Exhibit 10.2
Execution Copy
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
HICKORY CREEK GATHERING, L.P.,
AND
RANGE OPERATING TEXAS, LLC
(SELLER)
AND
GATEWAY PIPELINE COMPANY
(BUYER)
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") is made and entered
into this 7th day of January, 2010, by and between HICKORY CREEK GATHERING,
L.P., a Texas limited partnership ("Hickory Creek Partnership"), RANGE OPERATING
TEXAS, LLC (successor by merger to Xxxxxx Energy, Inc.), a Delaware limited
liability company ("Range") (Hickory Creek Partnership and Range are hereinafter
sometimes referred to individually as an "Individual Seller" or collectively as
"Seller"), and GATEWAY PIPELINE COMPANY, a Texas corporation (hereinafter
referred to as "Buyer"). Buyer and Seller are sometimes referred to collectively
as the "Parties" and, individually, as a "Party."
W I T N E S S E T H:
WHEREAS, Seller (in the following proportions: Hickory Creek Partnership --
an undivided 75.00%, and Range - an undivided 25.00%) is the owner of the Asset
(as defined below); and
WHEREAS, Seller is willing to sell the Asset to Buyer and Buyer is willing
to purchase the Asset from Seller on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants, conditions and agreements in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged by each Party, Buyer and Seller agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below. Other defined terms shall have the
meaning given to them in the section of the Agreement where they are first
defined:
"Affiliate" shall mean any Person that, directly or indirectly, through one
or more entities, controls, is controlled by or is under common control with the
Person specified. For the purpose of the immediately preceding sentence, the
term "control" and its syntactical variants mean the power to direct or cause
the direction of the management of such Person, whether through the ownership of
voting securities, by contract, agency or otherwise.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday on which banks in Fort Worth, Texas are authorized or obligated by
Law to close.
"Buyer Indemnitees" shall mean Buyer and its shareholders and Affiliates,
and the officers, directors, employees, agents and representatives of all of the
foregoing Persons.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement by Buyer dated November 30, 2009.
Page 1 of 41
"Contracts" shall mean all contracts, agreements, undertakings,
instruments, leases, licenses, commitments and arrangements.
"Encumbrance" shall mean any lien, mortgage, deed of trust, security
interest, charge, pledge, retention of title agreement, easement, encroachment,
condition, reservation, covenant or other encumbrance affecting title or the
use, benefit or value of the Asset.
"Environmental Laws" shall mean applicable federal and state statutes and
regulations and applicable local statutes, regulations and/or ordinances (in
each case, as the same have been amended) to protect human health and the
environment, including the Clean Air Act, the Clean Water Act, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Occupational Safety and Health
Act of 1970, the Resource Conservation and Recovery Act of 1976, the Safe
Drinking Water Act, the Toxic Substances Control Act and the Oil Pollution Act
of 1990.
"Governmental Authority" shall mean any federal, state, local or foreign
government or any court of competent jurisdiction, regulatory or administrative
agency, commission or other governmental authority that exercises jurisdiction
over the Asset.
"Interim Period" shall mean that period commencing on the date of the
execution of this Agreement and terminating upon the earlier of the Closing or
the termination of this Agreement.
"Knowledge" shall mean, (i) with respect to Hickory Creek Partnership, the
actual knowledge (after reasonable investigation and inquiry) of Xxxxxx X. Xxxx;
(ii) with respect to Range, the actual knowledge (after reasonable investigation
and inquiry) of Xxxx Xxxxxxxxxxx; and (iii) with respect to Buyer, the actual
knowledge (after reasonable investigation and inquiry) of Xxxxxx Xxxxxx.
"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.
"Liabilities" shall mean, except as provided in Section 12.09, 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.
"Lowest Cost Response" shall mean the response allowed under Environmental
Laws that a reasonably prudent operator would take to address the Condition to
bring it into compliance with applicable Environmental Laws at the lowest
reasonable cost (considered as a whole taking into consideration any negative
impact such response may have on the operations of the relevant Asset(s)) as
compared to any other response that is consistent with and permitted under
Environmental Laws. With regard to soil contamination, Lowest Cost Response
shall be based on remediation in place without excavation and removal of soil
unless the Condition cannot, under any circumstances, be remediated without
excavation and replacement of soil.
"Material Adverse Effect" shall mean an event or circumstance that results
in a material adverse effect (meaning $250,000 or greater) on the use, ownership
or operation of the Asset, taken as a whole and as currently operated as of the
Page 2 of 41
date of this Agreement, or an occurrence or event that materially hinders or
impedes the consummation by Seller of the transactions contemplated by this
Agreement; provided, however, that none of the following shall constitute a
Material Adverse Effect: (a) any effect resulting from entering into this
Agreement or the announcement of the transaction(s) contemplated by this
Agreement; (b) any effect resulting from changes in general market, economic,
financial or political conditions in the area in which the Asset is located, the
United States or worldwide including any act of terrorism, hostilities or war;
(c) any effect resulting from a change in Laws from and after the date of this
Agreement; and (d) any changes in the prices of hydrocarbons.
"Material Contract" shall mean any Contract that has or could reasonably be
expected to have a material economic impact on the use, ownership or operation
of the Asset, including the following:
(a) any Contract that can reasonably be expected to result in
aggregate payments by Seller with respect to the Asset of more than $25,000
during the current or any subsequent calendar year based solely on the
terms of the Contract and not on increases in other factors including
volumes or revenues;
(b) any Contract that can reasonably be expected to result in
aggregate revenues to Seller with respect to the Asset of more than $25,000
during the current or any subsequent calendar year based solely on the
terms of the Contract and not on increases in other factors including
volumes or revenues;
(c) any indenture, mortgage, loan, note, credit, sale-leaseback or
similar Contract (in each case) to which the Asset is subject (whether
Seller is the borrower or the lender) and all related security agreements
or similar agreements associated therewith, unless such Asset is to be
released from such Contracts on or before the Closing;
(d) any Contract between an Affiliate of Seller and Seller that will
not be terminated on or prior to Closing;
(e) any Contract obligating Seller to sell, acquire, grant, convey or
otherwise dispose of any of the Asset other than conventional rights of
reassignment;
(f) any operating agreement, development agreement, participation
agreement, joint venture agreement, partnership agreement, plant agreement,
or other similar agreement;
(g) any Contract that creates any area of mutual interest with respect
to the development or expansion of the Asset;
(h) any Contract relating to the use of the Asset to gather or
transport hydrocarbons;
(i) any Contract that materially limits the freedom of Seller to
compete in any line of business or to conduct business in any geographic
location and that relates to the Asset;
Page 3 of 41
(j) any Contract that evidences an easement, right of way, lease or
rental of any land, building or other improvements or portion thereof,
fixtures or personal property; and
(k) the Existing Contracts described in Section 2.02 below.
"Operating Expenses" shall mean all operating expenses (including costs of
insurance and taxes) and capital expenditures incurred in the ownership or
operation of the Asset in the ordinary course of business, but excluding (a)
Liabilities for personal injury or death, property damage or violation of any
Law, and (b) environmental Liabilities, including obligations to remediate any
contamination of groundwater, surface water, soil, sediments, the Asset or
personal property under applicable Environmental Laws.
"Permitted Encumbrances" shall mean any of the following Encumbrances:
(a) the terms, conditions, restrictions, exceptions, reservations,
limitations and other matters contained in the agreements, instruments and
documents that create or reserve to Seller its interest in the Asset or
(ii) such terms, conditions, restrictions, exceptions, reservations,
limitations and other matters are within general industry standards and do
not materially adversely affect the ownership, operation or use of the
Asset;
(b) any (i) undetermined or inchoate liens or charges constituting or
securing the payment of expenses that were incurred incidental to
maintenance, development, production or operation of the Asset or for the
purpose of developing, producing or processing Hydrocarbons therefrom or
therein, and (ii) materialman's, mechanic's, repairman's, vendor's,
construction, employee's, contractor's, operator's or other similar liens
or charges for the payment of expenses arising in the ordinary course of
business (in each case) that are not yet delinquent or, if delinquent, that
are being contested in good faith in the ordinary course of business
(provided that Seller shall be responsible for all such obligations
attributable to periods prior to the Effective Time);
(c) any liens for Taxes or assessments not yet delinquent or, if
delinquent, that are being contested in good faith in the ordinary course
of business (provided that Seller shall be responsible for all such
obligations attributable to periods prior to the Effective Time);
(d) any liens or security interests created by Law, or created to
secure compliance with the terms of the agreements, instruments and
documents that create or reserve to Seller its interests in the Asset;
(e) any obligations or duties affecting the Asset to any Governmental
Authority with respect to any franchise, grant, license or permit;
(f) any easements, rights of way, servitudes, licenses, permits and
other similar rights for the purposes of pipelines, transmission lines or
other similar fixtures or personalty to the extent the same do not
materially interfere with the operation of the Asset;
Page 4 of 41
(g) conventional rights of reassignment upon abandonment;
(j) such Title Defects as Buyer may have waived or for which a remedy
is provided at Closing pursuant to Section 4.04;
(k) all required notices to, filings with or other actions by any
Governmental Authority in connection with the sale or conveyance of oil and
gas pipelines or interests therein;
(l) the claims described on Schedule 6.01(f) and all Liabilities
arising in connection therewith;
(m) all defects and irregularities affecting the Asset that do not (i)
operate to reduce any interest of Seller in the Asset or (ii) otherwise
interfere materially with the ownership, operation or use of the Asset; and
(n) any indenture, mortgage, loan, note, credit, sale-leaseback or
similar Contract (in each case) to which the Asset is subject (whether
Seller or any other owner of an interest in the Asset is the borrower or
lender) and all related security agreements or similar agreements
associated therewith, so long as such Asset is released as security under
or from such Contracts in which Seller is the borrower or lender on or
before the Closing.
"Person" shall mean an individual, corporation, partnership, association,
trust, limited liability company or any other entity or organization, including
government or political subdivisions or an agency, unit or instrumentality
thereof.
"Seller Indemnitees" shall mean Hickory Creek Partnership, Xxxxxx County
Airport Xxxxxxx Shale, LC, its general partner, Xxxxxx X. Xxxx, sole manager of
said general partner, Range, its sole member, Range Resources Corporation, and
all partners, shareholders, officers, directors, employees, agents,
representatives, Affiliates, successors and assigns of all of the foregoing
Persons.
"Tax Returns" shall mean all returns, reports, statements and other similar
filings with respect to Taxes, and any amendments thereof.
"Taxes" shall mean any taxes, assessments and other governmental charges
imposed by any Governmental Authority, including net income, gross income,
profits, gross receipts, alternative or add-on minimum, ad valorem, property,
transfer, real property transfer, value added, sales, use, environmental,
excise, withholding, social security, unemployment, disability, payroll, fuel,
excess profits, windfall profit, severance, estimated or other tax, including
any interest, penalty or addition thereto.
"Third Party" shall mean any Person other than a Party to this Agreement or
an Affiliate of a Party to this Agreement.
Page 5 of 41
"Transfer Taxes" shall mean transfer, sales, use, real property transfer,
documentary, stamp, retailer occupation and other similar taxes.
Section 1.02 Interpretation. Unless the context otherwise requires, the
term "includes" and its syntactical variants means "includes but is not limited
to." The headings and captions contained in this Agreement have been inserted
for convenience only and do not modify, explain, enlarge or restrict any of the
provisions of this Agreement or its Exhibits. Preparation of this Agreement has
been a joint effort of the Parties and therefore shall not be construed more
strictly against one of the Parties than the other. All references to "Sections"
and "Articles" in this Agreement refer to the corresponding section and article
of this Agreement unless specific reference is made to such sections of another
document or instrument. The words "hereof," "herein" and "hereunder" and words
of similar import refer to this Agreement or a referenced agreement or
instrument as a whole and not to any particular provision of such agreement or
instrument.
ARTICLE II
ASSET
Section 2.01 Agreement to Sell and Purchase. Subject to the terms and
conditions of this Agreement, Buyer agrees to purchase the Asset from Seller,
and Seller agrees to sell, transfer and assign the Asset (as defined below) to
Buyer. If the transactions contemplated by this Agreement are consummated in
accordance with the terms and provisions of this Agreement, the ownership of the
Asset shall be transferred from Seller to Buyer on the Closing Date but
effective as of 8:00 a.m. Houston, Texas time on November 1, 2009 (the
"Effective Time").
Section 2.02 Asset. The Parties recognize that the intent of this Agreement
is for Seller to convey to Buyer all of Seller's right, title and interest in
the Hickory Creek Gathering System, as described below. Consistent with said
intent, therefore, and subject to Section 2.03, the term "Asset" shall mean:
(a) all of each Individual Seller's right, title and interest in and
to the Hickory Creek Gathering system in Xxxxxx County, Texas, as described
in and depicted on the Hickory Creek Pipeline Sales Exhibit (with Plat)
attached as Exhibit "1" to this Agreement (sometimes hereinafter referred
to as the "System"), including to the extent transferable all of each
Individual Seller's right title and interest in and to each easement, right
of way and license associated with the System, as more particularly listed
in Schedule "1" attached hereto (sometimes hereinafter referred to
collectively as the "Easements"), and all surface equipment and facilities
associated with or used as part of such System including all structures,
tubular goods, metering equipment, pipelines, cathodic protection
equipment, inventory and all other personal property, fixtures and
facilities to the extent appurtenant to or used primarily in connection
with, the System, as more particularly described in Schedule "2" attached
hereto (such personal property and/or fixtures being hereinafter referred
to collectively as the "Inventory"); and
(b) any trade credits or accounts receivable attributable to the Asset
accruing from and after the Effective Time;
Page 6 of 41
(c) all refunds of costs, taxes or expenses attributable to any
periods of time from and after the Effective Time;
(d) all rights and claims relating to the Asset and attributable to
periods of time from and after the Effective Time;
(e) Seller's T-4 Pipeline Permit issued by the Texas Railroad
Commission with respect to the Asset; and
(f) all of each Individual Seller's interest in the books, records,
files, muniments of title, title opinions, reports, Existing Contracts (in
the capacity of "Gatherer" and not as "Shipper") and similar documents and
materials held and used solely in connection with the System but excluding
any of the foregoing to the extent that (i) transfer is restricted by
third-party agreement or applicable Law and (ii) Seller is unable to
obtain, using commercially reasonable efforts, a waiver of, or otherwise
satisfy, such transfer restriction (provided that Seller shall not be
required to, but shall offer Buyer the opportunity to, provide
consideration or undertake obligations to or for the benefit of the holders
of such rights in order to obtain any necessary consent or waiver of such
transfer restriction) (subject to such exclusion, collectively, the
"Files").
Section 2.03 Conveyance subject to terms of Easements and other Existing
Contracts. The Asset will be conveyed subject to the terms and conditions of:
(i) each individual right-of way agreement and license agreement that
constitutes a part of the Easements; and (ii) each of the following two (2)
agreements (collectively, the "Existing Contracts"), to wit:
(a) "Gas Gathering Agreement" made and entered into as of November 1,
2003, by and between Hickory Creek Gathering, L.P. as Gatherer, and Xxx X.
Xxxxxx Company, as Shipper; and
(b) "Gas Gathering Agreement" dated November 1, 2003, entered into by
and between Hickory Creek Gathering, L.P., as Gatherer, and Trio Consulting
and Management, LLC, as Shipper, as amended by that certain "Amendment and
Supplement to Gas Gathering Agreement" made and entered into to be
effective as of the 1st day of September 2004.
Section 2.04 Excluded and Reserved Asset. The Asset does not include, and
there is excepted, reserved and excluded from the sale contemplated under this
Agreement, the Excluded Assets. "Excluded Assets" shall mean:
(a) all corporate, financial, tax and legal records of each Individual
Seller that relate to such Seller's business generally (including the
ownership and operation of the Asset) or that relate to the Excluded
Assets, together with a copy (electronic or otherwise) of all of the Files;
(b) any trade credits, accounts receivable, proceeds or revenues
attributable to the Asset accruing prior to the Effective Time;
Page 7 of 41
(c) all refunds of costs, taxes or expenses attributable to any
periods of time prior to the Effective Time;
(d) all area-wide permits and licenses or other permits, licenses or
authorizations used in the conduct of an Individual Seller's business
generally;
(e) all bonds, letters of credit and guarantees, if any, posted by
Seller or by an Individual Seller or its Affiliates with Governmental
Authorities relating to the Asset;
(f) subject to the provisions of Section 13.02, all rights, titles,
claims and interests of Seller or its Affiliates under any insurance policy
or agreement, to any insurance proceeds or to or under any bond or bond
proceeds related to the Asset;
(g) all rights and claims relating to the Asset and attributable to
periods of time prior to the Effective Time;
(h) all privileged attorney-client communications and attorney work
product other than title opinions related to the Asset;
(i) all materials and information that cannot be disclosed to the
Buyer as a result of confidentiality obligations to third parties; and
(j) all materials, information and analyses developed or prepared in
connection with marketing the Asset, including presentations, valuations
and bidder lists, and all communications with marketing advisors.
Section 2.05 Revenues and Expenses. Each individual Seller shall remain
entitled to all of its proportionate share of the rights of ownership (including
the right to all revenue and other proceeds) and shall remain responsible for
its proportionate share of all Operating Expenses attributable to the Asset for
the period of time prior to the Effective Time. Subject to the provisions of
this Agreement and subject to the occurrence of the Closing, Buyer shall be
entitled to all of the rights of ownership (including the right to all revenue
and other proceeds) and shall be responsible for all Operating Expenses
attributable to the Asset for the period of time from and after the Effective
Time. All Operating Expenses attributable to the Asset that are: (a) incurred
with respect to operations conducted prior to the Effective Time shall be paid
by or allocated to Seller and (b) incurred with respect to operations conducted
from and after the Effective Time shall, subject to the provisions of this
Agreement and subject to the occurrence of the Closing, be paid by or allocated
to Buyer.
ARTICLE III
CONSIDERATION
Section 3.01 Purchase Price.
(a) The total consideration for the purchase, sale and assignment of
the Asset by Seller to Buyer is (i) Buyer's covenants to assume certain
obligations, as set forth in this Agreement; and (ii) Buyer's payment to
Seller of the sum of Three Million Nine Hundred Thousand Dollars
($3,900,000) (the "Purchase Price"), as adjusted pursuant to this Agreement
(the "Adjusted Purchase Price").
Page 8 of 41
(b) The cash portion of the Purchase Price shall be paid by Buyer to
Seller at the Closing by means of completed wire transfers, according to
Seller's settlement statement to be provided to Buyer two (2) Business Days
prior to Closing. Such payments will be made to each Individual Seller
proportionate to its respective ownership of the System, to wit: Hickory
Creek Partnership - 75.00%, and Range - 25.00%.
ARTICLE IV
TITLE MATTERS
Section 4.01 Title Examination Period. Commencing on the date of Buyer's
execution of this Agreement and ending at 12:00 noon Houston, time, on December
31, 2009 (the "Title Examination Period"), Seller shall, subject to Section
7.01, (a) permit Buyer and/or its representatives to examine, in a reasonable
manner, at reasonable times and in Seller's offices, abstracts of title, title
opinions, title files, ownership maps, Property files, assignments, operating
records, agreements and all other files and records pertaining to the Asset
insofar as same may now be in existence and in the possession of Seller and (b)
subject to Third Party approval (to the extent applicable and which Seller shall
use commercially reasonable efforts to obtain), permit Buyer and/or its
representatives, at reasonable times and at Buyer's sole risk, cost and expense,
to conduct reasonable inspections of the Asset (other than environmental
inspections which are covered by Section 5.01).
Section 4.02 Title Defects. The Asset shall be deemed to have a "Title
Defect" if Seller is found to have less than Defensible Title and it is
reasonably estimated to (a) require an expenditure in excess of $25,000 to
remedy or (b) reduce the value of the Asset by an amount in excess of $25,000.
For purposes of this Agreement, the term "Defensible Title" shall mean such
title of Seller that, subject to and except for the Permitted Encumbrances:
(i) entitles Seller, cumulatively, to receive not less than one
hundred percent (100.00%) of the revenues generated by the Asset;
(ii) obligates Seller, cumulatively, to bear no greater than one
hundred percent (100.00%) of the costs and expenses relating to the
maintenance, development and operation of the Asset;
(iii) is free and clear of all material liens, encumbrances,
encroachments, charges, claims, burdens and defects;
(iv) is deducible from applicable county records; and
(v) is filed of record so as to be sufficient against competing claims
of bona fide purchasers for value without notice or other persons entitled
to protection of applicable recording laws.
Section 4.03 Notice of Title Defects. If Buyer discovers any Title Defect,
Buyer shall promptly notify Seller prior to the expiration of the Title
Examination Period. To be effective, such notice (a "Title Defect Notice") shall
Page 9 of 41
be in writing and shall include (a) a description of the alleged Title
Defect(s), (b) documentation sufficient to reasonably support and explain the
asserted Title Defect(s), and (c) the amount which Buyer reasonably believes to
be the Title Defect Amount resulting from the alleged Title Defect(s) and the
computations and information upon which Buyer's belief is based. Subject to
Buyer's rights with respect to any breach by Seller of Section 7.03 or the
special warranty of title in the Assignment, any matters that may otherwise
constitute Title Defects but that are not specifically disclosed to Seller
pursuant to a Title Defect Notice delivered to Seller prior to the expiration of
the Title Examination Period shall be deemed to have been waived by Buyer, on
behalf of itself and its successors and assigns, for all purposes.
Section 4.04 Remedies for Title Defects. Seller shall have the option, but
not the obligation, to attempt to cure any Title Defect prior to ten (10) days
after the end of the Title Examination Period (the "Title Defect Cure
Deadline"). In the event that any Title Defect is not cured to Buyer's
reasonable satisfaction on or before the Title Defect Cure Deadline, Seller
shall, at its sole election, for each Title Defect, either:
(a) indemnify Buyer against all Liabilities resulting from such Title
Defect (in an amount not to exceed the Purchase Price) pursuant to a form
of Title Indemnity Agreement mutually agreeable by the Parties (a "Title
Indemnity Agreement"); or
(b) subject to Section 4.05, reduce the Purchase Price by an amount
(the "Title Defect Amount") determined pursuant to Section 4.06, in which
event and subject to the other terms of this Agreement, the Parties shall
proceed to Closing, the Asset shall be conveyed by Seller to Buyer subject
to such Title Defect and Buyer shall pay to Seller the Purchase Price as so
adjusted.
In addition to the foregoing remedies, if the sum of all Title Defect
Amounts, Environmental Defect Amounts and Casualty Losses determined prior to
Closing is equal to or exceeds 5% of the Purchase Price, then either Party shall
have the right to terminate this Agreement.
Section 4.05 Limitations. Notwithstanding anything to the contrary, (i) in
no event shall there be any adjustments to the Purchase Price or other remedies
under this Agreement for any Title Defect if the sum of all Title Defect Amounts
and all Environmental Defect Amounts does not exceed 2% of the Purchase Price
(the "Defect Deductible"), (ii) in the event that the sum of all Title Defect
Amounts and all Environmental Defect Amounts exceeds the Defect Deductible, then
any adjustments to the Purchase Price or other remedies for Title Defects
provided by Seller pursuant to Section 4.0 shall be applicable only to the
portion that exceeds the Defect Deductible, and (iii) subject to Buyer's rights
with respect to any breach by Seller of Section 7.03 and as otherwise provided
in the Assignment, Section 4.04 as limited by this Section 4.05 shall, to the
fullest extent permitted by applicable Law, be the exclusive right and remedy of
Buyer with respect to any Title Defect or any other title matter related to the
Asset and Buyer waives any and all other rights or remedies, at Law or in
equity, with respect thereto.
Section 4.06 Title Defect Amount. The Title Defect Amount resulting from a
Title Defect shall be determined in accordance with the following terms and
conditions:
Page 10 of 41
(a) if Buyer and Seller agree on the Title Defect Amount, then that
amount shall be the Title Defect Amount;
(b) 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;
(c) if the Title Defect represents an obligation upon, 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 value of the Asset, the portion of the Asset 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 Asset, 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 reasonable cost and expense of curing
such Title Defect; and
(d) if Seller and Buyer are unable to agree upon any Title Defect,
Title Defect Amount or adjustment under this Section 4.06, Seller and Buyer
shall, in good faith, mutually agree upon an attorney experienced in oil
and gas or real property law licensed to practice law in the State of Texas
as the arbiter of the alleged Title Defects or Title Defect Amount, whose
decision on all such matters must be rendered within ten (10) business days
of the date of his or her designation, and will be final and binding on the
Parties. The costs and expenses of the arbitrator shall be shared one-half
by Seller and one-half by Buyer. To the extent necessary, the Closing Date
shall be extended by a period necessary to allow the determination of all
such amounts in accordance with this Section 4.06(d).
Section 4.07 Consents to Assignment. Prior to Closing, Seller shall use
commercially reasonable efforts to obtain all consents set forth in Schedule
6.01(c). Seller shall not be required to provide consideration or undertake
obligations to or for the benefit of the holders of such consents other than as
set forth in the instrument creating such consent right. Promptly after
execution of this Agreement, Seller shall deliver by mail written requests for
such consents to the holders thereof. If Seller fails to obtain a consent prior
to the Closing such failed consent shall constitute a Title Defect and Seller
and Buyer shall have the rights and remedies set forth in this Agreement with
respect thereto.
ARTICLE V
ENVIRONMENTAL
Section 5.01 Environmental Examination Period. Commencing on the date of
Buyer's execution of this Agreement and ending at 12:00 noon Houston time, on
December 31, 2009 (the "Environmental Examination Period"), Seller shall,
subject to any necessary surface owner approval (which, upon Buyer's request,
Seller shall use commercially reasonable efforts to obtain, provided that Seller
shall not be required to, but shall offer Buyer the opportunity to, provide
consideration or undertake obligations to or for the benefit of the holders of
such approval rights) and the provisions of Section 7.01, permit Buyer and/or
its representatives, in a reasonable manner, at reasonable times and at Buyer's
Page 11 of 41
sole risk, cost and expense, to conduct reasonable environmental inspections of
the Asset; provided however, that Buyer shall not conduct a Phase 2
environmental survey or collect or analyze samples of any media including soil
or water without the prior written consent of Seller, which consent shall not be
unreasonably withheld. In the event that Seller consents to and Buyer does
conduct a Phase 2 environmental survey or testing of media, Seller reserves the
right to collect split samples and have such samples analyzed at its own expense
and all reports, analyses, test results, samples and other work product
resulting from or relating to such Phase 2 survey shall be provided to Seller
and shall be kept confidential and shall not be disclosed by Buyer to any other
Person unless required by Law to be disclosed by Buyer, in which case Buyer
shall notify Seller in writing reasonably in advance of any such disclosure.
Section 5.02 Environmental Defect. The Asset shall be deemed to have an
"Environmental Defect" if Buyer shows that the Asset is subject to a condition
constituting a violation of Environmental Laws (a "Condition") with respect to
which the Lowest Cost Response is reasonably estimated to require expenditure in
excess of $50,000. In the event the Asset is located on or uses the surface
estate of real property in an area where other commercial activities are or have
been conducted, including (but not limited to) oil and gas exploration
activities, in no event shall a Condition form the basis for an Environmental
Defect unless such condition arose from or in connection with the operation of
the Asset. Further, each Environmental Defect shall be based on the analysis of
each separate Condition as the same result from discrete individual events at a
single continuous geographic location, even if multiple Conditions are located
on or in close proximity to the same well location or pad, tank battery site,
pump, meter or compressor location, pipeline easement, right of way or ditch
line or the like. In no event shall any Condition, including a former pit or
earthen disposal site, whether lined or unlined, form the basis of an
Environmental Defect if such Condition did not constitute a violation of an
Environmental Law or regulation at the time the Condition was created or
resulted from the operations utilizing such pit or disposal site. Further, no
Condition involving naturally occurring radioactive material ("NORM") shall
constitute the basis of an Environmental Defect unless such NORM results in
measured radioactivity in excess of a level of 50 uR/hr (50 micro roentgen per
hour) and more than 30 piC/gram for Radium 226 and Radium 228. The physical
condition of any surface or subsurface production equipment, including water or
oil tanks, separators or other ancillary equipment shall not form the basis of a
Condition provided that such equipment is useable for the purpose of operating
the Asset with which such equipment is associated in its current condition.
Section 5.03 Notice of Environmental Defects. If Buyer discovers any
Environmental Defect, Buyer shall promptly notify Seller within 3 business days
of such discovery and, in any event, prior to the expiration of the
Environmental Examination Period. To be effective, notice of an Environmental
Defect (an "Environmental Defect Notice") shall be in writing and shall include
(a) a description of the alleged Environmental Defect(s) including the GPS
coordinates of the Condition, (b) documentation, including any physical
measurements or, to the extent permitted by Seller under Section 5.01, lab
analyses, or photographs sufficient to reasonably support the asserted
Environmental Defect(s), (c) the amount which Buyer reasonably believes to be
the Lowest Cost Response to cure the alleged Environmental Defect(s) and the
computations and information upon which Buyer's belief is based, and (d) the
Specific Environmental Regulation (and date promulgated) that has been violated.
Page 12 of 41
Any matters that may otherwise constitute Environmental Defects but that are not
specifically disclosed to Seller pursuant to an Environmental Defect Notice
prior to the expiration of the Environmental Examination Period shall be deemed
to have been waived by Buyer.
Section 5.04 Remedies for Environmental Defects. Seller shall have the
option, but not the obligation, to attempt to cure any Environmental Defect
prior to Closing. In the event that any Environmental Defect is not cured on or
before Closing, Seller may, at its sole election, (a) extend the time for
Closing by a period of up to 15 days in order to continue to cure any
Environmental Defect; (b) proceed to Closing with the Lowest Cost Response for
each Environmental Defect to be escrowed (collectively the "Environmental Asset
Escrow Funds") and, once the Environmental Defects have been cured, the Asset
shall be conveyed to Buyer and the Environmental Asset Escrow Funds shall be
paid to Seller; or (c) for each Environmental Defect, at Seller's sole election,
Seller may either:
(a) indemnify Buyer against all Liabilities resulting from such
Environmental Defect pursuant to a form mutually agreeable by the Parties
(an "Environmental Indemnity Agreement"), in which event (subject to the
other terms of this Agreement) the Parties shall proceed to Closing and the
Asset shall be conveyed by Seller to Buyer subject to such Environmental
Defect(s), with no payment or settlement at the Closing as a result of such
Environmental Defect and no reduction or adjustment to the Purchase Price
shall occur; or
(b) subject to Section 5.06, reduce the Purchase Price by an amount
determined by Seller and Buyer to be the Lowest Cost Response to cure such
Environmental Defect(s), in which event (subject to the other terms of this
Agreement) the Parties shall proceed to Closing, the Asset shall be
conveyed by Seller to Buyer subject to such Environmental Defect and Buyer
shall pay to Seller the Purchase Price as so adjusted (such adjustment
being referred to as the "Environmental Defect Amount.")
Section 5.05 Environmental Defect Amount. The Environmental Defect Amount
shall be determined in accordance with the following terms and conditions:
(a) if Buyer and Seller agree on the Environmental Defect Amount, then
that amount shall be the Environmental Defect Amount;
(b) If Seller and Buyer are unable to agree upon any Environmental
Defect Amount, Seller and Buyer shall, in good faith, designate an attorney
experienced in environmental law as it relates to natural gas pipelines in
the State of Texas as the arbiter of the Environmental Defect Value(s) in
dispute, whose decision on all such matters must be rendered within ten
(10) business days of the date of his or her designation, and will be final
and binding on all Parties. To the extent necessary the Closing Date shall
be extended by a period necessary to allow the determination of all such
amounts in accordance with this Section 5.05(b). The costs and expenses of
the arbiter shall be shared one-half by Seller and one-half by Buyer.
Page 13 of 41
In addition to the foregoing remedies, if the sum of all Environmental
Defect Amounts, Title Defect Amounts and Casualty Losses is equal to or exceeds
5% of the Purchase Price, then either Party shall have the right to terminate
this Agreement.
Section 5.06 Limitations. Notwithstanding anything to the contrary, (a) in
no event shall there be any adjustments to the Purchase Price or other remedies
under this Agreement for any Environmental Defect if the sum of all
Environmental Defect Amounts and Title Defect Amounts does not exceed the Defect
Deductible, (b) in the event that the sum of all Environmental Defect Amounts
and Title Defect Amounts exceeds the Defect Deductible, then any adjustments to
the Purchase Price or other remedies for Environmental Defects provided by
Seller pursuant to Section 5.05 shall be applicable only to the portion that
exceeds the Defect Deductible, and (c) except for Seller's breach of any
representation with respect to Environmental Laws (including Section 6.01(j)),
Section 5.05 (as limited by this Section 5.06) shall, to the fullest extent
permitted by applicable Law, be the exclusive right and remedy of Buyer with
respect to any Environmental Law, any other environmental matter with respect to
the Asset, and Buyer waives any and all other rights, at Law or in equity, with
respect thereto.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties of Seller. Each Individual
Seller (unless expressly limited to a specific Individual Seller), on its own
behalf, and not on the joint behalf of the other Individual Seller, represents
and warrants to Buyer as follows:
(a) Organization. Such Individual Seller is duly formed, validly
existing and (to the extent applicable) in good standing under the Laws of
the jurisdiction of its formation.
(b) Qualification. Such Individual Seller is duly qualified to do
business, and is in good standing, in each jurisdiction in which the nature
of the business makes such qualification necessary, except where the
failure to be so qualified or in good standing would not have a Material
Adverse Effect.
(c) Authorization/Consents. The execution and delivery by such
Individual Seller of this Agreement and the performance of its obligations
hereunder have been duly and validly authorized by all requisite action by
such Individual Seller's governing body and under its organizational
documents. To such Individual Seller's Knowledge, subject to compliance
with those matters set forth on Schedule 6.01(c) and those consents of
Governmental Authorities customarily obtained post-Closing, such Individual
Seller is not required to (i) give any notice to, make any filing with or
obtain any authorization, consent or approval from any Governmental
Authority or (ii) obtain any consent from any other third party (in each
case) in order for such Individual Seller to consummate the transactions
contemplated by this Agreement, except for those consents the absence of
which would not have a Material Adverse Effect.
(d) Enforceability. This Agreement has been duly executed and
delivered by such Individual Seller and constitutes the valid and legally
binding obligation of such Individual Seller, enforceable in accordance
Page 14 of 41
with its terms and conditions except insofar as the enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar Laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless
of whether such principles are considered in a proceeding at Law or in
equity.
(e) Noncontravention. Except where the same would not have a Material
Adverse Effect, neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated by Seller will
violate or breach the terms of, cause a default under, result in
acceleration of, create in any party the right to accelerate, terminate,
modify or cancel this Agreement or any Material Contract or require any
notice under (i) any applicable Law or (ii) the organizational documents of
such Individual Seller.
(f) Litigation. Except for the claims described on Schedule 6.01(f),
there are no suits, actions, litigation, arbitration, mediation, judgments
or other proceedings pending, or to such Individual Seller's Knowledge,
threatened (i) against such Individual Seller that would affect such
Individual Seller's ability to perform its obligations hereunder, (ii)
which affect, or could reasonably be expected to affect, the Asset. To such
Individual Seller's Knowledge, there have been no events, occurrences,
facts or circumstances on or with respect to the ownership or operation of
the Asset that could give rise to a claim by any Person for property
damage, personal or bodily injury or death.
(g) Brokers' Fees. Except as set forth on Schedule 6.01(g), such
Individual Seller has no Liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.
(h) Bankruptcy. There are no bankruptcy, reorganization or arrangement
proceedings pending, being contemplated by or, to such Individual Seller's
Knowledge, threatened against such Individual Seller or any Affiliate of
such Individual Seller.
(i) Taxes. Except as would not have a Material Adverse Effect: (i) all
Tax Returns required to be filed by such Individual Seller with respect to
the Asset have been timely filed with the appropriate Governmental
Authorities, (ii) such Tax Returns are true and correct in all material
respects, (iii) all Taxes reported on such Tax Returns that have become due
and payable have been duly paid, (iv) there are no administrative
proceedings or lawsuits pending against such Individual Seller or the Asset
by any Governmental Authority with respect to such Taxes, and (iv) there
are no Tax liens (other than Permitted Encumbrances) on the Asset.
(j) Environmental Matters. To such Individual Seller's Knowledge and
except as noted in Schedule 6.01(j) and except as would not have a Material
Adverse Effect, as of the date of this Agreement, such Individual Seller
(i) has not received any written notice of violation of any Environmental
Laws by any Governmental Authority relating to the Asset where such
violation has not been previously cured or otherwise remedied, (ii) has
obtained and maintained in effect all environmental and health and safety
permits, licenses, approvals, consents, certificates and other
Page 15 of 41
authorizations necessary for the ownership or operation of the Asset
("Environmental Permits"), (iii) is in material compliance with all
applicable Environmental Laws and with all terms and conditions of all
Environmental Permits, and all prior instances of noncompliance have been
fully and finally resolved to the satisfaction of all Governmental
Authorities with jurisdiction over such matters; (iv) is not subject to any
material violation of Environmental Laws arising from, based upon,
associated with or related to the Asset or the ownership or operation of
any part thereof; and (v) is not otherwise aware of any facts, conditions
or circumstances in connection with, related to or associated with the
Asset or the ownership or operation of any part thereof, that could
reasonably be expected to give rise to the material violation of an
Environmental Law or any claim or assertion that such Individual Seller,
the Asset, or the ownership or operation thereof is not in compliance with
Environmental Laws or the terms or conditions of any Environmental Permit.
To the Knowledge of Hickory Creek Partnership, operator of the System, the
business consisting of the operation of the Asset has not (i) owned or
operated any above-ground or underground storage tanks or facilities, or
operated any equipment for the separation of liquids or waste products from
the gas stream, and (ii) has not transported any liquids.
(k) Compliance with Laws. To such Individual Seller's Knowledge and
except as would not have a Material Adverse Effect:
(i) the operation of the Asset has been in accordance with all
Laws, orders, rules and regulations (other than Environmental Laws) of
all Governmental Authorities having or asserting jurisdiction relating
to the ownership and operation of the Asset;
(ii) all necessary governmental certificates, consents, permits,
licenses or other authorizations with regard to operation of the Asset
(other than those required pursuant to Environmental Laws) have been
obtained and no violations exist or have been recorded in respect of
such certificates, consents, licenses, permits or authorizations; and
(iii) Since the Effective Time, such Individual Seller has not
received any written notice of any such violation where such violation
has not been previously cured or otherwise remedied.
(l) Contracts; Leases. To such Individual Seller's Knowledge, Section
2.02 and Schedule "1" list all Material Contracts, and each amendment
thereto, related to the Asset. Except as set forth on Schedule 6.01(l), (i)
such Individual Seller has not received any written notice alleging any
breach by such Individual Seller of any Material Contract, (ii) to such
Individual Seller's Knowledge, the Material Contracts are in full force and
effect, (iii) neither such Individual Seller nor, to such Individual
Seller's Knowledge, any other party to the Material Contracts is in default
thereunder, and (iv) to such Individual Seller's Knowledge, there exists no
state of facts that with notice or the passage of time or both would
constitute a default under any Material Contract.
Page 16 of 41
(m) Foreign Person. Such Individual Seller is not a "foreign person"
within the meaning of Section 1445 of the Code.
(n) Operating Costs. All costs incurred in connection with the
operation of the Asset which are the obligation of such Individual Seller,
other than any costs or charges that are being contested by such Individual
Seller in good faith, have been fully paid and discharged by such
Individual Seller, except normal expenses incurred in operating the Asset
within the previous sixty (60) days or as to which such Individual Seller
has not yet been billed.
(o) Mortgages and Security Interests. Schedule 6.01(o) sets forth a
list of all mortgages, deeds of trust, security interests and financing
statements encumbering the Asset in connection with such Individual
Seller's credit facilities, which mortgages, deeds of trust, security
interests and financing statements will be released and/or terminated at
Closing.
(p) Books and Records. Seller has delivered to Buyer the accounts
receivable records, meter readings, accounts payable records, and any
related working documents requested by Buyer that Seller maintains relating
to Seller's normal practice of accounting for the Asset. Such documents
fairly present the financial condition and results of operations of the
Asset as of the respective dates of and for the periods referred to in such
documents. The Buyer recognizes that Seller does not maintain audited
financial statements. To such Individual Seller's Knowledge, the books of
account and other financial records of the Asset which have been made
available to Buyer, are complete and correct in all material respects and
represent actual, bona fide transactions and have been maintained in
accordance with sound business practices.
(q) The Asset.
(i) Such Individual Seller has good and defensible title to the
easements and rights of way which comprise the Pipeline free and clear
of all Liens except for Permitted Encumbrances; provided, however,
that such Individual Seller's title is subject to the terms and
conditions of each of said easements and right of way agreements.
(ii) There are no contracts affecting the title to or possession
of the Asset.
(iii) Neither the whole nor any portion of the Asset has been
condemned, requisitioned, or otherwise taken by any public authority,
and no notice of any such condemnation, requisition, or taking has
been received by such Individual Seller. To such Individual Seller's
Knowledge, no such condemnation, requisition, or taking is threatened
or contemplated. To such Individual Seller's Knowledge there are no
public improvements that may result in special assessments against the
Asset.
Page 17 of 41
(iv) To the Knowledge of Hickory Creek Partnership, operator of
the System, the Asset has been operated by Seller in material
compliance with accordance with Title 49 Code of Federal Regulations,
Part 192.
(r) Dedicated Leases. Schedule 6.01(r) lists each oil and gas lease
covering interests identified in each gathering agreement as dedicated to
the pipeline system included in the Assets (the "Dedicated Leases"). Seller
has provided Buyer a true and correct copy of each Dedicated Lease,
together will all amendments thereto. To such Individual Seller's
Knowledge, the Dedicated Leases are valid and binding in all material
respects and in full force and effect. To such Individual Seller's
Knowledge, there has been no material breach of any Dedicated Lease by any
party thereto, which breach has not been cured or waived. To such
Individual Seller's Knowledge, no party to a Dedicated Lease has received
from the other party thereto notification that such Dedicated Lease is not
in full force and effect, that a party has failed to perform its
obligations thereunder to date. To such Individual Seller's Knowledge, no
event has occurred, and no circumstance or condition exists, that (with or
without notice or lapse of time) would reasonably be expected to result in
a material breach or violation of, or a default under, the terms of any
Dedicated Lease. No Dedicated Lease will be revoked, invalidated or
otherwise amended as a result of the consummation of the transaction
contemplated by this Agreement. Schedule 6.01(r) identifies for each
Dedicated Lease each of the oil and/or gas xxxxx completed on such
Dedicated Lease (the "Dedicated Xxxxx")
Section 6.02 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Organization. Buyer is duly formed, validly existing and in good
standing under the Laws of the jurisdiction of its formation.
(b) Qualification. Buyer is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of the business as
now conducted makes such qualification necessary, except where the failure
to be so qualified or in good standing would not materially hinder or
impede the consummation by Buyer of the transactions contemplated by this
Agreement.
(c) Authorization/Consents. The execution and delivery by Buyer of
this Agreement and the performance of its obligations hereunder have been
duly and validly authorized by all requisite action by Buyer's governing
body and under its organizational documents. Buyer is not required to give
any notice to, make any filing with or obtain any authorization, consent,
or approval from any Governmental Authority in order for Buyer to
consummate the transactions contemplated by this Agreement.
(d) Enforceability. This Agreement has been duly executed and
delivered by Buyer and constitutes the valid and legally binding obligation
of Buyer, enforceable in accordance with its terms and conditions, except
insofar as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar Laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of whether such
principles are considered in a proceeding at Law or in equity.
Page 18 of 41
(e) Noncontravention. Except where same would not materially hinder or
impede the consummation by Buyer of the transactions contemplated by this
Agreement, neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby by Buyer will
violate or breach the terms of, cause a default under, result in
acceleration of, create in any party the right to accelerate, terminate,
modify or cancel this Agreement or require any notice under: (i) any
applicable Law, (ii) the organizational documents of Buyer, or (iii) any
material contract of Buyer.
(f) Litigation. There are no suits, actions or litigation before or by
any Governmental Authority that are pending against Buyer that would
materially hinder or impede the consummation by Buyer of the transactions
contemplated by this Agreement.
(g) Brokers' Fees. Buyer has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Seller will be liable
or obligated.
(h) Bankruptcy. There are no bankruptcy, reorganization or arrangement
proceedings pending, being contemplated by or, to Buyer's knowledge,
threatened against Buyer or any Affiliate of Buyer.
(i) Qualifications. Buyer is and shall continue to be qualified to own
and assume operatorship of the Asset in all jurisdictions where such Asset
is located, and the consummation of the transactions contemplated by this
Agreement will not cause Buyer to be disqualified as such owner or
operator. Buyer currently has and will continue to maintain any surety
bonds as may be required by, and in accordance with, all applicable Laws
governing the ownership and operation of the Asset. To Buyer's knowledge,
there are no matters or circumstances applicable to Buyer that would
preclude or inhibit unconditional approval by Governmental Authorities of
the assignment of the Asset from Seller to Buyer.
(j) Financing. Buyer has sufficient cash, available lines of credit or
other sources of immediately available funds (in United States dollars) to
enable Buyer to pay the Purchase Price to Seller at the Closing.
(k) Investment. Buyer is an experienced and knowledgeable investor.
Prior to entering into this Agreement, Buyer was advised by and has relied
solely on its own legal, tax and other professional counsel concerning this
Agreement, the Asset and the value of such Asset. In making the decision to
enter into this Agreement and consummate the transactions contemplated
under this Agreement, Buyer has relied solely on the basis of its own
independent valuation and due diligence investigation of the Asset and not
on Seller.
(l) Accredited Investor. Buyer is an "accredited investor," as such
term is defined in Regulation D of the Securities Act of 1933, as amended.
Buyer is acquiring the Asset for its own account and not for distribution
or resale in any manner that would violate any state or federal securities
Law. Buyer understands and acknowledges that if the Asset were held to be
securities, they would be restricted securities.
Page 19 of 41
Section 6.03 Materiality. For purposes of this Article VI, the term
"material" (or any variation thereof) shall mean any matter reasonably
anticipated to cost or have an adverse effect on the value, ownership, operation
or use of the Asset in excess of $250,000.00.
ARTICLE VII
PRE-CLOSING OBLIGATIONS
Section 7.01 Access. Buyer agrees to release and indemnify the Seller
Indemnitees and all co-owners of the Asset from and against any and all
Liabilities arising out of or relating to access to Seller's offices or the
Asset by Buyer, its officers, employees, agents, advisors or representatives in
connection with this Agreement or any due diligence activity conducted by Buyer
or any of its officers, employees, agents, advisors or representatives in
connection with the transactions contemplated by this Agreement, except to the
extent (i) caused by the sole negligence or willful misconduct of any of the
Seller Indemnitees or (ii) of pre-existing Liabilities of Seller merely
discovered or disclosed by Buyer's activities.
Section 7.02 Confidentiality. Buyer acknowledges that, pursuant to its
right of access to the Files and the Asset, 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 officers, employees,
agents, advisors or representatives in accordance with the terms of the
Confidentiality Agreement. If the Closing should occur, the foregoing
confidentiality restrictions on Buyer, including the Confidentiality Agreement,
shall terminate (except as to (a) such portion of the Asset that are not
conveyed to Buyer pursuant to the provisions of this Agreement and (b) the
Excluded Asset).
Section 7.03 Dispositions of Asset. During the Interim Period, Seller shall
not, without the prior consent of Buyer, transfer, sell, encumber, remove or
otherwise dispose of its interest in the Asset.
Section 7.04 Interim Period Obligations.
(a) During the Interim Period, Seller shall take all reasonable steps,
consistent with Seller's past practices, to keep in full force and effect
all of Seller's rights in and to the Asset by the proper payment of sums
due and payable with respect to Seller's interest in the Asset.
(b) Seller shall not, without Buyer's prior consent, which consent
shall not be unreasonably withheld or delayed: (i) consent to any operation
with respect to the Asset reasonably expected to cost Seller in excess of
$25,000 that is proposed by any third party; (ii) enter into any contract
with a term in excess of 30 days affecting the Asset; (iii) reduce or
terminate (or cause to be reduced or terminated) any insurance coverage now
held in connection with the Asset; (iv) waive any right of material value
relating to the Asset; (v) modify or terminate any of the Contracts; (vi)
Page 20 of 41
incur any other costs or expenses in connection with the Asset for which
Buyer will be responsible if Closing occurs which individually exceeds
$25,000 or in the aggregate exceeds $50,000; (vii) materially alter the
Asset; or (viii) take any other actions with respect to the Asset outside
of the ordinary course of business, consistent with Seller's past
practices; except where such operation is (1) in response to an emergency
or, (2) necessary to maintain or prevent the termination of a right in the
Asset or prevent the loss of other property.
Section 7.05 Governmental Bonds. Buyer acknowledges that the bonds, letters
of credit and guarantees described on Schedule 7.05(a) posted by Seller or its
Affiliates with Governmental Authorities and relating to the Asset, are not
transferable and will not be transferred to Buyer. On or before the Closing
Date, Buyer shall obtain, or cause to be obtained in the name of Buyer,
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
such bonds, letters of credit and guarantees or other security with all
applicable Governmental Authorities meeting the requirements of such authorities
to own and, where appropriate, operate, the Asset, such required bonds, letters
of credit and guarantees being more particularly described on Schedule 7.05(b).
Section 7.06 Notice of Loss. During the Interim Period, Seller shall
promptly notify Buyer of the occurrence of any loss or damage to the Asset, or
any part thereof, of which Seller is aware or discovers, exceeding $25,000 with
respect to any individual occurrence or $100,000 in the aggregate.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.01 Conditions to Seller's Obligations. The obligations of Seller
to consummate the transactions contemplated by this Agreement are subject, at
the option of Seller, to the fulfillment on or prior to the Closing Date of each
of the following conditions:
(a) Representations. The representations and warranties of 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; provided, however, that any such representation or warranty
that is qualified by materiality shall be true and correct in all respects.
(b) 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.
(c) Pending Matters. No suit, action or other proceeding shall be
pending or threatened that seeks to restrain, enjoin or otherwise prohibit
the consummation of the transactions contemplated by this Agreement.
(d) Execution and Delivery of Closing Documents. Buyer shall have
executed and acknowledged, as appropriate, and shall be ready, willing and
able to deliver to Seller all of the documents described in Section 9.04
and Buyer shall be ready, willing and able to deliver to Seller the
Adjusted Purchase Price.
Page 21 of 41
(e) Performance Bonds. Buyer shall have obtained, or caused to be
obtained, in the name of Buyer or its designee, replacements for Seller's
and/or Seller's Affiliates' bonds, letters of credit and guarantees, and
such other bonds, letters of credit and guarantees to the extent required
by Article VII.
(f) Officer's Certificate. Buyer shall have delivered to Seller a
certificate of an authorized officer of Buyer dated as of Closing,
certifying on behalf of Buyer that, to the best of his or her knowledge,
the conditions set forth in Section 8.01(a) and (b) above have been
fulfilled.
(g) No Prior Termination. This Agreement has not been previously
terminated by either Party pursuant to the provisions hereof.
Section 8.02 Conditions to Buyer's Obligations. The obligations of Buyer to
consummate the transactions contemplated by this Agreement are subject, at the
option of Buyer, to the fulfillment on or prior to the Closing Date of each of
the following conditions:
(a) 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; provided, however, that any such representation or warranty
that is qualified by materiality shall be true and correct in all respects.
(b) 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.
(c) Pending Matters. No suit, action or other proceeding shall be
pending or threatened that seeks to restrain, enjoin or otherwise prohibit
the consummation of the transactions contemplated by this Agreement.
(d) Seller shall have obtained the consents of third parties
identified on Schedule 6.01(c) as "Required Notices, Filings and Consents."
(e) Execution and Delivery of Closing Documents. Seller shall have
executed and acknowledged, as appropriate, and shall be ready, willing and
able to deliver to Buyer all of the documents described in Section 9.03.
(f) Officer's Certificate. Each Individual Seller shall have delivered
to Buyer a certificate of an authorized officer of such Individual Seller
dated as of Closing, certifying on behalf of such Individual Seller that,to
the best of his or her knowledge, the conditions set forth in Section
8.02(a) and (b) above have been fulfilled with respect to such Individual
Seller.
Page 22 of 41
(g) No Prior Termination. This Agreement has not been previously
terminated by either Party pursuant to the provisions hereof.
(h) No Material Adverse Effect. No Material Adverse Effect shall have
occurred.
ARTICLE IX
CLOSING
Section 9.01 Time and Place of Closing. If the conditions referred to in
Article VIII have been satisfied or waived in writing, the sale by Seller and
the purchase by Buyer of the Asset pursuant to this Agreement (the "Closing")
shall take place at the offices of Xxxxxx X. Xxxx, the Manager of the general
partner of Hickory Creek Partnership, located at 0000 Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000 at 10:00 a.m., local time. The day on which the Closing occurs (the
"Closing Date") shall be January 7, 2010, or such earlier or later date as is
mutually agreed by the Parties or determined under the terms of this Agreement.
Section 9.02 Adjustments to Purchase Price at Closing.
(a) At the Closing, the Purchase Price shall be increased by the
Seller's estimate (as set forth in a statement delivered by Seller to Buyer
not later than 3 days prior to Closing) of the following amounts:
(i) Operating Expenses paid by Seller that are (A) attributable
to the Asset, (B) attributable to any period of time from and after
the Effective Time, (C) properly chargeable under the applicable
operating agreements and (D) incurred in compliance with the terms and
conditions of this Agreement;
(ii) any other amount provided for in this Agreement or agreed
upon by Seller and Buyer.
(b) At the Closing, the Purchase Price shall be decreased by the
Seller's estimate (as set forth in a statement delivered by Seller to Buyer
not later than 3 days prior to Closing) of the following amounts:
(i) the amount of all proceeds received by Seller with respect
the Asset attributable to the period of time from and after the
Effective Time;
(ii) the sum of all Title Defect Amounts (subject to Section
4.06) with respect to the Asset pursuant to Section 4.04(b) and the
sum of all Environmental Defect Amounts (subject to Section 5.05) with
respect to the Asset pursuant to Section 5.04(b); and
(iii) any other amount provided for in this Agreement or agreed
upon by Seller and Buyer.
Page 23 of 41
Section 9.03 Actions of Seller at Closing. At the Closing, each Individual
Seller shall:
(a) execute, acknowledge and deliver to Buyer a Xxxx of Sale
substantially in the form of Exhibit "2" (the "Xxxx of Sale") and an
Assignment and Assumption of Easements substantially in the form of Exhibit
"3" (the "Assignment"), and such other conveyances, assignments, transfers,
bills of sale and other instruments, whether state or federal, in form and
substance reasonable requested by Buyer, or as may be necessary or
desirable to convey ownership, title and possession of the Asset to Buyer
(the "Additional Assignments");
(b) deliver an executed statement described in Treasury Regulation
ss.1.1445-2(b)(2) certifying that such Individual Seller is not a "foreign
person" within the meaning of the Code;
(c) deliver to Buyer releases and/or terminations of any mortgages,
deeds of trust, security interests and financing statements applicable to
the Asset securing such Individual Seller's credit facilities, including
those listed on Schedule 6.01(o);
(d) execute and deliver to Buyer the certificate described in Section
8.02(e);
(e) deliver an executed termination of the Agreement for the
Construction and Operation of the Hickory Creek Gas Gathering System,
entered into as of the 1st day of September, 2003 by and between Xxx Xxxxxx
Company (predecessor in interest to Range), and Hickory Creek Gathering,
L.P.;
(f) except as otherwise provided in Section 10.03, deliver possession
of the Asset to Buyer; and
(g) execute, acknowledge and deliver any other agreements that are
provided for under this Agreement or are necessary or desirable to
effectuate the transactions contemplated by this Agreement.
Section 9.04 Actions of Buyer at Closing. At the Closing, Buyer shall:
(a) execute and acknowledge the Xxxx of Sale, the Assignment and such
Additional Assignments (in form and substance mutually agreed upon by Buyer
and Seller) as may be necessary or desirable to convey the Asset to Buyer;
(b) deliver to Seller the cash portion of the Purchase Price by wire
transfer as set forth in Section 3.01;
(c) execute and deliver to Seller the certificate described in Section
8.01(f); and
(d) execute, acknowledge and deliver any other agreements provided for
under this Agreement or necessary or desirable to effectuate the
transactions contemplated by this Agreement.
Page 24 of 41
Section 9.05 Obligation to Close. Each Party shall have the right to
specific performance in the event of breach by another Party of its obligation
to perform its Closing obligations in this Article IX, upon satisfaction of the
conditions to Closing set forth in Section 8.01 or 8.02, as applicable. IN NO
EVENT SHALL EITHER PARTY BE ENTITLED TO RECOVER CONSEQUENTIAL, INDIRECT OR
PUNITIVE DAMAGES, INCLUDING LOST PROFITS OR LOSS OF BUSINESS OPPORTUNITY, AS A
RESULT OF BREACH OF A PARTY'S CLOSING OBLIGATIONS.
ARTICLE X
POST-CLOSING OBLIGATIONS
Section 10.01 Post-Closing Adjustments to Purchase Price; Disputes.
(a) Seller shall prepare within 60 days after the Closing Date and
furnish to Buyer a final accounting statement setting forth the adjustments
and pro-rating of any amounts provided for in Article IX or elsewhere in
this Agreement (the "Final Accounting Statement") together with reasonable
supporting documentation. Buyer shall within 30 days after receipt of the
Final Accounting Statement deliver to Seller a written report (together
with reasonable supporting documentation) containing any changes that Buyer
proposes be made to such Final Accounting Statement (the "Dispute Notice").
The Parties shall undertake to agree on the final adjustment amounts and
such final adjustment amounts shall be paid by Buyer or Seller, as
appropriate, not later than 5 days after such agreement. During the
foregoing periods of time, either Party may at its own expense audit the
other Party's books, accounts and records relating to revenue, Operating
Expenses, Taxes paid that may have been adjusted on account of this
transaction and any other item in the Final Accounting Statement. Such
audit shall be conducted so as to cause a minimum of inconvenience to the
audited Party. The occurrence of the Closing shall not relieve either Party
of its obligation to account to the other Party after the Closing with
respect to amounts that are received or become due after the Closing and
that are properly payable or chargeable to either Party pursuant to any
provision of this Agreement.
(b) If Seller and Buyer are unable to resolve the matters addressed in
the Dispute Notice, each of Buyer and Seller shall, within 5 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 mutually agreeable accounting firm selected by
the Parties (the "Accounting Arbitrator"), together with the Dispute
Notice, the Final Accounting Statement and any other documentation such
Party may desire to submit. Within 10 Business Days after receiving the
Parties' respective submissions, the Accounting Arbitrator shall render a
decision 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 the Parties in any court of
competent jurisdiction. The costs of such Accounting Arbitrator shall be
borne one-half by Buyer and one-half by Seller.
Page 25 of 41
Section 10.02 Operation of the Asset After Closing. It is expressly
understood and agreed that neither Seller nor any of its Affiliates shall be
obligated to continue operating or supporting the operation of the Asset
following the Closing and Buyer assumes full responsibility for operating (or
causing the operation of) the Asset following the Closing.
Section 10.03 Files. Seller shall make the Files available for pickup by
Buyer at Closing and Buyer shall pick up such Files on such date or within 5
days thereafter, provided that Seller shall have access to the files for any
reasonable purpose as provided in Section 10.05.
Section 10.04 Further Cooperation. After the Closing, each Party, at the
request of the other and without additional consideration, 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 action
as the other Party may reasonably request to convey and deliver the Asset to
Buyer, to accomplish the orderly transfer of the Asset to Buyer in the manner
contemplated by this Agreement and/or to otherwise carry out the purpose and
intent of this Agreement. After the Closing, the Parties will cooperate to have
all proceeds received attributable to the Asset paid to the proper Party and to
have all expenditures to be made with respect to the Asset made by the proper
Party.
Section 10.05 Document Retention.
(a) Inspection. Subject to the provisions of Section 10.05(b), Buyer
agrees, and will cause its assigns to agree, that the Files shall be open
for inspection by representatives of Seller at reasonable times and upon
reasonable notice during regular business hours for a period of four (4)
years following the Closing Date (or for such longer period as may be
required by Law or Governmental Authorities) and that Seller may, during
such period, at its expense and in Buyer's offices during normal business
hours, make such copies thereof as it may reasonably request.
(b) Destruction. Without limiting the generality of the foregoing, for
a period of four (4) years after the Closing Date (or for such longer
period as may be required by Law or by Governmental Authorities), Buyer
shall not, and shall cause its assigns to agree that they shall not,
destroy or give up possession of any original or final copy of the Files
without first offering Seller the opportunity, at Seller's expense (without
any payment to Buyer), to obtain such original or final copy.
Section 10.06 Tax Obligations. All Taxes attributable to the Asset with
respect to Tax periods ending at or prior to the Effective Time shall remain
Seller's responsibility, and all deductions, credits and refunds pertaining to
such Taxes, no matter when claimed or received, shall belong to Seller. All
Taxes attributable to the Asset with respect to Tax periods beginning at or
after, the Effective Time shall be Buyer's responsibility, and all deductions,
credits and refunds pertaining to such Taxes, no matter when claimed or
received, shall belong to Buyer. The actual amounts or values associated with
the above, if any, shall be accounted for to the extent known in the adjustments
to the Purchase Price at Closing and finally reconciled in the Final Accounting
Settlement. Taxes on real and personal property with respect to the Asset which
have not been assessed and paid for calendar year 2009 by the Effective Time
shall be estimated based on the prior year assessment, prorated through the
Page 26 of 41
Effective Time and reflected in the adjustments to the Purchase Price at
Closing; provided, however, within thirty (30) Days after the actual ad valorem
tax liability for the 2009 calendar year is known, Buyer and Seller shall make
such payments or credits between themselves as are necessary so that each Party
bears only its pro-rata portion of the actual 2009 ad valorem tax liability.
ARTICLE XI
TERMINATION
Section 11.01 Right of Termination. This Agreement and the transactions
contemplated by this Agreement may be completely terminated at any time at or
prior to the Closing:
(a) by mutual consent of the Parties;
(b) by any Party if the Closing shall not have occurred on or before
the date which is 6 months after the execution of this Agreement; provided,
however, that neither Party can terminate this Agreement if such Party is
in material breach of this Agreement;
(c) by Seller, at Seller's option, in the event the conditions set
forth in Section 8.01 are not satisfied to the satisfaction of Seller as of
the Closing Date;
(d) by Buyer, at Buyer's option, if the conditions set forth in
Section 8.02 are not satisfied to the satisfaction of Buyer as of the
Closing Date; or
(e) by any Party (i) if the sum of all Title Defect Amounts,
Environmental Defect Amounts and Casualty Losses exceeds 5% of the Purchase
Price pursuant to the last sentence of Section 4.04, the last sentence of
Section 5.05 or Section 13.02(d) or (ii) if the reduction of the Purchase
Price pursuant to Section 4.08 exceeds 5% of the Purchase Price or (iii) if
any court or Governmental Authority shall have issued an order, judgment or
decree or taken any other action challenging, delaying, restraining,
enjoining, prohibiting or invalidating the consummation of any of the
transactions contemplated.
Section 11.02 Effect of Termination. In the event that the Closing does not
occur as a result of either Party exercising its right not to close pursuant to
Section 11.01, then, except as expressly provided by the terms of this
Agreement, this Agreement shall terminate and neither Party shall have any
rights or obligations under this Agreement, except that nothing shall relieve
any Party from Liability for any willful breach of its covenants or agreements.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL
EITHER PARTY BE ENTITLED TO RECEIVE ANY INDIRECT, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES, OR DAMAGES FOR LOST PROFITS OF ANY KIND OR LOSS OF BUSINESS
OPPORTUNITY IN CONNECTION WITH THE TERMINATION OR BREACH OF THIS AGREEMENT.
ARTICLE XII
ASSUMPTION OF OBLIGATIONS AND INDEMNIFICATION
Section 12.01 Assumption of Obligations and Indemnity. As of the Closing,
but without limiting Buyer's rights to indemnity under this Agreement, or any
Title Indemnity Agreement and Environmental Indemnity Agreement, Buyer assumes
Page 27 of 41
and agrees to pay, perform and discharge the following obligations and
Liabilities with respect to the Asset other than the Retained Obligations,
regardless of whether such obligations or Liabilities arose prior to, on or
after the Effective Time:
(a) all obligations, whether arising by Law or by contract, to abandon
the Asset and dismantle, decommission or remove all personal property,
fixtures and related equipment now located on the land associated with the
Asset and all obligations to cleanup and restore such lands;
(b) except as otherwise provided in the definition of the Retained
Obligations, all Taxes, including ad valorem Taxes to the extent provided
for in Section 10.06, attributable to the Asset; and
(c) all Liabilities attributable to the Asset arising from,
attributable to or alleged to be arising from or attributable to, a
violation of or the failure to perform any obligation imposed by any
Environmental Law.
All such assumed obligations and Liabilities described above in this Section
12.01 are collectively referred to as the "Assumed Obligations."
Section 12.02 Non-Assumed Liabilities. Notwithstanding anything to the
contrary set forth in Section 12.01, Buyer does not assume liabilities related
to the following issues and Seller assumes and agrees to pay, perform and
discharge all of the following obligations:
(a) personal injury or wrongful death relating to events occurring
prior to the Closing Date; and
(b) all Operating Expenses attributable to the Asset prior to the
Effective Time.
All such non-assumed obligations and Liabilities being herein collectively
referred to as the "Non-Assumed Liabilities."
Section 12.03 Indemnification by Buyer.
(a) Effective as of Closing, but without limiting Buyer's rights to
indemnity under this Agreement or any Title Indemnity Agreement or
Environmental Indemnity Agreement, Buyer agrees to defend, release,
indemnify and hold harmless the Seller Indemnitees from and against (i) the
Assumed Obligations and (ii) the breach by Buyer of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
(b) Notwithstanding anything to the contrary, in addition to the
indemnities set forth in Section 12.03(a), but without limiting Buyer's
rights to indemnity under this Agreement or under any Environmental
Indemnity Agreement, effective as of the Closing, Buyer and its successors
and assigns shall assume (as part of the Assumed Obligations), be
responsible for, shall pay and defend, indemnify, hold harmless and forever
Page 28 of 41
release the Seller Indemnitees 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
Asset, regardless of whether such Liabilities arose prior to, on or after
the Effective Time, including the presence, disposal or removal of any
hazardous substance or other material of any kind in, on or under the Asset
or other neighboring property and including any Liability of any Seller
Indemnitees with respect to the Asset under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
xx.xx. 9601 et. seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. ss. 6901 et. seq.), the Clean Water Act (33 U.S.C. xx.xx. 466
et. seq.), the Safe Drinking Water Act (14 U.S.C. xx.xx. 1401-1450), the
Hazardous Materials Transportation Act (49 U.S.C. xx.xx. 1801 et. seq.),
the Toxic Substance Control Act (15 U.S.C. xx.xx. 2601-2629), the Clean Air
Act (42 U.S.C. ss. 7401 et. seq.) as amended, the Clean Air Act Amendments
of 1990 and all state and local Environmental Laws.
Section 12.04 Non-Assumed Liabilities and Indemnification by Seller.
(a) Retained Obligations. Notwithstanding anything to the contrary
herein contained, each Individual Seller shall retain and agrees to pay,
perform and discharge according to law its share of all obligations and
Liabilities with respect to the Non-Assumed Liabilities and any claims in
any way arising out of or related to the Excluded Asset.
(b) Indemnification by Seller. From and after Closing, each Individual
Seller agrees to defend, release, indemnify and hold harmless the Buyer
Indemnitees from and against (i) such Individual Seller's share according
to law of the Non-Assumed Liabilities and (ii) the breach by such
Individual Seller of any of its representations, warranties, covenants or
agreements contained in this Agreement.
Section 12.05 Negligence and Fault. THE DEFENSE, RELEASE, INDEMNIFICATION
AND HOLD HARMLESS OBLIGATIONS SET FORTH IN THIS AGREEMENT SHALL ENTITLE THE
INDEMNITEE TO SUCH DEFENSE, RELEASE, INDEMNIFICATION AND HOLD HARMLESS HEREUNDER
IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, REGARDLESS OF WHETHER THE CLAIM
GIVING RISE TO SUCH OBLIGATION IS THE RESULT OF: (A) STRICT LIABILITY, (B) THE
VIOLATION OF ANY LAW BY SUCH INDEMNITEE OR BY A PRE-EXISTING CONDITION, OR (C)
THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE OR FAULT OF ANY NATURE OF SUCH
INDEMNITEE.
Section 12.06 Exclusive Remedy.
(a) From and after Closing, each of the Parties acknowledges and
agrees that its sole and exclusive remedy with respect to any and all
Liabilities pursuant to or in connection with this Agreement or relating to
the Asset, the purchase of the Asset by Buyer and the sale of the Asset by
Seller or otherwise in connection with the transactions contemplated by
this Agreement shall be limited to the indemnification provisions set forth
in this Agreement and any Title Indemnity Agreement, Environmental
Indemnity Agreement, and the special warranty of title contained in the
Page 29 of 41
Assignment. Except for the remedies contained in this Article XII, any
Title Indemnity Agreement, Environmental Indemnity Agreement, and the
special warranty of title contained in the Assignment, effective as of
Closing, each Party, on its own behalf and on behalf of its Affiliates,
releases and forever discharges the other Party and its Affiliates and all
such parties' shareholders, 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, at Law or in equity, known or
unknown, which such Party or its Affiliates might now or subsequently may
have, based on, relating to or arising out of this Agreement, the
transactions contemplated by this Agreement, the ownership, use or
operation of the Asset or the condition, quality, status or nature of the
Asset, including rights to contribution under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, and any other Environmental Law, 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
either Party or any of its Affiliates, excluding, however, any contractual
rights (apart from this Agreement) existing as of Closing between (a) Buyer
or any of Buyer's Affiliates, on the one hand, and (b) Seller or any of
Seller's Affiliates, on the other hand, under contracts between them
relating to the Asset (if any).
(b) Notwithstanding anything to the contrary contained herein, from
and after the Closing an Individual Seller shall not incur and shall have
no obligation or Liability to the Buyer Indemnitees under this Agreement or
in connection with the transactions contemplated by this Agreement for a
breach by any Seller of any of its representations or warranties, contained
in this Agreement (a) where the aggregate total of all such Liabilities is
less than $150,000 or to the extent that such aggregate total exceeds 35%
of the Purchase Price or (b) except with respect to Extended
Representations, to the extent that a Claim Notice of such Liabilities is
provided by Buyer to Seller later than 12 months after the Closing Date
PROVIDED, HOWEVER, that under no circumstances shall such Seller's
indemnity obligations exceed 100% of the Purchase Price received by such
Individual Seller and, to the extent both Individual Sellers have liability
to the Buyer Indemnitees, such liability shall be an individual liability
of the Individual Sellers in the proportions of Range 25% of any such
liability and Hickory Creek Partnership 75% of any such liability, there
being no joint and several liability to Buyer Indemnitees by the Individual
Sellers.
Section 12.07 Expenses. Notwithstanding anything to the contrary, the
foregoing defense, release, indemnity and hold harmless obligations shall not
apply to, and each Party shall be solely responsible for, all expenses,
including due diligence expenses, incurred by it to consummate the transactions
contemplated by this Agreement.
Section 12.08 Survival.
(a) The representations and warranties of Seller in (i) Sections
6.01(a), (b), (c), (d), (e), (g), (i) and (j) shall survive Closing
indefinitely ("Extended Representations"), and (ii) Xxxxxxxx 0.00(x), (x),
(x), (x), (x), (x), (x), (x), (x) and (r) shall survive the Closing for a
Page 30 of 41
period of one year. Articles X and XII and Sections 2.05, 7.01, 7.02,
13.01, 14.02, 14.03, 14.04, 14.05, 14.06, 14.07, 14.08, 14.09, 14.10,
14.11, 14.12, 14.13 and 14.14 shall survive Closing indefinitely. Subject
to the foregoing and as set forth in Section 12.08(b), the remainder of
this Agreement shall not survive the Closing. Representations, warranties,
covenants and agreements shall be of no further force and effect after the
date of their expiration; provided, however, that there shall be no
termination of any bona fide claim asserted pursuant to this Agreement with
respect to (i) such a representation or warranty prior to its expiration
date or (ii) such a covenant or agreement within one year after its
expiration date.
(b) The indemnities in Section 12.04(b)(ii) shall terminate (i) as of
the termination date of each respective representation or warranty that is
subject to indemnification, except in each case as to matters for which a
specific written claim for indemnity has been delivered to Seller on or
before such termination date and (ii) as of the termination date of each
respective 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 Seller on or before one year after such termination
date.
Section 12.09 Non-Compensatory Damages. NONE OF THE BUYER INDEMNITEES NOR
SELLER INDEMNITEES SHALL BE ENTITLED TO RECOVER FROM SELLER OR BUYER, OR THEIR
RESPECTIVE AFFILIATES, ANY INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY
DAMAGES OR DAMAGES FOR LOST PROFITS OF ANY KIND OR LOSS OF BUSINESS OPPORTUNITY
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, EXCEPT TO THE EXTENT ANY SUCH PARTY SUFFERS SUCH
DAMAGES (INCLUDING COSTS OF DEFENSE AND REASONABLE ATTORNEYS' FEES INCURRED IN
CONNECTION WITH DEFENDING OF SUCH DAMAGES) TO A THIRD PARTY, WHICH DAMAGES
(INCLUDING COSTS OF DEFENSE AND REASONABLE ATTORNEYS' FEES INCURRED IN
CONNECTION WITH DEFENDING AGAINST SUCH DAMAGES) SHALL NOT BE EXCLUDED BY THIS
PROVISION. SUBJECT TO THE PRECEDING SENTENCE, BUYER, ON BEHALF OF EACH OF THE
BUYER INDEMNITEES, AND SELLER, ON BEHALF OF EACH OF SELLER INDEMNITEES, WAIVE
ANY RIGHT TO RECOVER PUNITIVE, SPECIAL, EXEMPLARY AND CONSEQUENTIAL DAMAGES,
INCLUDING DAMAGES FOR LOST PROFITS OR LOSS OF BUSINESS OPPORTUNITY, ARISING IN
CONNECTION WITH OR WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 12.10 Indemnification Actions. All claims for indemnification under
this Article XII shall be asserted and resolved as follows:
(a) For purposes of this Agreement, the term "Indemnitor" when used in
connection with particular damages shall mean the Person having an
obligation to indemnify another Person or Persons with respect to such
damages pursuant to this Agreement, and the term "Indemnitee" when used in
connection with particular damages shall mean a Person having the right to
be indemnified with respect to such damages pursuant to this Agreement.
Page 31 of 41
(b) To make claim for indemnification under this Article XII, an
Indemnitee shall notify the Indemnitor of its claim, 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 Indemnitee (a "Claim"), the
Indemnitee shall provide its Claim Notice promptly after the Indemnitee has
actual knowledge of the Claim and shall enclose a copy of all papers (if
any) served with respect to the Claim; provided that the failure of any
Indemnitee to give notice of a Claim as provided in this Section 12.10
shall not relieve the Indemnitor of its obligations under this Article XII
except to the extent (and only to the extent of such incremental damages
incurred) such failure results in insufficient time being available to
permit the Indemnitor to effectively defend against the Claim or otherwise
prejudices the Indemnitor'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
Indemnitor shall have 30 days from its receipt of the Claim Notice to
notify the Indemnitee whether or not it agrees to indemnify and defend the
Indemnitee against such Claim under this Article XII. The Indemnitee is
authorized, prior to and during such 30 day period, to file any motion,
answer or other pleading that it shall deem necessary or appropriate to
protect its interests or those of the Indemnitor and that is not
prejudicial to the Indemnitor.
(d) If the Indemnitor agrees to indemnify the Indemnitee, it shall
have the right and obligation to diligently defend, at its sole cost and
expense, the Claim. The Indemnitor shall have full control of such defense
and proceedings, including any compromise or settlement of the Claim. If
requested by the Indemnitor, the Indemnitee agrees to cooperate in
contesting any Claim which the Indemnitor elects to contest (provided,
however, that the Indemnitee shall not be required to bring any
counterclaim or cross-complaint against any Person). The Indemnitee may
participate in, but not control, at its sole cost and expense, any defense
or settlement of any Claim controlled by the Indemnitor pursuant to this
Section 12.10. An Indemnitor shall not, without the written consent of the
Indemnitee, such consent not to be unreasonably withheld or delayed, settle
any Claim or consent to the entry of any judgment with respect thereto that
(i) does not result in a final resolution of the Indemnitee's Liability
with respect to the Claim (including, in the case of a settlement, an
unconditional written release of the Indemnitee from all Liability in
respect of such Claim) or (ii) may materially and adversely affect the
Indemnitee (other than as a result of money damages covered by the
indemnity).
(e) If the Indemnitor does not agree to indemnify the Indemnitee
within the 30 day period specified in Section 12.10(c), fails to give
notice to the Indemnitee within such 30 day period regarding its election
or if the Indemnitor agrees to indemnify, but fails to diligently defend or
Page 32 of 41
settle the Claim, then the Indemnitee shall have the right to defend
against the Claim (at the sole cost and expense of the Indemnitor, if the
Indemnitee is entitled to indemnification hereunder), with counsel of the
Indemnitee's choosing; provided, however, that the Indemnitee shall make no
settlement, compromise, admission or acknowledgment that would give rise to
Liability on the part of any Indemnitor without the prior written consent
of such Indemnitor, which consent shall not be unreasonably withheld,
conditioned or delayed.
(f) In the case of a claim for indemnification not based upon a Claim,
the Indemnitor shall have 30 days from its receipt of the Claim Notice to
(i) cure the damages complained of, (ii) agree to indemnify the Indemnitee
for such Damages, or (iii) dispute the claim for such damages. If such
Indemnitor does not respond to such Claim Notice within such 30 day period,
such Person will be deemed to dispute the claim for damages.
ARTICLE XIII
LIMITATIONS ON REPRESENTATIONS AND WARRANTIES
Section 13.01 Disclaimers of Representations and Warranties.
(a) EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT
OR IN THE ASSIGNMENT, (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
SELLER 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
AFFILIATES).
(b) EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT
OR IN THE ASSIGNMENT, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS,
STATUTORY OR IMPLIED, AS TO (i) TITLE TO THE ASSET, (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 ASSET, (iii) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS
IN OR FROM THE ASSET, (iv) ANY ESTIMATES OF THE VALUE OF THE ASSET OR
FUTURE REVENUES GENERATED BY THE ASSET, (v) THE PRODUCTION OF HYDROCARBONS
FROM THE ASSET, (vi) THE MAINTENANCE, REPAIR, CONDITION, QUALITY,
Page 33 of 41
SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSET, (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 ASSET, (viii) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN
MADE AVAILABLE TO BUYER, ITS AFFILIATES 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.
(c) EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT,
SELLER EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER WAIVES (i) ANY IMPLIED OR
EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS WARRANTY
OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESS WARRANTY
OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF
PURCHASERS UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION,
(v) ANY CLAIMS BY BUYER FOR DAMAGES BECAUSE OF REDHIBITORY VICES OR
DEFECTS, WHETHER KNOWN OR UNKNOWN AS OF THE EFFECTIVE TIME OR THE CLOSING
DATE, AND (vi) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE
LAW; IT BEING THE EXPRESS INTENTION OF BOTH BUYER AND SELLER THAT, EXCEPT
AS AND TO THE EXTENT EXPRESSLY SET FORTH IN SECTION 6.01 OF THIS AGREEMENT
OR THE ASSIGNMENT, THE ASSET SHALL BE CONVEYED TO BUYER IN THEIR PRESENT
CONDITION AND STATE OF REPAIR, "AS IS" AND "WHERE IS," WITH ALL FAULTS, AND
THAT BUYER HAS MADE OR SHALL MAKE PRIOR TO CLOSING SUCH INSPECTIONS AS
BUYER DEEMS APPROPRIATE.
(d) OTHER THAN EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NOT,
DOES 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, THE PROTECTION OF HUMAN HEALTH, SAFETY,
NATURAL RESOURCES OR THE ENVIRONMENT OR ANY OTHER ENVIRONMENTAL CONDITION
OF THE ASSET, AND NOTHING IN THIS SALE OR OTHERWISE SHALL BE CONSTRUED AS
SUCH A REPRESENTATION OR WARRANTY. EXCEPT FOR ANY LIABILTY OF SELLER UNDER
ANY ENVIRONMENTAL INDEMNITY AGREEMENT, IF ANY EXECUTED BY BUYER AND SELLER
UNDER THIS AGREEMENT, BUYER ACCEPTS THE ASSET "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.
(e) SELLER AND BUYER AGREE THAT THE DISCLAIMERS OF CERTAIN WARRANTIES
CONTAINED IN THIS SECTION 13.01 ARE "CONSPICUOUS" DISCLAIMERS FOR THE
PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.
Page 34 of 41
Section 13.02 Casualty Loss.
(a) Except as set forth in Section 13.02(c), Buyer assumes all risk of
loss with respect to, and any change in the condition of, the Asset from
the Effective Time until Closing, including the depreciation of personal
property due to ordinary wear and tear or any diminution of value resulting
from fluctuation in markets or economies.
(b) If, after the Effective Time and prior to the Closing, any part of
the Asset shall be damaged or destroyed by fire or other casualty or if any
part of the Asset shall be taken in condemnation, under the right of
eminent domain or if proceedings for such purposes shall be pending or
threatened, this Agreement shall remain in full force and effect
notwithstanding any such damage, destruction, taking, proceeding or the
threat thereof.
(c) In the event of any such damage, destruction or taking described
in Section 13.02(b), (i) the Purchase Price shall be reduced at the Closing
by the amount, if any, by which (x) the total of the cost to repair all
such damage or destruction and the value of the Asset taken by condemnation
or under the right of eminent domain (such total, a "Casualty Loss"),
exceeds (y) 1% of the Purchase Price, and (ii) Seller shall assign,
transfer and set over unto Buyer, all of the rights, title and interest of
Seller in and to any claims, causes of action, unpaid proceeds or other
payments arising out of such destruction or taking. Notwithstanding
anything to the contrary in this Section 13.02, Seller shall not be
obligated to carry or maintain, and shall have no obligation or Liability
to Buyer for the failure to carry or maintain, any insurance coverage with
respect to the Asset; provided, however, the foregoing shall not operate to
modify Seller's obligations under Section 7.04.
(d) In addition to the foregoing remedies, if the sum of all Title
Defect Amounts, Environmental Defect Amounts and Casualty Losses determined
prior to Closing is equal to or exceeds 5% of the Purchase Price, then
either Party shall have the right to terminate this Agreement.
ARTICLE XIV
MISCELLANEOUS
Section 14.01 1031 Exchange. Seller reserves the right, at or prior to
Closing, to assign its rights under this Agreement with respect to all or a
portion of the Purchase Price, and that portion of the Asset associated
therewith (the "1031 Asset"), to a Qualified Intermediary (as that term is
defined in Section 1.1031(k)-1(g)(4)(v) of the Treasury Regulations) ("QI")
designated by Seller to accomplish this Closing, in whole or in part, in a
manner that will comply with the requirements of a like-kind exchange
("Like-Kind Exchange") pursuant to Section 1031 of the Internal Revenue Code of
1986, as amended ("Code"). If Seller so elects, Seller may assign its rights to
the 1031 Asset under this Agreement to the QI. Buyer hereby (i) consents to
Seller's assignment of its rights in this Agreement with respect to the 1031
Asset and (ii) if such assignment is made, agrees to pay all or a portion of the
Purchase Price into the qualified trust account at Closing as directed in
writing by Seller. Seller and Buyer acknowledge and agree that a whole or
Page 35 of 41
partial assignment of this Agreement to a QI shall not release either Party from
any of its respective Liabilities and obligations to each other or expand any
such respective Liabilities or obligations under this Agreement. Neither Party
represents to the other that any particular Tax treatment will be given to
either Party as a result of such Like-Kind Exchange. Buyer shall cooperate with
Seller in connection with such Like-Kind Exchange but shall not be obligated to
pay any additional costs or incur any additional obligations as a result
thereof.
Section 14.02 Transfer Taxes. All sales, use or other Taxes (other than
taxes on gross income, net income, gross receipts, or ad valorem taxes) and
duties, levies or other governmental charges incurred by or imposed with respect
to the property transfers undertaken pursuant to this Agreement shall be the
responsibility of, and shall be paid by, Buyer.
Section 14.03 Filings, Notices and Certain Governmental Approvals. Promptly
after Closing, (a) Buyer shall record the Assignment of the Asset and any
Additional Assignments of the Asset executed at Closing in all applicable real
property records and at the offices of all relevant Governmental Authorities,
(b) Buyer and Seller shall actively pursue all other consents and approvals that
may be required in connection with the assignment of the Asset to Buyer and the
assumption of the Liabilities and obligations assumed by Buyer 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 the posting of any and all bonds or other
security that may be required.
Section 14.04 Entire Agreement. This Agreement, the documents to be
executed pursuant to this Agreement and the Exhibits and Schedules attached to
this Agreement constitute the entire agreement between the Parties pertaining to
the sale and assignment of the Asset from Seller to Buyer and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties pertaining to such subject matter. No supplement,
amendment, alteration, modification, waiver or termination of this Agreement
shall be binding unless executed in a writing signed by authorized
representatives of both the Parties which expressly references this Agreement or
a provision of this Agreement as being supplemented, amended, altered, modified,
waived or terminated.
Section 14.05 Waiver. No waiver of any of the provisions of this Agreement
or rights under this Agreement shall be deemed or shall constitute a waiver of
any other provisions or right (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided in writing.
Section 14.06 Publicity. Each Party shall provide a copy of any public
release concerning this Agreement or the transactions contemplated by this
Agreement to the other Party not less than twenty-four (24) hours prior to
issuing such public release; provided, however, (i) if a Party desires to issue
any such public release prior to the opening of the New York Stock Exchange on
any day, then such Party shall only be required to provide a copy of such public
release to the other Party no later than 5:00 p.m., Central Time, on the day
before the issuance of such public release, and (ii) if applicable Law,
Governmental Authority or the New York Stock Exchange requires the prior
issuance of any such public release, then such public release can be issued
without providing such prior notice to the other Party.
Page 36 of 41
Section 14.07 No Third Party Beneficiaries. Except with respect to the
Persons included within the definition of Seller Indemnitees or Buyer
Indemnitees, nothing in this Agreement shall provide any benefit to any Third
Party or entitle any Third Party to any claim, cause of action, remedy or right
of any kind, it being the intent of the Parties that this Agreement shall not be
construed as a Third Party beneficiary contract.
Section 14.08 Assignment. Subject to Section 14.01, neither Party may
assign or delegate any of its rights or duties under this Agreement without the
prior written consent of the other Party and any assignment made without such
consent shall be void. Any assignment of this Agreement made as permitted by
this Section 14.08 shall not relieve the assigning Party from any Liability or
obligation under this Agreement. Except as otherwise provided in this Agreement,
this Agreement shall be binding upon and inure to the benefit of the Parties and
their respective permitted successors, assigns and legal representatives.
Notwithstanding anything to the contrary in this Agreement, it is acknowledged
that effective December 31, 2009, ("the Merger Effective Date"), Range will
merge into an Affiliate, to wit: Range Texas Production, LLC. Such merger will
not constitute an assignment requiring Buyer's consent, and as of said Merger
Effective Date Range Texas Production, LLC will assume all of the rights,
obligations and liabilities of Range pursuant to this Agreement.
Section 14.09 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. THE
PARTIES 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 OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT SHALL BE EXCLUSIVELY LITIGATED IN COURTS IN XXXXXX, XXXXXX
COUNTY, TEXAS. EACH PARTY 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.
Section 14.10 Notices. Any notice, communication, request, instruction or
other document required or permitted shall be given in writing and delivered in
person or sent by United States mail (postage prepaid, return receipt
requested), facsimile or telecopy to the addresses of Seller and Buyer set forth
below. Any such notice shall be effective upon receipt only if received during
normal business hours or, if not received during normal business hours, on the
next business day.
SELLER:
-------
Hickory Creek Gathering L.P.
Attention: Xxxxxx X. Xxxx
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Page 37 of 41
and
---
Range Operating Texas, LLC
Attention: Xxxx Xxxxxxxx
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
PURCHASER:
----------
Gateway Pipeline Company
Attention: Xxxxxx Xxxxxx
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxx
Xxxxxxx Xxxxxxxx Xxxxxx LLP
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Either Party may, by written notice so delivered, change its address for notice
purposes.
Section 14.11 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 is not affected in any adverse manner
to either Party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated are fulfilled to the extent possible.
Section 14.12 Counterparts. This Agreement may be executed in any number of
counterparts, and each counterpart shall be deemed to be an original instrument,
but all such counterparts shall constitute but one instrument. Any signature
delivered by a Party by facsimile transmission or electronically in .pdf format
shall be deemed an original signature.
Section 14.13 Amendment. This Agreement may be amended only by an
instrument in writing executed by all Parties in accordance with Section 14.04.
Section 14.14 Schedules and Exhibits. The inclusion of any matter upon any
Schedule or any Exhibit to this Agreement does not constitute an admission or
agreement that such matter is material with respect to the representations and
warranties of the Parties.
Page 38 of 41
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the
date first written above.
SELLER:
Hickory Creek Gathering L.P.
By: Xxxxxx County Airport Xxxxxxx Shale, LC
its general partner
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Xxxxxx X. Xxxx, Manager
AND
Range Operating Texas, LLC
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------
Xxxx Xxxxxxxx,
Senior Vice President - Corporate
Development
PURCHASER:
Gateway Pipeline Company
By: /s/ Xxxxxx Xxxxxx
-------------------------------------------
Xxxxxx Xxxxxx
President
Page 39 of 41
