fees and other costs of presenting its case.
Each of Seller and Buyer shall bear one-half of the costs and expenses of the
Environmental Arbitrator. To the extent that the award of the Environmental
Arbitrator with respect to any Remediation Amount is not taken into account as
an adjustment to the Purchase Price pursuant to Article 3.6, then within ten
(10) days after the Environmental Arbitrator delivers written notice to Buyer
and Seller of his award with respect to a Remediation Amount, and subject to
Article 13.1, including Seller's rights under Article 13.1(b)(b)(iii),(i) Buyer
shall pay to Seller the amount, if any, so awarded by the Environmental
Arbitrator to Seller and (ii) Seller shall pay to Buyer the amount, if any, so
awarded by the Environmental Arbitrator to Buyer.
13.2 NORM, WASTES AND OTHER SUBSTANCES.
Buyer acknowledges that (i) the Assets have been used for exploration,
development, and production of oil and gas and that there may be petroleum,
produced water, wastes, or other substances or materials located in, on or under
the Assets or associated with the Assets, (ii) some of the Personal Property and
Lands may contain asbestos, NORM or other Hazardous Substances, (iii) NORM may
affix or attach itself to the inside of xxxxx, materials, and equipment as
scale, or in other forms, (iv) the xxxxx, materials, and equipment comprising or
located on the Assets or included in the Assets may contain NORM and other
wastes or Hazardous Substances, and (v) 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.
Buyer further acknowledges that special procedures may be required for the
assessment, remediation, removal, transportation, or disposal of environmental
media, wastes, asbestos, NORM and other Hazardous Substances from the Assets.
ARTICLE XIV
ASSUMPTION; SURVIVAL, INDEMNIFICATION
14.1 ASSUMPTION BY BUYER.
Without limiting Buyer's rights to indemnity under this Article XIV, Buyer's
rights under any Title Indemnity Agreement and any Access Agreement, from and
after the Closing Buyer assumes and hereby agrees to fulfill, perform, pay and
discharge (or cause to be fulfilled, performed, paid or discharged) all
obligations and Liabilities, known or unknown, with respect to the Assets,
regardless of whether such obligations or Liabilities arose prior to, or after,
the Effective Time, including but not limited to obligations and Liabilities
relating in any manner to the use, ownership or operation of the Assets,
including but not limited to obligations to (a) furnish makeup gas and/or settle
Imbalances according to the terms of applicable gas sales, processing, gathering
or transportation Contracts, and, (b) pay working interests, royalties,
overriding royalties and other interests, owners revenues or proceeds
attributable to sales of Hydrocarbons relating to the Properties, including
those held in suspense, (c) properly plug and abandon any and all Xxxxx,
including inactive Xxxxx or temporarily abandoned Xxxxx, drilled on the
Properties or otherwise pursuant to the Assets, (d) replug any Well, wellbore,
or previously
44
plugged Well on the Properties to the extent required or necessary, (e)
dismantle or decommission and remove any Personal Property and other property of
whatever kind related to or associated with operations and activities conducted
by whomever on the Properties or otherwise pursuant to the Assets, (f) clean up,
restore and/or remediate the premises covered by or related to the Assets in
accordance with applicable agreements and Laws, and (g) perform all obligations
applicable to or imposed on the lessee, owner, or operator under the Leases and
the Applicable Contracts, or as required by Laws (all of said obligations and
Liabilities, subject to the exclusions below, herein being referred to as the
"Assumed Obligations"); provided, however, Buyer does not assume, and Seller
shall retain responsibility for, any obligations or Liabilities:
(i) attributable to or arise out of the ownership, use or
operation of the Excluded Assets;
(ii) attributable to or arise out of the actions, suits or
proceedings, if any, set forth on Schedule 14.1, except insofar and only insofar
as they arise after the Effective Time or are attributable or relate to the
ownership or operation of the Assets, or production therefrom, for periods after
the Effective Time;
(iii) A claim for personal injury or death occurring prior to
the Closing Date to the extent Seller has liability for such claim and such
claim arises out of or is attributable to Seller's ownership or operation of the
Assets prior to the Closing Date ; or
(iv) Seller's disposal or transportation of any Hazardous
Substances to any location not on the Assets or lands pooled or unitized
therewith in violation of any Environmental Law.
14.2 INDEMNITIES OF SELLER.
Effective as of the Closing, subject to the limitations set forth in this
Article XIV including, without limitation Seller's Indemnity Cap and Buyer's
Indemnity Time Limit set forth in Article 14.4, Seller shall be responsible for,
shall pay on a current basis, and hereby defends, indemnifies, holds harmless
and forever releases Buyer and its Affiliates, and all of its and their
respective stockholders, partners, members, directors, officers, managers,
employees, agents and representatives (collectively, "Buyer Indemnified
Parties") from and against any and all Liabilities, arising from, based upon,
related to or associated with:
(a) any breach by Seller of its representations or warranties
contained in Article IV;
(b) any breach by Seller of its covenants and agreements under this
Agreement; or
(c) (i) any act or omission by Seller involving or relating to the
Excluded Assets, or (ii) the actions, suits or proceedings, if any, set forth on
Schedule 14.1, except insofar and only insofar as they arise after the Effective
Time or are attributable or relate to the ownership or operation of the Assets,
or production therefrom, for periods after the Effective Time.
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14.3 INDEMNITIES OF BUYER
(a) Effective as of the Closing, Buyer and its successors and
assigns shall assume, be responsible for, shall pay on a current basis, and
hereby defends, indemnifies, holds harmless and forever releases Seller and its
Affiliates, and all of their respective stockholders, partners, members,
directors, officers, managers, employees, agents and representatives
(collectively, "Seller Indemnified Parties") from and against any and all
Liabilities arising from, based upon, related to or associated with:
(i) any breach by Buyer of its representations or warranties
contained in Article V;
(ii) any breach by Buyer of its covenants and agreements under
this Agreement;
(iii) the Assumed Obligations; or
(iv) except as provided otherwise in Article 12.1, Title
Defects related or attributable to the Assets.
(b) Notwithstanding anything herein to the contrary and without
limiting Buyer's rights pursuant to this Article XIV, in addition to the
indemnities set forth in Article 14.3(a), effective as of the Closing, Buyer and
its successors and assigns shall assume, be responsible for, shall pay on a
current basis, and hereby defends, indemnifies, holds harmless and forever
releases the Seller Indemnified Parties from and against any and all Liabilities
arising from, based upon, related to or associated with any Environmental
Condition or other environmental matter related or attributable to the Assets,
arising on or after the Effective Time, including the presence or disposal of
any Hazardous Substance or other material of any kind in, on or under the Assets
or other property (whether neighboring or otherwise and including any liability
of any Seller Indemnified Party with respect to the Assets under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Sections 9601 et. seq.), the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. Section 6901 et. seq.), the Clean Water Act (33
U.S.C. Sections 466 et. seq.), the Safe Drinking Water Act (14 U.S.C. Sections
1401-1450), the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801
et. seq.), the Toxic Substance Control Act (15 U.S.C. Sections 2601-2629), the
Clean Air Act (42 U.S.C. Section 7401 et. seq.) as amended, and the Clean Air
Act Amendments of 1990, and all state and local Environmental Laws.
14.4 SELLER INDEMNITY CAP AND BUYER'S INDEMNITY TIME LIMIT.
Notwithstanding anything to the contrary in this Agreement, Seller shall not be
required to defend, indemnify or hold harmless Buyer for aggregate Liabilities
in excess of Twenty Five Million ($25,000,000) Dollars. (Seller's Indemnity
Cap") As to those liabilities which aggregated are below the Seller Indemnity
Cap, Seller shall have no obligation to defend, indemnify and hold harmless
Buyer for any liabilities of which Seller is not notified in writing by Buyer on
or before two years from the Closing. ("Buyer's Indemnity Time Limit").
14.5 EXPRESS NEGLIGENCE.
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THE INDEMNIFICATION, RELEASE AND ASSUMED OBLIGATIONS PROVISIONS PROVIDED FOR IN
THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, LOSSES,
COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE OR RESULTED SOLELY OR IN PART FROM
THE GROSS, SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT
LIABILITY OR OTHER FAULT OR VIOLATION OF LAW OF OR BY ANY INDEMNIFIED PARTY.
BUYER AND SELLER ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS
NEGLIGENCE RULE AND IS CONSPICUOUS.
14.6 EXCLUSIVE REMEDY.
Notwithstanding anything to the contrary contained in this Agreement, Article
XI, Article XII, Article XIII and Article XIV contain the parties' exclusive
remedy against each other with respect to breaches of the representations,
warranties, covenants and agreements of the parties contained in this Agreement.
Except for the remedies contained in Article XI, Article XII, Article XIII and
Article XIV, and effective as of Closing, Buyer, on its own behalf and on behalf
of its Affiliates, hereby releases, remises and forever discharges Seller and
its Affiliates and all such parties' stockholders, partners, members, directors,
officers, employees, agents and representatives from any and all suits, legal or
administrative proceedings, claims, demands, damages, losses, costs,
Liabilities, interest, or causes of action whatsoever, in Law or in equity,
known or unknown, which Buyer or its Affiliates might now or subsequently may
have, based on, relating to or arising out of this Agreement, the ownership, use
or operation of the Assets, or the condition, quality, status or nature of the
Assets, including rights to contribution under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, breaches of
statutory or implied warranties, nuisance or other tort actions, rights to
punitive damages, common law rights of contribution, and rights under insurance
maintained by Seller or any of its Affiliates, excluding, however, any
contractual rights (apart from this Agreement) existing as of the date hereof
between (i) Buyer or any of Buyer's Affiliates, on the one hand and (ii) Seller
or any of Seller's Affiliates, on the other hand, under contracts between them
relating to the Assets (if any).
14.7 INDEMNIFICATION PROCEDURES.
All claims for indemnification under Articles 11.1(c), 14.2 and 14.3 shall be
asserted and resolved as follows:
(a) For purposes of this Article XIV, the term "Indemnifying Party"
when used in connection with particular Liabilities shall mean the party or
parties having an obligation to indemnify another party or parties with respect
to such Liabilities pursuant to this Article XIV, and the term "Indemnified
Party" when used in connection with particular Liabilities shall mean the party
or parties having the right to be indemnified with respect to such Liabilities
by another party or parties pursuant to this Article XIV.
(b) To make claim for indemnification under Articles 11.1(c), 14.2
or 14.3, an Indemnified Party shall notify the Indemnifying Party of its claim
under this Article 14.7, including the specific details of and specific basis
under this Agreement for its claim (the "Claim Notice"). In the event that the
claim for indemnification is based upon a claim by a Third Party against the
Indemnified Party (a "Claim"), the Indemnified Party shall provide its Claim
Notice promptly after the Indemnified Party has actual knowledge of the Claim
and shall enclose a copy
47
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
Article 14.7 shall not relieve the Indemnifying Party of its obligations under
Articles 11.1(c), 14.2 or 14.3 (as applicable) 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 materially prejudices the
Indemnifying Party's ability to defend against the claim. In the event that the
claim for indemnification 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 that was inaccurate or
breached.
(c) In the case of a claim for indemnification based upon a Claim,
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 such Claim at the sole cost and expense
of the Indemnifying Party. The Indemnified Party is authorized, prior to and
during such thirty (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 is not prejudicial to the Indemnifying Party.
(d) If the Indemnifying Party admits its liability, 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 Article 14.7(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).
(e) If the Indemnifying Party does not admit its liability 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) days following receipt of such notice to (i) admit
in writing its liability for the Claim and (ii) if liability is so admitted,
reject, in its reasonable judgment, the proposed settlement.
(f) In the case of a claim for indemnification not based upon a
Claim, the Indemnifying Party shall have thirty (30) days from its receipt of
the Claim Notice to (i) cure the Liabilities complained of, (ii) admit its
liability for such Liability or (iii) dispute the claim for such Liabilities. If
the Indemnifying Party does not notify the Indemnified Party within such 30 day
period that it has cured the Liabilities or that it disputes the claim for such
Liabilities, the
48
amount of such Liabilities shall conclusively be deemed a liability of the
Indemnifying Party hereunder.
14.8 SURVIVAL.
(a) The representations and warranties of the parties in Article IV and Article
V (other than the representations and warranties in Articles 4.1, 4.2, 4.8, 4.9,
4.15, 4.16, 5.1, 5.2 and 12.1(b)) shall survive the Closing for a period of two
years. The representation and warranty of Seller in Article 12.1(b) shall
survive until the expiration of the applicable Survival Period. The
representations and warranties in Article 4.8 shall survive the Closing for a
period of six (6) months following Closing. The representations and warranties
in Articles 4.9 and 4.12 shall survive the Closing for ninety (90) days. The
representations and warranties in Article 4.15 shall survive the Closing for a
period of six (6) months The representations and warranties in Articles 4.16
shall survive until the expiration of any applicable statute of limitation.
Subject to the foregoing and as set forth in Article 14.8(b), the remaining
representations and warranties shall survive the Closing without time limit.
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 such a
representation or warranty, prior to its expiration date.
(b) The indemnities in Articles 14.2(a), 14.2(b) and 14.3(a)(i) and
14.3(a)(ii)) shall terminate as of the termination date of each respective
representation, warranty, covenant or agreement that is subject to
indemnification, except in each case as to matters for which a specific written
claim for indemnity has been delivered to the Indemnifying Party on or before
such termination date. Buyer's indemnities in Articles 14.3(a)(iii) and 14.3(b)
shall be deemed covenants running with the Assets (provided that Buyer and its
successors and assigns shall not be released from any of, and shall remain
jointly and severally liable to the Seller Indemnified Parties for, the
obligations or Liabilities of Buyer under such Articles of this Agreement upon
any transfer or assignment of any Asset) and Seller's indemnity set forth in
Article 14.2(c) shall survive the Closing without time limit.
14.9 WAIVER OF RIGHT TO RESCISSION.
Seller and Buyer acknowledge that the payment of money, as limited by the terms
of this Agreement, shall be adequate compensation for breach of any
representation, warranty, covenant or agreement contained herein or for any
other claim arising in connection with or with respect to the transactions
contemplated in this Agreement. As the payment of money shall be adequate
compensation, Buyer and Seller waive any right to rescind this Agreement or any
of the transactions contemplated hereby.
14.10 INSURANCE, TAXES.
The amount of any Liabilities for which any of the Buyer Indemnified Parties is
entitled to indemnification under this Agreement or in connection with or with
respect to the transactions contemplated in this Agreement shall be reduced by
any corresponding insurance proceeds actually realized.
14.11 NON-COMPENSATORY DAMAGES.
None of the Buyer Indemnified Parties nor Seller Indemnified Parties shall be
entitled to recover from Seller or Buyer, or their respective Affiliates, any
indirect, consequential, punitive
49
or exemplary damages or damages for lost profits of any kind arising under or in
connection with this Agreement or the transactions contemplated hereby, except
to the extent any such party suffers such damages (including costs of defense
and reasonable attorney's fees incurred in connection with defending of such
damages) to a Third Party, which damages (including costs of defense and
reasonable attorney's fees incurred in connection with defending against such
damages) shall not be excluded by this provision as to recovery hereunder.
Subject to the preceding sentence, Buyer, on behalf of each of the Buyer
Indemnified Parties, and Seller, on behalf of each of Seller Indemnified
Parties, waive any right to recover punitive, special, exemplary and
consequential damages, including damages for lost profits, arising in connection
with or with respect to this Agreement or the transactions contemplated hereby.
14.12 COOPERATION BY BUYER - RETAINED LITIGATION.
Subject to Seller's reimbursement of the costs incurred by Buyer, Buyer agrees
to use reasonable efforts to cooperate with Seller in connection with Seller's
defense and other actions relating to or arising out of the litigation and
claims set forth on Schedule 14.1. Buyer agrees to make available Buyer's
employees engaged in the operation of the Assets for the purposes of providing
testimony, depositions, information and other related activities relating to
such litigation and claims.
14.13 DISCLAIMER OF APPLICATION OF ANTI-INDEMNITY STATUTES.
The parties acknowledge and agree that the provisions of any anti-indemnity
statute relating to oilfield services and associated activities shall not be
applicable to this Agreement and/or the transactions contemplated hereby.
ARTICLE XV
TERMINATION, DEFAULT AND REMEDIES
15.1 RIGHT OF TERMINATION.
This Agreement and the transactions contemplated herein may be terminated at any
time at or prior to Closing:
(a) by Seller, at Seller's option, if any of the conditions set
forth in Article VIII have not been satisfied on or before the Closing Date;
(b) by Buyer, at Buyer's option, if any of the conditions set forth
in Article VII have not been satisfied on or before the Closing Date and such
conditions remain unsatisfied for a period of ten (10) days following written
notice thereof from Buyer to Seller;
(c) by Buyer if the condition set forth in Article 7.4 has not been
satisfied on or before the Closing Date or by Seller if the condition set forth
in Article 8.4 is not satisfied on or before the Closing Date; or
(d) by either Seller or Buyer if the Closing shall not have occurred
on or before April 23, 2005;
provided, however, that a party shall not have the right to terminate this
Agreement pursuant to clause (a), (b) or (d) above if such party is at such time
in material breach of any provision of this Agreement.
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15.2 EFFECT OF TERMINATION.
If the obligation to close the transactions contemplated by this Agreement
is terminated pursuant to any provision of Article 15.1 hereof, then, except as
provided in Article 3.2 and except for the provisions of Articles 1.1, 11.1(c)
through 11.1(e), 11.2, 11.3, 14.11 and this Article 15.2 and Article XVI (other
than Articles 16.2(b), 16.7, 16.8, 16.9 and 16.14), this Agreement shall
forthwith become void and the parties shall have no liability or obligation
hereunder except and to the extent such termination results from the willful
breach by a party of any of its covenants or agreements hereunder; provided that
if Seller is entitled to retain the Deposit as liquidated damages pursuant to
Article 3.2, then such retention shall constitute full and complete satisfaction
of any and all damages Seller may have against Buyer.
15.3 RETURN OF DOCUMENTATION AND CONFIDENTIALITY.
Upon termination of this Agreement, Buyer (i) shall return to Seller all title,
engineering, geological and geophysical data, environmental assessments and/or
reports, maps and other information furnished by Seller to Buyer and (ii) shall
destroy any data or information prepared by or on behalf of Buyer in connection
with its due diligence investigation of the Assets that is based upon or
reflecting any of the foregoing, and an officer of Buyer shall certify same to
Seller in writing.
ARTICLE XVI
MISCELLANEOUS
16.1 EXHIBITS.
All of the Exhibits referred to in this Agreement are hereby incorporated into
this Agreement by reference and constitute a part of this Agreement. Each party
to this Agreement and its counsel has received a complete set of Exhibits prior
to and as of the execution of this Agreement.
16.2 EXPENSES AND TAXES.
(a) Except as otherwise specifically provided, all fees, costs and expenses
incurred by Buyer or Seller in negotiating this Agreement or in consummating the
transactions contemplated by this Agreement shall be paid by the party incurring
the same, including, without limitation, legal and accounting fees, costs and
expenses.
(b) All required documentary, filing and recording fees and expenses
in connection with the filing and recording of the assignments, conveyances or
other instruments required to convey title to the Assets to Buyer shall be borne
by Buyer. Seller shall assume responsibility for, and shall bear and pay, all
federal income taxes, state income taxes, and other similar taxes (including any
applicable interest or penalties) incurred or imposed with respect to the
transactions described in this Agreement. Buyer shall assume responsibility for,
and shall bear and pay, all state sales and use taxes (including any applicable
interest or penalties) incurred or imposed with respect to the transactions
described in this Agreement. Seller shall assume responsibility for, and shall
bear and pay, all ad valorem, property, severance, production, and similar taxes
and assessments based upon or measured by the ownership of the Assets, the
production of Hydrocarbons, or the receipt of proceeds therefrom, but exclusive
of income taxes (including any applicable penalties and interest) and assessed
against the Assets by any taxing authority for any period prior to the Effective
Time, and Buyer shall be responsible for, and shall
51
bear and pay, all such taxes and assessments assessed against the Assets by any
taxing authority for any period that begins on or after the Effective Time. For
purposes of this Agreement, the foregoing proration of ad valorem and property
taxes shall be accomplished at the Closing based on the ratio of the number of
days in the year prior to (for Seller) and on and after (for Buyer) the
Effective Time to the total number of days in the year as applied to the amount
of ad valorem and property taxes for the most recent year for which the amount
of such taxes can be finally determined at the Closing. Buyer shall be
responsible for payment to the taxing authorities of all ad valorem and property
taxes for the current year, except to the extent Seller has paid all or a
portion of the ad valorem and property taxes to the taxing authorities for the
current tax year.
16.3 ASSIGNMENT.
This Agreement may not be assigned by Buyer without prior written consent of
Seller. No assignment of any rights hereunder by Buyer shall relieve Buyer of
any obligations and responsibilities hereunder.
16.4 PREPARATION OF AGREEMENT.
Both Seller and Buyer and their respective counsel participated in the
preparation of this Agreement. In the event of any ambiguity in this Agreement,
no presumption shall arise based on the identity of the draftsman of this
Agreement.
16.5 PUBLICITY.
Seller and Buyer shall consult with each other with regard to all press releases
or other public or private announcements issued or made at or prior to the
Closing concerning this Agreement or the transactions contemplated herein, and,
except as may be required by applicable laws or the applicable rules and
regulations of any governmental agency or stock exchange, neither Buyer nor
Seller shall issue any such press release or other publicity without the prior
written consent of the other party, which shall not be unreasonably withheld.
16.6 NOTICES.
All notices and communications required or permitted to be given hereunder shall
be in writing and shall be delivered personally, or sent by bonded overnight
courier, or mailed by U.S. Express Mail or by certified or registered United
States Mail with all postage fully prepaid, or sent by telex or facsimile
transmission (provided any such telex or facsimile transmission is confirmed
either orally or by written confirmation), addressed to the appropriate party at
the address for such party shown below or at such other address as such party
shall have theretofore designated by written notice delivered to the party
giving such notice:
If to Seller:
Devon Energy Production Company, L.P.
00 Xxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxx Xxxxx
Copy to: Xx. Xxxxx Xxxxxxx
Fax: (000) 000-0000
52
Devon Louisiana Corporation
00 Xxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxx Xxxxx
Copy to: Xx. Xxxxx Xxxxxxx
Fax: (000) 000-0000
If to Buyer:
KCS Energy, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxx Xxxxx
Fax: 000-000-0000
Any notice given in accordance herewith shall be deemed to have been given
when delivered to the addressee in person, or by courier, or transmitted by
facsimile transmission during normal business hours, or upon actual receipt by
the addressee after such notice has either been delivered to an overnight
courier or deposited in the United States Mail, as the case may be. The parties
hereto may change the address, telephone numbers, and facsimile numbers to which
such communications are to be addressed by giving written notice to the other
parties in the manner provided in this Article 16.7.
16.7 REMOVAL OF NAME.
As promptly as practicable, but in any case within thirty (30) days after the
Closing Date, Buyer shall eliminate the names "Devon Energy Production Company,
L.P.," "Devon Louisiana Corporation," "Devon" and any variations 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.
16.8 FURTHER COOPERATION.
After the Closing, Buyer and Seller shall execute and deliver, or shall cause to
be executed and delivered from time to time, such further instruments of
conveyance and transfer, and shall take such other actions as any party may
reasonably request, to convey and deliver the Assets to Buyer, to perfect
Buyer's title thereto, and to accomplish the orderly transfer of the Assets to
Buyer in the manner contemplated by this Agreement. If any party hereto receives
monies belonging to the other, such amount shall immediately be paid over to the
proper party. If an invoice or other evidence of an obligation is received by a
party, which is partially an obligation of both Seller and Buyer, then the
parties shall consult with each other, and each shall promptly pay its portion
of such obligation to the obligee.
16.9 FILINGS, NOTICES AND CERTAIN GOVERNMENTAL APPROVALS.
53
Promptly after Closing Buyer shall (a) record the Assignments of the Assets and
all state/federal assignments executed at the Closing in all applicable real
property records and/or, if applicable, all state or federal agencies, (b) send
notices to vendors supplying goods and services for the Assets of the assignment
of the Properties to Buyer and, if applicable, the designation of Buyer as the
operator thereof, (c) actively pursue the unconditional approval of all
applicable Governmental Authorities of the Assignment of the Assets to Buyer and
the designation of Buyer as the operator thereof and (d) actively pursue all
other consents and approvals that may be required in connection with the
assignment of the Assets to Buyer and the assumption of the liabilities assumed
by Buyer hereunder, that shall not have been obtained prior to Closing. Buyer
obligates itself to take any and all action required by any Governmental
Authority in order to obtain such unconditional approval, including but not
limited to, the posting of any and all bonds or other security that may be
required in excess of its existing lease, pipeline or area-wide bond.
16.10 ENTIRE AGREEMENT; CONFLICTS.
THIS AGREEMENT, THE EXHIBITS HERETO AND THE CONFIDENTIALITY AGREEMENT
COLLECTIVELY CONSTITUTE THE ENTIRE AGREEMENT AMONG SELLER AND BUYER 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. THERE ARE NO WARRANTIES,
REPRESENTATIONS, OR OTHER AGREEMENTS AMONG THE PARTIES RELATING TO THE SUBJECT
MATTER HEREOF EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, AND NEITHER
SELLER NOR BUYER SHALL BE BOUND BY OR LIABLE FOR ANY ALLEGED REPRESENTATION,
PROMISE, INDUCEMENT, OR STATEMENTS OF INTENTION NOT SO SET FORTH. IN THE EVENT
OF A CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THIS AGREEMENT AND THE TERMS
AND PROVISIONS OF ANY EXHIBIT HERETO, THE TERMS AND PROVISIONS OF THIS AGREEMENT
SHALL GOVERN AND CONTROL; PROVIDED, HOWEVER, THAT THE INCLUSION IN ANY OF THE
EXHIBITS HERETO OF TERMS AND PROVISIONS NOT ADDRESSED IN THIS AGREEMENT SHALL
NOT BE DEEMED A CONFLICT, AND ALL SUCH ADDITIONAL PROVISIONS SHALL BE GIVEN FULL
FORCE AND EFFECT, SUBJECT TO THE PROVISIONS OF THIS Article 16.10.
16.11 PARTIES IN INTEREST.
The terms and provisions of this Agreement shall be binding upon and inure to
the benefit of Seller and Buyer and their respective legal representatives,
successors, and assigns. No other person shall have any right, benefit,
priority, or interest hereunder or as a result hereof or have standing to
require satisfaction of the provisions hereof in accordance with their terms.
16.12 AMENDMENT.
This Agreement may be amended only by an instrument in writing executed by the
parties hereto against whom enforcement is sought.
16.13 WAIVER; RIGHTS CUMULATIVE.
Any of the terms, covenants, representations, warranties, or conditions hereof
may be waived only by a written instrument executed by or on behalf of the party
hereto waiving compliance.
54
No course of dealing on the part of Seller or Buyer, or their respective
officers, employees, agents, or representatives, nor any failure by Seller or
Buyer to exercise any of its rights under this Agreement shall operate as a
waiver thereof or affect in any way the right of such party at a later time to
enforce the performance of such provision. No waiver by any party of any
condition, or any breach of any term, covenant, representation, or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or a waiver of any other condition or of any breach of any other term, covenant,
representation, or warranty. The rights of Seller and Buyer under this Agreement
shall be cumulative, and the exercise or partial exercise of any such right
shall not preclude the exercise of any other right.
16.14 GOVERNING LAW; JURISDICTION, VENUE; JURY WAIVER.
THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY
CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH
PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE PARTIES HERETO
CONSENT TO THE EXERCISE OF JURISDICTION IN PERSONAM BY THE COURTS OF THE STATE
OF TEXAS FOR ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENTS. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR
INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS AGREEMENT OR THE
OTHER TRANSACTION DOCUMENTS SHALL BE EXCLUSIVELY LITIGATED IN COURTS HAVING
SITES IN HOUSTON, XXXXXX COUNTY, TEXAS. EACH PARTY HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
16.15 SEVERABILITY.
If any term or other provision of this Agreement is invalid, illegal, or
incapable of being enforced by any rule of law or public policy, 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 any adverse manner to any party. Upon
such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
16.16 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all of such
counterparts shall constitute for all purposes one agreement. Any signature
hereto delivered by a party by facsimile transmission shall be deemed an
original signature hereto.
[THE NEXT SUCCEEDING PAGE IS THE EXECUTION PAGE]
55
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the
date first above written.
SELLER:
DEVON ENERGY PRODUCTION COMPANY, L.P.,
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
DEVON LOUISIANA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
BUYER:
KCS RESOURCES, INC.
By: /s/ Xxxxx Xxx Xxxxx
--------------------------
Name: Xxxxx Xxx Xxxxx
Title: Senior Vice President
56
EXHIBIT A
ATTACHED TO AND MADE A PART OF THAT CERTAIN
PURCHASE AND SALE AGREEMENT DATED AS OF FEBRUARY 22, 2005
BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L. P. AND DEVON
LOUISIANA CORPORATION, AS SELLER, AND KCS RESOURCES, INC., AS BUYER
THIS EXHIBIT A CONSISTS OF THE FOLLOWING:
EXHIBIT A-1: LIST OF DESIGNATED UNITS
EXHIBIT A-2: LIST OF XXXXX
EXHIBIT A-3: LIST OF LEASES AND LANDS
THE FOREGOING APPEAR IN THE FOLLOWING PAGES OF THIS EXHIBIT A.
-----------------------------------------------------------------------------------------------------------------------------------
EXHIBIT A-1
-----------------------------------------------------------------------------------------------------------------------------------
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY
PRODUCTION COMPANY, L.P. and DEVON LOUISIANA CORPORATION, COLLECTIVELY AS SELLER, AND KCS RESOURCES, INC., AS BUYER
-----------------------------------------------------------------------------------------------------------------------------------
DESIGNATED UNITS
-----------------------------------------------------------------------------------------------------------------------------------
UNIT OR LANDS LOCATION WI NRI RESTRICTIONS
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 6-T16N-R10W 06-16-10 44.3699990% 36.0699980%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 20-T16N-R11W 20-16-11 51.6783120% 40.5602480% Rights from surface to base of Hosston
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 20-T16N-R11W 20-16-11 100.0000000% 77.8099950% Rights below the base of the Hosston
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 26-T15N-R13W 26-15-13 12.4600000% 9.6600000%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 27-T17N-R11W 27-17-11 0.0000000% 9.3700000% Rights from surface to 9908'
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 28-T15N-R12W 28-15-12 16.2800000% 13.2299990%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 28-T17N-R11W 28-17-11 12.4099990% 15.6600000% Rights from surface to 9825'
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 29-T17N-R10W 29-17-10 50.0000000% 39.9999980%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 30-T16N-R11W 30-16-11 100.0000000% 75.1299980% Rights below 4000'
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 30-T17N-R10W 30-17-10 12.6999990% 10.1000000%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 32-T15N-R12W 32-15-12 100.0000000% 81.0199980%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
3.3531% interest being held in suspense
Section 32-T17N-R10W 32-17-10 12.3200000% 10.7799990% pending outcome of litigation
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 33-T15N-R12W 33-15-12 100.0000000% 77.2199990%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 35-T15N-R13W 35-15-13 93.7699970% 72.6699950%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 35-T17N-R11W 35-17-11 0.0000000% 9.3700000%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 36-T15N-R13W 36-15-13 100.0000000% 77.4999980%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 9-T15N-R12W & that part of
Section 37 south of Section 4 9-15-12 68.5999990% 52.3100020%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Section 20-T19N-R4W 20-19-04 20.3799990% 16.8099980%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Leases comprising the Day Dome Unit FB-A,B 50.0000000% 42.8699940%
------------------------------------- ----------------- ---------------- ---------------- -----------------------------------------
Page 1 of 1
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN
PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
ATHENS 535320001 XXXXXX XXXXX 1D CLAIBORNE, LOUISIANA 170270214000
ATHENS 538561002 XXXXX 1-23 CLAIBORNE, LOUISIANA 170272096501
BEAR CREEK 535019001 XXXXXXXX UNIT 1 T BIENVILLE, LOUISIANA 170130015100
BEAR CREEK 535020001 XXXXXXX 1 BIENVILLE, LOUISIANA 170132069100
BEAR CREEK 535022001 XXXXXX 1 BIENVILLE, LOUISIANA 170132078400
BEAR CREEK 535023001 XXXXXX, X X 3 ALT BIENVILLE, LOUISIANA 170132088600
BEAR CREEK 535024001 PIPES A 1 BIENVILLE, LOUISIANA 170132105300
BOX CHURCH 416185011 XXXXXXXXX GAS UN 1 LIMESTONE, TEXAS 422933068600
BOX CHURCH 417865011 XXXXX, XXXXXXX 0 XXXXXXXXX, XXXXX 000000000000
XXXXXXXX XXXX 417804021 T-BAR-X/XXXXX 2 FREESTONE, TEXAS 421613138300
CASPIANA 067454001 CASPIANA SW DISPOSAL DE XXXX, LOUISIANA
CASPIANA 538615001 CASPIANA SW FACILITY DE XXXX, LOUISIANA
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
ATHENS UNKNOWN 0.044444 0.035243 0.000000 0.002734
0.044444 0.035243 0.000000 0.002734
ATHENS XXXXXXX ENGINEERING, INC. 0.048062 0.036795 0.000000 0.000000
0.048062 0.036795 0.000000 0.000000
BEAR CREEK EL PASO PRODUCTION COMPANY 0.142370 0.124574 0.000000 0.000000
0.142370 0.124574 0.000000 0.000000
BEAR CREEK EL PASO PRODUCTION COMPANY 0.273438 0.239258 0.000000 0.000000
0.273438 0.239258 0.000000 0.000000
BEAR CREEK EL PASO PRODUCTION COMPANY 0.201923 0.167218 0.000000 0.000000
0.201923 0.167218 0.000000 0.000000
BEAR CREEK EL PASO PRODUCTION COMPANY 0.281562 0.239258 0.000000 0.000000
0.281562 0.239258 0.000000 0.000000
BEAR CREEK EL PASO PRODUCTION COMPANY 0.273438 0.239258 0.000000 0.000000
0.273438 0.239258 0.000000 0.000000
BOX CHURCH XXXXXXXX OIL & GAS INC. 0.495511 0.419161 0.000000 0.000000
0.495511 0.419161 0.000000 0.000000
BOX CHURCH XXXXX & XXXXXXXX OIL CO. 0.500000 0.388949 0.000000 0.000000
0.500000 0.388949 0.000000 0.000000
XXXXXXXX XXXX XXXXXX PETROLEUM, INC. 0.200000 0.148928 0.000000 0.000000
0.200000 0.148928 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.064115 0.000000 0.000000 0.000000
0.064115 0.000000 0.000000 0.000000
CASPIANA X X OPERATING 0.009661 0.000000 0.000000 0.000000
0.009661 0.000000 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 1 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
CASPIANA 110949001 XXXXX, XXXXXXX B-1 DE XXXX, LOUISIANA 170312049100
CASPIANA 067455001 XXXXXXX 00-0 XXXX XXXXX XX XXXX, XXXXXXXXX 170312298700
DISPOS
CASPIANA 111312001 XXXXXXX #1-33; DE XXXX, LOUISIANA 170312304100
(SEE 65474-001)
CASPIANA 065474501 XXXXXXX 1-33 DE XXXX, LOUISIANA 170312304100
CASPIANA 065474001 XXXXXXX 33 1 CV XX XXXX DE XXXX, LOUISIANA 170312304100
CASPIANA 018143010 XXXXX, I.F. 00-0 XXX XX XXXX, XXXXXXXXX 170318803400
CASPIANA 072017001 XXXXXXXX X X ET AL 33 1 CADDO, LOUISIANA 170173334500
CASPIANA 063967001 XXXX PLYWOOD 1; DE XXXX, LOUISIANA 170312300500
CV RA SUV LCV
CASPIANA 063967004 XXXX PLYWOOD 1; DE XXXX, LOUISIANA 170312300500
CV RA SUV UCV
CASPIANA 063967002 XXXX PLYWOOD 2ALT; DE XXXX, LOUISIANA 170312305100
CV RA SUV
CASPIANA 063967003 XXXX PLYWOOD 3 ALT DE XXXX, LOUISIANA 170312304700
CASPIANA 063965001 XXXX PLYWOOD B1; DE XXXX, LOUISIANA 170312302800
CV XX XX 69
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
CASPIANA FAIR OIL LTD. 0.000000 0.000000 0.004569 0.000000
0.000000 0.000000 0.004569 0.000000
CASPIANA X-X OPERATING COMPANY 0.000000 0.000000 0.000000 0.000000
0.000000 0.000000 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.026895 0.000000 0.000000 0.000000
0.026895 0.000000 0.000000 0.000000
CASPIANA X X OPERATING 0.039269 0.028274 0.000000 0.000000
0.039269 0.028274 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.015351 0.012793 0.000000 0.000000
0.015351 0.012793 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.004686 0.000000 0.000000 0.000000
0.004686 0.000000 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 1.000000 0.800900 0.000000 0.000000
CO., L.P. 1.000000 0.800900 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 1.000000 0.775000 0.000000 0.000000
CO., L.P. 1.000000 0.775000 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 1.000000 0.775000 0.000000 0.000000
CO., L.P. 1.000000 0.775000 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 1.000000 0.775000 0.000000 0.000000
CO., L.P. 1.000000 0.775000 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 1.000000 0.775000 0.000000 0.000000
CO., L.P. 1.000000 0.775000 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 0.812330 0.645695 0.000000 0.000000
CO., L.P. 0.812330 0.645695 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 2 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
IELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
CASPIANA 063966001 XXXX PLYWOOD C-1; CV RA XXX XX XXXX, LOUISIANA 170312303000
CASPIANA 063966002 XXXX PLYWOOD C3 ALT; CV XX XX XXXX, LOUISIANA 170312304700
SUU
CASPIANA 067508001 XXXX PLYWOOD DE XXXX, LOUISIANA 170318802400
SWD #1 CASPIANA
CASPIANA 065477002 XXXXX, X X 1 DE XXXX, LOUISIANA 170312320100
CASPIANA 065477001 XXXXX, X X 0 X XX XXXX, XXXXXXXXX 170312320100
CASPIANA 111032001 OLINKRAFT 2 DE XXXX, LOUISIANA 170312072900
CASPIANA 110980001 OLINKRAFT A1 (FAIR) DE XXXX, LOUISIANA 170312056400
CASPIANA 065473001 RAMBIN 1 CV RA SUFF DE XXXX, LOUISIANA 170312300800
CASPIANA 065475001 XXXXX, XXX X 28-1 CADDO, LOUISIANA 170173240600
CV RA SU61
CASPIANA 072035001 XXXXX, XXX X ET AL 32-1 CADDO, LOUISIANA 170173333300
CASPIANA 111251001 XXXXXX 0-00 XX XX XX XXXX, XXXXXXXXX 170312306700
CASPIANA 065476001 XXXXX, X X 26-1 CV RA SUT DE XXXX, LOUISIANA 170312301700
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
CASPIANA DEVON ENERGY PRODUCTION 0.937676 0.726699 0.000000 0.000000
CO., L.P. 0.937676 0.726699 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 0.937676 0.726699 0.000000 0.000000
CO., L.P. 0.937676 0.726699 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 1.000000 0.000000 0.000000 0.000000
CO., L.P. 1.000000 0.000000 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.093080 0.077510 0.000000 0.000000
0.093080 0.077510 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.093080 0.077510 0.000000 0.000000
0.093080 0.077510 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.000000 0.000000 0.076759 0.000000
0.000000 0.000000 0.076759 0.000000
CASPIANA FAIR OIL LTD. 0.000000 0.000000 0.009644 0.000000
0.000000 0.000000 0.009644 0.000000
CASPIANA X-X OPERATING COMPANY 0.096764 0.080637 0.000000 0.000000
0.096764 0.080637 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.162813 0.132286 0.000000 0.000000
0.162813 0.132286 0.000000 0.000000
CASPIANA DEVON ENERGY PRODUCTION 1.000000 0.800900 0.000000 0.000000
CO., L.P. 1.000000 0.800900 0.000000 0.000000
CASPIANA X-X OPERATING COMPANY 0.000000 0.000000 0.090493 0.006250
0.000000 0.000000 0.090493 0.006250
CASPIANA X-X OPERATING COMPANY 0.124654 0.096607 0.000000 0.000000
0.124654 0.096607 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 3 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
CHOUDRANT 538539001 XXXXXXX B-1-4 LINCOLN, LOUISIANA 170612046600
CHOUDRANT 538540003 XXXXXX B 1-4 LINCOLN, LOUISIANA 170612050400
CHOUDRANT 535039001 XXXXX, T L B 2 LINCOLN, LOUISIANA 170612034600
CITY LIMITS 538248001 XXXXX XXXXXX 2A HENDERSON, TEXAS 422133079600
CITY LIMITS 538249001 XXXXX XXXXXX 3A HENDERSON, TEXAS 422133080200
DANVILLE 051632020 XXXX, X X 1-C XXXXX, TEXAS 421833071500
DANVILLE 051632022 XXXX, X X 1-T XXXXX, TEXAS 421833071500
DANVILLE 051632030 XXXX, X X 3 XXXXX, TEXAS 421833126900
DANVILLE 419782021 LONE STAR PROD UN 2 RUSK, TEXAS 424013268300
DANVILLE 419787011 XXXXXX, X X 0 X XXXX, XXXXX 421830022600
DANVILLE 419844010 XXXXXXX, XXX. XXXXXX OU 1 RUSK, TEXAS 421830023400
DANVILLE WEST 107724001 LINER, XXXXXX XXX OIL UN 1 RUSK, TEXAS 424013136300
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
CHOUDRANT XXXXX & XXXXXXX-JETTA 0.445679 0.350472 0.000000 0.000000
0.445679 0.350472 0.000000 0.000000
CHOUDRANT XXXXX & XXXXXXX-JETTA 0.262500 0.233124 0.000000 0.000000
0.262500 0.233124 0.000000 0.000000
CHOUDRANT XXXXX & XXXXXXX-JETTA 0.055566 0.045603 0.000000 0.000000
0.055566 0.045603 0.000000 0.000000
CITY LIMITS DEVON LOUISIANA 0.714286 0.582457 0.000000 0.000000
CORPORATION 0.714286 0.582457 0.000000 0.000000
CITY LIMITS DEVON LOUISIANA 0.714286 0.582011 0.000000 0.000000
CORPORATION 0.714286 0.582011 0.000000 0.000000
DANVILLE SAMSON LONE STAR LTD 0.000000 0.000000 0.010913 0.000000
PTNRSHP 0.000000 0.000000 0.010913 0.000000
DANVILLE SAMSON LONE STAR LTD 0.000000 0.000000 0.003516 0.000000
PTNRSHP 0.000000 0.000000 0.003516 0.000000
DANVILLE SAMSON LONE STAR LTD 0.000000 0.000000 0.003516 0.000000
PTNRSHP 0.000000 0.000000 0.003516 0.000000
DANVILLE SAMSON LONE STAR LP 0.000000 0.000000 0.000000 0.000181
0.000000 0.000000 0.000000 0.000181
DANVILLE XXX XXXXXX INC. 0.000000 0.000000 0.000000 0.001688
0.000000 0.000000 0.000000 0.001688
DANVILLE BUFFCO PRODUCTION INC. 0.000000 0.000000 0.000000 0.000064
0.000000 0.000000 0.000000 0.000064
DANVILLE WEST MC XXXXXXX ENERGY INC. 0.000000 0.000000 0.005508 0.000000
0.000000 0.000000 0.005508 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 4 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
DAY 535491001 XXXXXXX, X. X. #1 MADISON, TEXAS 423133007700
DAY 410149271 XXXXXX, XXXXXX 17 & 3 MADISON, TEXAS 423133002500
DAY 535496001 XXXXXX, XXXXXX A 14 MADISON, TEXAS 423133063600
DAY 535501001 XXXXXX, X X 1 MADISON, TEXAS 423133008700
DAY 057432150 XXXXXX, X X 5 MADISON, TEXAS 423133051500
DAY 057434110 XXXXXX X X UN 2 1 MADISON, TEXAS 423133021500
DAY 057434130 XXXXXX X X UN 2,3 MADISON, TEXAS 423133034100
XXX XXXXX (XX) 000000000 XXXXX 31 1ALT XXXXXXX, LOUISIANA 171192181300
XXX XXXXX (XX) 000000000 XXXXXXX 00-0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060011008 XXXXXXX 30 2-ALT XXXXXXX, LOUISIANA 171192184700
XXX XXXXX (XX) 000000000 XXXXXXX ET AL 00-0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 018158010 XXXXXX 6 #1 (CV XX XX 74) BOSSIER, LOUISIANA 170152349700
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
DAY DEVON LOUISIANA 1.000000 0.857500 0.000000 0.000000
CORPORATION 1.000000 0.857500 0.000000 0.000000
DAY DEVON LOUISIANA 1.000000 0.737500 0.000000 0.000000
CORPORATION 1.000000 0.737500 0.000000 0.000000
DAY DEVON LOUISIANA 1.000000 0.783333 0.000000 0.000000
CORPORATION 1.000000 0.783333 0.000000 0.000000
DAY DEVON LOUISIANA 0.875000 0.750312 0.000000 0.000000
CORPORATION 0.875000 0.750312 0.000000 0.000000
DAY DEVON LOUISIANA 0.875000 0.750312 0.000000 0.000000
CORPORATION 0.875000 0.750312 0.000000 0.000000
DAY DEVON LOUISIANA 0.927832 0.792706 0.000000 0.000000
CORPORATION 0.927832 0.792706 0.000000 0.000000
DAY DEVON LOUISIANA 0.927832 0.792706 0.000000 0.000000
CORPORATION 0.927832 0.792706 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) CAMTERRA RESOURCES PARTN, 0.500000 0.400042 0.000000 0.000000
LTD 0.500000 0.400042 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.443706 0.360700 0.000000 0.000000
0.443706 0.360700 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 5 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
ELM GROVE (LA) 072068010 XXXXXXX 00-0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060656006 XXXXXXXXX 00-0 XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 065478001 ELM GROVE CV XXX XX XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 069459002 ELM GROVE PLANTATION A 0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 063969001 ELM GROVE XXXX 0 1; CV BOSSIER, LOUISIANA 170152087100
XXXX00
XXX XXXXX (XX) 060611002 XXXXXX 20 1; LCV XX XX X XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060611001 XXXXXX 20-1 UV XXXXXXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 010093010 FLAT RIVER FARMS 0-0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 111511001 XXXXX XXXX 35 0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 539072001 XXXXXXX 0-00 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060011002 XXXXXXX 30 1 ALT XXXXXXX, LOUISIANA 171192176800
XXX XXXXX (XX) 000000000 XXXXXXX 30 2ALT XXXXXXX, LOUISIANA 171192183700
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
ELM GROVE (LA) CAMTERRA RESOURCES PARTN, 0.000000 0.000000 0.000000 0.011213
LTD 0.000000 0.000000 0.000000 0.011213
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 1.000000 0.751347 0.000000 0.001935
1.000000 0.751347 0.000000 0.001935
ELM GROVE (LA) SUNLAND PRODUCTION 1.000000 0.751347 0.000000 0.000000
COMPANY INC. 1.000000 0.751347 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.751347 0.000000 0.000000
CO., L.P. 1.000000 0.751347 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.778175 0.000000 0.000000
CO., L.P. 1.000000 0.778175 0.000000 0.000000
ELM GROVE (LA) SUNLAND PRODUCTION 0.516783 0.398215 0.000000 0.007387
COMPANY INC. 0.516783 0.398215 0.000000 0.007387
ELM GROVE (LA) PETRO-CHEM OPERATING 0.000000 0.000000 0.000000 0.008913
COMPANY, 0.000000 0.000000 0.000000 0.008913
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.085289 0.000000
0.000000 0.000000 0.085289 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 6 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
ELM GROVE (LA) 063972001 XXXXXXXX 00-0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 014809001 XXXXXXXX, XXXX 00-0 XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 014664010 XXXXXXXXX 34-1; CV XX XX000 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 014848010 XXXXXXX 1-32; LCV XX XX XX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060656007 XXXXXXXX 00-0 XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 099622010 XXXXXXXXX 36 SWD 2 (KORAN BOSSIER, LOUISIANA 170158808100
FAC)
ELM GROVE (LA) 110945001 XXXXXX 0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060651001 HERON 00-0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060011003 XXXXXXX 30 1 ALT XXXXXXX, LOUISIANA 171192173900
XXX XXXXX (XX) 000000000 XXXXXX 31 0-XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060656003 XXXXXX 31 0-XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 110159001 XXXXXXX 27 1 BOSSIER, LOUISIANA 170152294800
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.800189 0.000000 0.000000
CO., L.P. 1.000000 0.799559 0.000000 0.000000
ELM GROVE (LA) CAMTERRA RESOURCES PARTN, 1.000000 0.800189 0.000000 0.000000
LTD 1.000000 0.800189 0.000000 0.000000
ELM GROVE (LA) PETRO-CHEM OPERATING 0.000000 0.000000 0.000000 0.000794
COMPANY 0.000000 0.000000 0.000000 0.000794
ELM GROVE (LA) CAMTERRA RESOURCES PARTN, 0.123236 0.103640 0.000000 0.000000
LTD 0.123236 0.103640 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.014548 0.000000 0.000000 0.000000
0.014548 0.000000 0.000000 0.000000
ELM GROVE (LA) NON OPERATED FLAG XXXXXXX 0.000000 0.000000 0.088641 0.000000
0.000000 0.000000 0.088641 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.800189 0.000000 0.000000
CO., L.P. 1.000000 0.799559 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) X-X OPERATING CO. 0.000000 0.000000 0.093750 0.000000
0.000000 0.000000 0.093750 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 7 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
ELM GROVE (LA) 110177007 XXXXXXX 35 #1-ALT BOSSIER, LOUISIANA 170152345800
XXX XXXXX (XX) 000000000 XXXXXXXXXX 0 0 XXX (XX XX) CADDO, LOUISIANA 170173327600
XXX XXXXX (XX) 000000000 XXXXXXXXXX 0 0-X-XXX (XXXX CADDO, LOUISIANA 170173327600
UV)
ELM GROVE (LA) 063970005 XXXXXXXXXX 9-1 (XXXX XX XX XXXXX, XXXXXXXXX 000000000000
00)
XXX XXXXX (XX) 063970009 XXXXXXXXX 0-0 (XXXXXXXXXX) XXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 063970006 XXXXXXXXX, XX XX 0-0 (XX) XXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 063970010 XXXXXXXXXX, XX XX XXXXX, XXXXXXXXX 000000000000
0-0-X-XXX(X)
XXX XXXXX (XX) 060656004 XXXXXXX 31 0-XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 072042001 XXXX 00 0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 072042003 XXXX 00 0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 072046001 XXXXXXXXXX 10 1 BOSSIER, LOUISIANA 170152325500
XXX XXXXX (XX) 000000000 XXXXXX A 1 BOSSIER, LOUISIANA 170152252900
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
ELM GROVE (LA) X-X OPERATING CO. 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.760711 0.000000 0.000000
CO., L.P. 0.685953 0.523187 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.760711 0.000000 0.000000
CO., L.P. 0.685953 0.760711 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 0.685953 0.523187 0.000000 0.000000
CO., L.P. 0.685953 0.523187 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 0.685953 0.523187 0.000000 0.000000
CO., L 0.685953 0.523187 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 0.685953 0.760711 0.000000 0.000000
CO., L.P. 0.685953 0.523187 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 0.685953 0.523187 0.000000 0.000000
CO., L.P. 0.685953 0.523187 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) PETRO-CHEM OPERATING 0.018819 0.014773 0.000000 0.000000
COMPANY, 0.018819 0.014773 0.000000 0.000000
ELM GROVE (LA) PETRO-CHEM OPERATING 0.018819 0.014773 0.000000 0.000000
COMPANY, 0.018819 0.014773 0.000000 0.000000
ELM GROVE (LA) PETRO-CHEM OPERATING 0.000000 0.000000 0.000000 0.000000
COMPANY, 0.037625 0.000000 0.000000 0.000000
ELM GROVE (LA) SUNLAND PRODUCTION 0.023639 0.019207 0.000000 0.007387
COMPANY INC. 0.023639 0.019207 0.000000 0.007387
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 8 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
ELM GROVE (LA) 063970007 XXXXXX XXXXXXX 37; CADDO, LOUISIANA 170173327500
CVL 0-XXX
XXX XXXXX (XX) 063970013 XXXXXX XXXXXXX 37; XXXX X XXXXX, XXXXXXXXX 000000000000
0XXXX
XXX XXXXX (XX) 117012010 XXXXXX 27 #1-ALT; CV XX XX BOSSIER, LOUISIANA 170152308200
000
XXX XXXXX (XX) 117012020 XXXXXX 27 2-ALT; BOSSIER, LOUISIANA 170152331900
CV XX XX 00
XXX XXXXX (XX) 060011006 PRESCOTT 30 1 ALT XXXXXXX, LOUISIANA 171192183400
XXX XXXXX (XX) 000000000 XXXXXXX 000XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060669001 REEVES 00-0 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060656008 ROLLO 31 0-XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060656009 XXXXXXXX 31 0-XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 063968001 XXXXX, R E JR TR 1; CV XX XXXXXXX, LOUISIANA 170152278600
XX000
XXX XXXXX (XX) 110177001 XXXXXX 35 0-XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 110177002 XXXXXX 35 2-ALT BOSSIER, LOUISIANA 170152318000
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.760711 0.000000 0.000000
CO., L.P. 0.685953 0.523187 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.760711 0.000000 0.000000
CO., L.P. 0.685953 0.523187 0.000000 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.093881 0.000000
0.000000 0.000000 0.093881 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.093881 0.000000
0.000000 0.000000 0.093881 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.124985 0.124985 0.032437 0.000000
0.124985 0.124985 0.032437 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
ELM GROVE (LA) DEVON ENERGY PRODUCTION 1.000000 0.829322 0.000000 0.000000
CO., L.P. 1.000000 0.829322 0.000000 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 9 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
ELM GROVE (LA) 110177003 XXXXXX 35 3-ALT BOSSIER, LOUISIANA 170152318100
XXX XXXXX (XX) 000000000 XXXXXX OIL CORP 27 1ALT BOSSIER, LOUISIANA 170152327900
CVRASU
ELM GROVE (LA) 060669002 XXXXXX 28-1; LCV XX XX 00 XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 110178001 XXXXX 35 0-X XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 110178002 XXXXX 35 2-ALT; LCV XX XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 110177006 VALLHONRAT 35 #0-XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 110177004 VALLHONRAT 00-0XXX XXXXXXX, XXXXXXXXX 000000000000
XXX XXXXX (XX) 060011004 WINTAMUTE 30 1 ALT XXXXXXX, LOUISIANA 171192180500
XXX XXXXX (XX) 000000000 WINTAMUTE 31 1; CV RA XX XXXXXXX, LOUISIANA 171192177200
133
HAYNESVILLE 107062000 XXXXX, XXXXX XXXXXXXXX, LOUISIANA 170272069300
HAYNESVILLE 108659002 XXXXX, XXXXX XXXXXXXXX, LOUISIANA 170272075100
HAYNESVILLE 108659001 XXXXX, XXXXX XXXXXXXXX, LOUISIANA 170272075000
INTEREST-BPO/APO
-------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.093881 0.000000
0.000000 0.000000 0.093881 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.124985 0.124985 0.032437 0.000000
0.124985 0.124985 0.032437 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
ELM GROVE (LA) X-X OPERATING COMPANY 0.000000 0.000000 0.088638 0.000000
0.000000 0.000000 0.088638 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.127000 0.100576 0.000000 0.000000
0.127000 0.100576 0.000000 0.000000
ELM GROVE (LA) X.X. OPERATING CO. 0.047189 0.035797 0.000000 0.000000
0.047189 0.035797 0.000000 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 10 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
HAYNESVILLE 108463001 XXXXX, XXXXX (TR. 22-4) CLAIBORNE, LOUISIANA
HAYNESVILLE 108463003 XXXXX, XXXXX (TR. 22-4) CLAIBORNE, LOUISIANA
HAYNESVILLE 108483000 XXXXX, XXXXX (TR. 22-4) CLAIBORNE, LOUISIANA
HAYNESVILLE 108463004 XXXXX, XXXXX (TR. 22-4) CLAIBORNE, LOUISIANA
HAYNESVILLE 108464002 XXXX XX (TR. 22-11) CLAIBORNE, LOUISIANA
HAYNESVILLE 108464003 XXXX XX (TR. 22-12) CLAIBORNE, LOUISIANA
HAYNESVILLE 108464004 XXXX XX (TR. 22-13) CLAIBORNE, LOUISIANA
HAYNESVILLE 108658001 BOND XX X XXXXXXXXX, LOUISIANA 170272092700
HAYNESVILLE 108658004 XXXX XX X/X 0-X XXXXXXXXX, XXXXXXXXX 170270087300
HAYNESVILLE 108464013 XXXX XX X/X 0-X (X XXXX) XXXXXXXXX, XXXXXXXXX 170270086800
HAYNESVILLE 108464005 XXXX XX X/X 0-X 0 (XX.) XXXXXXXXX, XXXXXXXXX
HAYNESVILLE 108466004 XXXX XX (TR 21-11) CLAIBORNE, LOUISIANA
INTEREST-BPO/APO
--------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000732 0.000000
0.000000 0.000000 0.000732 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000504 0.000000
0.000000 0.000000 0.000504 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003050 0.000000
0.000000 0.000000 0.003050 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 11 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
HAYNESVILLE 108466006 XXXX XX (TR 21-11) CLAIBORNE, LOUISIANA
HAYNESVILLE 108466005 XXXX XX (TR 21-11) CLAIBORNE, LOUISIANA
HAYNESVILLE 108466003 XXXX XX (TR 21-11) CLAIBORNE, LOUISIANA
HAYNESVILLE 108466000 XXXX XX (TR 21-11) CLAIBORNE, LOUISIANA
HAYNESVILLE 108487000 XXXX XX 1 (TR 1) CLAIBORNE, LOUISIANA
HAYNESVILLE 108871000 HA RD SUD; XXXXXX 00 0 XX XXXXXXXXX, XXXXXXXXX
0000
HAYNESVILLE 108655001 XXXXXXX, G A CLAIBORNE, LOUISIANA 170272093500
HAYNESVILLE 108654004 XXXXXX, S R CLAIBORNE, LOUISIANA 170272094300
HAYNESVILLE 108462001 XXXXXX, S R (TR 22-1) CLAIBORNE, LOUISIANA
HAYNESVILLE 108460001 XXXXXX, S R (TR 23-6) CLAIBORNE, LOUISIANA
HAYNESVILLE 108459001 XXXXXX, S R (TR 23-7) CLAIBORNE, LOUISIANA
HAYNESVILLE 108656002 XXXXXX, S R B CLAIBORNE, LOUISIANA
INTEREST-BPO/APO
--------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003203 0.000000
0.000000 0.000000 0.003203 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003085 0.000000
0.000000 0.000000 0.003085 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003144 0.000000
0.000000 0.000000 0.003144 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003144 0.000000
0.000000 0.000000 0.003144 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.007919 0.000000
0.000000 0.000000 0.007919 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000488 0.000000
0.000000 0.000000 0.000488 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000651 0.000000
0.000000 0.000000 0.000651 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000977 0.000000
0.000000 0.000000 0.000977 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001628 0.000000
0.000000 0.000000 0.001628 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000651 0.005508
0.000000 0.000000 0.000651 0.005508
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000651 0.000000
0.000000 0.000000 0.000651 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 12 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
HAYNESVILLE 108656023 XXXXXX, S.R. (TR. 23-4) CLAIBORNE, LOUISIANA
HAYNESVILLE 108654003 XXXXXX-XXXXXXXX P CLAIBORNE, LOUISIANA 170270087800
HAYNESVILLE 108654006 XXXXXX XXXXXX XXXXXXXXX, LOUISIANA 170272084000
HAYNESVILLE 108461002 XXXXXX, X X TR 14-15 CLAIBORNE, LOUISIANA
HAYNESVILLE 108461001 XXXXXX, X X TR 14-15 CLAIBORNE, LOUISIANA
HAYNESVILLE 108461000 XXXXXX, X X TR 14-15 CLAIBORNE, LOUISIANA
HAYNESVILLE 108461003 XXXXXX, X X TR 14-15 CLAIBORNE, LOUISIANA
HAYNESVILLE 108741001 XXXXXX, X X UN K CLAIBORNE, LOUISIANA 170270076700
HAYNESVILLE 110103005 XXXXXX, XX #3 (HA XX XXX) CLAIBORNE, LOUISIANA 170272193600
HAYNESVILLE 110103001 XXXXXX, XX #3 TR 1 (HA XX XXXXXXXXX, LOUISIANA
SUH)
HAYNESVILLE 11010302A XXXXXX, XX #3 TR2A (HA XX XXXXXXXXX, LOUISIANA
SUH)
HAYNESVILLE 11010302B XXXXXX, XX #3 TR2B (HA XX XXXXXXXXX, LOUISIANA
SUH)
INTEREST-BPO/APO
--------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000651 0.000000
0.000000 0.000000 0.000651 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000244 0.000000
0.000000 0.000000 0.000244 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000570 0.000000
0.000000 0.000000 0.000570 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000895 0.000000
0.000000 0.000000 0.000895 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000895 0.000000
0.000000 0.000000 0.000895 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000895 0.000000
0.000000 0.000000 0.000895 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000895 0.000000
0.000000 0.000000 0.000895 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.000895 0.000000
0.000000 0.000000 0.000895 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003256 0.000000
0.000000 0.000000 0.003256 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003256 0.000000
0.000000 0.000000 0.003256 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003256 0.000000
0.000000 0.000000 0.003256 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003256 0.000000
0.000000 0.000000 0.003256 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 13 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
HAYNESVILLE 11010302C XXXXXX, XX #3 TR2C (HA XX XXXXXXXXX, LOUISIANA
SUH)
HAYNESVILLE 108656000 XXXXXX-XXXXXX CLAIBORNE, LOUISIANA 170272101300
HAYNESVILLE EAST 535072001 XXXXXX X X 0 0 XXXXXXXXX, XXXXXXXXX 170272172500
HAYNESVILLE EAST 535073001 XXXXXX, XXXXXX XXXXX 3 3 CLAIBORNE, LOUISIANA 170272181000
HAYNESVILLE EAST 538732001 BOLIEW 1 CLAIBORNE, LOUISIANA 170272225600
HAYNESVILLE EAST 535378001 XXXXXXX TRUST ET AL 1 CLAIBORNE, LOUISIANA 170272220000
HAYNESVILLE EAST 535074001 XXXXX, XXXX 1 CLAIBORNE, LOUISIANA 170272173600
HAYNESVILLE EAST 535075001 XXXXXXX 1 CLAIBORNE, LOUISIANA 170272207400
HAYNESVILLE EAST 535076001 DUBBERLY EST 1 CLAIBORNE, LOUISIANA 170272201300
HAYNESVILLE EAST 535077001 XXXXXXX ETAL 1 CLAIBORNE, LOUISIANA 170272204000
WAYNESVILLE EAST 535078001 XXXXXX 3 CLAIBORNE, LOUISIANA 170272219700
HAYNESVILLE EAST 535079001 XXXXXX X X ETAL 1 CLAIBORNE, LOUISIANA 170270178100
INTEREST-BPO/APO
--------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.003256 0.000000
0.000000 0.000000 0.003256 0.000000
HAYNESVILLE MARATHON OIL COMPANY 0.000000 0.000000 0.001628 0.000000
0.000000 0.000000 0.001628 0.000000
HAYNESVILLE EAST XXXX OIL COMPANY 0.078778 0.054420 0.000000 0.000000
0.078778 0.054420 0.000000 0.000000
HAYNESVILLE EAST XXXX OIL COMPANY 0.068741 0.054420 0.000000 0.000000
0.068741 0.054420 0.000000 0.000000
HAYNESVILLE EAST 0.000000 0.000000 0.000000 0.000000
0.087586 0.000000 0.000000 0.000000
HAYNESVILLE EAST TOTALFINAELF E & P USA 0.000911 0.000740 0.000000 0.000000
INC. 0.000911 0.000740 0.000000 0.000000
HAYNESVILLE EAST XXXX OIL COMPANY 0.091600 0.076784 0.000000 0.000000
0.091600 0.076784 0.000000 0.000000
HAYNESVILLE EAST TMR EXPLORATION INC. 0.092500 0.069375 0.000000 0.000000
0.092500 0.069375 0.000000 0.000000
HAYNESVILLE EAST TMR EXPLORATION INC. 0.072258 0.060971 0.000000 0.000000
0.072258 0.060971 0.000000 0.000000
HAYNESVILLE EAST TMR EXPLORATION INC. 0.092500 0.069160 0.000000 0.000000
0.092500 0.069160 0.000000 0.000000
WAYNESVILLE EAST XXXX OIL COMPANY 0.006424 0.005520 0.000000 0.000000
0.006424 0.005520 0.000000 0.000000
HAYNESVILLE EAST TMR EXPLORATION INC. 0.056149 0.047083 0.000000 0.000000
0.056149 0.047083 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 14 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
HAYNESVILLE EAST 535080001 XXXXXX X X 1 CLAIBORNE, LOUISIANA 170270182700
HAYNESVILLE EAST 535081001 XXXXXXX 1 CLAIBORNE, LOUISIANA 170272215300
HAYNESVILLE EAST 535082001 XXXXXXX HRS, T W 15 2 2 CLAIBORNE, LOUISIANA 170272200400
HAYNESVILLE EAST 535083001 SMACKOVER B RD SAND UNIT CLAIBORNE, LOUISIANA
HAYNESVILLE EAST 535085001 XXXX 1 CLAIBORNE, LOUISIANA 170272169500
HAYNESVILLE EAST 535086001 XXXX 2 CLAIBORNE, LOUISIANA 170272174500
HAYNESVILLE EAST 535087001 XXXXXX, X X 3 CLAIBORNE, LOUISIANA 170272210200
HAYNESVILLE SE 017657010 XXXXX 1-18 (XXXXX-PET XX XXXXXXXXX, LOUISIANA 170272177300
SUP)
HAYNESVILLE SE 017447010 RINICKER 1(WELSH-PET XX XXXXXXXXX, LOUISIANA 170272227700
SUQ)
INA 105549001 XXXXX, XXXXX XXXXXX, TEXAS 423153371600
JUST PLAIN LUCKY 533102001 XXXXX 1 VAN ZANDT, TEXAS 424673105500
JUST PLAIN LUCKY 18621010 JUST PLAIN LUCKY PIPELINE VAN ZANDT, TEXAS
& CF
INTEREST-BPO/APO
--------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
HAYNESVILLE EAST TMR EXPLORATION INC. 0.094872 0.071154 0.000000 0.000000
0.094872 0.071154 0.000000 0.000000
HAYNESVILLE EAST XXXX OIL COMPANY 0.071836 0.059454 0.000000 0.000000
0.071836 0.059454 0.000000 0.000000
HAYNESVILLE EAST MARATHON OIL COMPANY 0.022103 0.018042 0.000000 0.000000
0.022103 0.018042 0.000000 0.000000
HAYNESVILLE EAST MARATHON OIL COMPANY 0.022104 0.018000 0.000000 0.000000
0.022104 0.018000 0.000000 0.000000
HAYNESVILLE EAST XXXX OIL COMPANY 0.091642 0.069190 0.000000 0.000000
0.091642 0.069190 0.000000 0.000000
HAYNESVILLE EAST 0.071836 0.058367 0.000000 0.000000
0.071836 0.058367 0.000000 0.000000
HAYNESVILLE EAST XXXX OIL COMPANY 0.092500 0.069160 0.000000 0.000000
0.092500 0.069160 0.000000 0.000000
HAYNESVILLE SE MARATHON OIL COMPANY 0.045821 0.037231 0.000000 0.000000
0.045821 0.037231 0.000000 0.000000
HAYNESVILLE SE 0.061289 0.049797 0.000000 0.000000
0.061289 0.049797 0.000000 0.000000
INA SOUTHEASTERN PETROLEUM 0.000000 0.000000 0.000000 0.107031
0.000000 0.000000 0.000000 0.107031
JUST PLAIN LUCKY DEVON LOUISIANA 0.583333 0.470312 0.000000 0.000000
CORPORATION 0.583333 0.470312 0.000000 0.000000
JUST PLAIN LUCKY DEVON LOUISIANA 0.000000 0.000000 0.000000 0.000000
CORPORATION 0.000000 0.000000 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 15 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P.
AND DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
JUST PLAIN LUCKY 537791001 XXXXXX XXXXXXX 1 VAN ZANDT, TEXAS 424673106500
JUST PLAIN LUCKY 533066001 XXXXXXX 1 VAN ZANDT, TEXAS 424673104100
KINGSTON 016423010 XXXXXX 1 (CV RA SUF) DE XXXX, LOUISIANA 170312356200
KINGSTON 110998001 OLINKRAFT 1 (CASPIANA) DE XXXX, LOUISIANA 170312064900
XXXXXXXX 00000000 XXXXXXXXX 0-0XXX (XX XX XX XXXX, LOUISIANA 170312355600
SUC)
KINGSTON 016411010 SL 6760 #2 (CV RA SUC) DE XXXX, LOUISIANA 170312354900
KINGSTON 016422010 SL 6760 #3 (CV RA SUC) DE XXXX, LOUISIANA 170312355700
L C G 062439001 XXXXXXXX HEIRS GAS UN 1 XXXXXXXX, TEXAS 422033060000
L C G 062438001 XXXXX, XXXXX GAS UN 1 XXXXXXXX, TEXAS 422033015300
LONGWOOD 538670001 XXXXXX A 9 CADDO, LOUISIANA 170172538500
LONGWOOD 538674003 XXXXXXX 1-28 (XXXX 7800) CADDO, LOUISIANA 170172467200
LONGWOOD 538720001 XXXXXXX 2-29 CADDO, LOUISIANA 170172400300
INTEREST-BPO/APO
--------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
JUST PLAIN LUCKY DEVON LOUISIANA 0.583333 0.475647 0.000000 0.000000
CORPORATION 0.583333 0.475647 0.000000 0.000000
JUST PLAIN LUCKY DEVON LOUISIANA 0.657520 0.490364 0.000000 0.000000
CORPORATION 0.657520 0.490364 0.000000 0.000000
KINGSTON WINCHESTER PRODUCTION 0.000000 0.000000 0.080700 0.000000
COMPANY 0.000000 0.000000 0.080700 0.000000
XXXXXXXX X-X OPERATING COMPANY 0.000000 0.000000 0.080700 0.000000
0.000000 0.000000 0.080700 0.000000
KINGSTON WINCHESTER PRODUCTION 0.000000 0.000000 0.080700 0.000000
COMPANY 0.000000 0.000000 0.080700 0.000000
KINGSTON WINCHESTER PRODUCTION 0.000000 0.000000 0.080700 0.000000
COMPANY 0.000000 0.000000 0.080700 0.000000
KINGSTON WINCHESTER PRODUCTION 0.000000 0.000000 0.080700 0.000000
COMPANY 0.000000 0.000000 0.080700 0.000000
L C G G M XXXXXXXX 0.000000 0.000000 0.000000 0.039654
0.000000 0.000000 0.000000 0.039654
L C G XXX X XXXXXXXX, ET AL 0.000000 0.000000 0.000000 0.030757
0.000000 0.000000 0.000000 0.030757
LONGWOOD DEVON LOUISIANA 0.573984 0.428589 0.000000 0.000000
CORPORATION 0.573984 0.428589 0.000000 0.000000
LONGWOOD DEVON LOUISIANA 0.774830 0.580234 0.000000 0.000000
CORPORATION 0.167330 0.125000 0.000000 0.000000
LONGWOOD DEVON LOUISIANA 0.774830 0.580234 0.000000 0.000000
CORPORATION 0.774830 0.580234 0.000000 0.000000
-------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 16 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND
DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
LONGWOOD 538704001 XXXXXX 1 CADDO, LOUISIANA 170172471300
LONGWOOD 535111001 XXXXXXX 1 CADDO, LOUISIANA 170172373100
LOUISIANA VARIOUS 533697001 DISC 2 RD SUA (#24) ACADIA, LOUISIANA 170012083000
LOUISIANA VARIOUS 538736001 XXXXXXX ALT-1 (LCV RA SUN) LINCOLN, LOUISIANA 170612076500
MADISONVILLE 535815001 XXXXX #1 MADISON, TEXAS 423133035400
MADISONVILLE 535813001 XXXXXXX #1 MADISON, TEXAS 423133038700
MADISONVILLE 535810001 XXXXXXX, X. X. #1 WELL #1 MADISON, TEXAS 423133037000
MADISONVILLE 535811001 XXXXXXX, X. X. #2 WELL #3 MADISON, TEXAS 423133049300
MADISONVILLE 535814001 XXXXXXX, X. X. #4 SWD MADISON, TEXAS 423133069700
MADISONVILLE NORTHEAST 535812001 XXXXXXX X.X. 'B' #3 MADISON, TEXAS 423133046300
MARSTERS NE 532549001 XXXXXX XXXX # 0 XXXXXXXXX, XXXXX 421613139100
MARSTERS NE 532643001 DENT GU WELL 1 FREESTONE, TEXAS 421613133700
INTEREST-BPO/APO
--------------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
LONGWOOD XXXXXXXX OIL & GAS INC. 0.519405 0.392691 0.000000 0.000000
0.519405 0.392691 0.000000 0.000000
LONGWOOD CYPRESS OPERATING 0.037500 0.031250 0.000000 0.000000
0.037500 0.031250 0.000000 0.000000
LOUISIANA VARIOUS 0.000000 0.000000 0.001728 0.000000
0.000000 0.000000 0.001728 0.000000
LOUISIANA VARIOUS ST XXXX XXXX & 0.000000 0.000000 0.000000 0.000000
EXPLORATION CO. 0.225700 0.197500 0.000000 0.000000
MADISONVILLE DEVON LOUISIANA 0.750000 0.610000 0.000000 0.000000
CORPORATION 0.750000 0.610000 0.000000 0.000000
MADISONVILLE DEVON LOUISIANA 0.682871 0.561002 0.000000 0.000000
CORPORATION 0.682871 0.561002 0.000000 0.000000
MADISONVILLE DEVON LOUISIANA 1.000000 0.874511 0.000000 0.000000
CORPORATION 1.000000 0.874511 0.000000 0.000000
MADISONVILLE DEVON LOUISIANA 0.988281 0.864258 0.000000 0.000000
CORPORATION 0.988281 0.864258 0.000000 0.000000
MADISONVILLE DEVON LOUISIANA 0.993330 0.749251 0.000000 0.000000
CORPORATION 0.993330 0.749251 0.000000 0.000000
MADISONVILLE NORTHEAST DEVON LOUISIANA 1.000000 0.800000 0.000000 0.000000
CORPORATION 1.000000 0.800000 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.449269 0.359415 0.000000 0.000000
CORPORATION 0.400000 0.320000 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.657500 0.518697 0.000000 0.000000
CORPORATION 0.657500 0.518697 0.000000 0.000000
--------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 17 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND
DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
MARSTERS NE 532754001 HILL RANCH #1 FREESTONE, TEXAS 421613144200
XXXXXXXX XX 000000000 XXXX-XXXXXXX XX #0 FREESTONE, TEXAS 421613136700
MARSTERS NE 532740001 XXXX-XXXX #1 FREESTONE, TEXAS 421613130800
MARSTERS NE 532755001 XXXX-XXXXX GU WELL 1 FREESTONE, TEXAS 421613140000
MARSTERS NE 533073001 XXXXX-XXXX X.X. XXXX #0 XXXXXXXXX, XXXXX 421613128200
MARSTERS NE 533087001 XXXXXX XX GU #1-2 FREESTONE, TEXAS 421613095100
MARSTERS NE 533088001 XXXXXX XX GU #1-3 FREESTONE, TEXAS 421613122200
MARSTERS NE 533089001 XXXXXX XX GU #1-4 FREESTONE, TEXAS 421613125300
MARSTERS NE 533092001 XXXXXX XX GU #1-5 FREESTONE, TEXAS 421613143700
MARSTERS NE 533090001 XXXXXX TRUST GU 1-1 FREESTONE, TEXAS 421613132000
MARSTERS NE 533091001 XXXXXX TRUST GU 1-2 FREESTONE, TEXAS 421613016300
MC LOUISIANA UNASSIGNED 108871002 HA RD SUD; XXXXXX 22 1 XX XXXXXXXXX, LOUISIANA 170272189000
00004
INTEREST-BPO/APO
--------------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
MARSTERS NE DEVON LOUISIANA 0.511388 0.383286 0.000000 0.000000
CORPORATION 0.451388 0.338316 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.707500 0.532093 0.000000 0.000000
CORPORATION 0.647500 0.486968 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.725000 0.543750 0.000000 0.000000
CORPORATION 0.655000 0.491250 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.449269 0.349272 0.000000 0.000000
CORPORATION 0.400000 0.310968 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.877500 0.663310 0.000000 0.000000
CORPORATION 0.817500 0.617955 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.189560 0.146023 0.000000 0.000000
CORPORATION 0.188638 0.145285 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.237500 0.185875 0.000000 0.000000
CORPORATION 0.199078 0.155137 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.200000 0.150952 0.000000 0.000000
CORPORATION 0.199078 0.150951 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.465763 0.366986 0.000000 0.000000
CORPORATION 0.405763 0.320340 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.450000 0.342000 0.000000 0.000000
CORPORATION 0.450000 0.342000 0.000000 0.000000
MARSTERS NE DEVON LOUISIANA 0.500000 0.380000 0.000000 0.000000
CORPORATION 0.500000 0.380000 0.000000 0.000000
MC LOUISIANA UNASSIGNED MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
--------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 18 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND
DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
MUY MALO 064653001 PUIG 2-7 WEBB, TEXAS 424793591200
OTHER NORTH LA MINOR 535321001 XXXXXX 1 "CV D" CADDO, LOUISIANA 170172425500
OTHER NORTH LA MINOR 535318001 XXXXXX #3 LINCOLN, LOUISIANA 170610042200
OTHER NORTH LA MINOR 535163001 XXXXXXX 1 D CLAIBORNE, LOUISIANA 170272125100
OTHER NORTH LA MINOR 065473501 RAMBIN 1 SWD DE XXXX, LOUISIANA 170318802500
OTHER NORTH LA MINOR 535014001 XXXXXXX 1 BIENVILLE, LOUISIANA 170132086600
OTHER NORTH LA MINOR 535062001 XXXXXXX, O 1 CADDO, LOUISIANA
OTHER NORTH LA MINOR 538621001 XXXXX, XXX SWD #1 DE XXXX, LOUISIANA 170178835400
OTHER NORTH LA MINOR 535084001 ST XXXX XXX CLAIBORNE, LOUISIANA 170272208400
OTHER NORTH LA MINOR 535362001 XXXXXX UNIT, X X 1 CADDO, LOUISIANA 170170217800
XXXX NORTH 533100001 WHITE GAS UNIT #1 FREESTONE, TEXAS 421613075400
XXXXX HOOK GAS GATHERING 013554002 XXXXX HOOK GAS XXXX XXXXXX, MISSISSIPPI
MEASUREMENT
INTEREST-BPO/APO
--------------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
MUY MALO XXXXXXX ENGINEERING CORP. 0.400000 0.291743 0.000000 0.000000
0.400000 0.291743 0.000000 0.000000
OTHER NORTH LA MINOR XXXXXXXX OIL & GAS, INC. 0.000000 0.000000 0.005648 0.000000
0.000000 0.000000 0.005648 0.000000
OTHER NORTH LA MINOR SUNLAND PRODUCTION 0.225000 0.168750 0.000000 0.000000
COMPANY INC. 0.225000 0.168750 0.000000 0.000000
OTHER NORTH LA MINOR SUGAR CREEK PRODUCING 0.140625 0.120996 0.000000 0.000000
0.140625 0.120996 0.000000 0.000000
OTHER NORTH LA XXXXX X X OPERATING 0.009661 0.000000 0.000000 0.000000
0.009661 0.000000 0.000000 0.000000
OTHER NORTH LA MINOR XXXXXX X XXXXXXXXX INC. 0.016091 0.012167 0.000000 0.000000
0.016091 0.012167 0.000000 0.000000
OTHER NORTH LA MINOR UNKNOWN 0.000000 0.000000 0.000000 0.030733
0.000000 0.000000 0.000000 0.030733
OTHER NORTH LA XXXXX X X OPERATING 0.009661 0.000000 0.000000 0.000000
0.009661 0.000000 0.000000 0.000000
OTHER NORTH LA MINOR XXXX OIL COMPANY 0.000000 0.000000 0.001510 0.000000
0.000000 0.000000 0.001510 0.000000
OTHER NORTH LA MINOR XXXX OIL COMPANY 0.278800 0.243950 0.000000 0.000000
0.278800 0.243950 0.000000 0.000000
XXXX NORTH DEVON LOUISIANA 1.000000 0.751623 0.000000 0.000000
CORPORATION 0.788281 0.620873 0.000000 0.000000
XXXXX HOOK GAS GATHERING OCEAN FIELD SERVICES 0.000000 0.000000 0.000000 0.000000
COMPANY 0.000000 0.000000 0.000000 0.000000
--------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 19 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND
DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
XXXXX HOOK GAS GATHERING 013554003 XXXXX HOOK GAS XXXX XXXXXX, MISSISSIPPI
TECHNICAL
XXXXX HOOK GAS GATHERING 013554001 XXXXX HOOK GAS GATHERING XXXXXX, MISSISSIPPI
XXXXX HOOK WEST 546546001 XXXXX 01 XXXXXX, MISSISSIPPI 230912020000
XXXXX HOOK WEST 546548001 FORBES 01, X X XX XXXXXX, MISSISSIPPI 230912020600
XXXXX HOOK WEST 546547002 FORBES 01, XXXXX XXXXXX, MISSISSIPPI 230912005800
XXXXX HOOK WEST 546549001 FORBES 03, X X XXXXXX, MISSISSIPPI 230912019900
XXXXX HOOK WEST 542208001 XXXXXX 01 (FLS) WASHINGTON, LOUISIANA 171172023900
XXXXX HOOK WEST 542209001 XXXXXX 01-D, (JLS) WASHINGTON, LOUISIANA 171172023900
XXXXX HOOK WEST 101894002 XXXX 01, X.X. XXXXXX, MISSISSIPPI 230912007700
XXXXX HOOK WEST 546551001 XXXX 02, X.X. XXXXXX, MISSISSIPPI 230912012300
XXXXX HOOK WEST 546552001 XXXX 04, X.X. XXXXXX, MISSISSIPPI 230912015800
XXXXX HOOK WEST 546553002 XXXX 05 XXXXXX, MISSISSIPPI 230912021000
INTEREST-BPO/APO
--------------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
XXXXX HOOK GAS GATHERING OCEAN FIELD SERVICES 0.000000 0.000000 0.000000 0.000000
COMPANY 0.000000 0.000000 0.000000 0.000000
XXXXX HOOK GAS GATHERING OCEAN FIELD SERVICES 0.000000 0.000000 0.000000 0.000000
COMPANY 0.000000 0.000000 0.000000 0.000000
XXXXX HOOK XXXX XXXXX LOUISIANA 0.896948 0.741406 0.000000 0.000000
CORPORATION 0.896948 0.741406 0.000000 0.000000
XXXXX HOOK WEST DEVON LOUISIANA 0.898841 0.741616 0.000000 0.000000
CORPORATION 0.898841 0.741616 0.000000 0.000000
XXXXX HOOK XXXX XXXXX LOUISIANA 0.902807 0.724374 0.000000 0.000000
CORPORATION 0.902807 0.724374 0.000000 0.000000
XXXXX HOOK WEST DEVON LOUISIANA 0.845652 0.695651 0.000000 0.000000
CORPORATION 0.845652 0.695651 0.000000 0.000000
XXXXX HOOK XXXX XXXXX LOUISIANA 1.000000 0.802599 0.000000 0.000000
CORPORATION 1.000000 0.802599 0.000000 0.000000
XXXXX HOOK WEST DEVON LOUISIANA 1.000000 0.800482 0.000000 0.000000
CORPORATION 1.000000 0.800482 0.000000 0.000000
XXXXX HOOK XXXX XXXXX LOUISIANA 1.000000 0.833333 0.000000 0.000000
CORPORATION 1.000000 0.833333 0.000000 0.000000
XXXXX HOOK WEST DEVON LOUISIANA 0.877107 0.719152 0.000000 0.000000
CORPORATION 0.845852 0.692000 0.000000 0.000000
XXXXX HOOK XXXX XXXXX LOUISIANA 0.615927 0.506971 0.000000 0.000000
CORPORATION 0.615927 0.506971 0.000000 0.000000
XXXXX HOOK WEST DEVON LOUISIANA 0.684277 0.566838 0.000000 0.000000
CORPORATION 0.684277 0.566838 0.000000 0.000000
--------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 20 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 XXXXX
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND
DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
XXXXX HOOK WEST 546554001 XXXX 06 XXXXXX, MISSISSIPPI 230912021600
XXXXX HOOK WEST 546646001 XXXX 8 XXXXXX, MISSISSIPPI 230912032100
XXXXX HOOK WEST 546555001 XXXXXX 01 XXXXXX, MISSISSIPPI 230912014800
XXXXX HOOK WEST 507110001 XXXXX HOOK PIPELINE (DUKE) XXXXXX, MISSISSIPPI
SIMSBORO 535156001 JACKSON 1 LINCOLN, LOUISIANA 170612065500
XXXXXXXX XXXX XX 000000000 XXXXXXXX 0 XXXXXXXXX, XXXXX 421613123400
TERRYVILLE 535165001 XXXXXXXX, X X 0 XXXXXXX, XXXXXXXXX 170612019900
TERRYVILLE 535166001 XXXXXXX 20 1 LINCOLN, LOUISIANA 170612027300
TERRYVILLE 535167001 XXXXXXX 20 1 D LINCOLN, LOUISIANA 170612027300
TERRYVILLE 012240501 XXXXXXX, XXXXX 1 29 LINCOLN, LOUISIANA 170612017900
XXXXXXX XXXXX GAS 013552002 XXXXXXX XXXXX GAS GATH VAN ZANDT, TEXAS
GATHERING MEASURE
XXXXXXX XXXXX GAS 013552003 XXXXXXX XXXXX GAS GATH VAN ZANDT, TEXAS
GATHERING TECHNIC
INTEREST-BPO/APO
--------------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
XXXXX HOOK XXXX XXXXX LOUISIANA 0.912069 0.753717 0.000000 0.000000
CORPORATION 0.912069 0.753717 0.000000 0.000000
XXXXX HOOK WEST DEVON LOUISIANA 0.912351 0.753717 0.000000 0.000000
CORPORATION 0.912069 0.753000 0.000000 0.000000
XXXXX HOOK XXXX XXXXX LOUISIANA 0.903019 0.733532 0.000000 0.000000
CORPORATION 0.903019 0.733532 0.000000 0.000000
XXXXX HOOK WEST DEVON LOUISIANA 0.000000 0.000000 0.000000 0.000000
CORPORATION 0.000000 0.000000 0.000000 0.000000
SIMSBORO SUNLAND PRODUCTION 0.225000 0.168750 0.000000 0.000000
COMPANY INC. 0.225000 0.168750 0.000000 0.000000
STEWARDS MILL NE APACHE CORPORATION 0.140000 0.104311 0.000000 0.000000
0.005000 0.003709 0.000000 0.000000
TERRYVILLE VINTAGE PETROLEUM, INC. 0.233377 0.184375 0.000000 0.000000
0.232750 0.184375 0.000000 0.000000
TERRYVILLE VINTAGE PETROLEUM INC. 0.203835 0.168114 0.000000 0.000000
0.203835 0.168114 0.000000 0.000000
TERRYVILLE VINTAGE PETROLEUM INC. 0.225700 0.183154 0.000000 0.000000
0.225700 0.183154 0.000000 0.000000
TERRYVILLE VINTAGE PETROLEUM INC. 0.041717 0.034995 0.000000 0.000000
0.041717 0.034995 0.000000 0.000000
TIDWELL DAVIS GAS OCEAN FIELD SERVICES 0.000000 0.000000 0.000000 0.000000
GATHERING COMPANY 0.000000 0.000000 0.000000 0.000000
TIDWELL DAVIS GAS OCEAN FIELD SERVICES 0.000000 0.000000 0.000000 0.000000
GATHERING COMPANY 0.000000 0.000000 0.000000 0.000000
--------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 21 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 WELLS
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND
DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
TIDWELL DAVIS GAS 013552001 TIDWELL DAVIS GAS GATHERING VAN ZANDT, TEXAS
GATHERING
TIDWELL DAVIS GAS 013552004 TIDWELL DAVIS OPERATION VAN ZANDT, TEXAS
GATHERING NORTH
UNIONVILLE 110179001 CAMPBELL, M H 21 1 ALT LINCOLN, LOUISIANA 170612069800
UNIONVILLE 014164010 CV DAVIS RA; DAVIDSON ET 1 LINCOLN, LOUISIANA 170612072500
ALT
UNIONVILLE 107821001 DILLARD 1 (CV DAVIS RA UNION, LOUISIANA 171112294800
SUSS)
UNIONVILLE 107821002 ROBERTS 1-ALT (CV DAVIS RA UNION, LOUISIANA 171112544500
SUSS
UNIONVILLE 107823001 WRIGHT, HW "A" #1 CV D RA LINCOLN, LOUISIANA 170612025200
SUK
UNKNOWN 108463002 BEENE, CLAUD (TR. 22-6) CLAIBORNE, LOUISIANA
UNKNOWN 108464001 BOND, J.L. A (TR-2) CLAIBORNE, LOUISIANA
UNKNOWN 107065002 BOND, R.L. (TR. 16-18) CLAIBORNE, LOUISIANA
UNKNOWN 107065001 BOND, R.L. (TR. 21-8) CLAIBORNE, LOUISIANA
UNKNOWN 108871003 HA RD SUD; PARKER 22#1 TR. CLAIBORNE, LOUISIANA
00008
INTEREST-BPO/APO
--------------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
TIDWELL DAVIS GAS OCEAN FIELD SERVICES 0.000000 0.000000 0.000000 0.000000
GATHERING COMPANY 0.000000 0.000000 0.000000 0.000000
TIDWELL DAVIS GAS OCEAN FIELD SERVICES 0.000000 0.000000 0.000000 0.000000
GATHERING COMPANY 0.000000 0.000000 0.000000 0.000000
UNIONVILLE XTO ENERGY INC. 0.093750 0.076172 0.000000 0.003184
0.093750 0.076172 0.000000 0.003184
UNIONVILLE OWL CREEK PRODUCTION CO. 0.000000 0.000000 0.000000 0.003984
0.000000 0.000000 0.000000 0.003984
UNIONVILLE MIDROC OPERATING CO. 0.056016 0.047445 0.000000 0.000000
0.056016 0.047445 0.000000 0.000000
UNIONVILLE MIDROC OPERATING COMPANY 0.056016 0.047445 0.000000 0.000000
0.056016 0.047445 0.000000 0.000000
UNIONVILLE XTO ENERGY INC. 0.093750 0.076172 0.000000 0.000000
0.093750 0.076172 0.000000 0.000000
UNKNOWN MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
UNKNOWN MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
UNKNOWN MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
UNKNOWN MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
UNKNOWN MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
--------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 22 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT A-2 WELLS
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED
AS OF FEBRUARY 22, 2005 BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND
DEVON LOUISIANA CORPORATION AS SELLER, AND KCS RESOURCES, INC., AS BUYER
FIELD WELL ID WELL NAME STATE/COUNTY API
----- ------- --------- ------------ ---
UNKNOWN 108871001 HA RD SUD; PARKER 22#1 CLAIBORNE, LOUISIANA
TR.00001
WILLOW SPRINGS 104058001 JEFFERY GAS UN GREGG, TEXAS 421833042600
WILLOW SPRINGS 104059000 MOBBERLY UNIT 1 GREGG, TEXAS 421830008800
WILLOW SPRINGS 104060001 MOTT GAS UNIT GREGG, TEXAS 421830008400
WILLOW SPRINGS 535299001 THRASHER 1 GREGG, TEXAS 421833078400
WILLOW SPRINGS 535300001 THRASHER 4 GREGG, TEXAS 421833063100
WOODLAWN 535301001 WHITESIDE, R G ETAL 1 HARRISON, TEXAS 422033132400
INTEREST-BPO/APO
--------------------------------------------
FIELD OPERATOR WI NRI RI ORI
----- -------- -- --- -- ---
UNKNOWN MARATHON OIL COMPANY 0.000000 0.000000 0.001953 0.000000
0.000000 0.000000 0.001953 0.000000
WILLOW SPRINGS GENE POWELL INVESTMENTS, 0.000000 0.000000 0.000559 0.000000
INC. 0.000000 0.000000 0.000559 0.000000
WILLOW SPRINGS BURLINGTON RESOURCES OIL 0.000000 0.000000 0.007749 0.000000
& GAS 0.000000 0.000000 0.007749 0.000000
WILLOW SPRINGS GENE POWELL INVESTMENTS, 0.000000 0.000000 0.000057 0.000000
INC. 0.000000 0.000000 0.000057 0.000000
WILLOW SPRINGS HOUSTON EXPLORATION 0.037233 0.029500 0.000000 0.000000
COMPANY 0.037233 0.029500 0.000000 0.000000
WILLOW SPRINGS DORFMAN PRODUCTION COMPANY 0.124111 0.101198 0.000000 0.000000
0.124111 0.101198 0.000000 0.000000
WOODLAWN WILLIAMSON OIL & GAS INC. 0.437500 0.357360 0.000000 0.000000
0.437500 0.357360 0.000000 0.000000
--------------------------------------------------------------------------------
MONDAY, FEBRUARY 21, 2005 PAGE 23 MARKET: E.TX-N.LA-SANDYHOOK-2005 SALE
EXHIBIT B
ATTACHED TO AND MADE A PART OF THAT CERTAIN
PURCHASE AND SALE AGREEMENT DATED AS OF FEBRUARY 22, 2005
BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L. P. AND
DEVON LOUISIANA CORPORATION, AS SELLER,
AND KCS RESOURCES,INC., AS BUYER
ASSIGNMENT AND BILL OF SALE
This Assignment and Bill of Sale (this "Assignment") is from Devon Energy
Production Company, L.P., an Oklahoma limited partnership ("DEPC") and Devon
Louisiana Corporation, a Louisiana corporation ("DLC") ("DLC" and "DEPC" are
collectively and individually referred to as "Assignor"), whose collective
address is 20 N. Broadway, Oklahoma City, Oklahoma 73102, to KCS Resources,
Inc., a Delaware corporation, ("Assignee"), whose address is 7130 South Lewis,
Ste. 700, Tulsa, OK 74136, and is effective as of 7:00 A.M., Central Standard
Time, on January 1, 2005 (the "Effective Time").
ARTICLE 1
ASSIGNMENT OF ASSETS
SECTION 1.1 ASSIGNMENT. Assignor, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby bargains,
assigns, and transfers unto Assignee, all of Assignor's right, title and
interest in and to the following (excepting the Excluded Assets, as hereinafter
defined, individually, an "Asset," and collectively, the "Assets"):
(a) the oil and gas leases more particularly described in Exhibit A,
subject to any depth restrictions described in Exhibit A (collectively, the
"Leases"), together with any and all other rights, titles, and interests of
Assignor in and to (i) the leasehold estates created thereby, subject to any
depth restrictions described in Exhibit A and to the terms, conditions,
covenants, and obligations set forth in the Leases and/or Exhibit A and (ii) the
lands covered by the Leases or included in Units with which the Leases may have
been pooled or unitized, subject to any depth restrictions described in Exhibit
A (the "Lands"), including in each case, without limitation, fee interests,
royalty interests, overriding royalty interests, production payments, net
profits interests, carried interests, reversionary interests, and all other
interests of any kind or character;
(b) all oil and gas wells located on the Leases and the Lands or on
other leases or lands with which the Leases and/or the Lands may have been
pooled or unitized (collectively and including the wells set forth on Exhibit A,
the "Wells"), and all Hydrocarbons (as hereinafter defined) produced therefrom
or allocated thereto (the Leases, the Lands, and the Wells being collectively
referred to hereinafter as the "Properties");
(c) all rights and interests in, under, or derived from all
unitization and pooling agreements in effect with respect to the Properties and
the Units created thereby which accrue or are attributable to the interests of
Assignor in the Properties;
(d) to the extent that they may be assigned, all Applicable
Contracts (as hereinafter defined);
(e) to the extent that they may be assigned, all permits, licenses,
servitudes, easements, rights-of-way and other surface agreements to the extent
used primarily in connection with the ownership or operation of the Properties
or the Personal Property (as hereinafter defined);
(f) all equipment, machinery, fixtures, and other real, personal,
and mixed property, operational and nonoperational, known or unknown, located on
or used for the operation of the Properties or the other Assets described above
as of the Effective Time, including, without limitation, saltwater disposal
wells, well equipment, casing, rods, tanks, boilers, buildings, tubing, pumps,
motors, fixtures, machinery, compression equipment, flow lines, pipelines,
gathering systems, processing and separation facilities, platforms, structures,
materials, and other items used in the operation thereof as of the Effective
Time (collectively the "Personal Property");
(g) all Imbalances (as hereinafter defined) relating to the
Properties or other Assets; and
(h) all of the rights, titles, and interests of Assignor in and to
all of the files, records, information, and data, whether written or
electronically stored, primarily relating to the Assets, including, without
limitation: (i) land and title records (including abstracts of title, title
opinions, maps and title curative documents); (ii) contract files; (iii)
correspondence; (iv) operations, environmental, production, and accounting
records and (v) geological, geophysical, seismic and related data and
information (including maps and logs) to the extent the transfer thereof is not
restricted by obligations of Assignor to Third Parties under confidentiality or
license agreements and (vi) facility and well records but excluding any of the
foregoing items that are Excluded Assets ("Records"),
EXCEPTING AND RESERVING to Assignor, however, all Excluded Assets. Except
for the Excluded Assets, this Assignment shall cover and transfer all of
Assignor's right, title and interest in and to the Assets, whether or not
properly described in Exhibit A.
TO HAVE AND TO HOLD the Assets unto Assignee, its successors and assigns,
forever, subject, however, to all the terms and conditions of this Assignment.
SECTION 1.2 EXCLUDED ASSETS. shall mean (a) all of Assignor's corporate
minute books, financial records, and other business records that relate to
Assignor's business generally (including the ownership and operation of the
Assets); (b) all trade credits, all accounts, receivables and all other
proceeds, income or revenues attributable to the Assets with respect to any
period of time prior to the Effective Time; (c) all claims and causes of action
of Assignor arising under or with respect to any Contracts that are attributable
to periods of time prior to the Effective Time (including claims for adjustments
or refunds); (d) all rights and interests of
-2-
Assignor (A) under any policy or agreement of insurance or indemnity, (B) under
any bond or (C) to any insurance or condemnation proceeds or awards arising, in
each case, from acts, omissions or events, or damage to or destruction of
property; (e) all Hydrocarbons produced and sold from the Properties with
respect to all periods prior to the Effective Time; (f) all claims of Assignor
for refunds of or loss carry forwards with respect to (A) production or any
other taxes attributable to any period prior to the Effective Time, (B) income
or franchise taxes or (C) any taxes attributable to the Excluded Assets; (g) all
personal computers and associated peripherals and all radio and telephone
equipment; (h) all of Assignor's proprietary computer software, patents, trade
secrets, copyrights, names, trademarks, logos and other intellectual property;
(i) all documents and instruments of Assignor that may be protected by an
attorney-client privilege; (j) all seismic and related or other data that cannot
be disclosed or transferred to Assignee as a result of confidentiality
arrangements under agreements or restricted licenses with Third Parties; (k) all
audit rights arising under any of the Applicable Contracts or otherwise with
respect to any period prior to the Effective Time or to any of the Excluded
Assets, except for any Imbalances; (l) documents prepared or received by
Assignor with respect to (A) lists of prospective purchasers for such
transactions compiled by Assignor, (B) bids submitted by other prospective
purchasers of the Assets, (C) analyses by Assignor of any bids submitted by any
prospective purchaser, (D) correspondence between or among Assignor, its
respective representatives, and any prospective purchaser other than Assignee
and (E) correspondence between Assignor or any of its respective representatives
with respect to any of the bids, the prospective purchasers, or the transactions
contemplated in this Agreement; (n) any offices, office leases or personal
property located on such sites which are not directly related to any one or more
of the Assets; (o) all of Assignor's employee benefit plans, including all
rights and assets related thereto.
SECTION 1.3 RETAINED RIGHTS AND OBLIGATIONS. The execution and delivery of
this Assignment by Assignor, and the execution and acceptance of this Assignment
by Assignee, shall not operate to release or impair any surviving rights or
obligations of Assignor or Assignee under the Purchase and Sale Agreement (as
hereinafter defined).
ARTICLE 2
DEFINED TERMS
SECTION 2.1 DEFINITIONS. Capitalized terms used in this Assignment and not
otherwise defined shall have the meanings given to such terms in that certain
Purchase and Sale Agreement dated as of February 22, 2005, by and among Assignor
and Assignee (the "Purchase and Sale Agreement").
ARTICLE 3
DISCLAIMERS
SECTION 3.1 DISCLAIMERS OF WARRANTIES AND REPRESENTATIONS.
(a) EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE 12.1 OR
ARTICLE IV OF THE PURCHASE AND SALE AGREEMENT, (I) ASSIGNOR MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, AND (II) ASSIGNOR
EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION,
WARRANTY,
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STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO ASSIGNEE
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 ASSIGNEE BY ANY OFFICER, DIRECTOR, EMPLOYEE,
AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF ASSIGNOR OR ANY OF ITS
AFFILIATES).
(b) EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE
IV OF THE PURCHASE AND SALE AGREEMENT, AND WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, ASSIGNOR 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 REPORT OF ANY PETROLEUM ENGINEERING
CONSULTANT, OR ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION,
RELATING TO THE ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF
HYDROCARBONS 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 INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR
STATEMENTS PREPARED BY ASSIGNOR OR THIRD PARTIES WITH RESPECT TO THE ASSETS,
(VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO
ASSIGNEE 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 (IX) ANY
IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT.
EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THE
PURCHASE AND SALE AGREEMENT, ASSIGNOR FURTHER DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT
VICES OR DEFECTS, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR
SAMPLES OF MATERIALS OF ANY ASSETS, RIGHTS OF A PURCHASER UNDER APPROPRIATE
STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE,
IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT ASSIGNEE
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 OR DEFECTS (KNOWN OR
UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT ASSIGNEE HAS MADE OR
CAUSED TO BE MADE SUCH INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE. WITH RESPECT
TO ANY OF THE ASSETS THAT ARE LOCATED IN LOUISIANA, ASSIGNEE ACKNOWLEDGES THAT
THIS WAIVER HAS BEEN EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT
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LIMITATION, A WAIVER OF WARRANTY AGAINST REHIBITORY VICES ARISING UNDER
LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.
(c) OTHER THAN THOSE REPRESENTATIONS SET FORTH IN ARTICLE 4.15 OF AT HE
PURCHASE AND SALE AGREEMENT, ASSIGNOR HAS NOT AND WILL NOT MAKE ANY
REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO
ENVIRONMENTAL LAWS, 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 HEREIN OR OTHERWISE
SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND SUBJECT TO
ASSIGNEE'S RIGHTS UNDER ARTICLES XIII AND XIV OF THE PURCHASE AND SALE
AGREEMENT, ASSIGNEE SHALL BE DEEMED TO BE TAKING THE ASSETS "AS IS" AND "WHERE
IS" WITH ALL FAULTS FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT
ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS
ASSIGNEE DEEMS APPROPRIATE.
(d) ASSIGNOR AND ASSIGNEE AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE
LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND WARRANTIES
CONTAINED HEREIN ARE "CONSPICUOUS" DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE
LAW.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1 ASSIGNMENT SUBJECT TO AGREEMENT. This Assignment is expressly
made subject to the terms of the Purchase and Sale Agreement.
SECTION 4.2 SEPARATE ASSIGNMENTS. Where separate assignments of Assets
have been, or will be, executed for filing with and approval by applicable
Governmental Authorities, any such separate assignments (a) shall evidence the
Assignment and assignment of the applicable Assets herein made, and shall not
constitute any additional Assignment or assignment of the Assets, (b) are not
intended to modify, and shall not modify, any of the terms, covenants and
conditions, or limitations on warranties, set forth in this Assignment and are
not intended to create and shall not create any representations, warranties or
additional covenants of or by Assignor to Assignee, and (c) shall be deemed to
contain all of the terms and provisions of this Assignment, as fully and to all
intents and purposes as though the same were set forth at length in such
separate assignments.
SECTION 4.3 SUCCESSORS AND ASSIGNS. This Assignment shall bind and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that
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nothing in this Assignment shall assign or grant, or in any way operate to
assign or grant, any right, title or interest in, to or under the Purchase and
Sale Agreement to any successor or assign of Assignee with respect to the Assets
or any part thereof, it being expressly understood that rights, titles and
interests under the Agreement may only be obtained or assigned in strict
accordance with the terms thereof.
SECTION 4.4 TITLES AND CAPTIONS. All article or Article titles or captions
in this Assignment are for convenience only, shall not be deemed part of this
Assignment and in no way define, limit, extend, or describe the scope or intent
of any provisions hereof. Except to the extent otherwise stated in this
Assignment, references to "Articles" are to Articles of this Assignment, and
references to "Exhibits" are to the Exhibits attached to this Assignment, which
are made a part hereof and incorporated herein for all purposes.
SECTION 4.5 COUNTERPARTS. This Assignment may be executed in any number of
counterparts, and each counterpart hereof shall be deemed to be an original
instrument, but all such counterparts shall constitute but one instrument.
EXECUTED on _____________, 2005, but effective at the Effective Time.
ASSIGNOR: ASSIGNEE:
DEVON ENERGY PRODUCTION KCS RESOURCES, INC.
COMPANY, L.P.
_________________________________ _________________________________________
By: _____________________________ By: _____________________________________
Title: __________________________ Title: __________________________________
DEVON LOUISIANA CORPORATION
_________________________________
By: _____________________________
Title: __________________________
[APPROPRIATE ACKNOWLEDGEMENTS AND WITNESS EXECUTION LINES TO BE ADDED TO
EXECUTION FORM OF ASSIGNMENT]
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EXHIBIT C
ATTACHED TO AND MADE A PART OF THAT CERTAIN
PURCHASE AND SALE AGREEMENT DATED AS OF FEBRUARY 22, 2005
BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND DEVON
LOUISIANA CORPORATION, AS SELLER, AND KCS RESOURCES, INC., AS BUYER
TITLE INDEMNITY AGREEMENT
This Title Indemnity Agreement (the "Agreement") dated as of the ____
day of __________, 2005, is entered into among Devon Energy Production Company,
L.P., a Delaware limited partnership ("DEPC") and Devon Louisiana Corporation, a
Louisiana corporation ("DLC" and DEPC are collectively referred to as
"Indemnitor" and individually as an "Indemnitor") and ________________________
("Indemnitee"). Capitalized terms used herein and not otherwise defined below or
elsewhere in this Agreement shall have the meaning assigned to them in this
Agreement, or, if not so assigned, as assigned to them in that certain Purchase
and Sale Agreement dated as of ________________, 2005, by and among Seller and
Buyer (the "Purchase and Sale Agreement").
RECITALS
WHEREAS, of even date herewith, Indemnitor is selling and delivering,
and Indemnitee is purchasing and accepting, the Assets pursuant to the Purchase
and Sale Agreement; and
WHEREAS, certain alleged Title Defects have been raised by Indemnitee
in connection with its title review of the Assets and Indemnitor has agreed to
execute this Agreement in order to indemnify Indemnitee against the effects of
such alleged Title Defects pursuant to Article 12.2(d)(ii) of the Purchase and
Sale Agreement.
NOW, THEREFORE, in consideration of the purchase and sale as
contemplated by the Purchase and Sale Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
AGREEMENT
1. Unwaived Title Defects.
Attached hereto as Exhibit A is a list of unwaived alleged Title
Defects that Indemnitor and Indemnitee have determined may affect certain of the
Assets described in Exhibit A. Except as otherwise expressly provided on Exhibit
A, neither Indemnitor nor Indemnitee recognize the validity or existence of any
of such alleged Title Defects, nor is there any recognition, express or implied,
by the execution of this Agreement that any of such alleged Title Defects
affect, burden or encumber the Assets described in Exhibit A hereto. Each of the
parties reserves the right to contest with each other and/or with third parties
the validity, existence or effect of any or all of said alleged Title Defects in
accordance with the terms of the Purchase and Sale Agreement, and Indemnitor's
obligations hereunder are subject to such reserved right.
2. Indemnity.
Of even date herewith, Indemnitor has executed and delivered to
Indemnitee a document entitled Assignment and Bill of Sale conveying the Assets
to be filed in certain counties/parishes in ___________. Notwithstanding any
provision of the Purchase and Sale Agreement or any of the assignments or
conveyances delivered at or subsequent to the Closing, but subject to paragraph
1 above, Indemnitor agrees to defend, indemnify and hold Indemnitee harmless
against all Liabilities arising out of the alleged Title Defects described in
Exhibit A, subject to the following conditions:
(a) If Indemnitor has disputed Indemnitee's assertion of an alleged
Title Defect in accordance with the Purchase and Sale Agreement and
Indemnitee's assertion of such alleged Title Defect is determined to be
invalid, incorrect or not in compliance with the requirements of the
Purchase and Sale Agreement, then Indemnitor's obligations under this
Agreement shall not cover or apply to the portion of such alleged Title
Defect that is determined to be invalid, incorrect or not in compliance
with the requirements of the Purchase and Sale Agreement.
(b) The indemnity provided for herein by Indemnitor shall be the
sole and exclusive recourse and remedy of Indemnitee with respect to
the alleged Title Defects described on Exhibit A. All claims for
indemnification by Indemnitee under this Agreement must be asserted and
resolved pursuant to Article 14.7 of the Purchase and Sale Agreement,
as if this Agreement were part of the Purchase and Sale Agreement and
Article 14.7 applied to this paragraph 2.
(c) In no event shall Indemnitor be liable to Indemnitee hereunder
for any exemplary, punitive, special, indirect, consequential, remote
or speculative damages.
3. Assignment.
Notwithstanding anything herein to the contrary, neither this Agreement
nor any rights, covenants, duties or obligations hereunder shall be assigned or
transferred in any way whatsoever by Indemnitee except with the prior written
consent of Indemnitor, which consent Indemnitor shall be under no obligation to
grant, and any assignment, transfer or attempted assignment or transfer without
such consent shall be void ad initio; provided, however, that Indemnitee may
assign, in whole or in part, its rights under this Agreement with respect to any
alleged Title Defect described on Exhibit A, or any portion thereof, to an
assignee of its rights in any portion of the Assets affected by such alleged
Title Defect.
4. Binding Agreement.
Subject to the provisions of paragraph 3 above, this Agreement shall be
binding on, and shall inure to the benefit of, Indemnitor and Indemnitee and
their respective successors and assigns.
2
5. Governing Law.
THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION
OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE PARTIES
HERETO CONSENT TO THE EXERCISE OF JURISDICTION IN PERSONAM BY THE COURTS OF THE
STATE OF TEXAS FOR ANY ACTION ARISING OUT OF THIS AGREEMENT. ALL ACTIONS OR
PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH,
OUT OF, RELATED TO, OR FROM THIS AGREEMENT SHALL BE EXCLUSIVELY LITIGATED IN
COURTS HAVING SITES IN HOUSTON, HARRIS COUNTY, TEXAS. EACH PARTY HERETO WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
6. Severability.
If any term, clause or provision of this Agreement is ever held
illegal, invalid or unenforceable, the remainder of this Agreement shall not be
affected, but shall remain in full force and effect in accordance with the terms
hereof.
7. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to constitute one and the same Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first written above.
INDEMNITOR: INDEMNITEE:
DEVON ENERGY PRODUCTION
COMPANY, L.P. ---------------------------------
------------------------------------------- ---------------------------------
By: By:
---------------------------------------- ------------------------------
Title: Title:
------------------------------------- ---------------------------
DEVON LOUISIANA CORPORATION
By:
----------------------------------------
Title:
-------------------------------------
3
EXHIBIT D
ATTACHED TO AND MADE A PART OF THAT CERTAIN
PURCHASE AND SALE AGREEMENT DATED AS OF FEBRUARY 22, 2005
BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L. P. AND DEVON
LOUISIANA CORPORATION, AS SELLER, AND KCS RESOURCES, INC., AS BUYER
ACCESS AGREEMENT
THIS ACCESS AGREEMENT (this "Agreement"), dated as of _____________,
2005, is entered into among Devon Energy Production Company, L.P., a Delaware
limited partnership ("DEPC") and Devon Louisiana Corporation, a Louisiana
corporation ("DLC" and DEPC are collectively referred to as "Seller" and
individually as a "Seller"), and ________________, a _____________ ("Buyer").
Capitalized terms used herein and not otherwise defined below or elsewhere in
this Agreement shall have the meanings assigned to them in this Agreement, or,
if not so assigned, as assigned to them in that certain Purchase and Sale
Agreement dated as of ___________, 2005, by and among Seller and Buyer (the
"Purchase and Sale Agreement").
RECITALS
WHEREAS, certain of the Activities may be undertaken by Seller or
Seller's Consultants in whole or in part after the Closing Date;
WHEREAS, it may be necessary for Seller and Seller's Consultants to
gain access to the Assets after the Closing to conduct and perform the
Activities;
WHEREAS, Buyer desires to grant Seller and Seller's Consultants access
to the Assets in order that Seller may conduct and perform the Activities;
NOW, THEREFORE, in consideration of the purchase and sale as
contemplated by the Purchase and Sale Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
AGREEMENT
1. Definitions
1.1 Activities. The term "Activities" shall mean those investigation
activities and Remediation actions reasonably necessary in the judgment of
Seller to complete Remediation of any of the Assets required or permitted to be
performed by Seller pursuant to Article 13.1(b)(ii) of the Purchase and Sale
Agreement or otherwise agreed to in writing by Buyer, together with any
activities incidental thereto.
1.2 Seller's Consultant. The term "Seller's Consultant" shall mean any
and all agents, consultants or contractors retained by Seller to assist in
conducting or performing
the Activities and any employee, agent, contractor or subcontractor of a
Seller's Consultant.
2. Access. Subject to the terms of this Agreement, Buyer hereby grants
Seller and Seller's Consultants the right to enter upon the Assets for the
purpose of conducting and performing the Activities (the "Access Right"). The
Access Right shall be subject to the following conditions:
2.1 Scope. Neither Seller nor Seller's Consultants shall engage in any
activities on the Assets other than the Activities. Seller and Seller's
Consultants shall be entitled, subject to any third party restrictions, to (i)
install and operate on the Assets any remediation system which constitutes a
part of any Remediation and (ii) use, without cost to Seller or Seller's
Consultants, any utilities now or hereafter existing on the Assets as are
reasonably needed in connection with the Activities.
2.2 Termination. This Access Right shall remain in full force and
effect so long as Seller or any Seller's Consultant is continuing to perform
with reasonable diligence any Activities on the Assets pursuant to Article
13.1(b)(ii) of the Purchase and Sale Agreement.
2.3 Notice of Commencement. By at least 5:00 p.m. on the Business Day
three (3) days before the date on which Seller intends to commence or cause
Seller's Consultants to commence to conduct or perform the initial Activities on
any Asset, Seller shall notify Buyer in writing of the date on which such
initial Activities are expected to commence.
2.4 Vehicles. Except insofar as reasonably necessary to carry out the
Activities, all vehicles brought by Seller and Seller's Consultants onto the
Assets will be restricted to existing roadways, if any, on the Assets.
2.5 Compliance with Law. All Activities conducted or performed by
Seller and Seller's Consultants on the Assets shall be conducted and performed
in material compliance with all applicable Laws, including Environmental Laws.
3. Indemnity. Seller shall defend, indemnify and hold harmless the Buyer
Indemnified Parties from and against (i) all Liabilities of any Third Party to
the extent such Liabilities are caused by or result from the acts or omissions
of Seller or Seller's Consultants in conducting or performing the Activities on
the Assets, REGARDLESS OF FAULT, EXCEPTING ONLY ANY BUYER INDEMNIFIED PARTY'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, and (ii) all Liabilities for personal
injury or property damage of any Buyer Indemnified Party to the extent same are
caused by or result from any negligence or willful misconduct of Seller or
Seller's Consultants in conducting or performing the Activities on the Assets;
provided, however, that Seller shall not be obligated to defend, indemnify or
hold harmless any Buyer Indemnified Party under this clause (ii) for any Buyer
Indemnified Party's negligence or willful misconduct. Seller's obligations under
this Agreement shall be subject to the terms and provisions of Article 14.11 of
the Purchase and Sale Agreement, as if this
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Agreement were part of the Purchase and Sale Agreement. All claims for defense,
indemnification and hold harmless under this Article 3 shall be asserted and
resolved under Article 14.7 of the Purchase and Sale Agreement as if this
Agreement were part of the Purchase and Sale Agreement and Article 14.7 applied
to this Article 3. The terms and provisions of this Article 3 shall survive the
termination of the Access Right.
4. Further Provisions
4.1 No Admissions. This Agreement is not an admission or
acknowledgment, expressed or implied, of fault, responsibility or liability of
any kind by Buyer or Seller under any Law, including any Environmental Law, for
acts, omissions, obligations or events involving the presence, if any, of
Hazardous Substances on or adjacent to the Assets.
4.2 Rights of Third Parties. This Agreement is for the sole benefit of
(i) Buyer, Seller and their respective successors and assigns as permitted
herein and (ii) Seller's Consultants, and no other Person shall be entitled to
enforce this Agreement, rely on any covenant or agreement contained herein,
receive any rights hereunder or be a third party beneficiary of this Agreement.
Any member of the Buyer Indemnified Parties that is a third party shall be
defended, indemnified and held harmless under the terms of this Agreement only
to the extent that Buyer expressly elects to exercise such right of defense,
indemnity and hold harmless on behalf of such third party member of the Buyer
Indemnified Parties; and no party shall have any direct liability or obligation
to any third party member of the Buyer Indemnified Parties or be liable to any
third party member of the Buyer Indemnified Parties for any election or
non-election or any act or failure to act under or in regard to any term of this
Agreement. Any claim for defense, indemnity or hold harmless hereunder on behalf
of a member of the Buyer Indemnified Parties must be made and administered by
Buyer.
4.3 Notices. 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 as permitted under Article 16.6 of the Purchase and Sale Agreement.
4.4 Binding Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the rights and obligations of Seller shall not
be assignable or delegable by Seller (other than by Seller to Seller's
Consultants) without the express written consent of Buyer.
4.5 Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE
PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER
CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE
PARTIES HERETO CONSENT TO THE EXERCISE OF JURISDICTION IN PERSONAM BY THE COURTS
OF THE STATE OF TEXAS FOR ANY ACTION ARISING OUT OF THIS AGREEMENT. ALL ACTIONS
OR
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PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH,
OUT OF, RELATED TO, OR FROM THIS AGREEMENT SHALL BE EXCLUSIVELY LITIGATED IN
COURTS HAVING SITES IN HOUSTON, HARRIS COUNTY, TEXAS. EACH PARTY HERETO WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
4.6 Severability. If any term, clause or provision of this Agreement is
ever held illegal, invalid or unenforceable, the remainder of this Agreement
shall not be affected, but shall remain in full force and effect in accordance
with the terms hereof.
4.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
multiple counterparts as of the date first above written.
SELLER:
DEVON ENERGY PRODUCTION COMPANY, L.P.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
DEVON LOUISIANA CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
BUYER:
-------------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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