Exhibit 10.1
PURCHASE AND SALE AGREEMENT
XXX XXXXX D/B/A XXXXX EXPLORATION COMPANY,
THE SEBASTIAN REVOCABLE TRUST,
XXXXXX X. XXXXX REVOCABLE TRUST, & XXXXXX XXXXX FAMILY LIMITED PARTNERSHIP D/B/A
GSTX LIMITED PARTNERSHIP
(COLLECTIVELY, "SELLERS")
AND
NEW CENTURY ENERGY CORP. ("PURCHASER")
TABLE OF CONTENTS
PAGE
Recitals 5
1. Effective Date 5
2. Purchase and Sale 5
3. Apportionment of Proceeds 6
4. Excluded Assets 6
5. Sales Price 6
6. Manner of Payment 7
7. Adjustments 7
8. Post-Closing Adjustments 7
9. Closing 8
10. Purchaser's Due Diligence 9
A. Access to Sellers' Non-Proprietary Information 9
B. Title Defect 9
C. Notice of Title Defect 9
D. Remedies for Title Defects 10
E. Permitted Encumbrances 11
11. Representations 12
A. Mutual Representations 12
B. Brokers 12
C. Further Distribution 13
X. Xxxxxxx' Representations 13
12. Disclaimer of Representations and Warranties 14
A. Limitation of Warranties and Representations 14
B. Waiver of Consumer Protection Statutes 15
C. Financial Information 15
D. Instruments to Contain Disclaimers 16
E. Purchaser Acknowledges that the Waivers in this
Section are Conspicuous 16
13. Conditions of Closing 16
A. Representations 16
B. Performance 16
C. Pending Matters 16
D. Financial Condition 16
14. Allocation of Production and Proceeds 16
15. Taxes and Prepaid Items 16
A. Apportionment of Ad Valorem and Property Taxes 16
B. Proration of Taxes, Etc 17
C. Other Taxes 17
D. Indemnification 17
16. Responsibilities and Indemnifications 17
17. General Limitation of Damages 20
18. Physical Condition of the Interests 20
19. Further Assurances 21
A. Performance of Obligations 21
B. Further Conveyances and Assumptions 21
20. Notices 21
21. Purchaser's Post-Closing Obligation 22
22. Sellers' Post-Closing Obligations 22
23. Severability 22
24. Waiver 22
25. Construction of Ambiguity 23
26. Captions 23
27. Governing Law 23
28. Waiver of Jury Trial 23
29. Limitation of Liability 23
30. Publicity 23
31. Use of Sellers' Names 23
32. Counterparts 23
33. Assignment 23
34. Costs and Expenses 24
35. Joint Venture, Partnership and Agency 24
36. Confidentiality 24
37. Post-Closing Confidentiality 24
38. Survival 24
39. Limitations of Obligations 24
40. Entire Agreement 24
EXHIBITS
A. Form of Assignment
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made to be EFFECTIVE as
of the 2nd day of September, 2005, between Xxx Xxxxx d/b/a Xxxxx Exploration
Company, with place of business at XXXXXXXXXXXXXXXXXXXXXX; The Sebastian
Revocable Trust, XXXXXXXXXXXXXXXXXX; Xxxxxx X. Xxxxx Revocable Trust,
XXXXXXXXXXXXXXXXXXXX; and Xxxxxx Xxxxx Family Limited Partnership d/b/a GSTX
Limited Partnership, XXXXXXXXXXXXXXXXXXXX (collectively, "Sellers") and New
Century Energy Corp., a Colorado corporation, with a place of business at 0000
Xxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 ("Purchaser").
RECITALS
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WHEREAS, Sellers desire to sell to Purchaser and Purchaser desires to
purchase from Sellers on the terms and conditions set forth in this Agreement
Sellers' interests in certain oil and gas properties and leases;
WHEREAS, Xxx Xxxxx d/b/a Xxxxx Exploration Company, The Sebastian Revocable
Trust, Xxxxxx X. Xxxxx Revocable Trust, and Xxxxxx Xxxxx Family Limited
Partnership d/b/a GSTX Limited Partnership own and desire to convey to Purchaser
interests in certain leases that have been pooled into the Xxxxxxxx-Xxxxxx Gas
Unit together with interests in a certain contiguous lease (the "Leases");
NOW, THEREFORE, for good and valuable consideration and for the mutual
covenants herein contained, Sellers and Purchaser agree as follows:
1. Effective Date. The effective date of the sale and purchase of the
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interests provided for herein shall be July 1, 2005 (the "Effective Date").
2. Purchase and Sale. Subject to the terms, conditions, reservations, and
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exceptions specified in this Agreement, Sellers shall sell and Purchaser
shall purchase as of the Effective Date certain interests in and to the oil
and gas leases and the properties located within and adjacent to the
Xxxxxxxx-Xxxxxx Gas Unit (the "Unit"), and all of Sellers' related
interests in all contracts and agreements concerning the Leases, including,
but not limited to, unit agreements and pooling agreements (collectively,
with the Leases, called the "Interests"). The Interests shall consist of
the following ownership in the leases described in Exhibit "A":
Interest Net Revenue Interest
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Xxxxx Exploration Company 0.0300 Working Interest 0.022500 NRI
The Sebastian Revocable Trust 0.0225 Working Interest 0.016875 NRI
Xxxxxx X. Xxxxx Revocable Trust 0.0200 Working Interest(1) 0.012500 NRI
GSTX Limited Partnership 0.0025 Overriding Royalty 0.002500 NRI
=============================================
TOTAL= .0725 WORKING INTEREST 0.054375 NRI
(1) Subject to GSTX Limited Partnership's Overriding Royalty.
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3. Apportionment of Proceeds. The cash proceeds of the sale as described
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below shall be attributable among the Sellers in accordance with section 5
below. Purchaser shall issue Form 1099's for 2005 that reflect this
apportionment, not the payment solely to Xxxxx Exploration Company as
described in section 6.
4. Excluded Assets. Notwithstanding anything to the contrary contained in
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this Agreement, the Interests shall not include and Purchaser will not
acquire any interest in or purchase any of the following (collectively, the
"Excluded Assets"):
A. All minute books, tax returns, partnership documents of Sellers
or any of their affiliates as well as other business records or
related documents of Sellers or any of their affiliates that are not
related to the Interests.
B. All records that are (i) proprietary in nature, (ii) covered by
the attorney-client privilege or work product doctrine, (iii) not
readily severable from Sellers' general records through diligent
efforts, or (iv) required by applicable Law to be retained by Sellers
or any of Sellers' affiliates in their care, custody, or control.
C. All rights of Sellers or any of Sellers' affiliates under
this Agreement.
D. All contracts or agreements related solely to the Excluded
Assets.
E. All rights and claims arising, occurring, or existing in Sellers
prior to the Effective Date including, but not limited to, any and all
contract rights, claims, penalties, receivables, revenues, recoupment
rights, rights of reimbursement, audit rights, recovery rights
(excepting gas imbalances), accounting adjustments, mispayments,
erroneous payments or other claims of any nature relating solely to
any time period prior to the Effective Date.
F. Any claims, rights and interest of Sellers or any of Sellers'
affiliates in and to any refunds of taxes or fees of any nature
whatsoever which relate solely to and arise out of the period prior to
the Effective Date.
G. The consideration received by Sellers hereunder.
5. Sales Price. The sales price for the Interests shall be $8,750,000.00
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attributable as follows:
AllocationPercentage Amount of Proceeds
-------------------- -------------------
Xxxxx Exploration Company 41.3793 $ 3,620,689.66
The Sebastian Revocable Trust 31.0345 $ 2,715,517.24
Xxxxxx X. Xxxxx Revocable Trust 22.9885 $ 2,011,494.25
GSTX Limited Partnership 4.5977 $ 402,298.85
----------------------------------- --------- --------------
TOTALS= 100.00000 $ 8,750,000.00
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6. Manner of Payment. The Sales Price shall be paid as follows:
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A. At the Closing, as hereafter defined, Purchaser shall pay the
Sales Price to Sellers via wire transfer of immediately available
funds (the "Sales Price Funds") to the following account:
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXX.
X. Xxxxx Exploration Company shall disburse the Sales Price Funds to
the Sellers in accordance with this Agreement. Sellers agree to and do
hereby appoint Xxx Xxxxx as their attorney in fact for the limited
purpose of accepting and disbursing the Sales Price Funds. Purchaser
shall have fully performed its payment obligations when the Sales
Price Funds arrive in the designated account, and Sellers agree to
indemnify and hold Purchaser harmless for damages or any claims
resulting from any failure thereafter concerning the proper
disbursement of the Sales Price Funds.
7. Adjustments. The Sales Price shall be adjusted as follows:
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A. Sellers shall pay Purchaser at Closing the aggregate amount of
the following proceeds actually received by Sellers and attributable
to production during the period between the Effective Date and the
date upon which the Closing occurs (with the period between the
Effective Date and the date of Closing referred to as the "Adjustment
Period"): (i) proceeds from the sale of oil, gas and hydrocarbons net
of gathering processing and transportation costs, and any production,
severance, sales or excise and similar taxes not reimbursed to Sellers
by the purchaser of production and (ii) other proceeds earned with
respect to the Interests during the Adjustment Period;
X. Xxxxxxx shall pay Purchaser at Closing all ad valorem taxes
prorated to Sellers and assumed by Purchaser;
C. Purchaser shall pay Sellers at Closing the amount of all costs
attributable to the ownership and operation of the Interests that are
paid by Sellers and incurred at or after the Effective Date.
D. The adjustments made pursuant to this section, based on all then
available information concerning these matters for adjustment, shall
be made by checks to be exchanged at Closing.
8. Post-Closing Adjustments.
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A. As soon as practicable after the Closing but not later than 45
days thereafter, Sellers and Purchaser shall confer and attempt to
jointly produce in accordance with this Agreement and generally
accepted accounting principles a statement (herein the "Final
Settlement Statement") setting forth each adjustment, if any, that was
not finally determined as of the Closing and showing the calculation
of such adjustments. If needed, the parties shall attempt to agree to
the amounts due pursuant to such Post-Closing adjustments not later
than 90 days after the Closing.
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B. If Purchaser and Sellers are unable to agree upon a Final
Settlement Statement within one-hundred (100) days after the Closing,
Sellers shall select an independent accounting firm from a list of
three (3) such firms provided by Purchaser upon Sellers' request,
which firm shall audit the Purchaser's Final Settlement Statement and
the Sellers' Final Settlement Statement and determine the final
purchase price. The decision of such independent accounting firm shall
be binding on Purchaser and Sellers, and the fees and expenses of such
independent accounting firm shall be borne one-half by each of
Purchaser and Sellers.
9. Closing. The sale and purchase of the Interests shall take place at a
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closing (the "Closing"), at which the Purchaser shall pay or cause to be
paid to Sellers the Sales Price and any applicable closing charges and
Sellers shall deliver or cause to be delivered instruments sufficient to
convey the Interests to Purchaser. The Closing shall occur at New Century
Energy Corp. offices located at 0000 Xxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000 at 2:00 p.m., CST on September 20, 2005, or at such other time and
place to which the parties may agree (the "Closing Date"). At the Closing,
the following shall occur:
A. Sellers shall deliver executed and acknowledged Assignments for
the Interests in substantially the same form as that attached as
Exhibit A. Notwithstanding any and all other disclaimers and
limitations of warranty contained herein, the specified assignment
shall be provided with warranty of title by, through, and under the
respective Sellers, but not otherwise, and subject to: (a) all Title
Defects assumed by Purchaser pursuant to section 10.D; and (b) the
Permitted Encumbrances pursuant to section 10.E.
B. Purchaser shall wire to Sellers' designee, Xxx Xxxxx, the Sales
Price and deliver any check due under section 7.C.
C. Sellers shall deliver to Purchaser any check due under sections
7.A. and 7.X.
X. Xxxxxxx shall (subject to the terms of applicable operating
agreements and other provisions hereof) deliver to Purchaser exclusive
possession of the Interests, effective as of the Effective Date.
E. Immediately after the Closing, Purchaser shall notify all
operators, non-operators, oil and gas purchasers, government agencies
and royalty owners that it has purchased the Interests and execute any
and all transfer orders to reflect the same.
X. Xxxxxxx shall, at or as promptly as reasonably possible after the
Closing, provide Purchaser with copies of all files (OTHER THAN DATA
OR INFORMATION WHICH SELLERS CONSIDERS PROPRIETARY OR CONFIDENTIAL OR
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WHICH SELLERS CANNOT PROVIDE PURCHASER BECAUSE OF THIRD-PARTY
RESTRICTIONS ON SELLER), to the extent they are available to or in
Sellers' possession relating to the Interests. This will include all
well and property files, including all geological well logs,
engineering, geophysical land, accounting and other technical files in
its possession.
10. Purchaser's Due Diligence. Subject to Purchaser's execution of a
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Confidentiality Agreement satisfactory in form and substance to Seller:
A. Access to Sellers' Non-Proprietary Information. Sellers have and
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shall make available to Purchaser during normal business hours at
Sellers' offices, or other locations designated by Sellers, all
material non-proprietary files, records, documents and
non-interpretive data in Sellers' possession relating to the
Interests, including but not limited to lease, land, title and
division order files (including any abstracts of title, title opinions
and title curative documents), regulatory and environmental files,
contracts, correspondence, permitting files, engineering, production
and well files and well logs (to the extent not subject to applicable
confidentiality or intellectual property restrictions). Sellers shall
not be obligated to perform any additional title work and Sellers
shall not be obligated to make any existing abstracts and title
opinions current.
B. Title Defect. For the purpose of this Agreement, a "Title Defect"
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shall mean a material deficiency in one or more of the following
respects, provided that the non-transferability requirement in any
license, permit, right-of-way, pipeline franchise or easement
affecting the Interests or a requirement that it be renegotiated upon
a transfer of ownership shall not constitute a Title Defect unless the
inability to transfer any such rights to Purchaser would have a
material adverse effect on Purchaser's ability to continue to use,
exploit, and/or otherwise benefit from the Interests, and provided
also that the litigation identified in section 11.D.3 shall not
constitute a Title Defect:
1) The title at the Effective Date, as to one or more of the
Interests, is subject to an outstanding mortgage, deed of trust,
lien or encumbrance or other adverse claim;
2) The Interests are less than as set forth in section 2; or
3) One or more of Sellers is in default under some material
provision of a lease, agreement or other contract materially
affecting the Interests.
C. Notice of Title Defect. Upon discovery of a Title Defect,
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Purchaser shall immediately notify Sellers in writing of the nature of
the Title Defect and furnish Sellers Purchaser's basis for the
assertion of such Title Defect and data in support thereof. Sellers
may request an increase in the Sales Price by delivery to Purchaser of
written notice, together with data in support thereof, that the
interest actually owned by one or more of the Sellers in any of the
Interests is greater than that shown in section 2. Without affecting
the warranty of title provided in the assignment, any Title Defect
which is not disclosed to Sellers or any increase in the interest
owned by one or more of Sellers that is not disclosed to Purchaser
within two (2) business days prior to the Closing shall conclusively
be deemed waived by Purchaser or Sellers, as applicable, for all
purposes.
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D. Remedies for Title Defects. Upon timely delivery of notice, either by
Purchaser of a Title Defect or by Sellers of an increase in Sellers'
interest, Purchaser and Sellers shall meet and use their best efforts to
agree on the validity of the claim and the amount of any required
adjustment to the Sales Price. If the Purchaser and Sellers cannot agree on
the amount of such a Sales Price adjustment, said amount shall be
determined in accordance with the following guidelines:
1) If the Title Defect is based upon Purchaser's notice that one or
more of the Sellers owns a lesser interest or the notice is from
Sellers to the effect that one or more of the Sellers owns a greater
interest than that shown in section 2 then the portion of the Sales
Price fairly allocated to such Seller shall be reduced or increased
(as the case may be) in the same proportion that the actual interest
bears to the interest shown in section 2 for such Seller.
2) If the Title Defect is a lien, encumbrance or other charge upon a
property which is liquidated in amount, then the adjustment shall be
the sum necessary to be paid to the obligee to remove the Title Defect
from the affected property. If the Title Defect represents an
obligation or burden upon the affected property for which the economic
detriment to one or more of the Sellers is not liquidated but can be
estimated with reasonable certainty as agreed to by the parties, the
adjustment shall be the sum necessary to compensate Purchaser at the
Closing for the adverse economic effect which the Title Defect will
have on the affected property. If there is a lien or encumbrance in
the form of a judgment secured by a supersedeas bond or other security
approved by the Court issuing such order, such lien or encumbrance
shall not be considered a Title Defect under this Agreement.
3) Subject to paragraph 4 below, if the Title Defect cannot be
accommodated pursuant to paragraph 1 or 2 above and the parties cannot
otherwise agree on the amount of such an adjustment to the Sales Price
or Sellers cannot cure the Title Defect to the reasonable satisfaction
of Purchaser prior to the Closing, the portion affected by the Title
Defect shall, if requested by Purchaser, be excluded from the
Interests conveyed to Purchaser at the Closing and the Sales Price
shall be reduced by the amount fairly attributable to the excluded
portion under section 2.
4) Purchaser may only adjust the Sales Price for Title Defects at
the Closing if the cumulative amount of such adjustments in its favor
exceeds $25,000.00. Similarly, Sellers may only adjust the Sales Price
by reason of the Sellers owning a greater net revenue interest at the
Closing if the cumulative amount of such adjustments in its favor
exceeds $25,000.00. In the event the net amount of the Sales Price
adjustments downward or upward pursuant to the foregoing exceeds
$250,000.00 then Sellers or Purchaser may, upon written notice to the
other party, terminate this Agreement and the same shall be of no
further force and effect.
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5) If Purchaser shall receive an adjustment at the Closing on
account of a Title Defect, Sellers shall have until a date that is 90
days after the Closing Date to cure the Title Defect at its cost. If
by such date Sellers can demonstrate to Purchaser's reasonable
satisfaction the Title Defect has been cured then Sellers shall be
entitled to reimbursement by Purchaser for the amount of the
adjustment received by Purchaser at the Closing as a result of the
Title Defect. Purchaser shall pay such amount without interest to
Sellers within ten (10) business days from the date that the parties
agree the Title Defect has been cured.
E. Permitted Encumbrances. The Interests may be subject to and Title
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Defects shall not include the following ("Permitted Encumbrances"):
1) Non-participating royalty interests and other burdens (and any
liens or security interests created by law or reserved in instruments
creating such interests to secure payment of same) to the extent that
they do not, individually or in the aggregate, reduce Sellers'
interests below that shown in section 2;
2) All leases, unit agreements, pooling agreements, operating
agreements, production sales contracts, division orders and other
contracts, agreements and instruments applicable to the Interests, to
the extent that they do not, individually or in the aggregate, reduce
Sellers' interests below that shown in section 2;
3) Third-party consent requirements, preferential rights or other
rights assertable by third parties with respect to which waivers or
consents are obtained by Sellers prior to the Closing or the
appropriate time period for asserting the right has expired or that
need not be satisfied prior to a transfer;
4) Liens for current taxes or assessments not yet due or delinquent
on the Closing or, if delinquent, that are being contested in the
ordinary course of business;
5) Materialmen's, mechanic's, repairman's, employee's, contractor's,
operator's and other similar liens or charges arising in the ordinary
course of business, for amounts not yet delinquent;
6) All rights to consent by, required notices to, filings with or
other actions by governmental authorities in connection with the sale
or conveyance of oil and gas leases or interests therein or sale of
production therefrom if the same are customarily obtained subsequent
to such sale or conveyance;
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7) Easements, rights of way, servitudes, permits, surface leases and
other rights in respect of surface operations on or over any of the
Interests that do not materially interfere with the current or
proposed operations on the Interests; or
8) Any encumbrances that do not, individually or in the aggregate,
materially detract from the value of or materially interfere with the
use, ownership or operation of the Interests subject thereto or
affected thereby (as currently used, owned or operated) or that would
be accepted by a reasonably prudent purchaser engaged in the business
of owning and operating oil and gas properties in Texas.
11. Representations. THE EXPRESS REPRESENTATIONS OF SELLERS AND PURCHASER
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CONTAINED IN THIS PARAGRAPH OR OTHERWISE STATED IN THIS AGREEMENT ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS, EXPRESS, IMPLIED,
STATUTORY, OR OTHERWISE.
A. Mutual Representations. Each party to this Agreement represents
----------------------
that:
1) if the party is not an individual then it is an entity duly
organized, validly existing and in good standing under the laws
of the State of its organization or incorporation and is duly
qualified to do business in Texas;
2) the party has all authority necessary to enter into this
Agreement and to perform all of the party's obligations
hereunder;
3) the party's execution, delivery and performance of this
Agreement and the transactions contemplated hereby will not: (a)
violate or conflict with any provision of its Certificate of
Organization or Incorporation, By-Laws or other governing
documents; (b) result in the breach of any term or condition of
or constitute a default or cause the acceleration of any
obligation under any agreement or instrument to which the party
is a party or by which the party is bound; or (c) violate or
conflict with any applicable judgment, decree, order, permit,
law, rule or regulation;
4) this Agreement has been duly executed and delivered on the
party's behalf, and at the Closing all documents and instruments
required hereunder will have been duly executed and delivered.
This Agreement, and all documents and instruments required
hereunder, shall constitute legal, valid and binding obligations
enforceable in accordance with their respective terms; and
5) the party has been represented by legal counsel of its own
selection who has reviewed this Agreement.
B. Brokers. Neither Sellers nor Purchaser has incurred any obligation or
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liability, contingent or otherwise, for brokers' or finders' fees in
connection with this Agreement in respect of which the other party may have
any responsibility; and any such obligation or liability that might exist
shall be the sole obligation of the party whose action gave rise thereto.
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C. Further Distribution. Purchaser is acquiring the Interests for its own
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account and not with the intent to make a distribution thereof within the
meaning of the Securities Act of 1933, as amended, and the rules and
regulations thereunder or in violation of any other applicable securities
laws.
X. Xxxxxxx' Representations. Except as expressly disclaimed in section 12
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hereof, Sellers represent the following to the best of their knowledge and
belief:
1) The Interests are owned as represented, and the Sellers have the
authority and capacity to sell and convey the same;
2) None of the Sellers have defaulted or violated any agreement to
which they are a party in any material respect or any material
obligation to which Sellers are bound affecting or pertaining to the
Interests other than as disclosed hereunder or on any Exhibit attached
hereto;
3) There are no pending suits, actions, claims, investigations or
any legal, administrative or arbitration proceedings affecting or
pertaining to the Interests other than Cause No. M-05-0003-CV-A, Xxxx
X. Xxxxxx, et al. v. Xxxxx Xxxxxxx, et al., in the 36th Judicial
District Court of XxXxxxxx County, Texas;
4) The oil and gas leases included within and underlying the
Interests are in full force and effect;
5) To the knowledge of Seller, all material royalties (other than
royalties held in suspense), rentals and other payments due under the
leases being conveyed have been properly and timely paid, and all
conditions necessary to keep such leases in force have been fully
performed. No notices have been received by Sellers of any claim to
the contrary;
6) From July 1, 2005, until Closing, there has not been and will not
be:
a) Any material damage, destruction or loss to or of the
Interests or related assets, whether or not covered by insurance;
b) Any sale, lease or other disposition of the Interests or
related assets;
c) Any mortgage, pledge or grant of a lien or security interest
in any of the Interests; or
d) Any contract or commitment to do any of the foregoing.
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7) There will not be as of Closing any imbalances in the purchase and
sale of oil and gas from the Interests that would impair the ability of
Purchaser to receive future payments for a share of production of oil and
gas proportionate to the Interests being purchased; and
8) Sellers have not paid to the operator Sellers' share of expenses for
drilling the Xxxxxxxx-Xxxxxx Gas Unit No. 11 and the Xxxxxxxx Fee No.1
xxxxx.
12. Disclaimer of Representations and Warranties.
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A. LIMITATION OF WARRANTIES AND REPRESENTATIONS. EXCEPT AS PROVIDED
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FOR IN SECTIONS 9.A and 11, THE TRANSACTION CONTEMPLATED HEREBY SHALL
BE WITHOUT ANY WARRANTY OR REPRESENTATION OF TITLE, EITHER EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, WITHOUT ANY EXPRESS, IMPLIED,
STATUTORY OR OTHER WARRANTY OR REPRESENTATION AS TO THE CONDITION,
QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, FREEDOM FROM
REDHIBITORY VICES OR DEFECTS, CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS OR MERCHANTABILITY OF ANY OF THE EQUIPMENT OR ITS FITNESS
FOR ANY PURPOSE AND WITHOUT ANY OTHER EXPRESS, IMPLIED, STATUTORY OR
OTHER WARRANTY OR REPRESENTATION WHATSOEVER. PURCHASER SHALL HAVE
INSPECTED OR WAIVED ITS RIGHT TO INSPECT THE INTERESTS FOR ALL
PURPOSES AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL
CONDITION, BOTH SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO
CONDITIONS SPECIFICALLY RELATED TO THE PRESENCE OR RELEASE OR ONSITE
DISPOSAL OF HAZARDOUS SUBSTANCES, AND THE CONDITION OF ANY WELL
CASING, TUBING OR DOWNHOLE EQUIPMENT. PURCHASER IS RELYING SOLELY UPON
ITS OWN INSPECTION OF THE INTERESTS, AND PURCHASER SHALL ACCEPT ALL OF
THE SAME IN THEIR "AS IS, WHERE IS" CONDITION. IN ADDITION, SELLERS
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS,
RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR
HEREAFTER FURNISHED OR MADE AVAILABLE TO PURCHASER IN CONNECTION WITH
THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF THE
INTERESTS, PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON
RESERVES (IF ANY) ATTRIBUTABLE TO THE INTERESTS OR THE ABILITY OR
POTENTIAL OF THE INTERESTS TO PRODUCE HYDROCARBONS OR THE
ENVIRONMENTAL CONDITION OF THE INTERESTS OR ANY OTHER MATTERS
CONTAINED IN THE PROPRIETARY DATA OR ANY OTHER MATERIALS FURNISHED OR
MADE AVAILABLE TO PURCHASER BY SELLERS OR BY SELLERS' AGENTS OR
REPRESENTATIVES. ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS,
INFORMATION AND OTHER MATERIALS FURNISHED BY SELLERS OR OTHERWISE MADE
AVAILABLE TO PURCHASER ARE PROVIDED TO PURCHASER AS A CONVENIENCE AND
SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST SELLERS.
ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT PURCHASER'S SOLE RISK
TO THE MAXIMUM EXTENT PERMITTED BY LAW.
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B. WAIVER OF CONSUMER PROTECTION STATUTES. SELLERS AND PURCHASER
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CERTIFY THAT THEY ARE NOT "CONSUMERS" WITHIN THE MEANING OF THE TEXAS
DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SUBCHAPTER E OF
CHAPTER 17, SECTIONS 17.41, ET SEQ., OF VERNON'S TEXAS CODE ANNOTATED,
BUSINESS AND COMMERCE CODE, AS AMENDED (THE "DTPA") IF THE INTERESTS
ARE LOCATED IN TEXAS. PURCHASER HEREBY WAIVES ITS RIGHTS UNDER THE
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DTPA, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
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CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, PURCHASER
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VOLUNTARILY CONSENTS TO THIS WAIVER. TO EVIDENCE ITS ABILITY TO GRANT
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SUCH WAIVER, PURCHASER REPRESENTS TO SELLERS THAT: (I) IT IS NOT IN A
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SIGNIFICANTLY DISPARATE BARGAINING POSITION; (II) IT IS REPRESENTED BY
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LEGAL COUNSEL IN ENTERING INTO THIS AGREEMENT; AND (III) SUCH LEGAL
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COUNSEL WAS NOT DIRECTLY OR INDIRECTLY IDENTIFIED, SUGGESTED, OR
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SELECTED BY SELLERS OR AN AGENT OF SELLERS.
-------------------------------------------
C. Financial Information. Purchaser has been provided certain
----------------------
financial information relating to the ownership and operation of the
Interests for the period commencing on the date of the first modern
leases through the present (the "Financial Information"). EXCEPT AS
PROVIDED IN THIS AGREEMENT, WITH RESPECT TO THE INTERESTS' FINANCIAL
INFORMATION, SELLERS, THEIR AFFILIATES AND THEIR CONSULTANTS MAKE NO
REPRESEN-TATION OR WARRANTY, WHETHER EXPRESS, STATUTORY OR IMPLIED,
AND EXPRESSLY DISCLAIM ANY SUCH REPRESENTATION AND WARRANTY AS TO: (I)
THE ACCURACY, COMPLETENESS, OR MATERIALITY OF ANY FINANCIAL
INFORMATION FURNISHED TO PURCHASER IN CONNECTION WITH ANY INTEREST;
(II) THE CON-DITION, QUALITY AND QUANTITY OF ANY INTEREST; (III) THE
PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS OR PROFITS,
IF ANY, TO BE DERIVED FROM ANY INTEREST; OR (IV) THE ENVIRONMENTAL
CONDITION OF THE INTERESTS. ANY FINANCIAL INFORMATION FURNISHED BY
SELLERS IS PROVIDED TO PURCHASER AS A CONVENIENCE AND PURCHASER'S
RELIANCE ON OR USE OF THE SAME IS AT PURCHASER'S SOLE RISK.
15
D. INSTRUMENTS TO CONTAIN DISCLAIMERS. THE CONVEYANCE INSTRUMENTS TO
-------------------------------------
BE DELIVERED BY SELLERS AT CLOSING SHALL EXPRESSLY SET FORTH THE
DISCLAIMERS OF REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
SECTION AND SHALL EXPRESSLY STATE THAT THEIR TERMS ARE SUBJECT TO THE
TERMS AND CONDITIONS CONTAINED IN THIS AGREEMENT.
E. PURCHASER ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTIONARE
-----------------------------------------------------------------
CONSPICUOUS.
------------
13. Conditions of Closing. Each party's obligation to consummate the
-----------------------
transaction provided for herein is subject to the satisfaction or waiver by
the other party of the following conditions:
A. Representations. The representations contained in section 11
---------------
hereof shall be true and correct in all material respects on the
Closing Date as though made on and as of the Closing Date.
B. Performance. Each party shall have performed in all material
-----------
respects the obligations, covenants and agreements hereunder to be
performed by it at or prior to the Closing Date.
C. Pending Matters. Except as set forth in section 11.D.3 above, no
----------------
suit, action or other proceeding by a third party or a governmental
authority shall be pending which seeks damages, fines or other
penalties from either party in connection with the Interests, or seeks
to restrain, enjoin or otherwise prohibit the consummation of the
transactions contemplated by this Agreement.
D. Financial Condition. No material adverse change has occurred in
--------------------
the financial condition of either party.
14. Allocation of Production and Proceeds. All production of oil, gas and
-----------------------------------------
other minerals from the Interests prior to the Effective Date and all
proceeds from the sale of such production shall be the property of Sellers.
All such production upon and after the Effective Date and all proceeds from
the sale thereof shall be the property of Purchaser. Production shall be
allocated to the parties based upon the most reliable measurement method or
allocation calculation information available to the parties. Purchaser
shall assume all rights and/or liabilities of Sellers arising from any gas
imbalances affecting the Interests as of the Effective Date and thereafter.
15. Taxes and Prepaid Items.
--------------------------
A. Apportionment of Ad Valorem and Property Taxes. All ad valorem
----------------------------------------------------
taxes, real property taxes, personal property taxes and similar
obligations with respect to the Interests for the tax period in which
the Effective Date occurs shall be apportioned as of the Effective
Date between Sellers and Purchaser. The portion of such apportioned
tax liability which is attributable to the Sellers shall be credited
to Purchaser's account as an adjustment under section 7.B. hereof or
Purchaser shall assume responsibility for the payment of all such ad
valorem and property taxes and hold Sellers harmless therefrom.
16
Purchaser shall file or cause to be filed all required reports and
returns incident to such taxes and shall pay or cause to be paid to
the taxing authorities all such taxes arising out of the tax period in
which the Effective Date occurs. Purchaser shall supply Sellers with
copies of the filed reports and proof of payment promptly after filing
and paying same.
B. Proration of Taxes, Etc. All other taxes, including, but not
--------------------------
limited to, excise taxes, state severance taxes, and any other local,
state, and/or federal taxes or assessments attributable to the
properties or any part thereof relating to oil and gas produced prior
to the Effective Date remain Sellers' responsibility, and all
deductions, credits and refunds pertaining to the aforementioned
taxes, attributable to the Interests or any part thereof prior to the
Effective Date (no matter when received) belong to Sellers. All such
taxes attributable to the Interests or any part thereof at and after
the Effective Date are Purchaser's responsibility, and Purchaser shall
reimburse Sellers for any such taxes previously paid by Sellers and
all deductions, credits, and refunds pertaining thereto at and after
the Effective Date (no matter when received) belong to Purchaser.
C. OtherTaxes. Purchaser agrees to be liable for any and all
---------
conveyance, transfer, recording and registration fees and sales, gross
receipts, use, motor vehicle transfer and excise, real estate
transfer, documentary stamp and similar transfer taxes imposed with
respect to the sale, conveyance and assignment of the Interests
hereunder. Purchaser shall prepare and file (or cause to be prepared
and filed), to the extent permitted by applicable law, any necessary
tax returns in connection with the foregoing taxes and fees to be
borne by Purchaser and pay all filing and recording fees relating to
the filing and recording of any instruments delivered by Sellers to
convey the Interests to Purchaser.
D. Indemnification. As used in this paragraph and the subparagraphs
---------------
hereunder, "Claim" and "Claims" shall include claims, demands, causes
of action, liabilities, damages, fines, penalties and judgments of any
kind or character, whether matured or unmatured, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated or known
or unknown, and whether or not resulting from third party claims, and
all costs and fees (including, without limitation, interest,
reasonable attorneys' fees, reasonable costs of experts, court costs
and reasonable costs of investigation, including those incurred in
enforcing the indemnification provisions contained in this Agreement)
in connection therewith. As used herein, "Claims" shall not include
Title Defects, or other items for which Purchaser or Sellers shall
have received an adjustment to the Sales Price hereunder.
16. Responsibilities and Indemnifications. In addition to any other
---------------------------------------
indemnification or reservation provision contained in this Agreement:
A. Purchaser shall (i) as of the Effective Date assume, be
responsible for and comply with all duties and obligations of the
Sellers, express or implied, with respect to the Interests, including,
without limitation, those arising under or by virtue of any lease,
contract, agreement, document, permit, applicable law, statute or
rule, regulation or order of any governmental authority (specifically
including, without limitation, any governmental request or requirement
to plug, re-plug or abandon any well, or take any clean-up, remedial
or other action with respect to the Interests) and (ii) defend,
17
indemnify and hold Sellers harmless from and pay or reimburse Sellers
for any and all Claims in connection with the duties and obligations
of Sellers set forth in (i) above or in connection with the ownership,
operation, management or control of the Interests before or after the
Effective Date (except as set forth in paragraph B below), except (a)
to the extent any such Claim has been asserted against Sellers prior
to the Effective Date, (b) as otherwise set forth in this Agreement
and (c) any Claim expressly assumed by Sellers. With respect to any
Claim for cleanup or remediation of the Interests, such Claim shall be
deemed asserted against Sellers at the time the Order requiring
cleanup or remediation has been issued by the appropriate regulatory
agency.
B. After the Closing, Sellers shall be responsible for, shall pay on
a current basis, and shall indemnify, save, hold harmless, discharge
and release Purchaser from and against any and all Claims arising
from, based upon, related to or associated with (a) any act or
omission by Sellers involving or relating to the Interests occurring
before the Effective Date, other than obligations and liabilities
assumed by Purchaser pursuant to paragraph A above; and (b) any act or
omission by Sellers involving or relating to the Excluded Assets
whether occurring before or after the Effective Date.
C. Except as provided in paragraph D below, Purchaser shall defend,
indemnify and hold Sellers harmless from and pay or reimburse Sellers
for any and all Claims for damage to the environment, environmental
cleanup, remediation, or compliance, or for any other relief, arising
directly or indirectly from or incident to the use, occupation,
operation, maintenance or abandonment of any of the Interests, or
condition of the Interests, whether latent or patent, including,
without limitation, contamination of the property or premises with
Naturally Occurring Radioactive Materials (NORM), and WHETHER SUCH
CLAIM IS CAUSED BY SELLERS' NEGLIGENCE, INCLUDING SOLE NEGLIGENCE,
SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE NEGLIGENCE, PASSIVE
NEGLIGENCE, OR STRICT LIABILITY OR FAULT OF SELLERS OR ANY OTHER
THEORY OF LIABILITY OR FAULT, WHETHER IN LAW (WHETHER COMMON OR
STATUTORY) OR EQUITY, EXCLUDING GROSS NEGLIGENCE AND WILLFUL
MISCONDUCT OF SELLERS OR OF SELLERS' AGENTS, EMPLOYEES, OR CONTRACTORS
AND ASSERTED AGAINST PURCHASER AND/OR SELLERS AFTER THE CLOSING,
WHETHER OR NOT ANY SUCH CLAIMS RESULT FROM CONDITIONS, ACTIONS OR
INACTIONS PRESENT OR EXISTING ON OR BEFORE THE CLOSING. This
indemnification shall not apply to any off-site disposal by Sellers
which occurred prior to the Effective Date.
18
D. Any Claim for indemnity under the paragraphs above or under any
other provision of this Agreement shall be made by written notice from
the party seeking indemnification (the "Indemnified Party") to the
party required to provide same (the "Indemnifying Party"), together
with a written description of any third-party Claim against the
Indemnified Party, stating the nature and basis of such Claim and, if
ascertainable, the amount thereof. The Indemnifying Party shall have a
period of thirty (30) days after receipt of such notice within which
to respond thereto or, in the case of a third-party Claim which
requires a shorter time for response, within such shorter period as
specified by the Indemnified Party in such notice (the "Notice
Period"). If the Indemnifying Party denies responsibility or fails to
respond to the notice within the Notice Period, the Indemnified Party
may defend or compromise the Claim as it deems appropriate without
prejudice to any of the Indemnified Party's rights hereunder, with no
further obligation to inform the Indemnifying Party of the status of
the Claim and no right of the Indemnifying Party to approve or
disapprove any actions taken in connection therewith by the
Indemnified Party. If the Indemnifying Party accepts responsibility,
it shall so notify the Indemnified Party within the Notice Period and
elect either (a) to undertake the defense or compromise of such
third-party Claim with counsel selected by the Indemnifying Party and
reasonably approved by the Indemnified Party or (b) to instruct the
Indemnified Party to defend or compromise such Claim. If the
Indemnifying Party undertakes the defense or compromise of such
third-party Claim, the Indemnified Party shall be entitled, at its own
expense, to participate in such defense. No compromise or settlement
of any third-party Claim shall be made without reasonable notice to
the Indemnified Party and, unless such compromise or settlement
includes a general release of the Indemnified Party in respect of the
matter with no admission of liability on the part of the Indemnified
Party and no constraints on the future conduct of its business,
without the prior written approval of the Indemnified Party.
E. Each party's indemnity given under this Section shall extend to
the other and to the other's parent, subsidiaries and affiliates and
their present and former directors, officers, employees, attorneys,
contractors, agents and members and to each of their heirs, executors,
successors and assigns and shall apply to all obligations and
liabilities described above, INCLUDING THOSE BASED ON NEGLIGENCE,
INCLUDING SOLE NEGLIGENCE, SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE,
ACTIVE NEGLIGENCE, PASSIVE NEGLIGENCE, STRICT LIABILITY OR LIABILITY
WITHOUT FAULT OF THE OTHER (OR ANY OTHER INDEMNIFIED PARTY) OR ANY
OTHER THEORY OF LIABILITY OR FAULT, WHETHER IN LAW (WHETHER COMMON OR
STATUTORY) OR EQUITY, excluding gross negligence and willful
misconduct of the party or of the party's agents, employees, or
contractors.
19
17. General Limitation of Damages. NOTWITHSTANDING ANY OTHER PROVISION OF
-------------------------------
THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO ANY
INDEMNIFIED PARTY FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT,
CONSEQUEN-TIAL, REMOTE OR SPECULATIVE DAMAGES (INCLUDING ANY DAMAGES ON
ACCOUNT OF LOST PROFITS OR OPPORTUNITIES) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
18. Physical Condition of the Interests.
---------------------------------------
A. THE INTERESTS HAVE BEEN USED FOR OIL AND GAS DRILLING AND
PRODUCING OPERATIONS, RELATED OIL FIELD OPERATIONS AND POSSIBLY FOR
THE STORAGE AND DISPOSAL OF WASTE MATERIALS OR HAZARDOUS SUBSTANCES.
PHYSICAL CHANGES IN THE LAND MAY HAVE OCCURRED AS A RESULT OF SUCH
USES. THE INTERESTS ALSO MAY CONTAIN BURIED PIPELINES AND OTHER
EQUIPMENT, WHETHER OR NOT OF A SIMILAR NATURE, THE LOCATIONS OF WHICH
MAY NOT NOW BE KNOWN BY SELLERS OR BE READILY APPARENT BY A PHYSICAL
INSPECTION OF THE PROPERTY. PURCHASER UNDERSTANDS THAT SELLERS DOES
NOT HAVE THE REQUISITE INFORMATION WITH WHICH TO DETERMINE THE EXACT
NATURE OR CONDITION OF THE INTERESTS OR THE EFFECT ANY SUCH USE HAS
HAD ON THE PHYSICAL CONDITION OF THE INTERESTS.
B. PURCHASER ACKNOWLEDGES THAT: (I) IT HAS ENTERED INTO THIS
AGREEMENT ON THE BASIS OF ITS OWN INVESTIGATION OF THE PHYSICAL
CONDITION OF THE INTERESTS INCLUDING SUBSURFACE CONDITION; (II) THE
INTERESTS HAVE BEEN USED IN THE MANNER AND FOR THE PURPOSES SET FORTH
ABOVE AND THAT PHYSICAL CHANGES TO THE INTERESTS MAY HAVE OCCURRED AS
A RESULT OF SUCH USE; AND (III) LOW LEVELS OF NATURALLY OCCURRING
RADIOACTIVE MATERIAL (NORM) AND MAN-MADE MATERIAL FIBERS (MMMF) MAY BE
PRESENT AT SOME LOCATIONS. PURCHASER ACKNOWLEDGES THAT NORM IS A
NATURAL PHENOMENON ASSOCIATED WITH MANY OIL FIELDS IN THE U.S. AND
THROUGHOUT THE WORLD. PURCHASER SHOULD MAKE ITS OWN DETERMINATION OF
THIS PHENOMENON AND OTHER CONDITIONS. SELLERS DISCLAIMS ANY LIABILITY
ARISING OUT OF OR IN CONNECTION WITH ANY PRESENCE OF NORM OR MMMF ON
THE PROPERTY AND ON THE CLOSING DATE, PURCHASER SHALL ASSUME THE RISK
THAT THE INTERESTS MAY CONTAIN WASTES OR CONTAMINANTS AND THAT ADVERSE
PHYSICAL CONDITIONS, INCLUDING THE PRESENCE OF WASTES OR CONTAMINANTS,
MAY NOT HAVE BEEN REVEALED BY PURCHASER'S INVESTIGATION. ON THE
CLOSING DATE, ALL RESPONSIBILITY AND LIABILITY RELATED TO DISPOSAL,
SPILLS, WASTE, OR CONTAMINATION ON AND BELOW THE INTERESTS SHALL BE
TRANSFERRED FROM SELLERS TO PURCHASER AND PURCHASER SHALL INDEMNIFY,
DEFEND AND HOLD SELLERS HARMLESS THEREFROM. SELLERS AND PURCHASER
AGREE THAT THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE THE CLOSING.
20
19. Further Assurances.
-------------------
A. Performance of Obligations. Sellers and Purchaser shall use all
----------------------------
reasonable efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to
carry out all of their respective obligations under this Agreement and
to consummate and make effective the purchase and sale of the
Interests pursuant to this Agreement.
B. Further Conveyances and Assumptions. After the Closing, Sellers
--------------------------------------
and Purchaser shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered all such further conveyances,
transfer orders, notices, assumptions and releases and such other
instruments, and shall take such further actions, as may be necessary
or appropriate to assure fully to Purchaser and its successors or
assigns all of the Interests and to assure fully to Sellers and its
successors and assigns the assumptions of liabilities and obligations
of Purchaser or to otherwise carry out the terms and provisions of
this Agreement.
20. Notices. All notices and consents to be given hereunder shall be in
-------
writing and shall be deemed to have been duly given if delivered
personally; faxed with receipt acknowledged; mailed by registered mail,
return receipt requested, postage prepaid; or delivered by a recognized
commercial courier to the party at the address set forth below or such
other address as any party shall have designated for itself by ten (10)
days' prior notice to the other party. Notice is deemed to have been duly
received: on the day personally delivered; on the day after it is sent by
fax; seven (7) days after mailing by registered mail; or the day after it
is received from a recognized commercial courier.
SELLERS:
-------
Xxxxx Exploration Company
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
Phone: XXX-XXX-XXXX
Fax: XXX-XXX-XXXX
The Sebastian Revocable Trust
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
Phone: XXX-XXX-XXXX
Fax: XXX-XXX-XXXX
21
Xxxxxx X. Xxxxx Revocable Trust
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
Phone: XXX-XXX-XXXX
Fax: XXX-XXX-XXXX
Xxxxxx Xxxxx Family Limited Partnership d/b/a GSTX Limited
Partnership
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
Phone: XXX-XXX-XXXX
Fax: XXX-XXX-XXXX
PURCHASER:
---------
New Century Energy Corp.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
21. Purchaser's Post-Closing Obligations. If at any time subsequent to the
--------------------------------------
Closing, Purchaser comes into possession of money or property belonging to
Sellers, such money or other property shall be promptly delivered to
Sellers. Purchaser shall allow Sellers access to the Records during
Purchaser's normal business hours after Closing for the purpose of filing
and amending a tax return or for any other legitimate business purpose,
provided that any copies of Records made by Sellers shall be at the sole
expense of Sellers.
22. Sellers' Post-Closing Obligations. If at any time subsequent to the
-----------------------------------
Closing, Sellers come into possession of money or property belonging to the
Purchaser, such money or other property shall be promptly delivered to the
Purchaser. Furthermore, Sellers recognize that Purchaser will be required
to audit the historical performance of the Interests and shall cooperate
with Purchaser and provide copies of documents requested by Purchaser to
accomplish the same.
23. Severability. In the event any covenant, condition, or provision
------------
contained herein is held to be invalid by a court of competent
jurisdiction, the invalidity of any such covenant, condition or provision
shall in no way affect any other covenant, condition, or provision
contained herein, provided, however, that any such invalidity does not
materially prejudice either the Purchaser or Sellers in its respective
rights and obligations contained in the valid covenants, conditions, and
provisions of this Agreement.
22
24. Waiver. No waiver of any of the provisions of this Agreement shall
------
constitute a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
25. Construction of Ambiguity. In the event of any ambiguity in any of the
---------------------------
terms or conditions of this Agreement, including any exhibits hereto and
whether or not placed of record, such ambiguity shall not be construed for
or against any party hereto on the basis that such party did or did not
author the same.
26. Captions. The captions in this Agreement are for convenience only and
--------
shall not be considered a part of or affect the construction or
interpretation of any provisions of this Agreement.
27. Governing Law. This Agreement shall be governed by and interpreted in
--------------
accordance with the laws of the State of Texas, without reference to the
conflict of laws principles applied by the courts of the State of Texas.
28. Waiver of Jury Trial. SELLERS AND PURCHASER DO HEREBY IRREVOCABLY
-----------------------
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING BASED UPON, ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
29. Limitation of Liability. Sellers and Purchaser do hereby covenant and
-------------------------
agree that the recovery by either party hereto of any damages suffered or
incurred by it as a result of any breach by the other party of any
provision of this Agreement shall be limited to the actual damages suffered
or incurred by the non-breaching party as a result of the breach by the
breaching party and in no event shall the breaching party be liable to the
non-breaching party for any indirect, consequential, exemplary or punitive
damages suffered or incurred by the non-breaching party as a result of the
breach by the breaching party.
30. Publicity. Sellers acknowledge and understand that Purchaser is a
---------
publicly traded company subject to exchange-imposed obligations regarding
confidentiality and non-disclosure of material non-public information. In
this regard, Sellers agree that they shall not make or cause to be made any
disclosure of the transaction contemplated herein to any third party or
otherwise disseminate any news or announcement of any kind with respect to
this Agreement or the underlying transactions without the express written
approval of Purchaser. Sellers further agree to keep all information
regarding this Agreement and the underlying transactions confidential and
not to disclose, reveal, or discuss any such information without the
written approval of Purchaser.
31. Use of Sellers' Name. As soon as practicable after the Closing,
-----------------------
Purchaser shall remove or cause to be removed the names and marks used by
Sellers and all variations and derivations thereof and logos relating
thereto from the Interests and shall not thereafter make any use whatsoever
of those names, marks and logos.
23
32. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
33. Assignment. Except as otherwise provided herein, this Agreement shall
----------
be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. All future conveyances of all
or any portion of the Interests shall expressly recognize and perpetuate
the rights and obligations set out in this Agreement.
34. Cost and Expenses. Except as otherwise expressly provided herein, each
-------------------
party shall bear and pay its own costs and expenses, including, but not
limited to, attorneys fees, incurred in connection with this transaction.
35. Joint Venture, Partnership and Agency. Nothing contained in this
-----------------------------------------
Agreement shall be deemed to create a joint venture, partnership, tax
partnership or agency relationship between the parties.
36. Confidentiality. Prior to the Closing, Sellers and Purchaser, to the
---------------
extent permitted by law, shall keep confidential all information received
from the other unless such information is readily ascertainable from public
or published information or trade sources or is received from a third-party
having no obligation of confidentiality with respect to such information.
In the event of the termination of this Agreement, Sellers and Purchaser
shall return to the other or destroy all information received from the
other and to the extent permitted by law keep confidential and not use any
confidential information obtained pursuant to this Agreement.
37. Post-Closing Confidentiality. Following the Closing, Sellers agrees to
-----------------------------
keep confidential all information relative to the Interests covered by this
Agreement. Such obligation of confidentiality shall continue until the
earlier of the following: (1) three years from the Closing; (ii) the date
upon which Purchaser has conveyed the Interests to a third party; or (iii)
the date upon which Purchaser provides Sellers written notice of the
termination of such confidentiality requirements. The obligations of
confidentiality shall not apply to any information that is required to be
disclosed by Sellers as a result of applicable law, regulation, rule or
order of a duly empowered court or governmental entity.
38. Survival. Except as otherwise specifically provided in this Agreement,
--------
all covenants, obligations, agreements and guarantees shall survive the
execution of this Agreement, the Closing and the delivery and recordation
of any deeds, assignments or bills of sale which convey the Interests from
Sellers to Purchaser.
39. Limitations of Obligations. Notwithstanding anything to the contrary
----------------------------
contained herein, all representations, warranties, covenants and
indemnities made by Sellers hereunder shall be limited only to the
Interests conveyed hereby.
40. Entire Agreement. This Agreement, together with any Confidentiality
-----------------
Agreements relating to the Interests previously executed by Purchaser,
constitute the entire agreement between the parties and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, amendment, alteration,
modification, waiver or termination of this Agreement shall be binding
unless executed in writing by the parties hereto after the execution of
this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to be EFFECTIVE as of the day and year first set forth above.
24
SELLERS:
XXX XXXXX D/B/A XXXXX EXPLORATION COMPANY
/s/ Xxx Xxxxx
----------------------------------------------
THE SEBASTIAN REVOCABLE TRUST
/s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------------
By: Xxxxxxx X. Xxxxxxxxx
-------------------------------------------
Trustee
XXXXXX X. XXXXX REVOCABLE TRUST
/s/ Xxxxxx X. Xxxxx
---------------------------------------------
By: Xxxxxx X. Xxxxx
Trustee
XXXXXX XXXXX FAMILY LIMITED PARTNERSHIP
D/B/A GSTX LIMITED PARTNERSHIP
/s/ Xxxxxx X. Xxxxx
---------------------------------------------
By: Xxxxxx X. Xxxxx
General Partner
PURCHASER:
NEW CENTURY ENERGY CORP.
/s/ Xxxxxx X. XxXxxxxxx
---------------------------------------------
By: Xxxxxx X. XxXxxxxxx
President & CEO
