FINAL CLOSING AGREEMENT
THIS FINAL CLOSING AGREEMENT ("Agreement") is executed as of the
22nd day of February, 2007, by VOYAGER PARTNERS, LTD., a Texas limited
partnership ("Seller"), and DUNE ENERGY, INC., a Delaware corporation ("Buyer").
RECITALS
WHEREAS, Seller and Buyer are parties to a Second Amended and
Restated Asset Purchase and Sale Agreement dated as of October 6, 2006, as
amended by First Amendment to Second Amended and Restated Asset Purchase and
Sale Agreement, dated as of December 5, 2006, Second Amendment to Second Amended
and Restated Asset Purchase and Sale Agreement, dated as of December 27, 2006,
Third Amendment to Second Amended and Restated Purchase and Sale Agreement,
dated as of January 12, 0000, Xxxxxx Xxxxxxxxx to Second Amended and Restated
Purchase and Sale Agreement, dated as of January 19, 2007, Fifth Amendment to
Second Amended and Restated Asset Purchase and Sale Agreement, dated as of
January 31, 2007, and Sixth Amendment to Second Amended and Restated Asset
Purchase and Sale Agreement, dated as of February 9, 2007 (as so amended, the
"Amended Purchase Agreement"), pursuant to which Seller agreed to sell and
convey, and Buyer agreed to purchase and pay for, the "Assets" described therein
(terms defined in the Amended Purchase Agreement shall have the same meanings
when used herein, unless expressly provided otherwise); and
WHEREAS, under the terms of Section 2.2(e) of the Amended Purchase
Agreement, the date for the Final Closing is scheduled for February 22, 2007;
and
WHEREAS, as of the date of this Agreement, Buyer has been unable to
satisfy the condition set forth in Section 6.2(g) of the Amended Purchase
Agreement with respect to the Final Closing structured as described in Section
2.2(e) thereof; and
WHEREAS, as of the date of this Agreement, Seller has not paid
certain amounts owed by Seller to Buyer under the terms of the Amended Purchase
Agreement and/or the joint operating agreements in effect with respect to
certain Closed Assets and certain Remaining Assets as to which the Closing
occurred on October 6, 2006; and
WHEREAS, Seller and Buyer desire to restructure the Final Closing
and provide for the amicable resolution of such unpaid amounts in accordance
with the terms of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises
contained herein and in the Amended Purchase Agreement, the benefits to be
derived by each Party thereunder and hereunder, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer agree as follows:
1. Restructuring of the Final Closing. Notwithstanding the terms of
Section 2.2(e), 7.3, or any other provision of the Amended Purchase Agreement to
the contrary, Seller and Buyer agree that the Final Closing consists of the
following elements, which are occurring concurrently with the execution of this
Agreement except when otherwise provided below:
Exhibit F - Page 1
(a) Buyer shall not purchase from Seller any of the Tranche 3
Assets, or the Tranche 2 Asset identified as "New 11 Xxxxx Xxx 2 V", in each
case identified on Schedule 2.2(e) to the Amended Purchase Agreement (the
"Released Tranche 2/3 Assets"). The Released Tranche 2/3 Assets are described
more particularly in Section 1 of Exhibit A. Buyer hereby releases, remises,
acquits, and forever discharges Seller from any obligation of Seller under the
Amended Purchase Agreement to sell and convey to Buyer the Released Tranche 2/3
Assets and hereby waives and relinquishes to Seller any Claim that Buyer may
have against Seller with respect to the Released Tranche 2/3 Assets under the
Amended Purchase Agreement or otherwise. In like manner, Seller hereby releases,
remises, acquits, and forever discharges Buyer from any obligation of Buyer
under the Amended Purchase Agreement to purchase and pay for the Released
Tranche 2/3 Assets. In addition, Seller hereby waives and relinquishes to Buyer
any Claim that Seller may have against Buyer, and agrees not to terminate the
Amended Purchase Agreement in accordance with Section 6.3 thereof, as the result
of Buyer's failure to purchase the Released Tranche 2/3 Assets as contemplated
in the Amended Purchase Agreement. The Amended Purchase Agreement is hereby
amended to delete all references to the Released Tranche 2/3 Assets from the
terms thereof and the schedules and exhibits thereto.
(b) Concurrently with the execution of this Agreement, Seller has
executed and delivered to Buyer, in sufficient numbers of counterparts to
facilitate recording in all relevant jurisdictions, an Assignment, Xxxx of Sale,
and Conveyance substantially in the form attached hereto as Exhibit B, pursuant
to which Seller has conveyed to Buyer, without reservation of the Retained
Interests therein, all of Seller's interests in and to the Tranche 2 Asset
identified on Schedule 2.2(e) to the Amended Purchase Agreement as "New 12 Guyer
3" and "New 12 Guyer 4" (collectively, the "Transferred New Guyer Leases"),
effective as of February 1, 2007, at 7:00 a.m., Central Time (the "Revised
Effective Time"). The Transferred New Guyer Leases are described more
particularly in Section 2 of Exhibit A. From and after the date of this
Agreement until June 1, 2007, Seller shall have the right to acquire additional
Leases covering the acreage intended by Seller and Buyer to comprise the Tranche
2 Assets identified on such Schedule 2.2(e) as "New 12 Guyer 5" and "New 12
Guyer 6" (collectively, the "Remaining New Guyer Leases"). If Seller acquires
the Remaining New Guyer Leases on or before June 1, 2007, Seller shall execute
and deliver to Buyer, in sufficient numbers of counterparts to facilitate
recording in all relevant jurisdictions, an Assignment, Xxxx of Sale and
Conveyance substantially in the form attached hereto as Exhibit B, covering all
of Sellers' interests in and to the Remaining New Guyer Leases without
reservation of the Retained Interests therein, effective as of 7:00 a.m.,
Central Time, the first day of the month in which such conveyance is executed
(the "Remaining New Guyer Leases Effective Time"). If Seller fails for any
reason to acquire all of the Remaining New Guyer Leases on or before June 1,
2007, then unless the Parties otherwise agree, Seller shall have no further
obligation to Buyer, and Buyer shall have no further rights, under this
Agreement or otherwise with respect to the Remaining New Guyer Leases. The
Transferred New Guyer Leases and, if acquired in a timely manner as provided
herein, the Remaining New Guyer Leases may be referred to herein as the "Final
Transferred Tranche 2 Assets." The Final Transferred Tranche 2 Assets shall not
include the Tranche 2 Asset identified on Schedule 2.2(e) to the Amended
Purchase Agreement as "New 11 Xxxxx Xxx 2 V", which is included in the Released
Tranche 2/3 Assets. Similarly, the Final Transferred Tranche 2 Assets shall not
include the Tranche 2 Asset identified on such Schedule 2.2(e) as "Country Club
Loc 10". Seller and Buyer stipulate and agree that all assignments of interest
from Seller to Buyer pertaining to "Country Club Loc 10" required under the
terms of the Amended Purchase Agreement have been made, and that neither Seller
nor Buyer owes any further obligation to the other Party under this Agreement or
the Amended Purchase Agreement with respect to "Country Club Loc 10."
(c) Concurrently with the execution of this Agreement, Buyer has
executed and delivered to Seller, in sufficient numbers of counterparts to
facilitate recording in all relevant jurisdictions, an Assignment, Xxxx of Sale,
and Conveyance substantially in the form attached hereto as Exhibit C, pursuant
to which Buyer has reconveyed to Seller all of Buyer's rights and interests in
and to the Tranche 3 Assets identified in Schedule 2.2(d) of the Amended
Purchase Agreement as "Xxxxxx 1 V", "Xxxxxx 1 V", and "Hillview" (the
"Reconveyed Assets"), which were conveyed by Seller to Buyer at the Closing that
occurred on October 6, 2006. The Reconveyed Assets are described more
particularly in Section 3 of Exhibit A. Such conveyance of the Reconveyed Assets
has been made effective as of the Revised Effective Time. Such conveyance is
executed in lieu of the conveyance from Buyer to Seller provided for in Section
6.3(b) of the Amended Purchase Agreement, and such provision is superseded by
this Paragraph 1(c). In addition, if Seller acquires the Remaining New Guyer
Leases in a timely manner as provided in Paragraph 1(b), then concurrently with
the execution and delivery by Seller to Buyer of the conveyance of the Remaining
New Guyer Leases pursuant to Paragraph 1(b), Buyer shall execute and deliver to
Seller, in sufficient numbers of counterparts to facilitate recording in all
relevant jurisdictions, an Assignment, Xxxx of Sale, and Conveyance
substantially in the form of Exhibit C, covering all of Buyer's interests in and
to the Tranche 3 Assets identified in Schedule 2.2(d) of the Amended Purchase
Agreement as "Xxxxx East 1 V" and "Xxxxxxxxx 1 V" (collectively, the "Held Back
Assets"), which were also conveyed by Seller to Buyer at the Closing that
occurred on October 6, 2006. The Held Back Assets are described more
particularly in Section 4 of Exhibit A. Such conveyance of the Held Back Assets
shall be effective as of the Revised Effective Time. Notwithstanding the
foregoing, if Seller fails for any reason to acquire all of the Remaining New
Guyer Leases on or before June 1, 2007, as provided in Paragraph 1(b), then
unless the Parties otherwise agree, Buyer shall retain title to the Held Back
Assets, and Buyer shall have no further obligation to Seller, and Seller shall
have no further rights, under this Agreement or otherwise with respect to the
Held Back Assets.
(d) Concurrently with the execution of this Agreement, Seller has
executed and delivered to Buyer a Surface Use Agreement substantially in the
form attached hereto as Exhibit D, pursuant to which Seller has granted to
Buyer, subject to and in accordance with terms of such Surface Use Agreement,
the perpetual right to use the surface well pad site located on the Reconveyed
Asset identified in Section 3 of Exhibit A as the "Xxxxxx-Xxxxxx" in connection
with drilling operations on the Tranche 2 Assets identified in Section 5 of
Exhibit A as the "UNT Leases." Such Surface Use Agreement is executed in lieu of
the Surface Use Agreement provided for in Section 6.3(c) of the Amended Purchase
Agreement, and such provision is superseded by this Paragraph 1(d). In addition,
if Buyer conveys to Seller the Held Back Assets in accordance with Paragraph
1(c), then concurrently with the execution and delivery of such conveyance by
Buyer to Seller, Seller shall execute and deliver to Buyer a Surface Use
Agreement also substantially in the form of Exhibit D, pursuant to which Seller
will grant to Buyer, subject to and in accordance with the terms of such Surface
Use Agreement, the perpetual right to use the surface well pad site located on
the Held Back Asset identified in Section 4 of Exhibit A as "Xxxxxx-Xxxxx East"
in connection with drilling operations on the UNT Leases.
(e) Concurrently with the execution of this Agreement, Seller and
Buyer have executed and delivered each to the other, in sufficient numbers of
counterparts to facilitate recording in all relevant jurisdictions, a Memorandum
of Termination of Area of Mutual Interest substantially in the form attached
hereto as Exhibit E, pursuant to which Seller and Buyer have terminated the
Restated AMI Agreement and the area of mutual interest created thereby.
2. Unpaid Obligations. Seller and Buyer stipulate and agree that Schedule
1 is a list of all amounts due and owing by Seller to Buyer as of the date of
this Agreement pursuant to the Amended Purchase Agreement and joint interest
xxxxxxxx delivered prior to the date hereof to Seller by Buyer, or its
Affiliate, acting in its capacity as operator under the terms of the joint
operating agreements in effect with respect to those Assets also identified on
Schedule 1, net of all production revenues attributable to the interests of
Seller in such Assets received by Buyer, or its Affiliate, prior to, and that
had not been distributed to Seller as of, the date of this Agreement (the
"Unpaid Obligations"). Buyer hereby releases, remises, acquits, and forever
discharges Seller from the obligation to pay, and waives and relinquishes to
Seller any Claim that Buyer may have against Seller under the terms of the
Amended Purchase Agreement, the applicable joint operating agreements, or
otherwise with respect to, the Unpaid Obligations. In consideration of such
release, discharge, and waiver by Buyer, Seller has, concurrently with the
execution of this Agreement, executed and delivered to Buyer, in sufficient
numbers of counterparts to facilitate recording in all relevant jurisdictions,
an Assignment, Xxxx of Sale, and Conveyance substantially in the form attached
hereto as Exhibit F, pursuant to which Seller has conveyed to Buyer all Retained
Interests excepted and reserved by Seller in the Conveyances executed and
delivered by Seller to Buyer at the Closings referred to in Sections 2.2(b),
2.2(c), and 2.2(d) of the Amended Purchase Agreement (the "Transferred Retained
Interests"). Such conveyance of the Transferred Retained Interests has been made
effective as of the Revised Effective Time. Such conveyance is executed in lieu
of the exercise by Seller or Buyer of the Retained Interests Option under
Section 8.4 of the Amended Purchase Agreement, and the Amended Purchase
Agreement is hereby amended to delete such provision in its entirety.
3. Additional Concurrent Acts.
(a) Concurrently with the execution of this Agreement, and
notwithstanding any provision of the Amended Purchase Agreement to the contrary,
Seller and Buyer have taken the following additional actions, and granted the
following additional waivers, each in connection with the Final Closing,
restructured as provided herein:
(i) Seller has delivered to Buyer (A) releases of all Liens
(if any) encumbering the Transferred New Guyer Leases and the
Transferred Retained Interests that do not constitute Permitted
Encumbrances, (B) to the extent necessary, transfer orders or
letters in lieu thereof, on forms provided by Buyer, directing all
purchasers of production to make payment to Buyer of proceeds
attributable to Hydrocarbons produced from the Transferred New Guyer
Leases and the Transferred Retained Interests after the Revised
Effective Time, (C) all consents, waivers, and other similar matters
pertaining to the Transferred New Guyer Leases and the Transferred
Retained Interests obtained by Seller prior to the execution of this
Agreement, (D) counterparts of Railroad Commission of Texas Form P-4
for each Well located on the Transferred New Guyer Leases and the
Transferred Retained Interests as to which a change of operator will
occur as the result of the transactions contemplated in this
Agreement, and (E) all undisbursed revenues relating to the
Transferred New Guyer Leases (if any) that Seller is required to
deliver to Buyer under Section 8.3 of the Amended Purchase
Agreement.
(ii) Buyer has delivered to Seller (A) releases of all Liens
(if any) encumbering the Reconveyed Assets that do not constitute
Permitted Encumbrances, (B) transfer orders or letters in lieu
thereof, on forms provided by Seller, directing all purchasers of
production to make payment to Seller of proceeds attributable to
Hydrocarbons produced from the Reconveyed Assets after the Revised
Effective Time, (C) all consents, waivers, and other similar matters
pertaining to the Reconveyed Assets obtained by Buyer prior to the
execution of this Agreement, (D) counterparts of Railroad Commission
of Texas Form P-4 for each Well located on the Reconveyed Assets as
to which a change of operator will occur as the result of the
transactions contemplated in this Agreement, and (E) all undisbursed
revenues relating to the Reconveyed Assets that Buyer would
otherwise be required to deliver to Seller under Section 8.3 of the
Amended Purchase Agreement, if such provision were included in this
Agreement.
(iii) Seller has delivered to Buyer the certificate provided
for in Section 6.2(e) of the Amended Purchase Agreement in
connection with the conveyance of the Transferred New Guyer Leases
contemplated herein.
(iv) Buyer has delivered to Seller the certificate provided
for in Section 6.1(e) of the Amended Purchase Agreement in
connection with the conveyance of the Transferred New Guyer Leases
contemplated herein.
(v) In connection with the conveyance to Buyer of the
Transferred New Guyer Leases and the Transferred Retained Interests,
Seller has delivered to Buyer a statement that satisfies the
requirements of Treas. Reg. ss.1.1445-2(b)(2), certifying that
Seller is not a "foreign" Person for federal income tax purposes.
(vi) In connection with the conveyance to Seller of the
Reconveyed Assets, Buyer has delivered to Seller a statement that
satisfies the requirements of Treas. Reg. ss.1.1445-2(b)(2),
certifying that Buyer is not a "foreign" Person for federal income
tax purposes.
(vii) Seller and Buyer have executed and delivered
Ratifications and Amendments of Operating Agreements that (A) add
the Transferred New Guyer Leases to the joint operating agreement
for the Xxxxx Leases, (B) amend the joint operating agreements
covering the Reconveyed Assets to eliminate Dune as a party thereto,
and (C) amend the joint operating agreements covering the
Transferred Retained Interests to eliminate Seller as a party
thereto.
(viii) Seller and Buyer have executed such other documents and
taken such other actions as are provided for elsewhere in this
Agreement or as may be necessary to consummate the transactions
contemplated herein.
(b) Seller hereby waives the obligation of Buyer to deliver opinions
of counsel set forth in Sections 6.1(f) and 7.3(g) of the Amended Purchase
Agreement.
(c) Buyer hereby waives the obligation of Seller to deliver an
opinion of counsel set forth in Sections 6.2(f) and 7.3(f) of the Amended
Purchase Agreement.
(d) At the time of Seller's conveyance of the Remaining New Guyer
Leases to Buyer and Buyer's conveyance of the Held Back Assets as contemplated
in, respectively, Paragraphs 1(b) and 1(c), Seller and Buyer shall take the
actions required to be taken by the Parties in Paragraph 3(a), and grant the
waivers provided for in Paragraphs 3(b) and (3)(c), in connection with such
conveyances.
(e) Notwithstanding any provision of the Amended Purchase Agreement
to the contrary, neither Party shall be obligated, under the Amended Purchase
Agreement or otherwise, to pay to the other Party any cash consideration in
connection with any of the transactions contemplated in this Agreement. Seller
and Buyer hereby waive, therefore, the requirements of Section 7.2 of the
Amended Purchase Agreement regarding the preparation and execution of a
Preliminary Settlement Statement in connection with the Final Closing, as
restructured pursuant hereto.
4. Final Transferred Tranche 2 Assets. The conveyances of the Final
Transferred Tranche 2 Assets pursuant to Paragraph 1(b) are expressly made
subject to and in accordance with the terms of the Amended Purchase Agreement,
except to the extent such provisions are inconsistent with the terms of this
Agreement, in which case the terms of this Agreement shall govern and control.
5. Reconveyed Assets. Notwithstanding any provision of the Amended
Purchase Agreement to the contrary, and subject exclusively to the terms of this
Agreement and the Assignment, Xxxx of Sale, and Conveyance attached hereto as
Exhibit C:
(a) Except for those Assumed Liabilities for which Buyer will remain
responsible as set forth below in Paragraph 5(b), Seller assumes and agrees to
pay, perform, and discharge all Assumed Liabilities defined in Section 2.5 of
the Amended Purchase Agreement with respect to the Reconveyed Assets and, if
reconveyed pursuant to Paragraph 1(c), the Held Back Assets, effective for the
period from and after, as applicable, (i) the Revised Effective Time, in the
case of those Assumed Liabilities assumed by Buyer under such Section 2.5 as of
the Effective Time, or (ii) the date of this Agreement or the date of the
reconveyance of the Held Back Assets, as applicable, in the case of those
Assumed Liabilities assumed by Buyer under such Section 2.5 as of the Possession
Time. Nothing contained in this Agreement shall alter or affect Seller's
retention of the Retained Liabilities pertaining to the Reconveyed Assets and
the Held Back Assets pursuant to Section 2.6 of the Amended Purchase Agreement.
(b) Buyer expressly retains and agrees to pay, perform, and
discharge the Assumed Liabilities assumed by Buyer under Section 2.5 of the
Amended Purchase Agreement accruing or resulting from, arising out of, or
otherwise associated with the Reconveyed Assets and, if reconveyed pursuant to
Paragraph 1(c), the Held Back Assets for the periods, as applicable, (i) from
and after the Effective Time through the Revised Effective Time, in the case of
those Assumed Liabilities assumed by Buyer under such Section 2.5 as of the
Effective Time, or (ii) from and after the Possession Time and prior to the date
of this Agreement or the date of the reconveyance of the Held Back Assets, as
applicable, in the case of those Assumed Liabilities assumed by Buyer under such
Section 2.5 as of the Possession Time.
(c) Buyer shall assume responsibility for, and shall bear and pay,
all Transfer Taxes incurred or imposed with respect to the transfer of the
Reconveyed Assets and, if reconveyed pursuant to Paragraph 1(c), the Held Back
Assets. Buyer shall assume responsibility for, and shall bear and pay, all
Property-Related Taxes (including any applicable penalties and interest) based
upon or measured by the ownership of the Reconveyed Assets and, if reconveyed
pursuant to Paragraph 1(c), the Held Back Assets or the receipt of proceeds
therefrom, but exclusive of income taxes, and assessed against the Reconveyed
Assets and the Held Back Assets by any taxing authority for the period from and
after the Effective Time and prior to the Revised Effective Time. Seller shall
be responsible for, and shall bear and pay, all such Property-Related Taxes
assessed against the Reconveyed Assets and, if reconveyed pursuant to Paragraph
1(c), the Held Back Assets by any taxing authority for any period that begins on
or after the Revised Effective Time. For purposes of this Agreement, the
foregoing prorations of Property-Related Taxes, in the case of ad valorem and
other property taxes, shall be based upon the ad valorem and other property
taxes actually assessed against the Reconveyed Assets and the Held Back Assets
for 2006.
(d) As of the date of this Agreement or the date of the reconveyance
of the Held Back Assets, as applicable, Buyer shall deliver to Seller exclusive
possession and control of the Reconveyed Assets and the Held Back Assets. Buyer
agrees to cooperate with Seller to facilitate the transition of the ownership
and (if applicable) operation of the Reconveyed Assets and the Held Back Assets
to Seller. As between Seller and Buyer, and subject to the terms of this
Paragraph 5, Buyer has assumed and borne all risk of loss associated with the
Reconveyed Assets and, if reconveyed pursuant to Paragraph 1(c), the Held Back
Assets during the period from and after the Possession Time and prior to the
date of this Agreement or the date of the reconveyance of the Held Back Assets,
as applicable, and Seller shall assume and bear all risk of loss associated with
the Reconveyed Assets, and if reconveyed pursuant to Paragraph 1(c), the Held
Back Assets from and after the date of this Agreement or the date of such
reconveyance, as applicable.
(e) Buyer's conveyances to Seller of the Reconveyed Assets and the
Held Back Assets are made without representation or warranty of any kind, except
as set forth in this Agreement and in the form of Assignment, Xxxx of Sale, and
Conveyance attached hereto as Exhibit C.
(f) Seller and Buyer understand and agree that, as of the date of
this Agreement, the Xxxxxx No. 1 Well, located on the Reconveyed Asset
identified in Section 3 of Exhibit A as the "Xxxxxx-Xxxxxx", has been drilled to
its total depth and is awaiting completion. Buyer shall have no obligation in
favor of Seller to perform any further operations in, or pay any costs and
expenses incurred after the Revised Effective Time in connection with, the
Xxxxxx No. 1 Well, and Seller accepts the Xxxxxx No. 1 Well and the Reconveyed
Asset on which it is located in its current condition, "AS IS, WHERE IS, AND
WITH ALL FAULTS."
(g) As the result of the conveyance by Buyer to Seller of the
Reconveyed Assets and the Held Back Assets pursuant hereto, the terms of Section
8.5 of the Amended Purchase Agreement are no longer applicable, and the Amended
Purchase Agreement is hereby amended to delete such provision in its entirety.
(h) If Buyer does not convey the Held Back Assets to Seller as
provided in Paragraph 1(c), Buyer will expressly retain and continue to pay,
perform, and discharge the Assumed Liabilities assumed by Buyer under Section
2.5 of the Amended Purchase Agreement with respect to the Held Back Assets
subject to and in accordance with the terms thereof.
6. Transferred Retained Interests. Notwithstanding any provision of the
Amended Purchase Agreement to the contrary, and subject exclusively to the terms
of this Agreement and the Assignment, Xxxx of Sale, and Conveyance attached
hereto as Exhibit F:
(a) Except for the Retained Liabilities for which Seller will remain
responsible as set forth below in Paragraph 6(b), Buyer assumes and agrees to
pay, perform, and discharge all Assumed Liabilities defined in Section 2.5 of
the Amended Purchase Agreement with respect to the Transferred Retained
Interests, effective for the period from and after, as applicable, (i) the
Revised Effective Time, in the case of those Assumed Liabilities measured under
such Section 2.5 as of the Effective Time, or (ii) the date of this Agreement,
in the case of those Assumed Liabilities measured under such Section 2.5 as of
the Possession Time.
(b) Seller expressly retains and agrees to pay, perform, and
discharge the Retained Liabilities defined in Section 2.6 of the Amended
Purchase Agreement with respect to the Transferred Retained Interests for the
periods prior to, as applicable, (i) the Revised Effective Time, in the case of
those Retained Liabilities retained by Seller under such Section 2.6 for periods
prior to the Effective Time, or (ii) the date of this Agreement, in the case of
those Retained Liabilities retained by Seller under such Section 2.6 for periods
prior to the Possession Time.
(c) Seller shall assume responsibility for, and shall bear and pay,
all Transfer Taxes incurred or imposed with respect to the transfer of the
Transferred Retained Interests. Seller shall assume responsibility for, and
shall bear and pay, all Property-Related Taxes (including any applicable
penalties and interest) based upon or measured by the ownership of the
Transferred Retained Interests or the receipt of proceeds therefrom, but
exclusive of income taxes, and assessed against the Transferred Retained
Interests by any taxing authority for the period prior to the Revised Effective
Time. Buyer shall be responsible for, and shall bear and pay, all such
Property-Related Taxes assessed against the Transferred Retained Interests by
any taxing authority for any period that begins on or after the Revised
Effective Time. For purposes of this Agreement, the foregoing prorations, in the
case of ad valorem and other property taxes, shall be based upon the ad valorem
and other property taxes actually assessed against the Transferred Retained
Interests for 2006.
(d) As of the date of this Agreement, Seller shall deliver to Buyer
exclusive possession and control of the Transferred Retained Interests. Seller
agrees to cooperate with Buyer to facilitate the transition of the ownership of
the Transferred Retained Interests to Buyer. As between Seller and Buyer, and
subject to the terms of this Paragraph 6, Seller shall assume and bear all risk
of loss associated with the Transferred Retained Interests prior to the date of
this Agreement, and Buyer shall assume and bear all risk of loss associated with
the Transferred Retained Interests from and after the date of this Agreement.
(e) Seller's conveyances to Buyer of the Transferred Retained
Interests are made without representation or warranty of any kind, except as
otherwise set forth in this Agreement and in the form of Assignment, Xxxx of
Sale, and Conveyance attached hereto as Exhibit F.
7. Accounting Matters. Notwithstanding any provision of the Amended
Purchase Agreement to the contrary, on or before ninety (90) days after the date
of this Agreement (or, in the case of the Remaining New Guyer Leases and the
Held Back Assets, ninety (90) days after the date of the conveyances relating
thereto), Buyer will prepare a final accounting statement, subject to
verification by Seller, which sets forth the final calculation and proration
among Seller and Buyer of production revenues, costs and expenses,
Property-Related Taxes, and other amounts relating in each case to,
respectively, the Final Transferred Tranche 2 Assets, the Reconveyed Assets, the
Held Back Assets, and the Transferred Retained Interests required under the
terms of this Agreement and the Assignments, Bills of Sale, and Conveyances
executed in connection herewith (the "Final Settlement Statement"). No later
than fifteen (15) days after Seller's receipt of each Final Settlement Statement
from Buyer, Seller shall deliver to Buyer written notice setting forth any
changes to such Final Settlement Statement proposed by Seller. On or before
fifteen (15) days after Buyer's receipt of Seller's proposed changes to such
Final Settlement Statement, Buyer and Seller shall agree on the relevant Final
Settlement Statement and, as the case may be, shall pay to the other such sums
as may be found to be due in the final accounting. All amounts paid pursuant to
this Paragraph 7 shall be delivered by wire transfer of immediately available
U.S. funds to the account specified in writing by the relevant Party. If Buyer
and Seller are unable to agree on a Final Settlement Statement on or before
fifteen (15) days after Buyer's receipt of Seller's proposed changes thereto,
then Buyer and Seller shall submit all unresolved claims and amounts for
arbitration in accordance with the terms of Section 10.11 of the Amended
Purchase Agreement.
8. Further Cooperation. After the date of this Agreement, Buyer and Seller
shall execute and deliver, or shall cause to be executed and delivered from time
to time, such further instruments of conveyance and transfer, and shall take
such other actions as either Party may reasonably request, to carry out the
transactions contemplated in this Agreement. If, after the date of this
Agreement, either Party receives monies belonging to the other, such amounts
shall be promptly disbursed to the Party entitled to receive them. If an invoice
or other evidence of an obligation is received by a Party, which is either an
obligation assumed by the other Party or partially an obligation of both Seller
and Buyer, the Parties shall consult with each other, and an adjustment for such
amount will be made either on the relevant Final Settlement Statement, or, if
the evidence of the obligation is not received until after the completion of the
applicable final accounting pursuant to Paragraph 7, in cash as the Parties may
agree. If Seller and Buyer are unable to agree on the disposition of such an
obligation, Seller and Buyer shall submit the matter to binding arbitration in
accordance with the terms of Section 10.11 of the Amended Purchase Agreement.
9. Performance of the Amended Purchase Agreement. Seller and Buyer
stipulate and agree that the performance by each Party of its obligations under
this Agreement with respect to the Final Closing, restructured as provided
herein, shall constitute full and complete performance by such Party under the
Amended Purchase Agreement in connection with the Final Closing, and neither
Party shall be subject to any Claim or Liability in favor of the other Party
related to the breach of the Amended Purchase Agreement in connection with the
Final Closing if the first Party has performed all of its obligations hereunder.
10. Ratification. Seller and Buyer do hereby ADOPT, RATIFY, and CONFIRM
the Amended Purchase Agreement and all of its terms and provisions, as amended,
supplemented, and/or superseded hereby, and declare the Amended Purchase
Agreement, as so amended, supplemented, and/or superseded, to be in full force
and effect.
11. Representations and Warranties. In connection with all of the
transactions contemplated herein except for the conveyances by Seller to Buyer
of the Final Transferred Tranche 2 Assets (which are subject to the terms of the
Amended Purchase Agreement, as amended hereby), Seller hereby represents and
warrants to Buyer, and Buyer hereby represents and warrants to Seller, as
follows, in each case as of the date of this Agreement: (a) such Party is duly
organized, validly existing, and in good standing under the Laws of the
jurisdiction of its formation and is duly qualified to conduct business and is
in good standing in the State of Texas; (b) the execution, delivery, and
performance of this Agreement and the other documents executed in connection
herewith are within its powers, have been duly authorized by all necessary
action, and do not violate any of the terms or conditions of its governing
documents, any contract to which it is a party, or any applicable Law; (c) this
Agreement and the other documents executed in connection herewith constitute the
legal, valid, and binding obligations of such Party, enforceable against it in
accordance with their respective terms, subject to the effects of bankruptcy,
insolvency, reorganization, moratorium, and similar Laws, as well as to
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); (d) there are no bankruptcy, insolvency,
reorganization, receivership, or other similar proceedings pending or being
contemplated by such Party or, to its knowledge, threatened against it; and (e)
there are no suits, proceedings, judgments, rulings, or orders by or before any
court or other Governmental Authority that could materially adversely affect the
ability of such Party to perform this Agreement or the other documents executed
in connection therewith.
12. Survival. All representations, warranties, covenants, agreements, and
indemnities of Buyer and Seller under this Agreement shall survive each Closing
and the delivery of each document executed in connection herewith, shall not be
merged with or into any document executed in connection herewith, and shall
remain in force and effect as provided in this Paragraph 12, regardless of any
investigation at any time made by or on behalf of Buyer or Seller, or of any
information that Buyer or Seller may have with respect thereto. Such survival
does not obligate any Party to make any further representation or warranty after
the date of this Agreement, or to cause any representation or warranty made
hereunder to remain true and correct after the date of this Agreement.
13. Indemnities.
(a) The indemnity provided by each Party to the other under this
Paragraph 13 shall constitute the sole and exclusive remedy for such Party and
its Indemnity Group after the date of this Agreement with respect to (i) the
inaccuracy or breach of any representation or warranty made by the other Party
hereunder, and (iii) a breach or default in the performance by such other Party
of any covenant or agreement of such other Party contained in this Agreement.
Except as otherwise provided in this Paragraph 13, each Party hereby waives any
Claim arising under common law, any statute, or otherwise against the other
Party arising from or out of the inaccuracy or breach of any representation or
warranty made by the other Party hereunder or the breach or default in the
performance by such other Party of any covenant or agreement of such other Party
contained in this Agreement.
(b) Regardless of any investigation made at any time by or on behalf
of any Party or any information any Party may have, and regardless of the
presence or absence of insurance, Buyer shall indemnify and hold harmless Seller
and its Indemnity Group from and against any and all Claims and Liabilities
caused by, arising out of, resulting from, or relating in any way to, and to pay
to Seller or its Indemnity Group any sum that Seller or its Indemnity Group
pays, or becomes obligated to pay, on account of: (i) any breach or default in
the performance by Buyer of any covenant or agreement of Buyer contained in this
Agreement or any document executed in connection herewith; (ii) any breach of a
warranty or an inaccurate or erroneous representation made by Buyer in this
Agreement; (iii) all taxes for which Buyer has agreed to be responsible under
the terms of this Agreement; (iv) all Claims of Buyer (if any) released,
discharged, and waived by Buyer pursuant to Paragraph 1(a); (v) all Claims of
Buyer with respect to the Unpaid Obligations released, discharged, and waived by
Buyer pursuant to Paragraph 2; (vi) all Assumed Liabilities for which Buyer will
remain responsible as set forth in Paragraph 5(b); and (vii) all Assumed
Liabilities assumed by Buyer pursuant to Paragraph 6(a).
(c) Regardless of any investigation made at any time by or on behalf
of any Party or any information any Party may have, and regardless of the
presence or absence of insurance, Seller shall indemnify and hold harmless Buyer
and its Indemnity Group from and against any and all Claims and Liabilities
caused by, arising out of, resulting from, or relating in any way to, and to pay
Buyer or its Indemnity Group any sum that Buyer or its Indemnity Group pays or
becomes obligated to pay, on account of: (i) any breach or default in the
performance by any Seller of any covenant or agreement of Seller contained in
this Agreement or any document executed in connection herewith; (ii) any breach
of a warranty or an inaccurate or erroneous representation made by any Seller in
this Agreement; (iii) all taxes for which Seller has agreed to be responsible
under the terms of this Agreement; (iv) all Claims of Seller released,
discharged, and waived by Seller pursuant to Paragraph 1(a); (v) all Assumed
Liabilities assumed by Seller pursuant to Paragraph 5(a); and (vi) all Retained
Liabilities for which Seller will remain responsible as set forth in Paragraph
6(b).
(d) The terms of Section 9.5 (captioned "Limitation on
Indemnities"), Section 9.6 (captioned "Assertion of Claims"), and Section 9.7
(captioned "Limitation on Damages") of the Amended Purchase Agreement are
incorporated herein by this reference and made applicable to the indemnities of
the Parties under this Paragraph 13 for all purposes.
14. Publicity. Seller and Buyer have consulted each other with regard to,
and provided each other with the opportunity to review, all press releases or
other public or private announcements issued or made at or after the date hereof
concerning this Agreement or the transactions contemplated herein.
15. Notices. All notices and communications required or permitted to be
given hereunder shall be in writing and shall be delivered personally, or sent
by bonded overnight courier, or by telex or facsimile transmission (provided any
such telegram, telex, or facsimile transmission is confirmed either orally or by
written confirmation), addressed to the appropriate Party at the address for
such Party shown below or at such other address as such Party shall have
theretofore designated by written notice delivered to the Party giving such
notice:
If to Buyer: If to Seller:
------------ -------------
Dune Energy, Inc. Voyager Partners, Ltd.
0000 Xxxx Xxx Xxxxxxxxx The Mondrian
Suite 695 0000 Xxxxxxxxx Xx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Attention: Dr. Xxxxx Xxxxx Attention: Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Any notice given in accordance herewith shall be deemed to have been given on
the Business Day when delivered to the addressee in person or by telex,
facsimile, or bonded overnight courier; provided, however, that if any such
notice is received after normal business hours, the notice will be deemed to
have been given on the next succeeding Business Day. Any Party may change the
address, telephone number, and facsimile number to which such communications to
such Party are to be addressed by giving written notice to the other Party in
the manner provided in this Section 10.5.
16. ENTIRE AGREEMENT. THIS AGREEMENT, THE DOCUMENTS EXECUTED IN CONNECTION
HEREWITH, AND, TO THE EXTENT PROVIDED HEREIN, THE AMENDED PURCHASE AGREEMENT,
CONSTITUTE THE ENTIRE AGREEMENT AMONG THE PARTIES HERETO PERTAINING TO THE FINAL
CLOSING AND THE OTHER SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS,
UNDERSTANDINGS, NEGOTIATIONS, AND DISCUSSIONS, WHETHER ORAL OR WRITTEN, OF THE
PARTIES PERTAINING THERETO. THERE ARE NO WARRANTIES, REPRESENTATIONS, OR OTHER
AGREEMENTS BETWEEN THE PARTIES RELATING TO THE FINAL CLOSING AND THE OTHER
SUBJECT MATTER HEREOF EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, AND, TO THE EXTENT PROVIDED HEREIN, THE AMENDED
PURCHASE AGREEMENT, AND NO PARTY SHALL BE BOUND BY OR LIABLE FOR ANY ALLEGED
REPRESENTATION, PROMISE, INDUCEMENT, OR STATEMENT OF INTENTION NOT SO SET FORTH.
IN THE EVENT OF A CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND THE TERMS OF
THE AMENDED PURCHASE AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL GOVERN AND
CONTROL.
17. Incorporation of Provisions. In addition to other terms of the Amended
Purchase Agreement specifically incorporated into this Agreement elsewhere
herein, the following terms of the Amended Purchase Agreement are incorporated
herein by this reference for all purposes: Section 10.2 (captioned "Expenses"),
Section 10.4 (captioned "Assignment"), Section 10.7 (captioned "Amendment"),
Section 10.8 (captioned "Waiver, Rights Cumulative"), Section 10.9 (captioned
"Governing Law"), Section 10.10 (captioned "Severability"); and Section 10.11
(captioned "Arbitration").
18. REVIEW OF AGREEMENT. THIS AGREEMENT WAS REVIEWED BY EACH OF THE
PARTIES, AND EACH PARTY ACKNOWLEDGES AND AGREES THAT SUCH PARTY UNDERSTANDS
FULLY ALL OF THE TERMS OF THIS AGREEMENT AND THE CONSEQUENCES AND IMPLICATIONS
OF ITS EXECUTION AND HAS BEEN AFFORDED AN OPPORTUNITY TO HAVE THIS AGREEMENT
REVIEWED BY AN ATTORNEY AND SUCH OTHER PERSONS OR ENTITIES AS DESIRED AND TO
DISCUSS THE TERMS, CONSEQUENCES, AND IMPLICATIONS OF THIS AGREEMENT WITH SUCH
ATTORNEY AND OTHER PERSONS OR ENTITIES.
19. References. References in this Agreement to articles, sections,
exhibits, or schedules are to articles, sections, exhibits, or schedules of this
Agreement unless otherwise specified.
20. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all of such counterparts shall constitute for all purposes one
agreement. This Agreement may be executed by the Parties in different locations
and shall become binding upon both Parties upon the exchange by the Parties of
executed signature pages by facsimile. In the event of such a facsimile
execution, the Parties shall execute and deliver each to the other a fully
executed original counterpart of this Agreement within thirty (30) days after
such facsimile execution hereof; provided, however, that the failure of the
Parties to execute such an original counterpart of this Agreement shall not
affect or impair the binding character or enforceability of this Agreement.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as
of the date first above written, to be effective as provided herein.
SELLER:
VOYAGER PARTNERS, LTD.
By: Trek Management, LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxx
---------------------------
Xxxxxxx Xxxxx
Manager
SIGNATURE PAGE FOR DUNE ENERGY, INC., TO
FINAL CLOSING AGREEMENT
DATED AS OF FEBRUARY 22, 2007, BETWEEN
VOYAGER PARTNERS, LTD., AND
DUNE ENERGY, INC.
BUYER:
DUNE ENERGY, INC.
By: /s/ Dr. Xxxxx Xxxxx
---------------------------
Dr. Xxxxx Xxxxx
President
INDEX TO OMITTED SCHEDULES AND EXHIBITS TO FINAL CLOSING AGREEMENT
SCHEDULES
Schedule 1 - Unpaid Obligations
EXHIBITS
Exhibit A - Released Tranche 2/3 Assets; Final Transferred
Tranche 2 Assets; Reconveyed Assets; UNT Leases
Exhibit B - Form of Assignment, Xxxx of Sale, and
Conveyance - Final Transferred Tranche 2 Assets
Exhibit C - Form of Assignment, Xxxx of Sale, and
Conveyance - Reconveyed Assets
Exhibit D - Form of Surface Use Agreement
Exhibit E - Form of Memorandum of Termination of
Area of Mutual Interest
Exhibit F - Form of Assignment, Xxxx of Sale, and
Conveyance - Transferred Retained Interests