EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") dated as of the 29th
day of 2001, is between DELTA PETROLEUM CORPORATION, a corporation organized
and existing under the laws of the State of Colorado ("Seller") and PANACO,
INC., a corporation organized and existing under the laws of the State of
Delaware ("Buyer"). Seller and Buyer are referred to herein as a "Party" and
collectively as the "Parties").
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 1
PURCHASE AND SALE
1.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller agrees to sell and convey and Buyer agrees to purchase and
pay for all of Seller's right, title and interest in and to the Interests.
1.2 Interests. All of the following shall be referred to in this
Agreement collectively as the "Interests" and individually as an "Interest":
(a) The oil, gas and mineral leases described on Exhibit "A"
attached hereto (collectively, the "Leases"), including, without limitation,
working interests, overriding royalty interests, royalty interests and any
other interests of a similar nature affecting the lands covered by the Leases
(collectively, the "Lands").
(b) The oil and gas xxxxx described on Exhibit "A"
(individually, a "Well," and collectively, the "Xxxxx"), together with all
oil, natural gas, casinghead gas, drip gasoline, natural gas liquids,
condensate and other minerals produced from such Xxxxx.
(c) All unitization, communitization and pooling, agreements,
working interest units created by operating agreements, partnership agreements
and orders covering the Leases and Lands, or any portion thereof, and the
units and pooled or communities areas created thereby (collectively, the
"Units").
(d) The tangible personal property, tools, machinery,
materials, pipelines, plants, gathering systems, equipment, platforms and
facilities, fixtures and improvements, which are incident or attributable to
or underlie the Leases, Lands, Xxxxx or Units with the production,
transportation, treatment, sale or disposal of hydrocarbons or water produced
therefrom or attributable thereto, (collectively, the "Equipment").
(e) The licenses, permits, contracts, agreements and other
instruments owned by Seller (other than bonds posted by Seller) which concern
and relate to any of the Leases, Lands, Xxxxx, Units and/or Equipment, INSOFAR
AND ONLY INSOFAR as same concern or relate to the Leases, Lands, Xxxxx, Units
and/or Equipment, or the operation thereof; including, without limitation,
oil, gas and condensate purchase and sale contracts; permits; rights-of-way;
easements; licenses; servitude; estates; surface leases; farming and far-out
agreements; division orders and transfer orders; buttonhole agreements; dry
hole agreements; area-of-mutual interest agreements; salt water disposal
agreements; acreage contribution agreements; operating agreements; balancing
agreements and unit agreements; pooling agreements; pooling orders;
communitization agreements; processing, gathering, compression and
transportation agreements; facilities or equipment leases relating thereto or
used or held for use in connection with the ownership or operation thereof or
with the production, treatment, sale or disposal of hydrocarbons; and all
other contracts and agreements related to the Leases, Lands, Xxxxx and/or
Equipment.
(f) Subject to Section 1.3 below, originals or copies of all
computer tapes and discs, files, records, information or data relating to the
Interests in the possession or under the control of Seller, including, without
limitation, title records (including abstracts of title, title opinions,
certificate of title and title curative documents), accounting records and
files, contracts, correspondence, production records, electric logs, core
data, pressure data, decline curves, graphical production curves, drilling
reports, well completion reports, drill stem test charts and reports,
regulatory reports, and all related materials, INSOFAR AND ONLY INSOFAR as the
foregoing items constitute materials that may be lawfully conveyed to Buyer
(i.e., the materials are not subject to a proprietary agreement precluding
their transfer to Buyer), and, to the extent transferable, all other contract
rights, intangible rights (excluding Seller's trademarks and service marks),
inchoate rights, chooses in action, rights under warranties made by prior
owners, manufacturers, vendors or other third parties, and rights accruing
under applicable statutes of limitation or prescription, attributable to the
Interests.
(g) All payments, and all rights to receive payments, with
respect to the ownership of the production of hydrocarbons from or the conduct
of operations on the Interests accruing after the Effective Time.
1.3 Reserved Interests. Notwithstanding any provision of this
Agreement to the contrary, Seller reserves and retains (i) Seller's corporate,
financial, tax and legal records and its other business records; (ii) cash,
bank accounts, letters of credit, travel letter accounts and prepaid
insurance; (iii) the management information systems and other intellectual
property rights of Seller used by Seller in the management and administration
of its business; (iv) all accounts receivable, trade credits or notes
receivable accrued before the Effective Time; (v) any files or records that
Seller is contractually or otherwise obligated not to disclose to Buyer; (vi)
all claims and causes of action arising from acts, omissions or events, or
damage or destruction of property occurring prior to the Effective Time; (vii)
engineering studies or reserve reports relating to the Interests; (viii) all
interests and rights not included in the definition of the Interests (the
"Reserved Interests").
1.4 Effective Time. The purchase and sale of the Interests shall be
effective as of January 1, 2001, at 7:00 a.m., mountain standard time (herein
called the "Effective Time").
1.5 Ownership of the Interests. Subject to Section 13.1 and the
other provisions of this Agreement, should Closing occur, Seller shall be
entitled to all of the rights of ownership (including, without limitation, the
right to all production, proceeds of production and other proceeds), and shall
be subject to the duties and obligations of such ownership attributable to the
Interests for the period of time prior to the Effective Time and Buyer shall
be entitled to all of the rights of ownership (including, without limitation,
the right to all production, proceeds of production and other proceeds) and
shall be subject to the duties and obligation of such ownership attributable
to the Interests for the period of time from and after the Effective Time.
All expenses and costs, including, without limitation, all ad valorem,
property, production, severance, and similar taxes and assessments based upon
or measured by the ownership of the Interests, the production of hydrocarbons,
or the receipt of proceeds therefrom) attributable to the Interests, shall be:
(i) paid by or allocated to Seller if incurred or accruing with respect to
operations conducted prior to the Effective Time; or (ii) paid by or allocated
to Buyer if incurred or accruing with respect to operations conducted after
the Effective Time. All hydrocarbons in storage facilities above or upstream
from the pipeline connection to each storage facility, or downstream of
delivery point sales meters on gas pipelines, as of the Effective Time, shall
belong to Seller. All of the hydrocarbons placed in such storage facilities
or upstream of the aforesaid meters on pipelines after the Effective Time
shall belong to Buyer and shall become a part of the Interests. In order to
accomplish the foregoing allocation of production, the parties shall rely upon
the records maintained by the operator of the relevant Interest, unless such
records are demonstrated to be inaccurate.
1.6 Risk of Loss. If, prior to Closing, all or any material portion
of the Interests is destroyed by fire or other casualty (including any loss of
well control), or is taken in condemnation or under the right of eminent
domain, then either (a) Seller may, but shall have no obligation to, elect to
repair such damage, in which case all rights to insurance proceeds and claims
against third parties, related thereto shall belong to Seller and the parties
shall proceed with Closing without any adjustment of the Purchase Price on
account of such damage; or (b) if Seller does not elect to repair such damage
under clause (a) above, then, at Buyer's election, the affected Interest shall
be treated as if it has a Title Failure associated with it and the procedure
provided for in Article 10.7 shall be applicable thereto, in which case,
unless Buyer and Seller agree to the contrary, all rights to insurance
proceeds, and claims against third parties related thereto shall belong to
Seller; or (c) if Seller does not elect to repair such damage under clause (a)
above, and Buyer does not make the election provided for in clause (b), above,
the Purchase Price will not be adjusted, and Seller shall, at Seller's
election, either collect (and when collected pay over to Buyer) any insurance
claims related to such damage, or assign to Purchaser such insurance claims,
and, in either event, the parties shall proceed with Closing without any
adjustment of the Purchase Price on account of such damage or loss.
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Interests shall be
Four Million Dollars ($4,000,000.00) (the "Purchase Price"). At Closing, the
Purchase Price shall be adjusted, as set forth in Section 2.2 below.
2.2 Adjustments to Purchase Price. At Closing, the Purchase Price
shall be adjusted as follows and the resulting amount shall be referred to
herein as the "Adjusted Purchase Price":
(a) The Purchase Price shall be adjusted upward by the
following:
i. The amount of all actual operating or capital expenditures
or prepaid expenses attributable to the Interests incurred
by or on behalf of Seller in connection with the operation
of the Interests and which are, according to generally
accepted accounting principles, attributable to the period
of time between the Effective Time and the Closing Date, as
that term is defined in Article 8.1, below. Such
expenditures and expenses shall include, without limitation,
royalties, rentals and other charges; ad valorem, property,
excise, and any other taxes based upon or measured by the
ownership of the Interests, the production of hydrocarbons
or the receipt of proceeds therefrom; and expenses payable
to a third person under applicable joint operating
agreements, including, without limitation, overhead charges
at normal company overhead labor rates and royalty
disbursement fees payable to operator, or similar payments
to third party operators, or, in the absence of any joint
operating agreement, those items customarily billed under
such an agreement.
ii. The value, less taxes (other than taxes on net income), of
all hydrocarbons in storage facilities above or upstream
from the pipeline connection in each storage facility, or
downstream of delivery point, sales meters on gas pipelines,
as of the Effective Time, at the prevailing market value at
the time of sale in the area, adjusted for grade and
gravity.
iii. Any other amounts agreed upon by Seller and Buyer.
(b) The Purchase Price shall be adjusted downward by the
following:
i. Reductions due to Title Failures as provided in Sections
10.7 and 10.9.
ii. For uncured Title Defects and Contested Defects pursuant to
Section 10.8.
iii. Reductions due to Environmental Defects as provided in
Section 11.3.
iv. The gross proceeds earned by Seller, net of applicable
severance and production taxes and compression and
transportation charges, and derived from the sale of
hydrocarbons attributable to the Interests to the extent
owned by Seller between the Effective Time and the Closing
Date, pursuant to the provisions of Section 1.5 above.
v. Reductions due to receipt by Seller of denials to consent
and of exercises of preferential rights as provided in
Section 10.11.
vi. Any other amounts agreed upon by Seller and Buyer.
(c) Seller shall pay all capital expenditures and expenses
accruing prior to the Closing Date referenced in Section 2.2(a)(i) above and
shall collect and receive all proceeds accruing prior to the Closing Date
referenced in Section 2.2(b)(v) above. Seller shall be responsible for
accounting for all revenues earned and expenses incurred through the Closing
Date.
2.3 Purchase Price Allocation. The Purchase Price shall be allocated
among the Interests as set forth in Exhibit "B" attached hereto (the"Allocated
Values").
2.4 Preliminary Settlement Statement. Seller shall prepare and
deliver to Buyer at least five (5) "Business Days" (which term shall mean any
day except a Saturday, Sunday or other day on which commercial banks in
Denver, Colorado are required or authorized by law to be closed) prior to the
Closing Date, Seller's estimate of the Adjusted Purchase Price to be paid at
Closing, together with a statement setting forth Seller's estimate of the
amount of each adjustment to the Purchase Price to be made pursuant to Section
2.2 (the "Preliminary Settlement Statement"). The parties shall negotiate in
good faith and attempt to agree on such estimated adjustments prior to
Closing. In the event any estimated adjustment amounts are not agreed upon
prior to Closing, the Adjusted Purchase Price for purposes of Closing shall be
calculated based on Seller's and Buyer's agreed upon estimated adjustments and
Seller's good faith estimation of any disputed amounts, which estimate shall
be subject to adjustment in the Final Settlement Statement pursuant to Section
9.1.
2.5 Letter-of-Credit and Letter of Credit Note. There currently
exist certain letters of credit ("Letters of Credit") issued by Castle
Offshore, LLC ("Castle") and a letter of credit note ("Letter of Credit Note")
from Seller to Castle with respect to the Interests. Buyer agrees, prior to
Closing, to obtain a letter of credit in the amount of ($1,300,000),
acceptable to the beneficiaries of the Letters of Credit, to replace the
Letters of Credit, which will entitle Castle to a return of the Letter of
Credit Note from Seller.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer the following:
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado. Seller is duly
qualified to carry on its business in the State or States in which the
Interests are located and in each State where failure to so qualify would have
a material adverse effect upon its business or the Interests.
(b) Seller has all requisite power and authority to carry on
its business as presently conducted and to enter into this Agreement and to
perform its obligations hereunder.
(c) The execution, delivery and performance of this Agreement
and the transactions contemplated herein have been duly and validly authorized
by Seller.
(d) This Agreement has been duly executed and delivered on
behalf of Seller, and all documents and instruments required hereunder to be
executed and delivered by Seller at or prior to Closing shall have been duly
executed and delivered. This Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of Seller
enforceable in accordance with their terms.
(e) Seller has incurred no liability, contingent or
otherwise, for broker's or finder's fees or commissions relating to the
transactions contemplated by this Agreement for which Buyer shall have any
responsibility whatsoever.
(f) There are no outstanding authorizations for expenditures
("ACES") that (i) require the drilling of xxxxx or other material development
operations in order to earn or to continue to hold all or any portion of the
Interests, or (ii) obligate Seller to make payments of any amounts in
connection with drilling of xxxxx or other material capital expenditures
affecting the Interests.
(g) Seller is not obligated to deliver hydrocarbons produced
from the Interests at some future time without then or thereafter receiving
full payment for the production attributable to Seller's ownership in and to
the Interests by virtue of: (i) a prepayment arrangement under any contract
for the sale of hydrocarbons and containing a "take or pay," or similar
provisions, (ii) a production payment, or (iii) any other arrangement.
(h) Except for those taxes and assessments for which a
Purchase Price adjustment is made under Section 2.2(b)(iv), during the period
of Seller's ownership of the Interests, Seller has properly paid 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 before the Effective Time.
(i) No suit, action, claim, or other proceeding is pending or,
to the best of Seller's knowledge, threatened before any court, arbitration
panel or governmental agency which relates to the Interests and which might
result in a material loss of Seller's title to any portion of the Interests,
or a material diminution of the value of any of the Interests, or that might
materially hinder or impede the operation of the Leases.
(j) As used in this Agreement, the term, "Existing Documents"
shall mean all of the oil, gas and other mineral leases, assignments or other
instruments or agreements that comprise the Interests, and all contractually
binding arrangements to which the Interests may be subject and which will be
binding on the Interests or Buyer after Closing (including, without
limitation, oil, gas and other mineral leases, overriding royalty assignments,
farm-out and farm-in agreements, option agreements, forced pooling orders,
assignments of production payments, partnership agreements, unit agreements,
unit operating agreements, joint operating agreements, balancing agreements,
unit operating agreements, production contracts, processing contracts, gas
sales contracts, marketing and transportation contracts and division orders).
To the best of Seller's knowledge, (i) all Existing Documents are in full
force and effect and are the valid and legally binding obligations of the
parties thereto and are enforceable in accordance with their respective terms
(subject to the effects of bankruptcy, insolvency, reorganization, moratorium
and similar laws); (ii) Seller is not in material breach or default with
respect to any of its obligations pursuant to any such Existing Documents; and
(iii) all payments (including, without limitation, royalties, delay rentals,
shut-in royalties and valid calls under unit or operating agreements) due
thereunder have been timely paid and Seller has received no notice of default
under any of the Existing Documents.
(k) To the best of Seller's knowledge, all of the Equipment
Seller operates has been maintained in a state of repair so as to be adequate
for normal operations.
(l) To the best of Seller's knowledge, all of the Xxxxx that
have been drilled and completed have been so drilled and completed within the
boundaries and limits permitted by contract, pooling or unit agreement, and by
law; and all drilling, completion, and other operations on or affecting the
Leases have been conducted in compliance with all applicable laws, ordinances,
rules, regulations and permits, and judgments, orders and decrees of any court
or governmental body or agency. No Well is subject to penalties or allowables
after the date hereof because of any over-production or any other violation of
applicable laws, rules, regulations or permits or judgments, orders of decrees
of any court or governmental body or agency.
(m) Except as set forth on Exhibit "C" attached hereto:
(i) Seller's operations and activities with respect to the
Interests comply in all respects with all applicable
governmental laws, including, without limitation,
health and safety statutes and regulations and all
Environmental Laws, including any provisions requiring
notice to government agencies under Environmental
Laws.
(ii) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter
("Environmental Proceeding") known to Seller pending
or, to the best of Seller's knowledge, threatened
against Seller or any of the Interests relating in any
way to the Environmental Laws.
(iii) Neither Seller nor, to the best of Seller's knowledge,
any other person have released, placed, stored, buried
or dumped any Hazardous Substances, Oil, Pollutants or
Contaminants or any other wastes on, beneath, or
adjacent to the Leases, except for inventories of such
substances to be used in the ordinary course of
business of Seller (which inventories and wastes, if
any, were and are stored or disposed of in accordance
with applicable laws and regulations).
(iv) Seller has not received any notice or order from any
governmental or other public agency advising it that
Seller is responsible for or potentially responsible
for Cleanup or paying for the cost of Cleanup of any
Hazardous Substances, Oils, Pollutants, or
Contaminants or any other waste or substance affecting
the Interests. Seller is not aware of any facts,
which might reasonably give rise to any such notice or
order.
(v) The term "Cleanup" shall mean all actions required to:
(1) cleanup, remove, treat or remediate Hazardous
Substances, Oils, Pollutants or Contaminants; (2)
prevent the Release of Hazardous Substances, Oils,
Pollutants or Contaminants so that they do not
migrate, endanger or threaten to endanger public
health or welfare or the environment; (3) perform pre-
remedial studies and investigations and post-remedial
monitoring and care; or (4) respond to any government
requests for information or documents in any way
relating to cleanup, removal, treatment or remediation
or potential cleanup, removal, treatment or
remediation of Hazardous Substances, Oils, Pollutants
or Contaminants in the indoor or outdoor environment.
(vi) The term "Environmental Laws" shall mean all foreign,
Federal, state and local laws, regulations, rules and
ordinances relating to polluting or protection of the
environment, including, without limitation, laws
relating to Releases or threatened Releases of
Hazardous Substances, Oil, Pollutants or Contaminants
into the indoor or outdoor environment (including,
without limitation, ambient air, surface water,
groundwater, land, surface and subsurface strata) or
otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release,
transport or handling of Hazardous Substances, Oil,
Pollutants or Contaminants, and all laws and
regulations with regard to record keeping,
notification, disclosure and reporting requirements
respecting Hazardous Substances, Oils, Pollutants or
Contaminants.
(vii) The term "Hazardous Substances, Oils, Pollutants or
Contaminants" shall mean all substances defined as
such in the National Oil and Hazardous Substances
Pollution Contingency Plan, or defined as such by,
or regulated as such under, any Environmental Law.
(viii) The term "Release" or "Releases" means any release,
spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor
environmental (including, without limitation, ambient
air, surface water, groundwater, and surface or
subsurface strata) or into or out of any property,
including the movement of Hazardous Substances, Oils,
Pollutants or Contaminants through or in the air,
soil, surface water, groundwater or property.
3.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller the following:
(a) Buyer is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware Buyer is or will
be prior to Closing duly qualified to conduct business in the State or States
in which the Interests are located.
(b) Buyer has all requisite power and authority to carry on
its business as presently conducted, to enter into this Agreement, and to
purchase the Interests on the terms described in this Agreement and perform
its other obligations under this Agreement.
(c) The execution, delivery and performance of this Agreement
and the transactions contemplated hereby have been duly and validly
authorized.
(d) This Agreement has been duly executed and delivered by or
on behalf of Buyer; all documents and instruments required hereunder to be
executed and delivered by Buyer at or prior to Closing shall have been duly
executed and delivered; and this Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of Buyer
enforceable in accordance with their terms.
(e) Buyer has incurred no liability, contingent or otherwise,
for brokers' or finders' fees or commissions relating to the transactions
contemplated by this Agreement for which Seller shall have any responsibility
whatsoever.
(f) Prior to Closing, Buyer will have inspected the
Interests, the public records and Seller's files for all purposes, including,
but not limited to, detecting the presence and concentration of naturally-
occurring radioactive materials and satisfying itself as to the physical
condition and environmental condition of the Interests, both surface and
subsurface. In entering into this Agreement, Buyer has relied solely on the
express representations and covenants of Seller in this Agreement, its
independent investigation of, and judgment with respect to, the Interests and
the advice of its own legal, tax, economic, environmental, engineering,
geological and geophysical advisors, and not on any comments or statements of
any representatives of, or consultants or advisors engaged by Seller.
(g) At Closing, Buyer will meet the bonding and other
requirements required by all governmental authorities in respect to the
Interests (and Seller agrees to provide Buyer, prior to Closing, with a list
of such requirements) and, after Closing, Buyer anticipates that it will
continue to be able to meet such bonding requirements. Buyer is, and after
the Closing is expected to continue to be, otherwise qualified to own the
Interests. The consummation of the transactions contemplated hereby will not
cause Buyer to be disqualified to be an owner of oil, gas, and mineral leases
or to exceed any acreage limitation imposed by law, statute, rule or
regulation. Buyer is not aware of any fact that could reasonably be expected
to cause the appropriate governmental authorities to fail to unconditionally
approve the assignment of the Interests to Buyer. Seller will cooperate and
will assist Buyer relating to the preparation and presentation of documents
relating to changes in ownership and/or operatorship of the Interests.
(h) Buyer is an experienced and knowledgeable investor and
operator in the oil and gas business. Buyer is acquiring the Interests for
its own account and not with a view to, or for offer of resale in connection
with, a distribution thereof, within the meaning of the Securities Act of
1933, as amended, or any other rules, regulations, and laws pertaining to the
distribution of securities.
(i) Buyer has arranged or will have arranged to have
available by the Closing Date sufficient funds to enable the payment to
Seller, by wire transfer, of the Adjusted Purchase Price in accordance with
Section 2.2 and to otherwise perform Buyer's obligations under this Agreement.
ARTICLE 4
CERTAIN AGREEMENTS OF SELLER
4.1 Agreements Between Execution of Agreement and Closing. During
the period between the execution of this Agreement and the Closing Date,
Seller shall not, without the prior written consent of Buyer, (i) sell,
convey, assign, transfer or encumber any of the Interests; (ii) make or agree
to make any expenditure in excess of $25,000.00, net to Seller's interest,
except for, expenditures necessary in the event of any emergency, (iii) sell
oil, gas or other minerals from the Interests except sales made in the
ordinary course of business; (iv) enter into any agreement amending, modifying
or terminating any of the Leases; or (v) take any other action with respect to
any of the Interests that would cause a material diminution in the value
thereof or that would materially and adversely affect the use and enjoyment
thereof.
4.2 Access to Records. Following the execution of this Agreement by
the Parties, Seller shall afford to Buyer and its authorized representatives,
during normal business hours, reasonable access to well and land files, title,
contract and legal materials and operating data and information in Seller's
possession or to which it has access affecting the Interests.
4.3 Notification of Additional Proceedings. Seller shall promptly
notify Buyer of any new suits, actions, claims or other proceedings threatened
or pending before, or required to be filed with, any court, arbitrator or
governmental agency which relate to the Interests.
4.4 Consents. Seller shall use its commercially reasonable efforts
to obtain any consent necessary to transfer the Interests to Buyer.
ARTICLE 5
CERTAIN AGREEMENTS OF BUYER
5.1 Cooperation. Buyer shall cooperate with Seller to assist Seller
in carrying out the agreements of Seller hereunder.
ARTICLE 6
BUYER'S CONDITIONS TO CLOSING
The obligations of Buyer to consummate the transactions provided for
herein are subject, at the option of Buyer, to the fulfillment on or prior to
Closing of each of the following conditions:
6.1 Representations. The representations and warranties by Seller
set forth in Section 3.1 shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date.
6.2 Changes. There shall have been no material adverse change in the
physical condition of the Interests, except depletion through normal
production within authorized allowable and rates of production, depreciation
of equipment through ordinary wear and tear, and other transactions permitted
under this Agreement or approved in writing by Buyer.
6.3 Performance. Seller shall have timely performed and complied
with all agreements and covenants required by this Agreement.
6.4 No Legal Proceedings. No suit, action or other proceeding shall
be pending or threatened before any court, arbitration panel or governmental
agency seeking to restrain, prohibit or declare illegal, or seeking
substantial damages in connection with the purchase and sale contemplated by
this Agreement, or which might result in a material loss of any portion of the
Interests, a material diminution in the value of any of the Interests, or
materially interfere with the use or enjoyment of the Interests, except (i)
matters that are disclosed on Exhibit "C" or (ii) any suit or proceeding
affecting only a portion of the Interests, which portion could be treated as
subject to a Title Defect in accordance with Article 10.
6.5 Existing Documents. Buyer must be satisfied with the terms and
conditions of the Existing Documents.
ARTICLE 7
SELLER'S CONDITIONS TO CLOSING
The obligations of Seller to consummate the transactions provided for
herein are subject, at the option of Seller, to the fulfillment on or prior to
Closing of each of the following conditions:
7.1 Representations. The representations and warranties by Buyer
set forth in Section 3.2 above shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date.
7.2 Performance. Buyer shall have timely performed and complied in
all material respects with all agreements and covenants required by this
Agreement.
7.3 No Legal Proceedings. No suit or other proceeding shall be
pending before any court or governmental agency seeking to restrain prohibit
or declare illegal, or seeking substantial damages in connection with, the
sale contemplated by this Agreement, except (i) matters with respect to which
Seller have been adequately indemnified by Buyer or (ii) any suit or other
proceeding affecting only a portion of the Interests, which portion could be
treated as subject to a Title Defect in accordance with Article 10.
7.4 Letter of Credit. Buyer shall have obtained the replacement
letter of credit, as described in Article 2.5.
ARTICLE 8
CLOSING
8.1 Date of Closing. Subject to the conditions stated in this
Agreement, the purchase and sale of the Interests pursuant to this Agreement
(the "Closing") shall occur on or before April 13, 2001, at 10:00 a.m.,
Mountain Time, or on such other date and time as Buyer and Seller may agree
(the "Closing Date").
8.2 Place of Closing. The Closing shall be held at the offices of
Seller as set forth hereinabove; provided, however, the Parties may agree to
close via facsimile or overnight mail.
8.3 Closing Obligations. At the Closing, the following documents
shall be delivered and the following events shall occur, each event being a
condition precedent to the others and each being deemed to have occurred
simultaneously with the others:
(i) Seller shall execute and deliver: (1) an Assignment, Xxxx
of Sale and Conveyance in the form attached hereto as
Exhibit "D" (the "Assignment") (in sufficient counterparts
to facilitate recording) conveying the Interests, subject to
the Permitted Encumbrances; (2) such other instruments as
may be required to convey the Interests to Buyer and
otherwise effectuate the transactions contemplated by this
Agreement
(ii) Seller and Buyer shall execute and deliver the Preliminary
Settlement Statement.
(iii) Buyer shall deliver by direct bank or wire transfer to
Seller or to Seller's account (at such place as may be
designated by Seller in a written notice, such notice to be
delivered to Buyer on the Closing Date the Money Payment of
the Adjusted Purchase Price.
(iv) Seller shall deliver on forms supplied by Buyer transfer
orders or letters in lieu thereof, directing the operator or
purchaser to make payment of proceeds attributable to
production from the Interests after the Effective Time to
Buyer.
8.4 Records. In addition to the obligations set forth under
Sections 4.2 and 8.3 above, within thirty (30) days after Closing, Seller
shall deliver to Buyer all original well and land files in its possession or
to which it has access. Buyer shall be entitled to all original records
affecting the Interests assigned to Buyer pursuant to the terms of this
Agreement. Seller shall be entitled to keep a copy of such records for its
files. Buyer agrees to preserve and maintain such records for at least two
(2) years after the Closing Date and to provide Seller access to such records
during normal business hours during such period.
ARTICLE 9
POST-CLOSING MATTERS
9.1 Final Settlement Statement. As soon as practicable after the
Closing, but in no event later than ninety (90) days after Closing, Seller
shall prepare and deliver to Buyer, in accordance with this Agreement and
generally accepted accounting principles, a statement ("Final Settlement
Statement") setting forth each adjustment (other than adjustments for Title
Defects) finally determined as of Closing and showing the calculation of such
adjustments. Within thirty (30) days after receipt of the Final Settlement
Statement, Buyer shall deliver to Seller a written report containing any
changes that Buyer proposes be made in good faith to resolve any questions
with respect to the amounts due pursuant to such Final Settlement Statement no
later than one hundred twenty (120) days after the Closing.
9.2 Unpaid Third Party Funds. At such time as Buyer and Seller agree
on a Final Settlement Statement, Seller will transfer to Buyer all funds held
by Seller in suspense for a third party owner of royalty, overriding royalty,
working interests, mineral interest or other similar interests, attributable
to the Interests, and will deliver all records in Seller's possession,
including a schedule of such funds listing the owners thereof, which may be
used to determine proper disbursement. Buyer shall thereafter be responsible
for determining the proper payment of such amounts and shall indemnify and
hold harmless Seller from and against any and all cost, loss or expense of
whatever kind, including attorneys' fees, arising from or in connection with
the claim or any person, up to the amount listed on the schedule provided by
Seller with respect thereto, with respect to the funds transferred to Buyer
pursuant to this Section 9.2.
9.3 Further Assurances. After Closing, 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.
9.4 Survival. All representations and warranties set forth in this
Agreement in Sections 3.1 (a) - (e) and 3.2 (a) - (e) and in the Assignment
shall survive the Closing, but no other representations and warranties shall
survive the Closing.
ARTICLE 10
TITLE MATTERS
10.1 Access to Title and Other Documents.
(a) After the date hereof, Seller will make available to
Buyer and to its representatives (such representatives to include employees,
consultants, independent contractors, attorneys and other advisors of Buyer)
for Buyer's copying and/or inspection (at Buyer's cost and expense), at
Seller's offices during normal business hours the following documents in
Seller's possession or under its control:
(i) All abstracts of title, title opinions, title curative
materials, ownership reports, division orders, bills
of sale, other documents evidencing transfers of
title, tax receipts, and licenses and registrations
pertaining to the Interests.
(ii) All of the lease records, lease files, leases,
conveyances and assignments of interest in the Leases;
unitization, unit, pooling and operating agreements;
division orders; contracts; transfer orders; orders of
the applicable regulatory authorities or
administrative agencies; mortgages, deeds of trust,
security agreements, and financing statements; and all
other contracts, agreements and documents affecting
the Interests.
(iii) Instruments and documents concerning proper payment of
all general and special assessments, ad valorem and
property taxes, and production, severance and similar
taxes and assessments based on or measured by the
ownership of the Interests, the production of
hydrocarbons, or the receipt of proceeds therefrom for
2000 and years prior for which the applicable statute
of limitations has not expired.
(iv) All geological maps, geophysical surveys, ownership
maps, seismic surveys, logs, core studies, and surveys
relating to the Interests.
(v) All production records; transportation agreements;
contracts concerning the purchase of gas, oil,
casinghead gas, distillate, gas condensate or other
hydrocarbons; processing agreements; all
correspondence relating to the Interests; and data
sheets relating to the Interests and to bonuses,
rentals and royalties payable with respect thereto.
(vi) All agreements relating to the purchase, sale,
processing, and transportation of production from the
Xxxxx.
(vii) All bonds, leases, permits, easements, licenses,
orders, saltwater disposal agreements, agreements with
pumpers and other agreements in any way relating to
the Interests or the operation thereof.
Reliance on such information shall be at the sole risk of the Buyer, and
Seller makes no guaranty or representation as to the accuracy or completeness
of such data, except as otherwise provided in this Agreement.
Seller shall authorize Buyer and its representatives to consult
with attorneys, abstract companies and other consultants or independent
contractors of Seller (whether utilized in the past or present) concerning
title related matters. Reliance on such information of such third parties
shall be at the sole risk of the Buyer, and Seller makes no guaranty or
representation as to the accuracy or completeness of such data.
10.2 No Warranty or Representation. At the Closing, Seller shall
convey to Buyer all the Interests. Such conveyance shall be subject to the
Permitted Encumbrances and WITHOUT ANY WARRANTY OF TITLE, EITHER EXPRESS OR
IMPLIED, AND WHETHER BY COMMON LAW, STATUTE OR OTHERWISE, except for the
warranty of title as to persons claiming by, through and under Seller
contained in the Assignment. Without limiting Buyer's right to reduce the
Purchase Price in the manner provided in this Article 10, Seller makes no
warranty or representation, express or implied, with respect to the accuracy
or completeness of any information. Records or data now, heretofore, or
hereafter made available to Buyer in connection with this Agreement,
including, without limitation, any description of the Interests, pricing
assumptions, potential for production of hydrocarbons from the Interests, or
any other matters contained in any material furnished by Seller to Buyer or
its officers, directors, employees, agents, advisors or representatives.
10.3 Disclaimer. ALL PERSONAL PROPERTY, MACHINERY, FIXTURES,
EQUIPMENT AND MATERIALS CONVEYED HEREBY ARE SOLD AND ASSIGNED AND ACCEPTED BY
BUYER IN THEIR "WHERE IS, AS IS" CONDITION, WITHOUT ANY WARRANTIES, EXPRESS OR
IMPLIED OR STATUTORY, OF MARKETABILITY, QUALITY, CONDITION, MERCHANTABILITY
AND/OR FITNESS FOR A PARTICULAR PURPOSE OR USE, ALL OF WHICH ARE EXPRESSLY
DISCLAIMED.
10.4 Permitted Encumbrances. As used in this Agreement, the term
"Permitted Encumbrances" shall mean the following, provided that the same
shall not operate to reduce the net revenue interest or increase the gross
working interest of an Interest beyond that shown on Exhibit "A":
(a) Lessors' royalties, non-participating royalties,
overriding royalties, division orders, reversionary interests, and similar
burdens.
(b) Preferential rights to purchase and required third party
consents to assignments and similar agreements, with respect to which, prior
to Closing (i) waivers or consents are obtained from the appropriate parties,
(ii) the appropriate time period for asserting such rights has expired without
an exercise of such rights, or (iii) arrangements acceptable to Buyer can be
made by Buyer and Seller to allow Buyer to receive substantially the same
economic benefits as if all such waivers and consents to assign have been
obtained.
(c) Liens for taxes or assessments not yet due or delinquent
or, if delinquent, that are being contested in good faith in the normal course
of business.
(d) All rights to consent by, required notices to, filing
with, or other actions by governmental entities in connection with the sale or
conveyance of oil and gas leases or interests therein, if the same are
customarily obtained subsequent to such sale or conveyance and neither Seller
nor Buyer has no reason to believe they cannot be obtained.
(e) Such Title Defects as Buyer may have waived in writing.
(f) Rights reserved to or vested in any governmental
authority.
(g) Rights of a common owner of any Interest in rights-of-way
or easements currently held by Seller and such common owner as tenants in
common or through common ownership.
(h) Easements, conditions, covenants, restrictions,
servitudes, permits, rights-of-way, surface leases and other rights in the
Interests for the purpose of surface operations, roads, alleys, highways,
railways, pipelines, transmission lines, transportation lines, distribution
lines, power lines, telephone lines, and removal of timber, grazing, logging
operations, canals, ditches, reservoirs and other like purposes, or for the
joint or common use of real estate, rights-of-way, facilities and equipment
which do not materially impair the rights held by Buyer or the use and
enjoyment of the Interests.
(i) Defects, irregularities and deficiencies in title to any
rights-of-way, easements, surface lease or other rights which in the aggregate
do not materially impair the use of such right-of-way, easements, surface
leases or other rights for the purpose of which such rights will be held by
Buyer.
(j) Zoning, planning and environmental laws and ordinances
and municipal regulations.
(k) Vendors, carriers, warehousemen, repairmen, mechanics,
workmen, materialmen, construction or other like liens arising by operation of
law in the ordinary course of business or incident to the construction or
improvement of any property in respect of obligations which are not yet due,
or which are being contested in good faith by appropriate proceedings by or on
behalf of Seller.
(l) Liens created under operating agreements in respect of
obligations that are not yet due or that are being contested in good faith by
appropriate proceedings by or on behalf of Seller.
(m) The terms and provisions of all instruments of record..
10.5 Good and Defensible Title. For the purposes of this Article 10,
the term "Good and Defensible Title" shall mean, with respect to each of the
Interests, that title of Seller which, subject to and except for Permitted
Encumbrances:
(a) Entitles Seller, throughout the duration of the relevant
Interest, to receive from such Interest (free and clear of all royalties,
overriding royalties, non-participating royalties, net profits interests, or
other burdens on or measured by production of hydrocarbons) not less thant the
interest shown as the net revenue interest on Exhibit "A" in all hydrocarbons
produced, saved and marketed from the Interest and of all hydrocarbons
produced, saved, and marketed from any unit of which the Interest is a part
and which is allocated to such Interest; all without reduction, or termination
of the interest.
(b) Obligates Seller to bear the percentage of the costs and
expenses relating to the maintenance and development of, and operations
relating to, the Interest not greater than the gross working interest shown on
Exhibit "A" without increase throughout the duration of such Interest.
(c) Is free and clear of liens, encumbrances and defects.
(d) Any and all (i) defects in the chain of title consisting
of failure to recite marital status or the omission of succession or heirship
proceedings; (ii) defects or irregularities arising out of prior oil and gas
leases which, on their face, expired more than three (3) years prior to the
Effective Time, and which have not been released of record; (iii) defects or
irregularities arising out of acknowledgments, questions of identity, trusts
or trustees, executors and personal representatives, and the manner in which
they executed documents or were identified thereon; (iv) defects or
irregularities arising out of mortgages or deeds of trust which, by their
terms, matured more than ten (10) years prior to the date thereof but which
remain unreleased of record; (v) defects or irregularities arising out of the
lack of survey of specific land or lease description; (vi) defects or
irregularities arising out of the lack of recorded powers of attorneys from
corporations, banks, trusts or personal representatives to execute and deliver
documents on their behalf or on behalf of others; (vii) defects or
irregularities cured by possession under applicable statutes of limitation and
statutes relating to prescription. (viii) defects or irregularities arising
out of the Chevron USA Inc. Assignment dated October 1 1987 to American Land &
Exploration, Inc., as recorded COB 679, Folio 1 of the official records of
Plaquemines Parish, Louisiana,concerning Article A. on page (1) of the
Assignment which limits the assignment to Leasehold to lands within the Sales
Area indicated on Exhibit "A-1" of such Assignment.
10.6 Notice of Title Defect. Except for Permitted Encumbrances, any
defect in title, lien, encumbrance, or defect that would cause Seller's title
to any Interest not to be Good and Defensible Title shall be a title defect
("Title Defect"). Not later than two (2) days before the Closing Date (the
"Warranty Claim Date"), Buyer must notify Seller in writing of any matter that
Buyer considers to be a Title Defect ("Notice of Title Defect"), which notice
shall include, (i) a specific description of the matter Buyer asserts as a
Title Defect, (ii) a specific description of the Interest or the portion of
the Interest that is affected by the Title Defect, (iii) Buyer's calculation
of the amount ("Title Defect Amount") that the value of the Interest should be
reduced because of the Title Defect based on the Allocated Value shown on
Exhibit "B," and (iv) appropriate supporting documentation.
Notwithstanding anything to the contrary in this Agreement, the Buyer
shall be deemed to have waived any Title Defect which the Buyer has not
specifically asserted in its Notice of Title Defect presented before the
Warranty Claim Date.
10.7 Title Failure. Any item that Seller acknowledges is a Title
Defect but that Seller is unwilling to cure shall be deemed a title failure
("Title Failure") and, subject to Section 10.9 below, the Purchase Price shall
be reduced for such Title Defect pursuant to Section 2.3.
10.8 Defect Notice; Seller's Opportunity to Cure. To the extent that
Seller disputes that any item described in the Notice of Title Defect actually
constitutes a Title Defect or disputes the Title Defect Amount assigned by
Buyer to any such Title Defect ("Contested Defect"), Seller shall deliver to
Buyer a notice so stating ("Defect Notice"). Subject to the provisions of
10.9 below, the portion of the Purchase Price attributable to Title Defects
which Seller is willing to cure but which are uncured at Closing, or which are
not waived by Buyer at Closing (including Contested Defects), shall be
deposited into an escrow account pursuant to an escrow agreement agreed to by
the Parties and the Assignment will be revised to delete all of that portion
of the Interests affected by such Title Defects (including Contested Defects).
If Seller fails to cure a Title Defect within ninety (90) days after Closing,
it shall be deemed a Title Failure and the funds attributable to such Title
Defect shall be released from escrow to Buyer and the property on which such
Title Defect exists shall not be conveyed to Buyer.
10.9 Title Purchase Price Adjustments. Notwithstanding any provision
hereof to the contrary, there shall be no reduction in the Purchase Price for
Title Failures and no escrow for Title Defects or Contested Defects unless and
until the aggregate amount of such Title Defects (including Title Failures and
Contested Defects) exceeds four percent (4%) of the Purchase Price.
10.10 Termination Amount. Notwithstanding any provision hereof to
the contrary, in the event the aggregate adjustments for Title Defects
pursuant to this Article 10 and for Environmental Defects pursuant to Article
11 amount to twenty percent (20%) or more of the Adjusted Purchase Price (the
"Termination Amount"), either Party shall have the option to terminate this
Agreement, without any liability, upon written notice to the other Party.
10.11 Preferential Rights and Consents to Assign. Some Interests may
be subject to existing preferential rights to purchase the Interests or
consents may be required in order to assign the Interests. Seller shall
obtain consent and waivers of any preferential rights which Seller knows must
be obtained prior to Closing and are not ordinarily obtained after Closing.
Buyer shall notify Seller of any additional consent requirement or
preferential right to purchase it discovers prior to Closing. If a
preferential right is exercised or a consent is denied prior to Closing, the
Purchase Price shall be adjusted downward in an amount equal to the price paid
to Seller for the Interest with respect to which the preferential right has
been exercised or the consent has been denied and such Interest shall be
deleted from this Agreement. In the case of a preferential right to purchase,
Seller shall be entitled to all proceeds paid by the third party exercising
its preferential right to purchase. If a third party preferential purchase
right burdening any Interest has not been exercised or waived by Closing,
Buyer shall pay for and accept an assignment covering such Interest and, if
the preferential right is exercised after Closing, Buyer shall be entitled to
all proceeds paid for such interest by the third party exercising such
preferential purchase right. Buyer shall be responsible for conveying title
to the Interest affected by said preferential right to the party exercising
the same and shall indemnify and hold Seller harmless from and against any
claim or liability for Buyer's failure to make such conveyance.
ARTICLE 11
ENVIRONMENTAL
11.1 Inspection; Indemnity. Buyer and its authorized
representatives, at Buyer's sole risk and expense, shall have the right to
enter upon and inspect the real and personal properties comprising the
Interests, and to conduct such well, environmental and other tests and
assessments as Buyer shall deem appropriate, subject to the approval of the
operator in the case of non-operated properties. Buyer shall repair any
damages to the Interests resulting from its inspection and shall defend and
hold Seller harmless from and against any and all losses, damages, claims,
obligations, liabilities, expenses (including court costs and attorneys' fees)
or causes of action directly resulting from Buyer's inspection of the
Interests.
11.2 Environmental Assessment. As part of its inspection of the
Interests, Buyer and its authorized representatives shall have the right to
conduct soil and water tests and borings, and generally to conduct such tests,
examinations, investigations and studies as may be necessary or appropriate in
Buyer's sole judgment to make an environmental assessment of the Interests.
Buyer shall keep any data or information acquired through such examination and
the results of all analyses of such data and information strictly confidential
and shall not disclose the same to any person or agency without the prior
written approval of Seller unless such disclosure is required by law. Buyer
shall take all steps necessary to ensure that Buyer's authorized
representatives comply with the provisions of this Article 11. If Buyer has
discovered in its environmental assessment circumstances which require
remediation, control or other response under environmental laws, rules or
regulations then in effect (an "Environmental Defect"), Buyer shall notify
Seller of such circumstances as soon as practicable, but in no event less than
ten (10) days prior to Closing.
11.3 Environmental Defects. If Buyer properly notifies Seller of an
Environmental Defect related to an Interest, Buyer may (i) waive the
Environmental Defect and Close, or (ii) request Seller to cure the
Environmental Defect. If Buyer asks Seller to cure an Environmental Defect,
and if the aggregate amount of all such Environmental Defects exceeds four
percent (4%) of the Purchase Price, Seller have the option (i) to cure the
Environmental Defect, or (ii) to exclude the Interest affected by the
Environmental Defect from this Agreement. If Seller elects to cure the
Environmental Defect, but the cure has not been completed by Closing, the
Interest affected by the Environmental Defect shall not be conveyed to Buyer
at Closing, the Purchase Price shall be reduced by the amount allocated to
such Interest and such amount shall be deposited into the escrow account
referred to in Section 10.7. If the Environmental Defect is cured within
ninety (90) days after Closing, within five (5) days after the Environmental
Defect is cured, Seller will convey to Buyer the Interest affected by the
Environmental Defect and the applicable amount shall be released from escrow
to Seller. If Seller elect to exclude the Interest affected by the
Environmental Defect from this Agreement, subject to Section 11.4 below, the
Purchase Price will be reduced by the allocated value of the Interest
affected.
11.4 Environmental Purchase Price Adjustment. Notwithstanding any
provision hereof to the contrary, there shall be no reduction in the Purchase
Price for uncured Environmental Defects unless, and only to the extent that,
the aggregate amount of such uncured Environmental Defects exceeds four
percent (4%) of the Purchase Price.
ARTICLE 12
TERMINATION, DEFAULT AND REMEDIES
12.1 Right of Termination. The Agreement and the transactions
contemplated herein may be terminated at any time at or prior to Closing:
(i) By Seller, at Seller's option, in the event any of the conditions
set forth in Article 7 have not been satisfied as provided
therein.
(ii) By Buyer, at Buyer's option, in the event any of the conditions
set forth in Article 6 have not been satisfied as provided
therein.
(iii) By either Party in the event that the adjustments to the Purchase
Price exceed the Termination Amount, as provided for in Section
10.10.
(iv) At any time by the mutual written agreement of the Parties.
12.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to either Section 12.1 (iii) or (iv) hereof, the
termination shall be without penalty and the Parties shall have no further
obligations to, nor rights against, one another.
12.3 Dispute Resolution. If the Parties disagree as to the cause for
termination, they will first attempt to resolve such disagreement through a
meeting, to be held within ten (10) days of such termination, of senior
executives of each party, and if such meeting fails to resolve the matter,
through a neutral arbitrator appointed by such executives within thirty (30)
days of the date of such meeting.
12.4 Return of Documentation. Upon termination of this Agreement,
Buyer shall return to Seller all title, geological data, reports, contracts,
and maps and other information furnished by Seller to Buyer and all copies
thereof.
ARTICLE 13
ASSUMPTION OF OBLIGATIONS
13.1 Assumption of Obligations. At Closing, Buyer shall assume (a)
the obligation to (i) plug and abandon or remove and dispose of all Xxxxx
(whether then producing or temporarily or permanently abandoned), platforms,
structures, flow lines, pipelines, and the other equipment now or hereafter
located on the Interests; (ii) cap and bury all flow lines, to the extent
required by applicable law and (iii) dispose of other pipelines now or
hereafter located on the Interests, to the extent required by applicable law,
and all other pollutants, wastes, contaminants, or hazardous, extremely
hazardous, or toxic materials, substances, chemicals or wastes now or
hereafter located on the Interests; (b) all obligations and liabilities
arising from or in connection with any gas production, pipeline, storage,
processing or other imbalance attributable to substances produced from the
Interests on or after the Effective Time; and (c) all other costs, obligations
and liabilities that relate to the Interests and, in each case, arise from or
relate to events occurring on or after the Effective Time. All such plugging,
replugging, abandonment, removal, disposal, and restoration operations shall
be in compliance with applicable laws and regulations and contracts, and shall
be conducted in a good and workmanlike manner.
ARTICLE 14
MISCELLANEOUS
14.1 Fees and Taxes. Except as otherwise specifically provided, all
fees, costs and expense 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. All required documentary,
filing and recording fees for the assignments, conveyance or other instruments
required to convey title to the Interests to Buyer shall be borne by Buyer.
In addition, the liability for any sales, use, transfer or similar tax
associated with the sale and/or transfer of the Interests shall be the
liability of, and for the account of, the Buyer and such liability shall not
be subject to proration as provided in Section 2.3.
14.2 Notices. All notices and communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
made when actually delivered, including delivery by courier, facsimile,
telecopy, or other electronic medium, or if mailed by registered to certified
mail, postage prepaid, addressed as follows:
SELLER:
DELTA PETROLEUM CORPORATION
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BUYER:
PANACO, INC.
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
President & COO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either Party may, by written notice so delivered to the other, change the
address to which delivery shall thereafter be made.
14.3 Amendments. This Agreement may not be amended except by an
instrument in writing signed by Buyer and Seller.
14.4 Preparation of Agreement. Both Seller and Buyer and their
respective counsel participated in the preparation of this Agreement. In the
event of any ambiguity in this Agreement, no presumption shall arise based on
the identity of the draftsman of this Agreement.
14.5 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.
14.6 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.
14.7 References. References made in this Agreement, including use
of a pronoun, shall be deemed to include, where applicable, masculine,
feminine, singular or plural, individuals or corporations. As used in this
Agreement, "person" shall mean any natural person, corporation, partnership,
trust, estate or other entity.
14.8 Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by,
the laws of the State of Louisiana without giving effect to the conflicts of
law rules thereof. Any disputes concerning this Agreement or the subject
matter hereof shall be brought in a court of competent jurisdiction of the
State of Louisiana
14.9 Entire Agreement. This Agreement (including the Exhibits
hereto) constitutes the entire understanding between the Parties with respect
to the subject matter hereof, superseding all negotiations, prior discussions
and prior agreements and understanding relating to such subject matter.
14.10 Assignment; Parties in Interest. Neither Party shall assign
this Agreement without the other Party's prior written consent; provided,
however, that this requirement shall not apply to a subsidiary or other
affiliate of the assigning Party so long as the assigning Party remains
responsible for its assignee's obligations hereunder. Subject to the
foregoing, this Agreement shall be binding upon, and shall inure to the
benefit of, the Parties and their respective successors and assigns.
14.11 Further Cooperation. After the Closing, Buyer and Seller
shall execute and deliver, or shall caused to be executed and delivered from
time to time, such further instruments of conveyance and transfer and shall
take such other action as any Party may reasonably request to convey and
deliver the Interests to Buyer, to accomplish the orderly transfer of the
Interests to Buyer, or to otherwise effectuate the transactions contemplated
by this Agreement. If either Party hereto receives monies belonging to the
other, such amount shall immediately be paid over to the proper Party. If an
invoice or other evidence of an obligation is received by a Party, which is
partially an obligation of both Seller and Buyer, then the Parties shall
consult with each other and each shall promptly pay its portion of such
obligation to the oblige.
14.12. Press Release. Neither Party shall make any press release or
other announcement in connection with the execution of this Agreement or the
Closing without first consulting with the other Party. Following such
consultation and good faith attempt to make reasonable accommodations, either
Party may make any announcement or press release that it believes is either
required by applicable law or the rules of any stock exchange, or is advisable
in connection with such Party=s obligation to provide public disclosure
regarding its activities. This provision shall not apply to any filing with
any governmental body or stock exchange required by law, rule or regulation.
14.13 Subrogation. Buyer shall be subrogated to all rights, actions
and warranties that Seller may have with respect to Seller's predecessors-in-
interest as to the Interests.
EXECUTED as of the date first above stated, but made effective as of the
Effective Time.
SELLER:
DELTA PETROLEUM CORPORATION
By:__________________________________
Xxxxx X. Xxxxxx, President
BUYER:
PANACO, INC.
By___________________________________
Xxxxxx X. Xxxxxx
President & C.O.O.
