EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") dated as of July 27,
1998, is between West Texas Recovery, Inc., a Texas corporation ("Seller"),
and Lyric International, Inc., a Colorado corporation ("Buyer"), duly
authorized to transact business in the state of Texas.
In consideration of the mutual promises contained herein, the benefits to
be derived by each party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller
agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Purchase and Sale. Seller agrees to sell and convey and Buyer
agrees to purchase and pay for the Interests (as defined in Section 1.02
below), subject to the terms and conditions of this Agreement.
1.02 Interests. All of the following shall be referred to as the
"Interests":
(a) The undivided interests described in Exhibit A hereto in and
to the entire estates created by the leases, licenses, permits and other
agreements described in Exhibit A (the "Leases"), insofar as the Leases cover
and relate to the land described in Exhibit A (the "Land"), together with
identical undivided interests in and to all the property and rights incident
thereto, including all rights in, to and under all agreements, product
purchase and sale contracts, leases, permits, rights-of-way, easements,
licenses, farmouts, options and orders in any way relating thereto;
(b) Identical undivided interests in and to all of the personal
property, fixtures and improvements now or as of the Effective Time (as
defined in Section 1.03 below) on the Land, appurtenant thereto or used or
obtained in connection therewith or with the production, treatment, sale or
disposal of hydrocarbons or water produced therefrom or attributable thereto
and all other appurtenances there unto belonging:
(c) All other leasehold interests, overriding royalty interests,
mineral interests and other interests, if any, whether now owned or hereafter
acquired by Seller, in and to the Land and the Leases and in or attributable
to production therefrom.
1.03 Effective Time. The purchase and sale of the Interests shall be
effective for all purposes as of July 1, 1998, at 7:00 A.M., local time (the
"Effective Time"), said time to be determined for each locality described in
Exhibit A in accordance with the time generally observed in said locality.
ARTICLE II
PURCHASE PRICE
2.01 Purchase Price. The purchase price for the Interests shall be
$1.8 Million Dollars (U.S.) (the "Purchase Price"), which shall be adjusted as
set forth in Section 2.02 below.
2.02 Adjustments to Purchase Price, The Purchase Price shall be
adjusted as follows and the resulting amount shall be referred to as the
"Adjusted Purchase Price":
(a) The Purchase Price shall be adjusted upward by the following:
(1) The value of all merchantable, allowable oil in storage
above the pipeline connection at the Effective Time that
is credited to the Interests, the value to be the market
price in effect as of the Effective Time less applicable
taxes; and
(2) The amount of all actual direct operating expenditures
(including royalties and production taxes paid with
respect to the Interests, but excluding any of Seller's
overhead or administrative expenses), paid by Seller that
are attributable to the Interests during the period of
time between the Effective Time and the Closing Date (as
defined in Section 7.01 below).
(b) The Purchase Price shall be adjusted downward by the
following:
(1) The proceeds (other than those referred to in Section
2.02(b)(2) below) received by Seller that are
attributable to the Interests during the period of time
between the Effective Time and the Closing Date;
(2) The amount of the proceeds received by Seller from the
disposition (with the prior written consent of Buyer as
provided in Section 4.01(e) below) of all or any portion
of the Interests; and
(3) An amount equal to all unpaid ad valorem, property,
production, severance and similar taxes and assessments
based upon or measured by the ownership of property or
the production of hydrocarbons or the receipt of proceeds
therefrom accruing to the Interests prior to the
Effective Time, which amount shall be based upon such
taxes assessed against the applicable portion of the
Interests for the preceding calendar year or, in the
cases where such taxes are assessed on other than a
calendar year basis, for the tax related year last ended.
(c) The purchase price shall be paid as follows:
(1) $450,000.00 in cash, U.S., including Note as described in
the attached Exhibit.
(2) $50,000.00 of Buyer's stock paid to the designated
Assignee of Seller.
(3) Balance of purchase price to be paid in the form of
Preferred "B" Stock of Buyer, said stock to have a par
value of not less than $100.00 per share and said stock
to be fully convertible during a one year period from
January 1, 1999, to December 31, 1999, to common stock of
said Buyer for equal dollar value of preferred stock. At
the end of said one year option period all of said
Preferred stock that has not been converted shall be
automatically converted to said common stock. During the
one year option period said Preferred stock shall pay a
dividend rate of 9.5 cumulative.
(4) Terms of stock transfer, and manner of conversion may be
modified by mutual consent of the parties hereto in
writing only.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas, and Seller is duly
qualified to carry on its business in each of the states identified in Exhibit
A.
(b) Seller has all requisite power and authority to carry on its
business as presently conducted, to enter into this Agreement, and to perform
its obligations under this Agreement, and to perform its obligations under
this Agreement. The consummation of the transactions contemplated by this
Agreement will not violate, nor be in conflict with, any provision of Seller's
charter, bylaws or governing documents, or any agreement or instrument to
which Seller is a party or is bound, or any judgment, decree, order, statute,
rule or regulation applicable to Seller.
(c) The execution, delivery and performance of this Agreement and
the transactions contemplated hereby have been duly and validly authorized by
all requisite action, corporate and otherwise, on the part of the Seller.
(d) This Agreement has been duly executed and delivered on behalf
of Seller, and at the Closing all documents and instruments required hereunder
to be executed and delivered by Seller shall have been duly executed and
delivered. This Agreement does, and such documents and instruments shall,
constitute legal and valid obligations of Seller.
(e) Except as specifically set forth in Exhibit A, Seller has fee
simple title to the Interests, free and clear of all liens, encumbrances,
burdens, claims and defects of title of any kind, and Seller has provided
Buyer with complete and accurate information relating to the Interests.
(f) The Leases are in full force and effect, are valid and
subsisting, cover the entire estates they purport to cover.
(g) Seller is not in default under any contract or agreement
pertaining to the Interests and, except as specifically indicated in Exhibit
A.
(h) All royalties, rentals and other payments due under the Leases
have been properly and timely paid, and all conditions necessary to keep the
Leases in force have been fully performed.
(i) Seller is not obligated, by virtue of a prepayment
arrangement, a "take or pay" arrangement, a production payment or any other
arrangement, to deliver hydrocarbons produced from the interests at some
future time without then or thereafter receiving full payment therefor.
(j) Except as specifically indicated in Exhibit A, no hydrocarbons
produced from the Interests are subject to a sales contract or other agreement
relating to the production, gathering, transporting, processing, treating or
marketing of hydrocarbons, and no person has any call upon, option to purchase
or similar rights with respect to the Interests or to the production
therefrom.
(k) All ad valorem, property, production, severance, excise and
similar taxes and assessments based on or measured by the ownership of
property or the production of hydrocarbons or the receipt of proceeds
therefrom on the Interests that have become due and payable have been properly
and timely paid.
(l) Seller has incurred no liability, contingent or otherwise,
for brokers' or finders' fees relating to the transactions contemplated by
this Agreement for which Buyer shall have any responsibility whatsoever.
(m) No suit, action or other proceeding is pending or threatened
before any court or governmental agency and no cause of action exists that
relates to the Interests or that might result in impairment or loss of
Seller's title to any portion of the Interests or the value thereof or that
might hinder or impede the operation or enjoyment of the Leases.
(n) The Interests entitle Seller to receive not less than the
undivided interests set forth in Exhibit A as "Net Revenue Interests" of all
indicated hydrocarbons produced, saved and marketed from or attributable to
the Land and all xxxxx located thereon or attributable to thereto through the
plugging, abandonment and salvage of such xxxxx. Seller's obligation to bear
costs and expenses relating to the development of and operations on the
Leases, Land and xxxxx thereon or attributable thereto is not, and, through
the plugging, abandonment and salvage of such xxxxx, shall not be, greater
than the "Operating Interests" set forth in Exhibit A.
(o) Seller is currently receiving from all purchasers of
production from the Interests at least the "Net Revenue Interests" set forth
in Exhibit A without suspense or any indemnity other than standard division
order warranties. Seller is currently paying the operators of the Interests
for the development and operation thereof no more than the "Operating
Interests" set forth in Exhibit A, and Seller is current for all costs and
expenses pertaining to the development and operation of Interests.
(p) All laws, rules, regulations, ordinances and orders of all
local, tribal, state and federal governmental bodies, authorities and agencies
having jurisdiction over the Interests have been complied with.
(q) Applications for well determination under the Natural Gas
Policy Act of 1978, as amended (the "NGPA") and the rules and regulations of
the Federal Energy Regulatory Commission under such act (the "NGPA
Regulations") relating to the Interests have been filed as set forth in
Exhibit B hereto. Except as noted in Exhibit B, each such application has
been approved by the indicated state and federal agency and by the Federal
Energy Regulatory Commission and has been finally approved under the NGPA.
Such applications comply with the requirements of the NGPA and the NGPA
Regulations and do not (1) contain any untrue statement of material fact or
(2) omit any statement of material fact necessary to make the statements
therein not misleading, No further applications are required under the NGPA
and the NGPA Regulations to allow the legal sale of all gas produced from the
Interests at a price equal to the price for such gas currently being received.
(r) All necessary plans for development, applications,
inspection reports, certificates and other instruments pertaining to
environmental matters have been filed with the appropriate local, tribal,
state and federal governmental bodies, authorities and agencies and all
permits necessary for the legal operation of the Interests in full compliance
with all environmental laws, rules, regulations, ordinances and orders have
been obtained and Seller is in full compliance with all such laws, rules,
regulations, ordinances and orders. All applications, reports, certificates
and other instruments filed with or famished to any local, tribal, state or
federal governmental body, authority or agency do not (1) contain any untrue
statement of material fact or (2) omit any statement of material fact
necessary to make the statements therein not misleading.
(s) No portion of the Interests (1) has been contributed to and
is currently held by a tax partnership; (2) is subject to any form of
agreement (whether formal or informal, written or oral) deemed by any state or
federal tax statute, rule or regulation to be or to have created a tax
partnership; or (3) otherwise constitutes "partnership property" (as that term
is used throughout Subchapter K of Chapter I of Subtitle A of the Code) of a
tax partnership. For purposes of this Section 3.01(s) a "tax partnership" is
any entity, organization or group deemed to be a partnership within the
meaning of section 761 of the Code or any similar state or federal statute,
rule or regulation, and that is not excluded from the application of the
partnership provisions of Subchapter K of Chapter I of Subtitle A of the Code
and of all similar provisions of state tax statutes or regulations by reasons
of elections made, pursuant to section 761(a) of the Code and all such similar
state or federal statutes, rules and regulations, to be excluded from the
application of all such partnership provisions.
(t) Seller has provided Buyer with complete and accurate
information relating to the Interests, including without limitation,
production history and characteristics, NGPA classifications, operating and
net revenue interests and prices currently being received for production.
(u) Except as specifically set forth on Exhibit B, no portion of
the Interests is subject to any offer of Lake or pay credits for gas
transported pursuant to FERC Order No. 500 or (ii) has been the subject of a
request for good faith negotiations under FERC Order No. 451.
(v) No portion of the Interests is, or by this transaction shall
become, burdened by any liability or contingent liability under the Multi-
employer Pension Plan Amendments Act of 1980 and the purchase and sale
contemplated herein shall not cause any liability under such act for Seller or
Buyer.
(w) Except as set forth on Exhibit B, no portion of the Interests
is either overproduced or underproduced in natural gas under any gas balancing
agreement or gas storage agreement or in regard to any well, pooling unit or
unitized area without such an agreement.
3.02 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado and is duly authorized
to transact business in the state of Texas, and Buyer is duly qualified to
carry on its business in each of the states identified in Exhibit A.
(b) Buyer has all requisite power and authority to carry on its
business as presently conducted, to enter into this Agreement, to purchase the
Interests on the terms described in this Agreement and to perform its other
obligations under this Agreement. The consummation of the transactions
contemplated by this Agreement will not violate, nor be in conflict with, any
provision of Buyer's charter, bylaws or governing documents, or any agreement
or instrument to which Buyer is a party or is bound, or any judgment, decree,
order, statute, rule or regulation applicable to Buyer.
(c) The execution, delivery and performance of this Agreement and
the transactions contemplated hereby have been duly and validly authorized by
all requisite action, corporate and otherwise, on the part of Buyer.
(d) This Agreement has been duly executed and delivered on behalf
of Buyer, and at the Closing all documents and instruments required hereunder
to be executed and delivered by Buyer shall have been duly executed and
delivered. This Agreement does, and such documents and instruments shall,
constitute legal and valid obligations of Buyer.
(e) Buyer has incur-red no liability, contingent or otherwise, for
brokers' or finders' fees relating to the transactions contemplated by this
Agreement for which Seller shall have any responsibility whatsoever.
ARTICLE IV
COVENANTS
4.01 Covenants of Seller. Seller covenants and agrees with Buyer as
follows:
(a) Within 15 days after the date of this Agreement, Seller, at
the expense of Seller, shall deliver to Buyer the following title information:
(1) [TITLE OPTIONS]
(2) [ABSTRACTS OF TITLE AND STATUS REPORTS]
(3) [OTHER LAND RECORDS]
(4) [RENTAL AND ROYALTY PAYMENT RECORDS]
(5) [TAX PAYMENT RECORDS]
(6) [MAPS AND SURVEYS]
(7) [PRODUCTION SALE, PROCESSING AND TRANSPORTATION
AGREEMENTS]
(8) [GENERAL PERMITS, EASEMENTS, LICENSES AND ORDERS]
All such information shall also be open to inspection and photocopying by
Buyer at any reasonable time during the term of this Agreement.
(b) Within 15 days after the date of this Agreement, Seller, at
the expense of Seller, shall obtain and deliver to Buyer the following
production and operation information:
(1) [PRODUCTION RECORDS AND VERIFICATION]
(2) [OPERATING EXPENSE RECORDS AND VERIFICATION]
(3) [INVENTORY]
(4) [BONDS AND INSURANCE POLICIES]
(5) [SALT WATER DISPOSAL AGREEMENTS AND OTHER OPERATION
AGREEMENTS]
(6) [ENGINEERING, GEOLOGICAL AND GEOPHYSICAL DATA]
(7) [NGPA DOCUMENTS]
(8) [DEVELOPMENT PLANS AND PERMITS)
All such information shall also be open to inspection and photocopying by
Buyer at any reasonable time during the term of this Agreement.
(c) Seller shall cause the Interests to be developed, maintained
and operated in a good and workmanlike manner, shall maintain insurance now in
force with respect to the Interests, shall pay or cause to be paid all costs
and expenses incurred in connection therewith, shall keep the Leases in full
force and effect and shall perform and comply with all of the covenants and
conditions contained in the Leases and all agreements relating to the
Interests; provided, however, that Seller shall not commence operations for
tile drilling of any new well or the redrilling of any existing well on the
Interests after the date of this Agreement without the prior written consent
of Buyer.
(d) Seller shall carry on the business of Seller with respect to
the Interests in substantially the same manner as Seller has heretofore and
shall not introduce any new method of management, operation or accounting with
respect to the Interests.
(e) Without the prior written consent of Buyer, Seller shall not
enter into any new agreements or commitments with respect to the Interests
which extend beyond the Closing, shall not make any expenditures on any
Interest in excess of $2500.00, shall not abandon any well located on the
Interests nor release or abandon all or any portion of any of the Leases,
shall not modify or terminate any of the agreements relating to the Interests
and shall not encumber, sell or otherwise dispose of any of the Interests
other than personal property that is replaced by equivalent property or
consumed in the normal operation of the Interests.
(f) Seller shall exercise good faith to cause Buyer or his
appointee to be duly designated Operator of all xxxxx included in the
Interests and to allow Buyer to take over operations of the Interests as of
7:00 A.M. local time on the day after the Closing.
(g) Seller shall exercise good faith to maintain and preserve the
field organization of Seller for operating the Interests so that it will be
preserved for Buyer on and after the Closing.
(h) Seller shall exercise good faith in safeguarding and
maintaining secure all engineering, geological and geophysical data, reports
and maps, and all other confidential data in the possession of Seller,
relating to the Interests.
(i) All laws, rules, regulations, ordinances and orders of all
local, tribal, state and federal governmental bodies, authorities and agencies
having jurisdiction over the Interests shall be complied with.
(j) Buyer and the employees and agents of Buyer shall have access
to the Interests and shall have the right to witness and conduct well tests
thereon.
(k) Seller shall exercise good faith to take or cause to be taken
all such actions as may be necessary or advisable to consummate and make
effective the sale of the Interests and the transactions contemplated by this
Agreement and to assure that as of the Closing Date it will not be under any
material corporate, legal or contractual restriction that would prohibit or
delay the timely consummation of such transactions.
(l) Seller shall cause all the representations and warranties of
Seller contained in this Agreement to be true and correct on and as of the
Closing Date. To the extent the conditions precedent to the obligations of
Buyer are within the control of Seller, Seller shall cause such conditions to
be satisfied on or prior to the Closing Date and, to the extent the conditions
precedent to the obligations of Buyer are not within the control of Seller,
Seller shall exercise good faith to cause such conditions to be satisfied on
or prior to the Closing Date.
(m) Seller shall promptly notify Buyer (1) if any representation
or warranty of Seller contained in this Agreement is discovered to be or
becomes untrue, or (2) if Seller fails to perform or comply with any covenant
or agreement contained in this Agreement or it is reasonably anticipated that
Seller will be unable to perform or comply with any covenant or agreement
contained in this Agreement.
(n) Within 5 business days after the date hereof, Seller shall
prepare and submit all necessary filings for Seller in connection with the
transactions contemplated by this Agreement under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
of the Federal Trade Commission under such act.
4.02 Covenants of Buyer. Buyer covenants and agrees with Seller as
follows:
(a) Buyer shall exercise good faith to take or cause to be taken
all such actions as may be necessary or advisable to consummate and make
effective the purchase of the Interests and the transactions contemplated by
this Agreement and to assure that as of the Closing Date it will not be under
any material corporate, legal or contractual restriction that would prohibit
or delay the timely consummation of such transactions.
(b) Buyer shall cause all the representations and warranties of
Buyer contained in this Agreement to be true and correct on and as of the
Closing Date. To the extent the conditions precedent to the obligations of
Seller are within the control of Buyer, Buyer shall cause such conditions to
be satisfied on or prior to the Closing Date and, to the extent the conditions
precedent to the obligations of Seller are not within the control of Buyer,
Buyer shall exercise good faith to cause such conditions to be satisfied on or
prior to the Closing Date.
(c) Buyer shall promptly notify Seller (1) if any representation
or warranty of Buyer contained in this Agreement is discovered to be or
becomes untrue, or (2) if Buyer fails to perform or comply with any covenant
or agreement contained in this Agreement or it is reasonably anticipated that
Buyer will be unable to perform or comply with any covenant or agreement
contained in this Agreement.
(d) Buyer shall exercise good faith in safeguarding and
maintaining secure all engineering, geological and geophysical data, reports
and maps, and all other confidential data in the possession of Buyer, relating
to the Interests.
(e) Within 5 business days after the date hereof, Buyer shall
prepare and submit all necessary filings for Buyer in connection with the
transactions contemplated by this Agreement under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
of the Federal Trade Commission under such act.
ARTICLE V
TITLE PROCEDURE AND CASUALTY LOSS
5.01 Title Procedure, If any of the information or material supplied
by Seller pursuant to this Agreement or any other information or data reflects
the existence of any encumbrance, encroachment, defect in or objection to
title, other than those set forth in Exhibit A, that render title to the
Interests or any portion thereof then Seller shall notify Buyer in writing at
the address provided below of such encumbrance or defect and shall immediately
take steps to cure same. In the event such defects or encumbrances cannot be
so cured, then the purchase price described herein shall be reduced by the
amount necessary, including applicable attorneys fees, costs and expenses
incurred by Buyer to cure same which shall be deducted from any payments to be
made pursuant to this Agreement.
5.02 Casualty Loss. If, prior to the Closing, all or any portion of
the Interests shall be destroyed by fire or other casualty, or if any portion
of the Interests shall be taken in condemnation or under the right of eminent
domain or if proceedings for such purposes shall be pending or threatened,
Buyer may elect to terminate this Agreement. If Buyer shall so elect, neither
party shall have any further obligation to the other hereunder. If not so
terminated, this Agreement shall remain in full force and effect
notwithstanding any such destruction or taking, and Seller shall at the
Closing pay to Buyer all sums paid to Seller by reason of such destruction or
taking. In addition, Seller shall assign, transfer and set over unto Buyer
all of the fight, title and interest of Seller in and to any unpaid awards or
other payments arising out of such destruction or taking. Seller shall not
voluntarily compromise, settle or adjust any amounts payable by reason of such
destruction or taking without first obtaining the written consent of Buyer.
ARTICLE VI
CONDITIONS TO CLOSING
6.01 Conditions to Obligations of Seller. The obligations of Seller
to consummate the transactions contemplated by this Agreement are subject to
the satisfaction, or waiver by Seller, of the following conditions:
(a) All representations and warranties of Buyer contained in this
Agreement shall be true in all material respects at and as of the Closing as
if such representations and warranties were made at and as of the Closing, and
Buyer shall have performed and satisfied all covenants and agreements required
by this Agreement to be performed and satisfied by Buyer at or prior to the
Closing.
(b) Seller shall have received an opinion dated as of the Closing
from Buyer's counsel, as set forth in Exhibit C hereto.
6.02 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated by this Agreement are subject, to the
satisfaction, or waiver by Buyer, of the following conditions:
(a) All representations and warranties of Seller contained in this
Agreement shall be true in all material respects at and as of the Closing as
if such representations and warranties were made at and as of the Closing, and
Seller shall have performed and satisfied all agreements required by this
Agreement to be performed and satisfied by Seller at or prior to the Closing.
6.03 Conditions to Obligations of Both Parties. The obligations of
Seller and Buyer to consummate the transactions contemplated by this Agreement
are subject, to the satisfaction, or waiver by both parties, of the following
conditions:
(a) There shall not be pending or instituted, threatened or
proposed, any action or proceeding by or before any court or administrative
agency or arty other person challenging or complaining of, or seeking to
collect damages or other relief in connection with, the transactions
contemplated by this Agreement.
(b) Closing shall not be a violation of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
of the Federal Trade Commission under such act.
(c) No state or federal statute, rule, regulation or action shall
exist or shall have been adopted or taken and no judicial or administrative
decision shall have been entered (whether on a preliminary or final basis),
that would prohibit, restrict or delay the consummation of the transactions
contemplated by this Agreement or make the payments due hereunder illegal.
ARTICLE VII
CLOSING
7.01 Date of Closing. Subject to the conditions stated in this
Agreement, the consummation of the transactions contemplated by this Agreement
(the "Closing") shall be held on July 27, 1998, or such other date as the
parties shall agree in writing. Said date, as amended if amended, shall be
referred to as the "Closing Date."
7.02 Place of Closing. The Closing shall be held at the offices of
Lyric International, Inc., or at such other place as Buyer and Seller may
agree upon in writing.
7.03 Closing Obligations, At the Closing the following events shall
occur, each being a condition precedent to the others and each being deemed to
have occurred simultaneously with the others:
(a) Seller shall execute, acknowledge and deliver (in sufficient
counterparts to facilitate recording) the assignment, xxxx of sale and
conveyance attached hereto as Exhibit E conveying the Interests to Buyer. As
appropriate, Seller shall also execute, acknowledge and deliver separate
assignments of the Interests on officially approved forms in sufficient
counterparts to satisfy applicable statutory and regulatory requirements.
(b) Seller and Buyer shall execute and deliver a settlement
statement (the "Preliminary Settlement Statement") prepared by Buyer that
shall set forth the Preliminary Amount (as hereinafter defined) and each
adjustment and the calculation of such adjustments used to determine such
amount. The term "Preliminary Amount" shall mean the Purchase Price adjusted
as provided in Section 2.02 using for such adjustments the best information
then available.
(c) Buyer shall deliver to Seller or to Seller's account (at such
place as may be designated by Seller at least five days prior to the Closing
date) a certified or bank cashier's check or direct bank or wire transfer for
the Preliminary Amount,
(d) Seller shall deliver to Buyer exclusive possession of the
Interests.
(e) Seller and Buyer shall execute, acknowledge and deliver
transfer orders or letters in lieu thereof directing all purchasers of
production to make payment of proceeds attributable to production from the
Interests after the Effective Time to Buyer.
(f) Seller shall deliver to Buyer all files and records relating
to the Interests, including without limitation, all information and material
referred to in Sections 4.01(b) not previously delivered to Buyer.
ARTICLE VIII
OBLIGATIONS AFTER CLOSING
8.01 Post-Closing Adjustments. Within 60 days after the Closing,
Seller shall make available to Buyer all accounting records necessary for
Buyer to prepare, in accordance with this Agreement a statement (the "Final
Settlement Statement") setting forth each adjustment or payment which was not
finally determined as of the Closing and showing the calculation of such
adjustments. As soon as practicable after receipt of the Final Settlement
Statement, Seller shall deliver to Buyer a written report containing any
changes which Seller proposes be made to the Final Settlement Statement. The
parties shall undertake to agree with respect to the amounts due pursuant to
such post-closing adjustment no later than 60 days after the Closing date. If
such post-closing adjustment has not been agreed to within 90 days after the
Closing Date, either party may seek to enforce any rights it claims hereunder.
The date upon which such agreement is reached or upon which the Adjusted
Purchase Price is established, shall be referred to as the "Final Settlement
Date." In the event that (1) the Adjusted Purchase Price is more than the
Preliminary Amount, Buyer shall deliver to Seller or to Seller's account the
amount of such difference in immediately available funds, or (2) the Adjusted
Purchase Price is less than the Preliminary Amount, Seller shall deliver to
Buyer or to Buyer's account the amount of such difference in immediately
available funds. Payment by Buyer or Seller shall be made within five days of
the Final Settlement Date. To the extent not accounted for in the computation
of the Adjusted Purchase Price, all uncollected accounts receivable
attributable to the Interests on or after the Effective Time shall be assigned
to Buyer.
8.02 Sales Taxes and Recording Fees. Seller shall pay all sales taxes
occasioned by the sale of the Interests. Buyer shall pay all documentary,
filing and recording fees required in connection with the filing and recording
of the assignments described in Section 7.03(a) above.
8.03 Indemnification. After the Closing, Buyer and Seller shall
indemnify each other as follows:
(a) Buyer shall defend, indemnify and save and hold harmless
Seller against all claims, costs, expenses and liabilities with respect to the
Interests, which accrue or relate to times after the Effective Time (excluding
those incurred by Seller with respect to the sale of the Interests to Buyer or
the negotiations leading to such sale and excluding those that result from or
are attributable to the negligence or willful misconduct of Seller, its
employees or agents with respect to the operation and maintenance of the
Interests, and excluding those that result from or are attributable to any
representation of Seller contained in this Agreement being untrue or a breach
of any warranty or covenant of Seller contained in this Agreement.)
(b) Seller shall defend, indemnify and save and hold harmless
Buyer against all claims, costs, expenses and liabilities with respect to the
Interests, which accrue or relate to times prior to the Effective Time
(excluding those incurred by Buyer with respect to the purchase of the
Interests by Buyer or the negotiations leading to such purchase, and excluding
those that result from or are attributable to any representation of Buyer
contained in this Agreement).
8.04 Proceeds of Production. Buyer shall be entitled to receive all
proceeds of production, attributable to the Interests after the Effective
Time. Seller shall be entitled to receive all proceeds of production,
attributable to the Interests prior the Effective Time.
8.05 Further Assurances. Seller and Buyer shall execute, acknowledge
and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be necessary or advisable to
carry out their obligations under this Agreement and under any Exhibit,
document, certificate or other instrument delivered pursuant hereto.
8.06 Survival. All warranties and guarantees hereunder shall survive
the closing of this transaction.
ARTICLE IX
TERMINATION OF AGREEMENT
9.01 Termination. This Agreement and the transactions contemplated
hereby may be terminated in the following instances:
(a) By either Buyer or Seller if any condition set forth in
Section 6.03 above shall not be satisfied at the Closing.
(b) By Buyer if any condition set forth in Section 6.02 above
shall not be satisfied on or before August 1, 1998.
(c) By Seller if any condition set forth in Section 6.01 above
shall not be satisfied on or before August 1, 1998.
(d) By the mutual written agreement of Buyer and Seller.
This Agreement shall terminate without any further action by Seller or
Buyer if the Closing has not occurred on or before September 1, 1998.
9.02 Return of Information. If this Agreement is terminated Buyer
shall return to Seller all information and material delivered to Buyer by
Seller pursuant to the terms of this agreement.
9.03 Liabilities Upon Termination. If this Agreement is terminated
for any reason or is breached, nothing contained herein shall be construed to
limit Seller's or Buyer's legal or equitable remedies including, without
limitation, damages for the breach or failure of any representation, warranty,
covenant or agreement contained herein and the right to enforce specific
performance of this Agreement.
10.01 Expenses. Except as otherwise specifically provided in this
Agreement, all fees, costs and expenses incurred by Buyer or Seller in
negotiating this Agreement or in consummating the transactions contemplated by
this Agreement shall be paid by the party incurring the same, including
without limitation, legal and accounting fees, costs and expenses.
10.02 Notices. All notices and communications required or permitted
under this Agreement shall be in writing and shall be effective when delivered
addressed as follows:
If to Seller:
West Texas Recovery, Inc.
X.X. Xxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxx
If to Buyer:
Lyric International, Inc.
00000 Xxxxxxx Xx., Xxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Either party may, by written notice so delivered to the other, change the
address to which delivery shall thereafter be made.
10.03 Amendment. This Agreement may not be altered or amended, nor any
rights hereunder be waived, except by an instrument in writing executed by the
party or parties to be charged with such amendment or waiver. No waiver of
any term, provision or condition of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, provision or condition or as a waiver of any other
term, provision or condition of this Agreement.
10.04 Assignment. Neither Seller nor Buyer may assign any portion of
its rights or delegate any portion of its duties or obligations under this
Agreement without the prior written consent of the other party.
10.05 Announcements. Seller and Buyer shall consult with each other
with regard to all press releases and other announcements concerning this
Agreement or the transaction contemplated hereby and, except as may be
required by applicable laws or regulations of any governmental agency or stock
exchange, neither Buyer nor Seller shall issue any such press release or make
any other announcement without the prior written consent of the other party.
10.06 Generality of Provisions. The specificity of any representation,
warranty, covenant, agreement or indemnity included or provided in this
Agreement, or in any Exhibit, document, certificate or other instrument
delivered pursuant hereto, shall in no way limit the generality of any other
representation, warranty, covenant, agreement or indemnity included or
provided in this Agreement, or in any Exhibit, document, certificate or other
instrument delivered pursuant hereto.
10.07 Headings. The headings of the articles and sections of this
Agreement are for guidance and convenience of reference only and shall not
limit or otherwise affect any of the terms or provisions of this Agreement.
10.08 Counterparts. This Agreement may be executed by Buyer and Seller
in any number of counterparts, each of which shall be deemed an original
instrument, but all of which together shall constitute but one and the same
instrument. This Agreement shall become operative when each party has
executed at least one counterpart of this Agreement.
10.09 References. References made in this Agreement, including use of
a pronoun, shall be deemed to include where applicable, masculine, feminine,
singular or plural, individuals, partnerships or corporations. As used in
this Agreement, "person" shall mean any natural person, corporation,
partnership, trust, estate or other entity. As used in this Agreement,
"affiliate" of a person shall mean any partnership, joint venture, corporation
or other entity in which such person has an interest or which controls, is
controlled by or is under common control with such person.
10.10 Governing Law. This Agreement and the transactions contemplated
hereby shall be construed in accordance with, and governed by, the laws of the
State of Texas.
10.11 Entire Agreement. This Agreement (including the Exhibits hereto)
constitutes the entire understanding between the parties with respect to the
subject matter hereof and supersedes all negotiations, prior discussions and
prior agreements and understandings relating to such subject matter. No
material representation, warranty, covenant, agreement, promise, inducement or
statement, whether oral or written, has been made by Seller or Buyer and
relied upon by the other that is not set forth in this Agreement or in the
instruments referred to herein, and neither Seller no Buyer shall be bound by
or liable for any alleged representation, warranty, covenant, agreement,
promise, inducement or statement not so set forth.
10.12 Parties in Interest. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and, except as otherwise
prohibited, their respective successors and assigns. Nothing contained in
this Agreement, express or implied, is intended to confer upon any other
person or entity any benefits, rights or remedies.
10.13 FERC Duties. After Closing neither buyer not Seller nor any
successor or assign of either shall have any duty as a result of this
transaction to offer take or pay credits for gas transported pursuant to FERC
Order No. 500, to allow price renegotiation under FERC Order No. 451 or to
take or allow any other action pursuant to any similar FERC order or
regulation. Neither Buyer nor Seller nor any successor or assign of either
shall take any action or make any filing pursuant to any such FERC order or
regulation which purports to bind the other or any property owned by the
other. Regardless of any other provision hereof, the covenants of this
paragraph 10.13 shall survive Closing and shall survive so long as any FERC
regulation to which it might apply remains in effect.
Executed as of the date first above mentioned.
SELLER: West Texas Recovery, Inc.
By: /s/Xxxx Xxxxxxx
__________________________________
Xxxx Xxxxxxx, President
BUYER: Lyric International, Inc.
By: /s/Xxxxx Xxxxxx
___________________________________
Xxxxx Xxxxxx, Chairman
THE STATE OF TEXAS )
)
COUNTY OF XXXXXX )
SUBSCRIBED AND SWORN TO BEFORE ME by Xxxxx Xxxxxx, Chairman of Lyric
International, Inc. on the 27th day of July, 1998.
/s/Xxxxx X. Xxxxx
Notary Public, State of Texas
THE STATE OF TEXAS )
)
COUNTY OF XXXXXX )
SUBSCRIBED AND SWORN TO BEFORE ME by Xxxx Xxxxxxx, President of West
Texas Recovery Inc. on the 27th day of July, 1998.
/s/Xxxxx X. Xxxxx
Notary Public, State of Texas