PURCHASE AND SALE AGREEMENT
BETWEEN
EAST RESOURCES, INC.
AND
ENERGY CORPORATION OF AMERICA
DATED
AUGUST 2, 2002
TABLE OF CONTENTS
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PARAGRAPH # PAGE #
1.. . . . . Property or Properties 1
2.. . . . . Sale and Purchase 3
3.. . . . . Sale Price 3
4.. . . . . Xxxxxxx Money 3
5.. . . . . Allocated Values 4
6.. . . . . Seller's Representations 4
7.. . . . . Buyer's Representation 4
8.. . . . . Covenants Concerning Access to Records 5
9.. . . . . Title Defects 6
10. . . . . Notice of Title Defects 6
11. . . . . Preferential Rights 7
12. . . . . Physical and Environmental Inspection 7
13. . . . . Sale Price Adjustments 8
14. . . . . Effect of Termination 8
15. . . . . Gas Utility Requirements 9
16. . . . . Warranty of Title 10
17. . . . . Conditions of Closing by Buyer 10
18. . . . . Conditions of Closing by Seller 11
19. . . . . Preliminary Closing Statement 11
20. . . . . Closing 12
21. . . . . Reservations and Exceptions 13
22. . . . . Assumption of Liabilities and Indemnities 13
23. . . . . Taxes 17
24. . . . . Accounting 18
25. . . . . Sales Tax 18
26. . . . . Post-Closing Adjustments 18
27. . . . . Notices 19
28. . . . . Further Assurances 19
29. . . . . Disclaimer of Warranties 20
30. . . . . Operations by Seller 21
31. . . . . Securities Laws 22
32. . . . . Due Diligence 22
33. . . . . Material Factor 22
34. . . . . Entire Agreement 22
35. . . . . Tax Reporting 23
36. . . . . Assignability 23
37. . . . . Survival 23
38. . . . . Choice of Law 23
39. . . . . Counterpart Execution 23
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of August 2, 2002,
but effective as July 1, 2002, is entered into by and between East Resources,
Inc., a Pennsylvania Corporation, with offices at 00000 Xxxxx Xxxxxxx, Xxxxx
000, X.X. Xxx 000 Xxxxxxx, Xx 00000, (hereinafter referred to as "Seller"), and
Energy Corporation of America, a West Virginia corporation, with offices at 000
00xx Xxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000 (hereinafter referred to as
"Buyer").
WHEREAS Seller and Buyer entered into a Letter Agreement dated April 5,
2002, whereby Seller agreed to sell unto Buyer, subject to the terms and
conditions of this Agreement, all of Seller's right, title and interest in and
to certain oil and gas properties in the Xxxxxx-Xxxxxxx Field ("Field") as more
fully described in this Agreement.
THEREFORE, in consideration of the covenants and agreements herein
contained, Seller and Buyer agree as follows:
1. "PROPERTY" OR "PROPERTIES" means Seller's ownership rights in the
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Properties (real, personal or mixed) and appurtenant rights (contractual or
otherwise) included in the Field and set out below:
(a) All of Seller's right, title and interests in, to and under, or derived
from, the oil and gas leasehold interests, royalty interests, overriding royalty
interests, mineral interests, production payments, net profits interests, rights
to take royalties in-kind, fee interests (including, but not limited to fee oil
and gas and fee mineral interests) and surface interests or other interests in
production of oil, gas or other minerals which are associated with the
Properties described in Exhibit "A" which is attached hereto;
(b) All of Seller's right, title and interests in, to and under, or derived
from, all of the presently existing and valid unitization, communitization and
pooling declarations, orders, and agreements (including all units formed by
voluntary agreement and those formed under the rules, regulations, orders or
other official acts of any governmental entity or tribal authority having
appropriate jurisdiction) to the extent they relate to any of the Properties
which are described in Exhibit "A", or the production of oil, gas or hydrocarbon
and non-hydrocarbon substances attributable thereto;
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(c) All of Seller's right, title and interests in, to and under, or derived
from, the xxxxx (whether producing, plugged and abandoned , shut-in, injection,
disposal or water supply), which xxxxx, save and except the plugged and
abandoned xxxxx, are described on attached Exhibit "A-1", all personal property,
equipment, fixtures and improvements, gathering lines and pipelines together
with the rights-of-way, easements, or other similar agreements thereto, which
pipelines are depicted on attached Exhibit "A-2", compressor sites, compressors,
meter stations tanks, roads and other appurtenances, to the extent the same are
used or held for use by Seller solely in connection with the ownership,
operation, maintenance or repair of the Properties which are described in
Exhibit "A", or the production of oil, gas or other hydrocarbon and
non-hydrocarbon substances attributable thereto;
(i) The northern most point of the gathering line to be conveyed Buyer
is the junction of Seller's line no. 951-08 and line no. 951-05, which is near
the Xxxxx/Lincoln County line.
(d) All of Seller's right, title and interests in, to and under, or derived
from, all of the presently existing and valid oil sales contracts, casinghead
gas sales contracts, gas sales contracts, gas purchase contracts, processing
contracts, gathering contracts, transportation contracts, Section 29 Tax Credits
relating to the Properties as of the Effective Time, as hereinafter defined,
surface leases, subsurface leases, permits or licenses of any nature owned, held
or operated in connection with operations, farm-out contracts, farm-in
contracts, balancing contracts (including, but not limited to, gas imbalances)
suspense funds, operating agreements, areas of mutual interest, and other
contracts, agreements and instruments (to the extent said contracts are
transferable) to the extent they relate to any of the Properties which are
described in Exhibit "A", or the production of oil, gas or other hydrocarbon and
non-hydrocarbon substances attributable thereto and said contracts are described
on attached Exhibit "A-3";
(e) All files, records, or data owned by or in the possession of Seller
or any affiliate of Seller and relating to or associated with the Properties and
operations described above, including, without limitation, all land, leases,
division and transfer orders, prospect and title files and records, production
records, accounting records, engineering records and data, logs, core data,
pressure data and other related matters, including, but not limited to, all
computer-generated disks, diskettes, and access codes and tapes.
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2. SALE AND PURCHASE. Subject to and upon all of the terms, conditions,
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reservations and exceptions hereinafter set forth, Seller shall sell, transfer,
assign, convey and deliver the Properties to Buyer, and Buyer shall purchase,
receive, pay for and accept the Properties from Seller, effective as of July 1,
2002 at 7:00 a.m. Eastern Daylight Savings Time, (the "Effective Time").
3. SALE PRICE. The sale price for the Properties shall be Six Million
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Dollars ($6,000,000) ("Sale Price"), subject only to any applicable price
adjustment as provided for hereinbelow.
4. XXXXXXX MONEY. Selle r acknowledges that, on April 25, 2002, Seller
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received from Buyer the sum of One Million Two Hundred Thousand Dollars
($1,200,000) by wire transfer into an interest bearing joint control account
established at Branch Banking and Trust Company, N.A. (the "Bank") styled "East
Resources/Energy Corp Account" that amount being equal to 20% of the Sale Price
( the "Deposit"). In the event the transaction contemplated hereby is
consummated in accordance with the terms hereof, the Deposit, including
interest, shall be applied to the Sale Price to be paid by Buyer at the Closing
(as defined in Paragraph 20 hereof). In the event this Agreement is terminated,
the Deposit, including interest, shall be returned to Buyer.
5. ALLOCATED VALUES. INTENTIONALLY DELETED
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6. SELLER'S REPRESENTATIONS. Seller represents and warrants to Buyer
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that as of the Closing Date (as hereinafter defined):
(a) Seller is a duly organized corporation validly existing and in good
standing under the laws of the State of Pennsylvania, is duly qualified to carry
on its business in the state in which the Properties are located, and has full
power and authority to enter into and perform pursuant to this Agreement
according to its terms and this Agreement has been duly executed and delivered
by Seller and constitutes a legal, valid and binding obligation on it,
enforceable against it in accordance with its terms; and
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(b) Seller's execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and will not with or without the giving of
notice or the lapse of time, or both, violate or conflict with any agreement,
law, rule, regulation, charter or other instrument governing either Seller's
organization, management, business affairs or instrument to which Seller is a
party or by which Seller is bound.
(c) Exhibit A-3 contains a list of all material contracts affecting the
Properties. Seller has received no notice of its default under any of such
contracts. Such contracts are in full force and effect and have not been
modified or amended subsequent to the date hereof. As of the Effective Time, the
Properties to be conveyed by Seller shall not be obligated by virtue of any
prepayment under any gas sales contract or oil contract which contains a "take
or pay" clause or any similar arrangement to deliver said oil and gas at some
future time without then and thereafter receiving full payment, therefore.
Seller warrants that at the Closing Date Buyer will be able to market the gas
attributable to Seller under terms and conditions no less favorable than those
under which Seller is marketing the gas as of the date hereof.
(d) Except as described on Exhibit A-4, no claim, demand, filing, cause of
action, administrative proceeding, lawsuit or other litigation is pending or, to
Seller's knowledge, threatened with respect to Seller or the Properties that
could now or hereafter materially adversely affect the ownership, operation or
value of the Properties.
(e) Seller has not incurred any liability, contingent or otherwise, for
brokers' or finders' fees in respect to this transaction for which Buyer shall
have any responsibility whatsoever.
(f) Seller has no knowledge, and has not received any notice from any
federal, state or municipal authority that the Properties or Seller's use
thereof in its business, are not in material compliance with all laws, rules,
regulations and permits relating to the Properties except for such
non-compliance and violations which, individually or in the aggregate, would not
have a material adverse effect on the ownership, operation or value of the
Properties. Seller will promptly notify Buyer upon receipt of any such notice.
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(g) To Seller's knowledge, Seller has complied in all material respects
with all environmental laws and with the terms of all permits, licenses, orders,
decrees and agreements there under. Except as set forth in Exhibit A-5, Seller
is not aware of, and has not received notice from any person or entity asserting
or alleging (i) any non-compliance with the environmental laws by Seller
relating to the operation and ownership of the Properties; (ii) any liability in
connection with the release, spill, discharge, storage, disposal or presence of
any pollutants, contaminations, chemicals, industrial, toxic or hazardous
substances or wastes, petroleum, petroleum products or wastes and natural gas
by-products, liquids or wastes (collectively, "Hazardous Materials"), including
but not limited to liability under the federal Comprehensive Environmental
Response, Compensation and Liability Act or similar state "Superfund" laws,
relating in any way to the Properties; or (iii) the release, discharge or
presence of any Hazardous Materials at, on, under or from any of the Properties
requiring cleanup or other remedial action pursuant to the environmental laws.
7. BUYER'S REPRESENTATIONS. Buyer represents and warrants to Seller that as
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of the Closing Date:
(a) Buyer is a duly organized corporation validly existing and in good
standing under the laws of West Virginia. Buyer is duly qualified to carry on
its business in the state in which the Properties are located, and has full
power and authority to enter into and perform pursuant to this Agreement
according to its terms and this Agreement has been duly executed and delivered
by Buyer and constitutes a legal, valid and binding obligation on it,
enforceable against it in accordance with its terms; and
(b) Buyer's execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and will not with or without the giving of
notice or the lapse of time, or both, conflict with or violate any agreement,
law, rule, regulation, ordinance, charter or other instrument governing either
Buyer's organization, management, business affairs or instrument to which Buyer
is a party or by which Buyer is bound; and
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(c) Buyer represents that by reason of its knowledge and experience in the
evaluation, acquisition and operation of oil and gas properties, Buyer has
evaluated the merits and risks of purchasing the Properties from Seller and has
formed an opinion based solely on Buyer's knowledge and experience. Buyer
represents that in entering into this Agreement, Buyer has relied solely on the
express representations, warranties and covenants of Seller in this Agreement,
Buyer's independent investigation of, and judgment with respect to, the
equipment and the other Properties and the advice of its own legal, tax,
economic, environmental, engineering, geological and geophysical advisors. Buyer
further represents that it has not relied and will not rely on any statements by
Seller in making its decision to enter into this Agreement or to close this
transaction.
(d) Buyer has not incurred any liability, contingent or otherwise, for
brokers' or finders' fees in respect to this transaction for which Seller shall
have any responsibility whatsoever.
8. COVENANTS CONCERNING ACCESS TO RECORDS. After execution of this
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Agreement, Seller shall give Buyer and its authorized representatives, during
regular regular business hours, at Buyer's sole risk, cost and expense, access,
with copying privileges, to all raw geological, geophysical, production,
engineering and other technical data and records, and to all contract, land,
title and lease records, to the extent such data and records are in Seller's
possession and relate to the Properties, and to such other information relating
to the Properties as Buyer may reasonably request; provided, however, Seller
shall have no obligation to provide Buyer such access to any data or information
which Seller considers proprietary or confidential or to which access Seller
cannot legally provide Buyer because of third-party restrictions on Seller.
Seller agrees to use its best efforts to obtain the consent of any such
third-party to furnish such information to Buyer. Buyer shall keep all materials
and data obtained confidential and shall return any and all materials and data
including Buyer's notes and work papers as to any Properties not purchased at
Closing.
9. TITLE DEFECTS. For the purpose of this Agreement, a "Title Defect" shall
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mean any material deficiency caused by Seller in one (or more) of the following
respects, to-wit:
(a) Seller's title at the Effective Time and at Closing, as to one or more
Properties, is subject to an outstanding mortgage, deed of trust, lien or
security interest;
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(b) Seller owns less than the net revenue interest shown on Exhibit "A-1"
or is obligated to bear a share of the costs of operation greater than the
working interest shown on Exhibit "A-1" without a corresponding increase in net
revenue interest;
(c) Seller's rights and interests have been or are subject to being reduced
by virtue of the exercise by a third party reversionary or back-in interest,
farmout of other than wellbore rights, or other similar right not reflected on
Exhibit "A-3"; or
(d) Seller is in default under some material provision of a lease, farmout
agreement, or other contract or agreement affecting the Properties.
The parties hereto shall reach an agreement as to all Title Defects no later
than ten (10) business days prior to Closing, otherwise Seller shall have the
unilateral right to terminate this Agreement in accordance with the provisions
of Paragraph 14(a) hereof, and the agreement shall be of no further force and
effect.
10. NOTICE OF TITLE DEFECTS.
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(a) Upon the discovery of a Title Defect by Buyer, Buyer shall immediately
notify Seller in writing of such Title Defect. Any such notice by Buyer shall
include appropriate evidence and documentation to substantiate its position and
shall be delivered to Seller. Within five (5) business days after Seller's
receipt of the title defects notice, Seller shall notify Buyer whether Seller
agrees with Buyer's claimed Title Defects and/or the proposed Defect Values
therefore ("Seller's Response"). The "Defect Value" shall mean the value by
which any Property subject to this Agreement is impaired or reduced as a result
of the existence of a Title Defect. If Seller does not agree with any claimed
Title Defect and/or the proposed Defect Value therefore, then the parties shall
enter into good faith negotiations and shall attempt to agree on such matters.
If the notice of Title Defect is given and the Seller does not agree with the
claimed Title Defect and/or the proposed Defect Value, the parties shall
mutually agree upon an appropriate independent consultant in the state to
resolve all points of disagreement relating to Title Defects and Defect Values.
If within ten (10) days after the notice of the Title Defect has been provided
by Buyer the parties have failed to mutually agree upon such appointment then
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each party shall retain such a consultant and those two consultants shall retain
a third such consultant. The cost of any such consultants shall be borne 50% by
Seller and 50% by Buyer. Each party shall present a written statement of its
position on the Title Defect and/or Defect Value in question to the consultants
within five (5) business days after the third consultant is selected, and the
consultants shall make a determination of all points of disagreement in
accordance with the terms and conditions of this Agreement within ten (10)
business days of receipt of such position statements. The determination by the
consultants shall be conclusive and binding on the parties, and shall be
enforceable against any party in any court of competent jurisdiction. If the
Defect Value of the Title Defect(s) exceeds five percent (5%) of the Sale Price
then either party may elect to terminate this transaction and such termination
shall be treated consistent with Paragraph 14 hereof.
(b) At Closing, Buyer shall be deemed to have fully inspected and
accepted the Properties "as is" in their then current physical and environmental
condition and the Properties shall be deemed to be free of Title Defects. Any
Title Defect which is not disclosed to Seller at least ten (10) business days
prior to Closing shall conclusively be deemed waived by Buyer for all purposes.
11. PREFERENTIAL RIGHTS. If any of the Properties are subject to
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preferential purchase rights, rights of first refusal, consents to assign,
Lessor's approvals, or similar rights (collectively, "preferential rights"),
Seller shall promptly upon the execution of this Agreement by the parties hereto
notify all holders of preferential rights of its intention to sell the leases
affected thereby. Seller shall promptly notify Buyer if the preferential rights
are exercised, or if the requisite period has elapsed without said rights having
been exercised.
If any party that elects to exercise a preferential purchase right fails to
consummate the purchase of the Properties covered by such right upon the same
terms and conditions offered under this Agreement. The parties agree that the
values associated with the Properties for which a preferential right has been
exercised will be determined as treated as a Title Defect pursuant to Paragraph
10(a) above.
All Properties for which preferential purchase rights have been waived, or for
which the period to exercise such rights has expired prior to Closing shall be
sold to Buyer at Closing pursuant to the provisions of this Agreement. Seller
is not aware of any preferential rights affecting the Properties.
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12. PHYSICAL AND ENVIRONMENTAL INSPECTION. After the execution of this
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Agreement, Buyer and its authorized representatives shall have physical access
to the Properties at Buyer's sole cost, risk and expense for the purpose of
inspecting the same, conducting such tests, examination, investigations and
assessments as may be reasonable and necessary or appropriate to evaluate the
environmental and physical condition of the Properties, including the
identification of wetlands. Buyer shall defend and indemnify Seller from any and
all liability, claims, causes of action, injury to Buyer's employees, agents,
contractors, subcontractors or invitees or to Buyer's property, and/or injury to
Seller's property, employees, agents or contractors which may arise out of
Buyer's inspections, but only to the extent of Buyer's negligence or the
negligence of Buyer's agents, employees, contractors, subcontractors, and/or
invitees. Buyer agrees to provide to Seller, upon request, a copy of any
environmental assessments, including any reports, data and conclusions. Buyer
and Seller shall keep any and all data or information acquired by all such
examinations and results of all analysis of such data and information strictly
confidential and not disclose same to any person or agency without the prior
written approval of the other party, unless required to do so by applicable law.
The foregoing obligation of confidentiality shall survive Closing or termination
of this Agreement without Closing.
13. SALE PRICE ADJUSTMENTS.
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Sale Price adjustments shall be determined in good faith and in accordance with
the following guidelines:
(a) In the event a third party exercises an applicable preferential right
to purchase, the subject Property(ies) shall be removed from the sale and the
Sale Price shall be adjusted in accordance with the provisions of Paragraph 11
above;
(b) In the event a third party fails to give a necessary consent or
approval to assign the subject Property(ies) in a form acceptable to Seller
and/or Buyer, the subject Property(ies) shall be removed from the sale and the
Sale Price shall be adjusted in accordance with the provisions of Paragraph 11
above; or
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(c) If a Title Defect is a lien, encumbrance or other charge upon a
Property which is liquidated in amount, then the sum necessary to be paid to the
obligee to remove the Title Defect from the affected Property shall be deducted
from the Sale Price. If there is a lien or encumbrance in the form of a judgment
secured by a supersedes bond or other security approved by the court issuing
such order, it shall not be considered a Title Defect under this Agreement.
14. EFFECT OF TERMINATION.The following provisions shall apply in the event
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of a termination of this Agreement:
(a) If the Closing has not occurred on or prior to the Closing Date on
account of any failure of Buyer to perform its obligations hereunder or the
parties have not obtained the approval of the Public Service Commission of West
Virginia and Seller has fully complied and performed pursuant to the provisions
of this Agreement, Seller may terminate this Agreement and Seller's sole and
exclusive remedy against Buyer shall be to terminate this Agreement, and within
five (5) business days after Buyer receives written notice of such election by
Seller, Seller shall give written instructions to the Bank to return the
Deposit, including interest, to Buyer.
(b) If, any time prior to Closing, it is determined that any of the
representations and warranties made herein by Seller are materially incorrect or
if Seller fails to fully and timely comply with any of Seller's obligations as
set forth herein or as required by applicable law or the parties have not
obtained the approval of the Public Service Commission of West Virginia, Buyer's
sole and exclusive remedy against Seller shall be to terminate this Agreement,
and within five (5) business days after Seller receives written notice of such
election by Buyer, Seller shall give written instructions to the Bank to return
the Deposit, including interest, to Buyer.
15. GAS UTILITY REQUIREMENTS. Within the Field , Seller has approximately
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twelve hundred (1,200) residential and commercial pay gas consumers, who are
either located directly on the gathering line or utility lines. Seller shall
reserve unto itself all existing gas utility meter taps on the pipelines to be
conveyed to Buyer together with rights of ingress and egress to said taps for
the pay consumers located on gathering lines. Seller shall have the further
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right to set additional gas utility meter taps on said lines or any new
gathering lines that Buyer may construct in the Field for residential and
commercial consumers. Additionally, Seller shall have the right to construct
new gas utility lines and tie said lines into Buyer's gathering line system so
long as the Gas Supply Agreement remains in full force and effect. Further,
Seller shall reserve unto itself the gas utility lines and the pipeline rights
of way associated therewith as depicted on attached Exhibit "A-2". Seller and
Buyer shall enter into a mutually agreeable Gas Supply Agreement for purposes of
providing gas services to the residential and commercial pay gas consumers,
which Supply Agreement will be approved in form and attached hereto as Exhibit
"B". Additionally, to ensure sufficient quantities of gas for Buyer's utility
consumers, said Gas Supply Agreement contains provisions whereby Buyer commits
to provide gas transportation/backhaul service on Buyer's pipeline system to
Seller as needed. Prior to Buyer abandoning any oil or gas well(s), gathering
line(s) or gas sales delivery point(s) in the Field it shall first notify
Seller of its intent to abandon such facilities and give Seller the opportunity
to assume the same.
16. WARRANTY OF TITLE. In all conveyances executed and delivered hereunder,
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Seller shall specially warrant to Buyer and its successors and assigns that it
has not previously conveyed the Properties and warrant and defend title to the
Properties against the lawful claims and demands of all persons whomsoever claim
the same or any part thereof by, through or under Seller, but not otherwise.
Seller makes no other warranty or representation as to the quantity or quality
of title to the Properties.
17. CONDITIONS OF CLOSING BY BUYER. The obligation of Buyer to close is
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subject to the satisfaction of the following conditions:
(a) Buyer shall have had reasonable access during normal business hours to
all data and records obligated to be provided to Buyer as provided herein;
(b) Buyer shall have had reasonable access to the leases and equipment
included in the Properties to conduct an inspection for all purposes, including
environmental condition;
(c) All representations and warranties of Seller contained in this
Agreement shall be true, correct and not misleading in all material respects,
and Seller shall have performed and satisfied all agreements and covenants in
all material respects required by this Agreement to be performed and satisfied
by Seller;
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(d) Seller shall have obtained and delivered to Buyer (i) all prerequisite
waivers of preferential rights of purchase and (ii) all necessary consents for
transfer of the Properties, except those which by their nature cannot be
requested or obtained until after Closing, or Buyer and Seller shall have
adjusted the Sale Price in accordance with the provisions of this Agreement;
(e) No suit or other proceeding shall be pending or threatened before any
court or governmental agency seeking to restrain, or prohibit this transaction,
or to declare the transaction illegal, or to obtain substantial damages in
connection with the transaction contemplated hereby;
No material adverse change in the condition of the Properties shall have
occurred subsequent to the Effective Time, except depletion through normal
production within authorized allowables, ordinary changes in rates of
production, and depreciation of equipment through ordinary wear and tear;
(f) As of the Closing Date, Buyer will be able to market the gas
attributable to Seller under terms and conditions no less favorable than those
under which Seller is marketing the gas as of the date hereof. Further that as
of the Closing Date, the Properties to be conveyed by Seller shall not be
obligated by virtue of any prepayment under any gas sales contract or oil sales
contract which contains a "take or pay" clause or any similar arrangement to
deliver said oil and gas at some future time without then and thereafter
receiving full payment, therefore; and
(g) All requisite final approvals of state or federal government agencies,
including, without limitation, that of the Public Service Commission of West
Virginia, shall have been granted and do not contain any terms or conditions
which are unsatisfactory to either Seller or Buyer, to be determined in such
party's sole discretion.
18. CONDITIONS OF CLOSING BY SELLER. The obligation of Seller to close is
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subject to the satisfaction of the following conditions:
(a) All representations and warranties of Buyer contained in this Agreement
shall be true, correct and not misleading in any and all material respects, and
Buyer shall have performed and satisfied all agreements and covenants in any and
all material respects required by this Agreement to be performed and satisfied
by Buyer;
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(b) No suit or other proceeding shall be pending or threatened before any
court or governmental agency seeking to restrain or prohibit this transaction,
or to declare this transaction illegal, or to obtain substantial damages in
connection with the transaction contemplated hereby; and
(c) All requisite final approvals of state or federal government agencies,
including, without limitation, that of the Public Service Commission of West
Virginia, shall have been granted and do not contain any terms or conditions
which are unsatisfactory to either Seller or Buyer, to be determined in such
party's sole discretion.
19. PRELIMINARY CLOSING STATEMENT. Seller shall prepare and furnish to
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Buyer at least seven (7) days prior to Closing a preliminary closing statement
setting forth the adjustments to the Sale Price and the total amount of funds to
be paid by Buyer at Closing. Such statement shall reflect each adjustment and
the calculation used to determine such amount, including the hereinafter
described $12,600 monthly operating fee to be paid by Buyer to Seller. For
purposes of this Agreement, it is understood that Seller will continue to
operate the Properties after the Effective Time and until Closing. To eliminate
various accounting adjustments, Buyer agrees to pay to Seller an amount of
twelve thousand six hundred dollars ($12,600) per month, or portion thereof
which shall be deemed to cover all costs, save and except costs incurred in
repairing leaky gas pipelines, associated with operation of the Properties.
Pipeline repair costs shall be deemed to be a workover expenditure and as such
are covered under the provisions of Paragraph 30(b). The adjusted Sale Price
shall mean the Sale Price adjusted as provided herein, including, but not
limited to, the Deposit, Title Defects, environmental defects, tax allocations
under paragraph 23, accounting adjustments under paragraph 24, preferential
rights exercised, and the $12,600 monthly operating fee described above.
20. CLOSING. The closing ("Closing") shall occur on or before November 1,
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2002 at 9:00 a.m. (the "Closing Date"), at the offices of Buyer, 000 00xx
Xxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx, or at such other time and place as Seller and
Buyer may mutually agree in writing. If the transaction fails to close by said
date, Buyer shall be entitled to receive the Deposit plus interest thereon. At
Closing the following shall occur:
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(a) Seller shall execute, acknowledge and deliver to Buyer or an entity
controlled by Buyer an Assignment and Xxxx of Sale substantially in the form and
substance of Exhibit "C" attached hereto, covering all of the Properties to be
sold pursuant hereto;
(b) Buyer shall deliver to Seller by wire transfer the balance of the total
Sale Price due, ($4,800,000.), as adjusted hereunder, subject to further
adjustment after Closing as provided for herein;
(c) On or before Closing, Seller and Buyer shall execute all necessary
forms to be filed with the appropriate regulatory authorities concerning the
change of ownership and operatorship of the Properties;
(d) Seller shall, subject to the terms of any applicable operating
agreements and to the provisions hereof, deliver to Buyer exclusive possession
of the Properties;
(e) Seller at or immediately after Closing shall provide the following:
any maps, reports and other written material relating to the Properties,
including, without limitation, lease files, property records, contract files,
operations files, well files, geological and geophysical maps, core analyses and
hydrocarbon analyses, well logs, mud logs, core data and field studies
("Records"); however, Seller shall have no obligation to furnish Buyer any data
or information which Seller considers confidential or proprietary or which
Seller cannot provide Buyer because of third-party restrictions. Buyer shall
keep all original files, maps and other "Records" as hereinsetforth at its place
of business. Seller shall have the right to access all of the above listed
materials at Buyer's office during normal business hours for a period of five
(5) years from the Closing Date of this Agreement, subject to Seller's agreement
to maintain confidentiality thereof;
(f) Buyer shall execute and deliver to Seller all necessary forms to be
filed with the applicable conservation or regulatory agencies concerning the
change of ownership or operatorship of the Properties, including by way of
example the West Virginia Division of Environmental Protection, Office of Oil
and Gas for change in operatorship of the xxxxx and Seller shall submit same for
filing to such agencies at Buyer's expense, which will include, among other
items the West Virginia per well transfer fee (currently $50.00/well) and Buyer
shall deliver to Seller evidence of any appropriate plugging bonds, surety
letters, or letter of credit acceptable to such authorities to authorize Buyer's
right to conduct operations, if applicable; and
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(g) Upon mutual execution of this Agreement, Seller shall retain the law
firm of Xxxxxxx and Xxxxxxx in Charleston, West Virginia and file a petition
with the PSC seeking approval for the conveyance of the Properties to Buyer.
21.RESERVATIONS AND EXCEPTIONS. Sale and purchase of the Properties is
-----------------------------
made subject to all reservations, exceptions, limitations, contracts and other
burdens or instruments which are of record or of which Buyer has actual or
constructive notice, including any matter included or referenced in the
materials made available by Seller to Buyer.
22.ASSUMPTION OF LIABILITIES AND INDEMNITIES. As used in this paragraph
-------------------------------------------
and the subparagraphs hereunder, "Claims" shall include claims (including those
associated with matters disclosed by Seller at Closing), demands, causes of
action, liabilities, damages, penalties and judgments of any kind or character
and all costs and fees in connection therewith, including attorney's fees, but
shall not include claims, demands, causes of action, liabilities, damages,
penalties and judgments arising out of the following: (i) failure of Seller to
pay or properly pay income, excise or other taxes, whether federal, state or
local, (ii) the continual defense of any and all lawsuits now pending with
regard to the Properties and the judgments resulting there from and (iii) any
liabilities or obligations resulting from or arising out of Seller's violation
of laws in effect at the Effective Time, if the particular facts about the
liability or obligation were known by an officer, manager or supervisor of
Seller and not disclosed to Buyer or otherwise known to Buyer at the Effective
Time and (iv) any liabilities or obligations associated with the collective
bargaring agreement with Seller's union employees ("Seller Retained
Liabilities").
(a) The Properties have been used for exploring, developing,
producing, treating and transporting oil and gas. Properties used for such
purposes may have experienced spills of wastes, crude oil, produced water,
hazardous substances and other materials, and may have thereon unknown,
abandoned xxxxx, plugged xxxxx, pipelines and other equipment on or underneath
-15-
the surface thereof. It is the intent of Buyer and Seller that all liability,
if any, associated with the above matters as well as any liability to plug or
replug any such xxxxx in accordance with the applicable rules, regulations and
requirements of governmental agencies be passed to Buyer at Closing and that
Buyer shall assume all liability, if any, for such matters and all Claims, if
any, related thereto. Additionally, Properties used for such purposes may
contain asbestos, hazardous substances or Naturally Occurring Radioactive
Material ("NORM"). NORM may affix or attach itself to the inside of xxxxx,
materials and equipment as scale or in other forms; xxxxx, materials, equipment,
and surface locations located on such Properties may contain NORM; and NORM
containing material may be buried or otherwise disposed of on such Properties.
Special procedures may be required for remediating, removing, transporting and
disposing of asbestos, NORM, hazardous substances and other materials from the
Properties, and Buyer assumes all liability, if any, for any assessment,
remediation, removal, transportation and disposal of these materials and
associated activities in accordance with the applicable rules, regulations and
requirements of governmental agencies.
(b) Buyer shall, at Closing, assume and be responsible for and comply with
all duties and obligations of Seller, express or implied, with respect to the
Properties, including, without limitation, those arising under or by virtue of
any lease, contract, agreement, document, permit, applicable statute or rule,
regulation or order of any governmental authority, (specifically including,
without limitation, any governmental request or requirement to plug, re-plug
and/or abandon any well of whatsoever type, status or classification, or take
any clean-up or other action with respect to the Property or premises, including
hazardous waste cleanup costs under the Resource and Recovery Act (RCRA), 42
U.S.C. 6901-6991, the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), 42 U.S.C. 9601-9675 or similar laws, rules or
regulations). Buyer shall defend, indemnify and hold Seller harmless from any
and all Claims arising out of or in connection therewith.
(c) Buyer shall at Closing, defend, indemnify and hold Seller
harmless from and against any and all Claims for personal injury, death or
damage to property or to the environment, or for any other relief, arising
directly or indirectly from, or incident to, the use, occupation, operation,
maintenance or abandonment of any of the Properties, or condition of the
Property or premises, whether latent or patent, and whether asserted against
Buyer and/or Seller after the Effective Time, whether or not any such Claims
result from conditions, actions or inactions at or before the Effective Time.
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(d) Environmental Indemnity and Release. As of Closing, Buyer releases
------------------------------------
and forever discharges Seller, and Buyer agrees to defend, indemnify and hold
Seller harmless from any and all damages, Claims, losses, liabilities,
penalties, fines, liens, judgments, costs and expenses whatsoever (including,
without limitation, attorney's fees and costs), whether direct or indirect, that
may arise on account of or in any way be connected with the physical condition
of the Properties or any law or regulation applicable thereto, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. & 6091 et. seq.), The Resource
--- -----
Conservation and Recovery Act of 1976 (42 U.S.C. & 6901 et. seq.), The Clean
--- -----
Water Act (33 U.S.C. & 466 et. seq.), The Safe Drinking Water Act (14 U.S.C. &
--- ----
1401 -1450), The Hazardous Materials Transportation Act (49 U.S.C. & 1401-7401
et. seq.) as amended, The Clean Air Act amendments of 1990, and any other
applicable federal, state or local law, regardless whether or not arising during
the period of, or from, or in connection with Seller's ownership of the
Properties or use of the property.
(e) Neither Seller nor Buyer shall have any obligation or liability under
this Agreement or in connection with or with respect to the transactions
contemplated in this Agreement for (a) any breach, misrepresentation or
noncompliance with respect to any representation, warranty, covenant or
obligation if such breach, misrepresentation or noncompliance shall have been
waived by the other party, (b) any misrepresentation or breach of warranty if
such other party had knowledge of the relevant facts at or before Closing, or
(c) any misrepresentation or breach of warranty if such other party should have
known, in the exercise of reasonable diligence, of the relevant facts at or
before Closing.
(f) At Closing, Buyer shall defend, indemnify and hold harmless Seller for
Buyer's loss of or misdelivery of the suspense funds transferred to the Buyer by
Seller at Closing, including, without limitation, reasonable attorneys fees and
costs. At closing, Seller shall provide to Buyer a listing showing all proceeds
from production attributable to the Properties that are currently held in
suspense and shall transfer to Buyer all such suspended proceeds. Seller
represents and warrants to the best of its knowledge, the amounts in suspense
are materially sufficient to cover all claims hereunder.
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(g) The indemnities in this paragraph shall inure to the benefit of Buyer
and Seller and the respective officers, directors, employees, agents, successors
and assigns of each of them.
(h) THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS PROVIDED
------------------------------------------------------------------
FOR IN PARAGRAPH 22 OF THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE
------------------------------------------------------------------------------
LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE FROM THE GROSS, SOLE,
------------------------------------------------------------------------------
CONCURRENT ACTIVE OR PASSIVE NEGLIGENCE OF THE SELLER AND ITS EMPLOYEES AND/OR
------------------------------------------------------------------------------
AGENTS OR ANY THIRD PARTY AND REGARDLESS OF WHO MAY BE AT FAULT OR OTHERWISE
-------------------------------------------------------------------------------
RESPONSIBLE UNDER ANY OTHER CONTRACT, OR ANY STATUTE, RULE OR THEORY OF LAW,
-------------------------------------------------------------------------------
INCLUDING, BUT NOT LIMITED TO, THEORIES OR STRICT LIABILITY. BUYER AND SELLER
-------------------------------------------------------------------------------
ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS
-------------------------------------------------------------------------------
CONSPICUOUS.
-----------
(i) Seller and the West Virginia Division of Environmental Protection,
Office of Oil and Gas have entered into an Agreed Order No. 2001-02, that
requires Seller to either re-establish production of oil and/or gas or plug and
abandon certain temporarily abandoned xxxxx, one of which is a well to conveyed
to Buyer, the X. X. Xxxxxxxxx Well No. 6 (API No. 47-005-0683). Buyer
acknowledges receipt of a copy of the aforesaid Agreed Order and Buyer agrees to
be bound by and to comply with all terms, conditions and requirements of the
Agreed Order with respect to the X. X. Xxxxxxxxx Well No. 6.
23. TAXES. All ad valorem taxes, real property taxes and similar
-----
obligations with respect to the tax period in which the Effective Time occurs
(the "current tax period") shall be apportioned between Seller and Buyer as of
the Effective Time based on the actual assessment or the immediately preceding
tax period assessment if actual assessment has not been received. Buyer shall
pay, and defend and hold Seller harmless with respect to payment of all such
taxes on the Properties for the current tax period and thereafter, together with
any interest or penalties assessed thereon.
-18-
24. ACCOUNTING. All proceeds from the sale of production actually sold
----------
and delivered by Seller prior to the Effective Time attributable to the
Properties shall belong to Seller and all proceeds from the sale of production
actually sold and delivered after the Effective Time ("Buyer Proceeds")
attributable to the Properties shall belong to Buyer. Proceeds held in suspense
or escrow which will be transferred to Buyer at Closing shall not be considered
Buyer Proceeds. Except as otherwise specifically provided in this Agreement,
all costs, expenses and obligations relating to the Properties which accrue
prior to the Effective Time shall be paid and discharged by Seller regardless of
when invoices for such costs, expenses and obligations are received and all
costs, expenses and obligations relating to the Properties which accrue after
the Effective Time shall be paid and discharged by Buyer.
The foregoing adjustments shall be made by debits and credits between the
parties at Post-Closing, as provided for hereinafter, and included as an
adjustment to the Sale Price at Closing.
25. SALES TAX. All sales and transfer taxes, or assessments, levied by any
---------
governmental authority on the contemplated transaction or transfer of Properties
shall be paid by Seller.
26.POST-CLOSING ADJUSTMENTS. As soon as practicable after Closing, but
-------------------------
in any event within ninety (90) days thereafter, Seller shall prepare, in
accordance with this Agreement and (where applicable) in accordance with
generally accepted accounting principles consistently applied, a final
settlement statement (herein called the "Final Statement") setting forth each
adjustment or payment which was not finally determined as of the Closing Date,
and showing the calculation of the final settlement amount based on such Final
Statement (the "final settlement amount"). Seller shall submit the Final
Statement to Buyer and shall afford Buyer access to Seller's records pertaining
to the computations contained in the Final Statement. As soon as practicable
after receipt of the statement, Buyer shall deliver to Seller a written report
containing any changes which Buyer proposes be made to the Final Statement. The
parties shall agree with respect to the amounts due pursuant to such
Post-Closing adjustment not later than thirty (30) days after Buyer's receipt of
Seller's Final Statement. The date upon which such agreement is reached shall
be herein called the "Settlement Date". Within two (2) days after such
Settlement Date, Buyer shall pay to Seller or Seller shall pay to Buyer in
immediately available funds the net amount due.
-19-
27. NOTICES. All communications required or permitted under this Agreement
-------
shall be in writing and any communication or delivery hereunder shall be deemed
to have been fully made if actually delivered, or if mailed by registered or
certified mail, postage prepaid, to the address as set forth below:
SELLER
------
EAST RESOURCES, INC.
P. O. Xxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
BUYER
-----
ENERGY CORPORATION OF AMERICA
000 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
28. FURTHER ASSURANCES. After Closing each of the parties shall execute,
--------------------
acknowledge and deliver to the other such further instruments, and take such
other actions as may be reasonably necessary to carry out the provisions of this
Agreement. However, Buyer shall assume all responsibility for notifying the
purchaser of gas production from the Properties, and such other designated
persons who may be responsible for disbursing payments for the purchase of such
production, of the change of ownership of the Properties. Buyer and Seller
shall take all actions necessary to effectuate the transfer of such payments to
Buyer. After the Settlement Date, additional proceeds received by or expenses
paid by either Buyer or Seller on behalf of the other party shall be settled by
invoicing such party for expenses paid or remitting to such other party any
proceeds received.
-20-
29.DISCLAIMER OF WARRANTIES. EXCEPT AS PROVIDED IN PARAGRAPHS 16 & 22
--------------------------
HEREOF, ANY INSTRUMENT OF CONVEYANCE OR SALE EXECUTED PURSUANT HERETO SHALL BE
EXECUTED WITHOUT ANY WARRANTY OF TITLE, EITHER EXPRESS, IMPLIED, STATUTORY, OR
OTHERWISE, WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION AS TO THE
MERCHANTABILITY OF ANY OF THE EQUIPMENT OR OTHER PERSONAL PROPERTY INCLUDED IN
THE PROPERTIES OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, AND WITHOUT ANY OTHER
EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION WHATSOEVER. IT IS UNDERSTOOD AND
AGREED THAT BUYER SHALL HAVE INSPECTED THE PROPERTIES FOR ALL PURPOSES,
INCLUDING, WITHOUT LIMITATION, FOR THE PURPOSE OF DETECTING THE PRESENCE OF NORM
AND MAN MADE MATERIAL FIBERS (HEREINAFTER REFERRED TO AS "MMMF") AND SATISFIED
ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND
SUBSURFACE, INCLUDING, BUT NOT LIMITED TO, CONDITIONS RELATED TO THE PRESENCE,
RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, AND THAT BUYER IS RELYING SOLELY
UPON THE RESULTS OF SUCH INSPECTION OF THE PROPERTIES AND SHALL ACCEPT ALL OF
THE SAME IN THEIR "AS IS, WHERE IS" CONDITION. SELLER DISCLAIMS ALL LIABILITY
ARISING IN CONNECTION WITH THE PRESENCE OF NORM OR MMMF ON THE PROPERTIES AND IF
TESTS HAVE BEEN CONDUCTED BY SELLER FOR THE PRESENCE OF NORM OR MMMF, SELLER
DISCLAIMS ANY WARRANTY RESPECTING THE ACCURACY OF SUCH TESTS OR RESULTS. IN
ADDITION, SELLER AND ITS CONSULTANTS SHALL MAKE NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, INFORMATION
OR MATERIALS HERETOFORE OR HEREAFTER FURNISHED BUYER IN CONNECTION WITH THE
PROPERTIES, OR AS TO THE QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY)
ATTRIBUTABLE TO THE PROPERTIES OR THE ABILITY OF THE PROPERTIES TO PRODUCE
HYDROCARBONS. ANY AND ALL SUCH DATA, INFORMATION AND OTHER MATERIALS FURNISHED
BY SELLER IS PROVIDED TO BUYER AS A CONVENIENCE AND ANY RELIANCE ON OR USE OF
THE SAME SHALL BE AT BUYER'S SOLE RISK. BUYER EXPRESSLY ACKNOWLEDGES THAT THIS
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EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF THIS SALE
AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT THIS WAIVER HAS BEEN
BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL AND THAT BUYER HAS
VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF FITNESS AND/OR
WARRANTY AGAINST REDHIBITORY VICES AND DEFECT FOR THE PROPERTIES. BUYER
ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND
INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT
THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL
AND THAT BUYER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER. ALL
INSTRUMENTS OF CONVEYANCE TO BE DELIVERED BY SELLER AT CLOSING SHALL EXPRESSLY
SET FORTH THE DISCLAIMERS OF REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
PARAGRAPH.
30. OPERATIONS BY SELLER. Seller will operate the Properties until
----------------------
Closing.
a. Risk. The risk of casualty loss relating to the Properties will pass
----
from Seller to Buyer as of the Effective Time. Seller agrees that for any
casualty loss subsequent to the Effective Time it shall seek recovery under
applicable policies and upon recovery, any payment of benefits under such policy
attributable to coverage for such casualty loss shall be forwarded to Buyer by
Seller.
b. Operations after Effective Time. Seller shall not (i) act in any manner
--------------------------------
with respect to the Properties other than in the normal, usual and customary
manner, consistent with prior practice; (ii) dispose of, encumber or relinquish
any of the Properties (other than in the ordinary course of business or as a
result of the expiration of a lease or other agreements or contracts that Seller
has no right or option to renew); (iii) waive, compromise or settle any material
right or claim with respect to any of the Properties; (iv) make capital or
workover expenditures with respect to the Properties in an amount which exceeds
$5,000.00 without Buyer's consent, except when required by an emergency when
there shall have been insufficient time to obtain advance consent; (v) abandon
any well unless required to do so by a governmental or regulatory agency or (vi)
modify or terminate any lease or other material agreement or contract.
-22-
31.SECURITIES LAWS. The solicitation of offers and the sale of the
----------------
Properties by Seller have not been registered under any securities laws. Buyer
represents that at no time has it been presented with or solicited by or through
any public promotion or any form of advertising in connection with this
transaction. Buyer represents that it intends to acquire the Properties for its
own benefit and account and that it is not acquiring the Properties with the
intent of distributing fractional, undivided interests that would be subject to
regulation by federal or state securities laws, and that if it sells, transfers
or otherwise disposes of the Properties or fractional, undivided interests, it
will do so in compliance with applicable federal and state securities laws.
32. DUE DILIGENCE. Buyer represents that it has performed, or will perform
-------------
prior to Closing, sufficient review and due diligence with respect to the
Properties, which includes reviewing well-data, title and other files, and
performing necessary evaluations, assessments and other tasks involved in
evaluating the Properties, to satisfy its requirements completely and to enable
it to make an informed decision to acquire the Properties under the terms of
this Agreement.
33. MATERIAL FACTOR. Buyer acknowledges that Buyer's representations under
---------------
Paragraphs 28 and 29 are a material inducement to Seller to enter into this
Agreement with, and close the sale to, Buyer.
34.ENTIRE AGREEMENT. This instrument states the entire agreement between
-----------------
the parties and may be supplemented, altered, amended, modified or revoked by
writing only, signed by both parties. This Agreement supersedes any prior
agreements between the parties concerning sale of the Properties, except that
any confidentiality agreement shall terminate at Closing. The headings are for
guidance only and shall have no significance in the interpretations of this
Agreement.
00.XXX REPORTING. Seller and Buyer agree that this transaction is not
--------------
subject to the reporting requirement of Section 1060 of the Internal Revenue
Code of 1986, as amended, and that, therefore, IRS Form 8594, Asset Acquisition
statement, is not required to be and will not be filed for this transaction. In
the event the parties mutually agree that a filing of Form 8594 is required, the
parties will confer and cooperate in the preparation and filing of their
respective forms to reflect a consistent reporting of the agreed upon
allocation.
-23-
36. ASSIGNABILITY. This Agreement and the rights and obligations hereunder
-------------
shall not be assignable or delegable by either party hereto without the prior
written consent of the other party unless such assignment occurs by merger,
reorganization or sale of all of a party's assets. Provided however that Buyer
may assign its rights and obligations hereunder to an affiliate without such
consent.
37. SURVIVAL. Unless expressly limited, all of the representations,
--------
warranties and agreements of or by the parties hereto shall survive the
execution and delivery of the Assignment and Xxxx of Sale.
38.CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
---------------
STATE OF WEST VIRGINIA.
39.COUNTERPART EXECUTION. This Agreement may be executed in counterparts
----------------------
and each counterpart shall constitute a binding agreement as if the parties had
executed a single document.
BUYER ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT IN ITS ENTIRETY, AND THAT IT
UNDERSTANDS ALL THE PROVISIONS SET FORTH THEREIN, INCLUDING, BUT NOT LIMITED TO,
THOSE PROVISIONS LOCATED IN PARAGRAPH 22 WHEREIN BUYER AGREES TO INDEMNIFY
SELLER IN CERTAIN CIRCUMSTANCES EVEN THOUGH THE LOSSES, COSTS, EXPENSE AND/OR
DAMAGES MAY HAVE BEEN CAUSED BY THE GROSS, SOLE, CONCURRENT, ACTIVE OR PASSIVE
NEGLIGENCE OF THE SELLER, ITS EMPLOYEES OR ANY THIRD PARTY AND EVEN THOUGH THE
SELLER MAY BE RESPONSIBLE FOR SUCH LOSSES, COSTS, EXPENSES AND/OR DAMAGES UNDER
ANY THEORY OF LAW, INCLUDING, BUT NOT LIMITED TO, STRICT LIABILITY.
-24-
EXECUTED AS OF THE DATE FIRST ABOVE MENTIONED.
SELLER
EAST RESOURCES, INC.
BY: /S/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
Vice President of Engineering
BUYER
ENERGY CORPORATION OF AMERICA
BY: /S/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
-25-
