Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Texas Standard Oil Company 101 474K
2: EX-2.1 Purchase and Sale Agreement 23 80K
3: EX-3.1 Articles of Incorporation 4 12K
4: EX-3.2 Articles of Amendment of Articles of Incorporation 7 20K
5: EX-3.3 Amended and Restated Bylaws 12 42K
6: EX-5.1 Opinion of Haynes and Boone, LLP 3 13K
7: EX-10.1 Promissory Note to Roberson Oil Company 2 11K
8: EX-10.3 2002 Equity Incentive Plan 17 85K
9: EX-23.2 Consent of Hein & Associates LLP 1 7K
10: EX-23.3 Consent of Ryder Scott Company, L.P. 1 7K
11: EX-99.1 Form of Letter to Record Holders 2± 8K
12: EX-99.2 Form of Letter to Clients 2 11K
13: EX-99.3 Form of Letter of Transmittal 8 41K
EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (THE "AGREEMENT") DATED THIS 27TH DAY
OF AUGUST, 2001, AND EFFECTIVE AS OF THE EFFECTIVE DATE, BY AND BETWEEN IMC
GLOBAL INC., A DELAWARE CORPORATION WHOSE ADDRESS IS 100 SOUTH SAUNDERS ROAD,
SUITE 300, LAKE FOREST, ILLINOIS 60045- 2581 ( "SELLER") AND TEXAS STANDARD OIL
COMPANY, A TEXAS CORPORATION WHOSE ADDRESS IS 6371 RICHMOND AVE., SUITE 100,
HOUSTON, TEXAS 77057 ("PURCHASER").
R E C I T A L S:
WHEREAS, SELLER OWNS CERTAIN LEASEHOLD INTERESTS AND ASSOCIATED RIGHTS
(COLLECTIVELY, THE "INTERESTS") IN AND WITH RESPECT TO OIL AND GAS PROPERTIES
LOCATED IN FEDERAL WATERS OFFSHORE TEXAS AND LOUISIANA, MORE PARTICULARLY
DESCRIBED ON EXHIBIT A ATTACHED HERETO ("SUBJECT PROPERTIES"); AND
WHEREAS, SELLER DESIRES TO SELL AND PURCHASER DESIRES TO PURCHASE THE
INTERESTS (BUT EXCLUDING THE EXCESS CLASS A COSTS AS DEFINED IN THAT CERTAIN
OVERRIDING ROYALTY CONVEYANCE DATED SEPTEMBER 28, 1983, FROM MCMORAN-FREEPORT
OIL COMPANY TO MCMORAN OIL & GAS CO.) ON THE TERMS AND SUBJECT TO THE CONDITIONS
SET FORTH IN THIS AGREEMENT;
NOW, THEREFORE, THE PARTIES HERETO INTENDING TO BE MUTUALLY BOUND DO
HEREBY COVENANT AND AGREE AS FOLLOWS:
I. AGREEMENT TO BUY AND SELL
1.1 SALE AND PURCHASE OF THE INTERESTS. IN CONSIDERATION OF THE
PURCHASE PRICE, AS HEREAFTER DEFINED, AND THE MUTUAL PROMISES AND COVENANTS
CONTAINED IN THIS AGREEMENT, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED BY BOTH PARTIES, SELLER
AGREES TO SELL AND PURCHASER AGREES TO BUY, SUBJECT TO THE TERMS, CONDITIONS,
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, ONE HUNDRED PERCENT
(100%) OF THE INTERESTS, INCLUDING THE FOLLOWING CONSTITUENT ELEMENTS THEREOF:
(a) UNDIVIDED INTERESTS OF SELLER IN AND TO THOSE CERTAIN OIL AND
GAS LEASES DESCRIBED ON EXHIBIT A ("LEASES") AND ALL SELLER'S
RIGHTS WITH RESPECT TO POOLED, UNITIZED OR COMMUNITIZED
ACREAGE RELATING TO THE SUBJECT PROPERTIES TOGETHER WITH
SELLER'S RIGHTS, TITLE, INTERESTS, TENEMENTS, HEREDITAMENTS,
APPURTENANCES, BENEFITS, EASEMENTS, PERMITS, LICENSES,
SERVITUDES, RIGHTS-OF-WAY AND PRIVILEGES ATTRIBUTABLE THERETO;
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(b) UNDIVIDED INTERESTS OF SELLER IN AND TO THE OIL, CONDENSATE OR
NATURAL GAS WELL(S), WATER SOURCES WELL(S), AND WATER OR OTHER
TYPES OF INJECTION WELL(s) LOCATED ON THE SUBJECT PROPERTIES,
WHETHER PRODUCING, OPERATING, SHUT-IN OR TEMPORARILY ABANDONED
(COLLECTIVELY, THE "WELLS") ON AND AFTER THE EFFECTIVE DATE.
(c) UNDIVIDED INTERESTS OF SELLER IN THE SEVERED CRUDE OIL,
NATURAL GAS, CASINGHEAD GAS, DRIP GASOLINE, NATURAL GASOLINE,
PETROLEUM, NATURAL GAS LIQUIDS, CONDENSATE, PRODUCTS, LIQUIDS
AND OTHER HYDROCARBONS AND OTHER MINERALS OR MATERIALS OF
EVERY KIND AND DESCRIPTION PRODUCED FROM THE SUBJECT
PROPERTIES ON AND AFTER THE EFFECTIVE DATE (COLLECTIVELY, THE
"SUBSTANCES").
(d) UNDIVIDED INTERESTS OF SELLER IN AND TO PHYSICAL FACILITIES OR
INTERESTS THEREIN, INCLUDING WELL PROTECTOR, PLATFORM,
PIPELINE, GATHERING LINES, EQUIPMENT AND FIXTURES OF EVERY
TYPE AND DESCRIPTION TO THE EXTENT THAT THE SAME ARE USED OR
HELD FOR USE IN CONNECTION WITH OWNERSHIP OF THE SUBJECT
PROPERTIES, WHETHER OR NOT LOCATED THEREON, INCLUDING, WITHOUT
LIMITATION, ALL CASING AND TUBULAR EQUIPMENT IN THE WELLS.
(e) UNDIVIDED INTERESTS OF SELLER IN EASEMENTS, PRIVILEGES,
RIGHTS-OF-WAY AGREEMENTS, LICENSES OR OTHER AGREEMENTS
RELATING TO THE USE OR OWNERSHIP OF THE SUBJECT PROPERTIES.
(f) THE (i) LEASE AND LAND FILES, FILINGS WITH REGULATORY
AGENCIES, OTHER DOCUMENTS AND INSTRUMENTS THAT RELATE TO THE
INTERESTS IN SELLER'S POSSESSION; (ii) PRODUCTION AND OTHER
TECHNICAL DATA OWNED BY SELLER AND RELATED TO THE INTERESTS
EXCEPT TO THE EXTENT TRANSFER OF SAME IS RESTRICTED OR
PROHIBITED BY AGREEMENT WITH A THIRD PARTY; AND (iii) ALL
OTHER BOOKS, RECORDS AND FILES CONTAINING FINANCIAL, TITLE AND
RELATED INFORMATION IN SELLER'S POSSESSION WITH RESPECT TO THE
FOREGOING.
(g) UNDIVIDED INTERESTS OF SELLER IN CONTRACTS, COMMITMENTS,
AGREEMENTS AND ARRANGEMENTS THAT IN ANY WAY RELATE TO THE
INTERESTS FOR ANY PERIOD OF TIME AFTER THE EFFECTIVE DATE
("AGREEMENTS"), INCLUDING PRODUCTION, STORAGE, TREATMENT,
TRANSPORTATION, PROCESSING, PURCHASE, SALE OR OTHER DISPOSAL
OF SUBSTANCES, AND ALL AMENDMENTS, RATIFICATIONS OR EXTENSIONS
OF THE FOREGOING TOGETHER WITH SELLER'S UNEXERCISED RIGHTS
REGARDING THE INTERESTS IN WEST CAMERON BLOCK 498, AS OF THE
CLOSING DATE, IF ANY, TO AUDIT THE RECORDS OF ANY PARTY
THERETO AND RECEIVE REFUNDS OF ANY NATURE THEREUNDER RELATING
TO PERIODS ON OR AFTER THE EFFECTIVE DATE.
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(h) UNDIVIDED INTERESTS OF SELLER IN (i) ACCOUNTS, INSTRUMENTS AND
GENERAL INTANGIBLES (AS SUCH TERMS ARE DEFINED IN THE UNIFORM
COMMERCIAL CODE OF THE STATE OF TEXAS ATTRIBUTABLE TO ANY OF
THE INTERESTS WITH RESPECT TO ANY PERIOD OF TIME ON OR AFTER
THE EFFECTIVE DATE) AND (ii) LIENS AND SECURITY INTERESTS,
WHETHER EXPRESS OR INCHOATE, UNDER ANY LAW, RULE OR REGULATION
OR UNDER THE CONTRACTS DESCRIBED IN PARAGRAPH 1.1.g ARISING
FROM OWNERSHIP, OPERATION OR SALE OR OTHER DISPOSITION OF THE
SUBJECT PROPERTIES ON OR AFTER THE EFFECTIVE DATE.
1.2 ASSUMPTION OF OBLIGATIONS. SALE AND PURCHASE OF THE INTERESTS SHALL
BE SUBJECT TO, AND PURCHASER SHALL UNCONDITIONALLY ASSUME, THE TERMS, CONDITIONS
AND OBLIGATIONS OF ALL APPLICABLE AND VALID AGREEMENTS, OIL AND GAS SALES
CONTRACTS, PROCESSING AGREEMENTS, EASEMENTS AND RIGHTS-OF-WAY, EXISTING LEASE
BURDENS (INCLUDING, BUT NOT LIMITED TO, ROYALTIES OR SIMILAR BURDENS AND
PLUGGING AND ABANDONMENT LIABILITIES ATTRIBUTABLE TO THE INTERESTS) AND DUTIES
IMPOSED ON SELLER BY GOVERNMENTAL REGULATION, INCLUDING BUT NOT LIMITED TO THAT
CERTAIN OFFSHORE OPERATING AGREEMENT BETWEEN TRANSCO EXPLORATION COMPANY, AS
OPERATOR, AND THE SUPERIOR OIL COMPANY, ET AL., AS NON-OPERATORS, DATED AUGUST
1, 1977, COVERING BLOCK 498, WEST CAMERON AREA, SOUTH ADDITION, OFFSHORE
LOUISIANA. OFFSHORE OPERATING AGREEMENT BETWEEN TRANSCO EXPLORATION COMPANY, AS
OPERATOR, AND THE SUPERIOR OIL COMPANY, ET. AL., AS NON-OPERATORS, DATED JANUARY
3, 1977, COVERING THE N1/2 OF BLOCK 34, WEST DELTA AREA, OFFSHORE LOUISIANA, AS
AMENDED BY LETTER AMENDMENT DATED MARCH 2, 1995; AND OFFSHORE OPERATING
AGREEMENT BETWEEN TRANSCO EXPLORATION COMPANY, AS OPERATOR, AND ENERGY
DEVELOPMENT CORPORATION, ET. AL., AS NON-OPERATORS, DATED MARCH 1, 1979,
COVERING BLOCK A-552, HIGH ISLAND AREA, SOUTH EXTENSION, OFFSHORE LOUISIANA.
1.3 EARNEST MONEY. CONTEMPORANEOUSLY WITH THE SIGNING OF THIS
AGREEMENT, PURCHASER SHALL PAY TO SELLER IN CASH OR BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY SELLER AS EARNEST MONEY
THE SUM OF ONE HUNDRED TEN THOUSAND DOLLARS ($110,000) (THE "EARNEST MONEY"). IN
THE EVENT THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT IS CLOSED, THE EARNEST
MONEY SHALL BE APPLIED TO THE PURCHASE PRICE AT CLOSING. IN THE EVENT THIS
AGREEMENT IS TERMINATED OR THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT IS NOT
CLOSED FOR ANY REASON OTHER THAN PURCHASER'S SOLE AND EXCLUSIVE DEFAULT UNDER
THE TERMS OF THIS AGREEMENT, SELLER SHALL BE LIABLE FOR AND SHALL IMMEDIATELY
REPAY THE EARNEST MONEY TO PURCHASER.
II. PURCHASE AND SALE
2.1 TRANSFER OF THE PROPERTIES. SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, NO LATER THAN OCTOBER 15, 2001 ("CLOSING DATE") SELLER SHALL
SELL AND PURCHASER SHALL PURCHASE AND PAY THE PURCHASE PRICE, AS ADJUSTED
HEREUNDER, FOR THE INTERESTS EFFECTIVE AS OF 7:00 A.M., CENTRAL TIME, JANUARY 1,
2001 (THE "EFFECTIVE DATE").
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2.2 PURCHASE PRICE. IN CONSIDERATION FOR THE SALE OF THE INTERESTS, THE
PURCHASER SHALL PAY TO SELLER ON THE CLOSING DATE ONE MILLION ONE HUNDRED
THOUSAND DOLLARS ($1,100,000.00) IN CASH OR BY WIRE TRANSFER OF IMMEDIATELY
AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY SELLER, SUBJECT TO THE ADJUSTMENTS
REFERRED TO IN SECTION 2.3 AND THE EARNEST MONEY DEFINED IN SECTION 1.4(a) (THE
"PURCHASE PRICE").
2.3 DETERMINATION OF PURCHASE PRICE ADJUSTMENTS. AT OR IN CONNECTION
WITH THE CLOSING, THE FOLLOWING ACCOUNTING SHALL BE EFFECTED BETWEEN SELLER AND
PURCHASER:
(a) DURING THE PERIOD BETWEEN THE EFFECTIVE DATE AND THE
CLOSING DATE, SELLER SHALL RETAIN ALL PROCEEDS FROM SALE OF SELLER'S
INTEREST IN SUBSTANCES AND SHALL PAY ALL CAPITAL AND OPERATING COSTS
INCURRED IN CONNECTION WITH THE INTERESTS. THE PROCEEDS OF ALL
SUBSTANCES SOLD PRIOR TO THE EFFECTIVE DATE (IRRESPECTIVE OF WHETHER
PAYMENT THEREFOR HAS BEEN MADE OR RECEIVED ON OR BEFORE THAT DATE)
SHALL BE AND REMAIN THE PROPERTY OF SELLER. OIL ABOVE THE PIPELINE
CONNECTION AT 7:00 A.M., LOCAL TIME, ON THE EFFECTIVE DATE SHALL BE
CONSIDERED TO HAVE BEEN PRODUCED PRIOR TO THE EFFECTIVE DATE. PURCHASER
SHALL BE (i) CREDITED WITH THE PROCEEDS OF SUBSTANCES SOLD DURING THE
PERIOD FROM THE EFFECTIVE DATE TO THE CLOSING DATE ("REVENUES") AND
(ii) CHARGED WITH ALL CAPITAL AND OPERATING COSTS INCURRED IN
CONNECTION WITH THE INTERESTS (INCLUDING WITHOUT LIMITATION DELAY
RENTALS AND SHUT-IN PAYMENTS AND OVERRIDING ROYALTIES (BUT NOT
INCLUDING ANY AMOUNT THAT WOULD OTHERWISE BE PAYABLE BY VIRTUE OF THE
OVERRIDING ROYALTY CONVEYANCE, ALL OF WHICH OBLIGATIONS SHALL BE
IGNORED AS EXPENDITURES IN CALCULATING THE PURCHASE PRICE ADJUSTMENTS),
ROYALTIES AND OTHER PAYMENTS IN RESPECT OF SUBSTANCES AND PRODUCTION,
SEVERANCE AND SALES TAXES TO THE EXTENT NOT PREVIOUSLY DEDUCTED FROM
REVENUES) DURING THE PERIOD FROM THE EFFECTIVE DATE TO THE CLOSING
DATE; AND ALL AUDIT ADJUSTMENTS IN SELLER'S FAVOR, IF ANY, RELATING TO
PERIODS PRIOR TO THE EFFECTIVE DATE WHICH HAVE BEEN AGREED TO IN
WRITING BY THE CONCERNED PARTIES AND WHICH REMAIN UNPAID AT THE CLOSING
DATE (IN WHICH EVENT SUCH AMOUNTS SHALL THEN BE DEEMED TO BE ASSIGNED
TO AND BE THE PROPERTY OF PURCHASER. ("EXPENDITURES")).
(b) PRIOR TO THE CLOSING DATE, SELLER SHALL CAUSE TO BE
PREPARED AN UNAUDITED SETTLEMENT STATEMENT (THE "PRELIMINARY SETTLEMENT
STATEMENT") SETTING FORTH, INTER ALIA, AN ESTIMATE OF REVENUES AND
EXPENDITURES. THE PURCHASE PRICE SHALL BE INCREASED BY THE DOLLAR
AMOUNT, IF ANY, BY WHICH EXPENDITURES EXCEED REVENUES OR DECREASED BY
THE DOLLAR AMOUNT, IF ANY, BY WHICH REVENUES EXCEED EXPENDITURES, IN
EACH INSTANCE AS REFLECTED IN THE PRELIMINARY SETTLEMENT STATEMENT.
PURCHASER SHALL PAY TO SELLER, AT CLOSING, THE PURCHASE PRICE AS
ADJUSTED IN ACCORDANCE WITH SUBSECTIONS (b), (d) AND (e)
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OF THIS SECTION 2.3. ALL SUCH ADJUSTMENTS, TOGETHER WITH THE PURCHASE
PRICE AS SO ADJUSTED, SHALL BE SET FORTH IN THE PRELIMINARY SETTLEMENT
STATEMENT.
(c) AS SOON AS PRACTICABLE AFTER THE CLOSING DATE, BUT NOT
LATER THAN NINETY (90) DAYS THEREAFTER, SELLER AND PURCHASER SHALL
AGREE ON A STATEMENT (THE "FINAL SETTLEMENT STATEMENT"), PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, DEFINITIVELY
SETTING FORTH EACH CONSTITUENT INCREASE OR DECREASE IN THE PURCHASE
PRICE AS THE SAME SHALL THERETOFORE HAVE BEEN ADJUSTED AT THE CLOSING
IN ACCORDANCE WITH THIS SECTION 2.3 AND SHOWING THE CALCULATION
THEREOF. IF THE PURCHASE PRICE AS ADJUSTED IN ACCORDANCE WITH THE FINAL
SETTLEMENT STATEMENT DIFFERS FROM THE PURCHASE PRICE AS ADJUSTED IN
ACCORDANCE WITH THE PRELIMINARY SETTLEMENT STATEMENT AND REVEALS THAT
EITHER PARTY OWES A SUM OF MONEY TO THE OTHER, THE OBLIGATED PARTY
SHALL PROMPTLY PAY THE OTHER PARTY SUCH SUM BY CASHIER'S OR CERTIFIED
CHECK OR OTHER GUARANTEED FUNDS.
(d) AD VALOREM TAXES, IF ANY, ASSESSED IN THE JURISDICTION(S)
IN WHICH THE SUBJECT PROPERTIES ARE LOCATED ARE PAYABLE IN ARREARS, AND
SUCH TAXES SHALL BE INCLUDED IN THE PRELIMINARY SETTLEMENT STATEMENT
AND THE FINAL SETTLEMENT STATEMENT ON A PRORATED BASIS BASED ON PRIOR
YEAR TAXES OR CURRENT YEAR TAXES, RESPECTIVELY.
(e) ALL CHARGES PREPAID BY SELLER AND APPLICABLE TO PERIODS
FOLLOWING THE EFFECTIVE DATE, INCLUDING WITHOUT LIMITATION PREPAID
RENTALS OR ROYALTIES PAID UNDER THE LEASES OR ANY AGREEMENTS FOR
PERIODS SUBSEQUENT TO THE EFFECTIVE DATE SHALL BE PRORATED AS OF THE
EFFECTIVE DATE AND THE PRO RATA SHARE OF PURCHASER SHALL BE INCLUDED IN
THE ACCOUNTING FOR ADJUSTMENT AS AN INCREASE TO THE PURCHASE PRICE.
(f) PURCHASER SHALL PAY ALL SALES, USE OR TRANSFER TAXES THAT
MAY BE OR BECOME DUE ON ACCOUNT OF THE SALE AND PURCHASE OF THE
INTERESTS AS PROVIDED HEREIN.
III. REPRESENTATIONS OF SELLER
SELLER REPRESENTS AND WARRANTS TO PURCHASER THAT:
3.1 EXISTENCE. SELLER IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE, AND IS DULY
QUALIFIED TO CARRY ON ITS BUSINESS IN THE STATE OF DELAWARE.
3.2 POWER. SELLER HAS THE CORPORATE POWER TO ENTER INTO AND PERFORM
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, SUBJECT TO RIGHTS TO
CONSENT BY, REQUIRED NOTICES TO,
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AND FILINGS WITH OR OTHER ACTIONS BY GOVERNMENTAL ENTITIES WHERE THE SAME ARE
CUSTOMARILY OBTAINED SUBSEQUENT TO THE ASSIGNMENT OF OIL AND GAS INTERESTS AND
LEASES. THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY SELLER, AND
THE TRANSACTIONS CONTEMPLATED HEREBY, WILL NOT VIOLATE (i) ANY PROVISION OF THE
CERTIFICATES OF INCORPORATION OR BYLAWS OF SELLER, (ii) ANY MATERIAL AGREEMENT
OR INSTRUMENT TO WHICH SELLER IS A PARTY OR BY WHICH SELLER IS BOUND, (III) ANY
JUDGMENT, ORDER, RULING, OR DECREE APPLICABLE TO SELLER AS A PARTY IN INTEREST,
OR (IV) ANY LAW, RULE OR REGULATION APPLICABLE TO SELLER.
3.3 AUTHORIZATION. THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN DULY AND VALIDLY
AUTHORIZED BY ALL REQUISITE CORPORATE ACTION ON THE PART OF SELLER. THIS
AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED ON BEHALF OF SELLER, AND AT THE
CLOSING ALL DOCUMENTS AND INSTRUMENTS REQUIRED HEREUNDER TO BE EXECUTED AND
DELIVERED BY SELLER SHALL HAVE BEEN DULY EXECUTED AND DELIVERED. THIS AGREEMENT
DOES, AND SUCH DOCUMENTS AND INSTRUMENTS SHALL, CONSTITUTE LEGAL, VALID AND
BINDING OBLIGATIONS OF SELLER ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS,
SUBJECT, HOWEVER, TO THE EFFECT OF BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM AND SIMILAR LAWS FROM TIME TO TIME IN EFFECT RELATING TO THE RIGHTS
AND REMEDIES OF CREDITORS, AS WELL AS TO GENERAL PRINCIPLES OF EQUITY
(REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS CONSIDERED IN A PROCEEDING IN
EQUITY OR AT LAW).
3.4 BROKER. SELLER HAS NOT INCURRED ANY LIABILITY, CONTINGENT OR
OTHERWISE, FOR BROKER'S OR FINDER'S FEES RELATING TO THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT.
3.5 LITIGATION. THERE IS NO LITIGATION OR PROCEEDING PENDING OR, TO
SELLER'S KNOWLEDGE THREATENED, OR ANY ORDER, INJUNCTION OR DECREE OUTSTANDING,
AGAINST OR RELATING TO SELLER OR THE INTERESTS THAT, IF ADVERSELY DETERMINED,
WOULD HAVE A MATERIAL ADVERSE EFFECT UPON THE INTERESTS; AND, TO SELLER'S
KNOWLEDGE, (i) SELLER IS NOT IN VIOLATION OF ANY APPLICABLE LAW, REGULATION,
ORDINANCE, OR ANY OTHER APPLICABLE REQUIREMENT OF ANY GOVERNMENTAL BODY OR
COURT, WHICH VIOLATION WOULD HAVE A MATERIAL ADVERSE EFFECT UPON THE INTERESTS,
AND (ii) NO NOTICE HAS BEEN RECEIVED BY SELLER ALLEGING ANY SUCH VIOLATION.
3.6 PREFERENTIAL RIGHTS. NO PERSON HAS ANY RIGHT TO ACQUIRE, RIGHT TO
EARN AN INTEREST OR OPERATING RIGHT, OR ANY CALL UPON, OPTION OR PREFERENTIAL
RIGHT TO PURCHASE OR SIMILAR RIGHTS IN OR WITH RESPECT TO THE INTERESTS OR
SUBSTANCES PRODUCED THEREFROM.
3.7 INTERESTS. TO THE KNOWLEDGE OF SELLER:
(a) THE LEASES ARE IN FULL FORCE AND EFFECT, ARE VALID AND
SUBSISTING, AND COVER THE ENTIRE ESTATES THEY PURPORT TO
COVER.
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(b) SELLER IS NOT IN DEFAULT UNDER ANY AGREEMENT PERTAINING TO THE
INTERESTS.
(c) ALL ROYALTIES, RENTALS, AND OTHER PAYMENTS DUE UNDER THE
LEASES HAVE BEEN PROPERLY AND TIMELY PAID, AND ALL CONDITIONS
NECESSARY TO KEEP THE LEASES IN FORCE HAVE BEEN FULLY
PERFORMED.
(d) SELLER IS NOT OBLIGATED, BY VIRTUE OF ANY PREPAYMENT
ARRANGEMENT, TAKE-OR-PAY ARRANGEMENT, PRODUCTION PAYMENT, OR
OTHER SIMILAR ARRANGEMENT TO DELIVER SUBSTANCES PRODUCED FROM
OR WITH RESPECT TO THE INTERESTS AT SOME FUTURE TIME WITHOUT
THEN OR THEREAFTER RECEIVING FULL PAYMENT THEREFOR.
(e) ALL AD VALOREM, PROPERTY, PRODUCTION, SEVERANCE, EXCISE, AND
SIMILAR TAXES AND ASSESSMENTS BASED ON OR MEASURED BY THE
OWNERSHIP OF PROPERTY OR THE PRODUCTION OF HYDROCARBONS OR THE
RECEIPT OF PROCEEDS THEREFROM ON OR WITH RESPECT TO THE
INTERESTS THAT HAVE BECOME DUE AND PAYABLE HAVE BEEN PROPERLY
AND TIMELY PAID.
(f) THE INTERESTS ENTITLE SELLER TO OWNERSHIP RIGHTS COEXTENSIVE
WITH THE UNDIVIDED INTERESTS SET FORTH IN EXHIBIT A, AS "NET
REVENUE INTERESTS," WITH RESPECT TO THE ITEMS DESCRIBED IN
SUBSECTIONS (a)-(e), (g) AND (h) OF SECTION 1.1 HEREOF.
SELLER'S OBLIGATION TO BEAR COSTS AND EXPENSES RELATING
THERETO, INCLUDING WITHOUT LIMITATION THE PLUGGING,
ABANDONMENT, AND SALVAGE OF THE WELLS, IS NOT GREATER THAN THE
"OPERATING INTERESTS" ALSO SET FORTH IN EXHIBIT A.
(g) SELLER IS CURRENTLY RECEIVING FROM ALL PURCHASERS OF
SUBSTANCES IN RESPECT OF THE INTERESTS AMOUNTS AT LEAST EQUAL
TO THOSE DETERMINED IN ACCORDANCE WITH THE "NET REVENUE
INTERESTS" SET FORTH IN EXHIBIT A WITHOUT SUSPENSE OR ANY
INDEMNITY OTHER THAN STANDARD DIVISION ORDER WARRANTIES.
SELLER IS PAYING THE OPERATORS OF THE SUBJECT PROPERTIES IN
RESPECT OF THE INTERESTS AMOUNTS NO GREATER THAN THOSE
DETERMINED IN ACCORDANCE WITH THE "OPERATING INTERESTS" SET
FORTH IN EXHIBIT A, AND SELLER HAS PAID ON A CURRENT BASIS ALL
COSTS AND EXPENSES IN RESPECT OF THE INTERESTS PERTAINING TO
DEVELOPMENT AND OPERATION OF THE SUBJECT PROPERTIES.
(h) ALL LAWS, RULES, REGULATIONS, ORDINANCES, AND ORDERS OF ALL
LOCAL, TRIBAL, STATE, AND FEDERAL GOVERNMENTAL BODIES,
AUTHORITIES, AND AGENCIES HAVING JURISDICTION OVER THE SUBJECT
PROPERTIES HAVE BEEN COMPLIED WITH.
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(i) EXCEPT AS SET FORTH ON EXHIBIT A, NONE OF THE SUBJECT
PROPERTIES IS EITHER OVERPRODUCED OR UNDERPRODUCED IN NATURAL
GAS UNDER ANY GAS BALANCING AGREEMENT OR GAS STORAGE AGREEMENT
OR IN REGARD TO ANY WELL, POOLING UNIT OR UNITIZED AREA
WITHOUT SUCH AN AGREEMENT.
IV. REPRESENTATIONS OF PURCHASER
PURCHASER REPRESENTS AND WARRANTS TO SELLER THAT:
4.1 EXISTENCE. PURCHASER IS A CORPORATION DULY ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF TEXAS, AND IS DULY
QUALIFIED TO CARRY ON ITS BUSINESS IN THE STATE OF TEXAS.
4.2 POWER. PURCHASER HAS THE CORPORATE POWER TO ENTER INTO AND PERFORM
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, SUBJECT TO RIGHTS TO
CONSENT BY, REQUIRED NOTICES TO, AND FILINGS WITH OR OTHER ACTIONS BY
GOVERNMENTAL ENTITIES WHERE THE SAME ARE CUSTOMARILY OBTAINED SUBSEQUENT TO THE
ASSIGNMENT OF OIL AND GAS INTERESTS AND LEASES. THE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AGREEMENT BY PURCHASER, AND THE TRANSACTIONS CONTEMPLATED
HEREBY, WILL NOT VIOLATE (i) ANY PROVISION OF THE CERTIFICATES OF INCORPORATION
OR BYLAWS OF PURCHASER, (ii) ANY MATERIAL AGREEMENT OR INSTRUMENT TO WHICH
PURCHASER IS A PARTY OR BY WHICH PURCHASER IS BOUND, (iii) ANY JUDGMENT, ORDER,
RULING, OR DECREE APPLICABLE TO PURCHASER AS A PARTY IN INTEREST, OR (iv) ANY
LAW, RULE OR REGULATION APPLICABLE TO PURCHASER.
4.3 AUTHORIZATION. THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN DULY AND VALIDLY
AUTHORIZED BY ALL REQUISITE CORPORATE ACTION ON THE PART OF PURCHASER. THIS
AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED ON BEHALF OF PURCHASER, AND AT
THE CLOSING ALL DOCUMENTS AND INSTRUMENTS REQUIRED HEREUNDER TO BE EXECUTED AND
DELIVERED BY PURCHASER SHALL HAVE BEEN DULY EXECUTED AND DELIVERED. THIS
AGREEMENT DOES, AND SUCH DOCUMENTS AND INSTRUMENTS SHALL, CONSTITUTE LEGAL,
VALID AND BINDING OBLIGATIONS OF PURCHASER ENFORCEABLE IN ACCORDANCE WITH THEIR
TERMS, SUBJECT, HOWEVER, TO THE EFFECT OF BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM AND SIMILAR LAWS FROM TIME TO TIME IN EFFECT RELATING
TO THE RIGHTS AND REMEDIES OF CREDITORS, AS WELL AS TO GENERAL PRINCIPLES OF
EQUITY (REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS CONSIDERED IN A PROCEEDING
IN EQUITY OR AT LAW).
4.4 INDEPENDENT EVALUATION AND REVIEW. PURCHASER IS AN EXPERIENCED AND
KNOWLEDGEABLE INVESTOR IN THE OIL AND GAS BUSINESS. PURCHASER ACKNOWLEDGES THAT,
OTHER THAN AS EXPRESSLY SET OUT IN THIS AGREEMENT, SELLER HAS MADE NO
REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF ANY
INFORMATION SUPPLIED TO PURCHASER OR AS TO TITLE TO THE
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INTERESTS OR THE SUBJECT PROPERTIES. IN ENTERING INTO AND PERFORMING THIS
AGREEMENT, PURCHASER HAS RELIED AND WILL RELY SOLELY UPON ITS INDEPENDENT
INVESTIGATION OF, AND JUDGMENT WITH RESPECT TO, THE INTERESTS AND THE SUBJECT
PROPERTIES, THEIR CONDITION, VALUE AND SELLER'S TITLE THERETO.
4.5 FURTHER DISTRIBUTION. PURCHASER IS ACQUIRING THE INTERESTS FOR ITS
OWN ACCOUNT AND NOT WITH A VIEW TO, OR FOR OFFER OR RESALE IN CONNECTION WITH, A
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PERTAINING THERETO.
4.6 BROKERS. PURCHASER HAS INCURRED NO LIABILITY, CONTINGENT OR
OTHERWISE, FOR BROKER'S OR FINDER'S FEES RELATING TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.
4.7 LITIGATION. THERE IS NO LITIGATION OR OTHER PROCEEDING PENDING, OR
TO PURCHASER'S KNOWLEDGE THREATENED, OR ANY ORDER, INJUNCTION OR DECREE
OUTSTANDING AGAINST OR RELATING TO PURCHASER WHICH WOULD PREVENT PURCHASER FROM
ENTERING INTO THIS AGREEMENT.
V. PRE-CLOSING TRANSACTIONS
5.1 OPERATION OF THE PROPERTIES PENDING THE CLOSING DATE.
(a) PRIOR TO THE CLOSING DATE, SELLER AGREES, UNLESS SUCH
AGREEMENT IS SPECIFICALLY WAIVED BY PURCHASER IN WRITING: (i)
ONLY WITH RESPECT TO THE SUBJECT PROPERTIES, IF ANY, THAT IT
OPERATES, TO MAINTAIN AND OPERATE THE SAME IN GOOD AND
WORKMANLIKE MANNER AND IN SUBSTANTIALLY THE SAME MANNER AS
SELLER HAS HERETOFORE OPERATED THE SAME; (ii) PAY TIMELY ALL
COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH; (iii) NOT
ENTER INTO ANY MATERIAL NEW AGREEMENTS OR AMEND OR TERMINATE
ANY MATERIAL EXISTING AGREEMENTS RELATING THERETO; (iv) NOT
ENCUMBER, SELL, OR OTHERWISE DISPOSE OF ANY OF THE SUBJECT
PROPERTIES OTHER THAN IN THE ORDINARY COURSE OF BUSINESS; (v)
NOT ABANDON ANY WELL INCLUDED IN THE SUBJECT PROPERTIES OR
RELEASE OR ABANDON ANY PORTION OF THE LEASES INCLUDED THEREIN;
(vi) NOT WAIVE, COMPROMISE OR SETTLE ANY MATERIAL RIGHT OR
CLAIM THAT WOULD MATERIALLY ADVERSELY AFFECT THE OWNERSHIP OR
OPERATION OF THE SUBJECT PROPERTIES AFTER THE CLOSING DATE;
(vii) MAINTAIN INSURANCE NOW IN FORCE WITH RESPECT TO THE
SUBJECT PROPERTIES; AND (viii) USE REASONABLE EFFORTS TO CAUSE
THE LEASES AND AGREEMENTS TO BE KEPT IN FULL FORCE AND EFFECT
AND PERFORM AND COMPLY WITH ALL OF THE MATERIAL COVENANTS AND
CONDITIONS CONTAINED IN SAME. SELLER SHALL AFFORD PURCHASER
AND ITS REPRESENTATIVES ACCESS TO THE SUBJECT PROPERTIES
OPERATED BY SELLER, IF ANY, ALL AT PURCHASER'S RISK AND
EXPENSE.
9
(b) SELLER SHALL NOT PROPOSE ANY OPERATION UNDER THE TERMS OF ANY
APPLICABLE OPERATING AGREEMENT AFTER THE DATE OF THIS
AGREEMENT. IN CONNECTION WITH ANY OPERATION PROPOSED BY A
PARTY OTHER THAN SELLER, SELLER SHALL FURNISH PURCHASER ANY
DATA AND OTHER INFORMATION FURNISHED TO SELLER UNDER ANY SUCH
OPERATING AGREEMENT BY THE PARTY PROPOSING SUCH OPERATION.
PURCHASER SHALL THEN ELECT WHETHER TO CONSENT TO SUCH PROPOSED
OPERATION, AND SELLER SHALL BE BOUND BY PURCHASER'S DECISION
TO CONSENT OR NOT TO SUCH OPERATION.
5.2 CASUALTY; INSURANCE. PURCHASER SHALL ASSUME THE RISK OF ANY CHANGE
IN THE CONDITION OF THE SUBJECT PROPERTIES FROM THE EFFECTIVE DATE UNTIL
CLOSING. SHOULD ANY OF THE WELLS BE DESTROYED, LOST OR CEASE TO PRODUCE BECAUSE
OF BLOWOUT, FIRE, STORM, CASING COLLAPSE, ACT OF GOD OR OTHER CASUALTY PENDING
THE CLOSING DATE, SUCH EVENT SHALL NOT CONSTITUTE A TITLE DEFECT, NOR SHALL
PURCHASER BE RELIEVED OF ITS OBLIGATION TO CLOSE HEREUNDER; PROVIDED, HOWEVER,
THAT PURCHASER SHALL BE ENTITLED TO RECEIVE AN ASSIGNMENT OF ANY INSURANCE
CLAIMS OR CAUSES OF ACTION THAT SELLER MAY BE ENTITLED TO ASSERT OR PURSUE
AGAINST INSURERS OR OPERATORS OR THIRD PARTIES AS A RESULT OF THE LATTER'S
NEGLIGENCE.
5.3 PERMISSIONS. PURCHASER SHALL OBTAIN ALL APPLICABLE LOCAL, STATE AND
FEDERAL GOVERNMENTAL AND AGENCY PERMISSIONS, APPROVALS AND CONSENTS AS MAY BE
REQUIRED TO CONSUMMATE THE SALE CONTEMPLATED HEREUNDER (EXCLUDING THOSE
PERMISSIONS, APPROVALS, AND CONSENTS WHICH ARE CUSTOMARILY OBTAINED AFTER THE
ASSIGNMENT OF AN OIL AND GAS LEASE OR INTEREST), INCLUDING BUT NOT LIMITED TO
APPROVALS FROM THE MINERALS MANAGEMENT SERVICE, UNITED STATES DEPARTMENT OF THE
INTERIOR.
VI. SELLER'S CONDITIONS OF CLOSING
SELLER'S OBLIGATION TO CONSUMMATE THE TRANSACTION PROVIDED FOR HEREIN
IS SUBJECT TO THE SATISFACTION OR WAIVER BY SELLER OF THE FOLLOWING CONDITIONS:
6.1 REPRESENTATIONS. THE REPRESENTATIONS AND WARRANTIES OF PURCHASER
CONTAINED IN ARTICLE IV SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON
THE CLOSING DATE AS IF MADE ON AND AS OF THAT DATE.
6.2 PERFORMANCE. PURCHASER SHALL HAVE PERFORMED IN ALL MATERIAL
RESPECTS THE OBLIGATIONS, COVENANTS AND AGREEMENTS HEREUNDER TO BE PERFORMED BY
IT AT OR PRIOR TO THE CLOSING.
6.3 PENDING MATTERS. NO SUIT, ACTION OR OTHER PROCEEDING BY A THIRD
PARTY OR A GOVERNMENTAL AUTHORITY SHALL BE PENDING OR THREATENED THAT SEEKS
SUBSTANTIAL DAMAGES FROM
10
SELLER IN CONNECTION WITH, OR SEEKS TO RESTRAIN, ENJOIN OR OTHERWISE PROHIBIT,
CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT.
VII. PURCHASER'S CONDITIONS OF CLOSING
PURCHASER'S OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREBY IS SUBJECT TO THE SATISFACTION OR WAIVER BY PURCHASER OF THE FOLLOWING
CONDITIONS:
7.1 REPRESENTATIONS. THE REPRESENTATIONS AND WARRANTIES OF SELLER
CONTAINED IN ARTICLE III SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON
THE DATE OF CLOSING AS THOUGH MADE ON AND AS OF THAT DATE.
7.2 PERFORMANCE. SELLER SHALL HAVE PERFORMED IN ALL MATERIAL RESPECTS
THE OBLIGATIONS, COVENANTS AND AGREEMENTS HEREUNDER TO BE PERFORMED BY IT AT OR
PRIOR TO THE CLOSING.
7.3 PENDING MATTERS. NO SUIT, ACTION OR OTHER PROCEEDING BY A THIRD
PARTY OR A GOVERNMENTAL AUTHORITY SHALL BE PENDING OR THREATENED THAT SEEKS
SUBSTANTIAL DAMAGES FROM PURCHASER IN CONNECTION WITH, OR SEEKS TO RESTRAIN,
ENJOIN OR OTHERWISE PROHIBIT, CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT.
7.4 ACQUISITION OF OVERRIDING ROYALTY. PURCHASER SHALL HAVE ACQUIRED
THE OVERRIDING ROYALTY OWNED BY FREEPORT-MCMORAN OIL AND GAS ROYALTY PARTNERSHIP
ON TERMS AND CONDITIONS SATISFACTORY TO PURCHASER IN ITS SOLE DISCRETION.
7.5 DISSOLUTION OF PARTNERSHIP. THE FREEPORT-MCMORAN OIL AND GAS
ROYALTY PARTNERSHIP SHALL BE DISSOLVED AND THE INDEMNITY OF THE MANAGING GENERAL
PARTNER THEREOF SHALL BE TERMINATED.
VIII. CLOSING
8.1 TIME AND PLACE OF CLOSING. IF THE CONDITIONS OF CLOSING HAVE BEEN
SATISFIED OR WAIVED, PURCHASE AND SALE OF THE INTERESTS (THE "CLOSING") SHALL BE
HELD AS SOON AS POSSIBLE BUT NOT LATER THAN THE CLOSING DATE AT SELLER'S
COUNSEL'S OFFICES IN HOUSTON, TEXAS, OR OTHER MUTUALLY ACCEPTABLE LOCATION.
8.2 CLOSING OBLIGATIONS. AT THE CLOSING:
(a) SELLER SHALL EXECUTE, ACKNOWLEDGE AND DELIVER AN ASSIGNMENT
AND BILL OF SALE TO CONVEY TITLE TO THE INTERESTS TO PURCHASER
WITH SPECIAL LIMITED WARRANTY OF TITLE
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(IN SUFFICIENT COUNTERPARTS TO FACILITATE RECORDING), IN THE
FORMS ATTACHED AS EXHIBIT B.
(b) SELLER SHALL EXECUTE AND DELIVER A RELEASE OF PURCHASER FROM
ANY OBLIGATION WITH RESPECT TO THE EXCESS CLASS A COSTS FROM
AND AFTER THE CLOSING DATE.
(c) SELLER SHALL EXECUTE SUCH OTHER INSTRUMENTS AND TAKE SUCH
OTHER ACTION AS MAY BE NECESSARY TO CARRY OUT ITS OBLIGATIONS
UNDER THIS AGREEMENT;
(d) PURCHASER SHALL PAY THE PURCHASE PRICE BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FEDERAL FUNDS;
(e) PURCHASER SHALL EXECUTE, ACKNOWLEDGE AND ACCEPT THE ASSIGNMENT
AND BILL OF SALE EXECUTED BY SELLER AND SHALL EXECUTE SUCH
OTHER INSTRUMENTS AND TAKE SUCH OTHER ACTION AS MAY BE
NECESSARY TO CARRY OUT ITS OBLIGATIONS UNDER THIS AGREEMENT;
(f) SELLER AND PURCHASER SHALL, IF NEEDED, EXECUTE, ACKNOWLEDGE
AND DELIVER TRANSFER ORDERS OR LETTERS IN LIEU THEREOF
DIRECTING ALL PURCHASERS OF PRODUCTION TO MAKE PAYMENT TO
PURCHASER OF PROCEEDS ATTRIBUTABLE TO THE INTERESTS;
(g) IF SELLER SHALL BE RESPONSIBLE ON THE CLOSING DATE FOR
DISBURSEMENT TO THIRD PARTIES OF PROCEEDS FROM PRODUCTION WITH
RESPECT TO THE INTERESTS AND PURCHASER SHALL REQUIRE
ADDITIONAL TIME AFTER THE CLOSING DATE TO ASSUME THIS
RESPONSIBILITY IN ORDER TO AVOID ANY INTERRUPTION IN SUCH
DISBURSEMENT AS THE RESULT OF SALE OF THE INTERESTS, SELLER
AND PURCHASER SHALL ENTER INTO A MUTUALLY ACCEPTABLE LETTER
AGREEMENT PROVIDING THAT SELLER SHALL RETAIN RESPONSIBILITY
THEREFOR FOR A PERIOD NOT TO EXCEED NINETY (90) DAYS FROM THE
FIRST DAY OF THE MONTH NEXT FOLLOWING THE MONTH IN WHICH THE
CLOSING DATE OCCURS;
(h) PURCHASER SHALL DELIVER TO SELLER CERTIFICATE(s) OF INSURANCE
AS REQUIRED PURSUANT TO SECTION 9.4 HEREOF; AND
(i) PURCHASER SHALL DELIVER TO SELLER THE OPINION OF PURCHASER'S
COUNSEL AS REQUIRED PURSUANT TO SECTION 9.4 HEREOF.
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IX. POST-CLOSING OBLIGATIONS
9.1 RECEIPTS AND CREDITS. ALL MONIES, PROCEEDS, RECEIPTS, CREDITS AND
INCOME ATTRIBUTABLE TO THE INTERESTS FOR ALL PERIODS OF TIME SUBSEQUENT TO THE
EFFECTIVE DATE SHALL BE THE SOLE PROPERTY AND ENTITLEMENT OF THE PURCHASER, AND,
TO THE EXTENT RECEIVED BY SELLER AFTER THE CLOSING, SELLER SHALL FULLY DISCLOSE,
ACCOUNT FOR AND PROMPTLY TRANSMIT SAME TO PURCHASER. ALL MONIES, PROCEEDS,
RECEIPTS AND INCOME ATTRIBUTABLE TO SELLER'S INTEREST IN THE PROPERTIES FOR ALL
PERIODS OF TIME PRIOR TO THE EFFECTIVE DATE SHALL BE THE SOLE PROPERTY AND
ENTITLEMENT OF SELLER, AND, TO THE EXTENT RECEIVED BY PURCHASER, PURCHASER SHALL
FULLY DISCLOSE, PROMPTLY ACCOUNT FOR AND TRANSMIT SAME TO SELLER. ALL COSTS,
EXPENSES, TAXES (SUBJECT TO ARTICLE XI) AND DISBURSEMENTS, ATTRIBUTABLE TO
PERIODS OF TIME PRIOR TO THE EFFECTIVE DATE, REGARDLESS OF WHEN DUE OR PAYABLE,
SHALL BE THE SOLE OBLIGATION OF SELLER, AND SELLER SHALL PROMPTLY PAY, OR IF
PAID BY PURCHASER, PROMPTLY REIMBURSE PURCHASER FOR SAME. ALL COSTS, EXPENSES,
TAXES (SUBJECT TO ARTICLE XI) AND DISBURSEMENTS, ATTRIBUTABLE TO PERIODS OF TIME
SUBSEQUENT TO THE EFFECTIVE DATE, REGARDLESS OF WHEN DUE OR PAYABLE, SHALL BE
THE SOLE OBLIGATION OF PURCHASER, AND IF PAID BY SELLER, SELLER SHALL BE
PROMPTLY REIMBURSED BY PURCHASER. SELLER SHALL BE ENTITLED TO A CREDIT FOR AND
REIMBURSEMENT IN AN AMOUNT EQUAL TO ANY AMOUNT RECEIVED BY PURCHASER AFTER
CLOSING FOR ANY DELIVERY OR PERFORMANCE BY SELLER PRIOR TO THE EFFECTIVE DATE.
ALL UNCOLLECTED ACCOUNTS RECEIVABLE ATTRIBUTABLE TO THE INTERESTS, AFTER THE
EFFECTIVE DATE, SHALL BE ASSIGNED TO PURCHASER.
TO THE EXTENT THE PROVISIONS OF THIS SECTION 9.1 MAY BE INTERPRETED TO
CONFLICT WITH THE PROVISIONS OF SECTION 9.2 BELOW, THE PROVISIONS OF SECTION 9.2
SHALL BE DEEMED TO CONTROL.
9.2 INDEMNITY. IF CLOSING OCCURS:
PURCHASER AGREES TO RELEASE, DEFEND, INDEMNIFY, AND HOLD SELLER, ITS
RESPECTIVE AFFILIATED COMPANIES AND THE OFFICERS, DIRECTORS, AGENTS,
REPRESENTATIVES AND EMPLOYEES OF EACH HARMLESS FROM ANY DAMAGES, EXPENSES
(INCLUDING COURT COSTS AND ATTORNEY'S FEES), CIVIL FINES, PENALTIES AND OTHER
COSTS AND LIABILITIES INCURRED AS A RESULT OF CLAIMS, DEMANDS, AND CAUSES OF
ACTION NOT NOW KNOWN TO SELLER. AND MADE ON OR AFTER THE EFFECTIVE DATE AS A
RESULT OF OWNERSHIP OR OPERATION OF, OR FOR ANY ACT OR OMISSION IN CONNECTION
WITH , THE INTERESTS PURCHASED AND SOLD HEREUNDER, WHETHER BEFORE OR AFTER THE
EFFECTIVE DATE OF THE PURCHASE AND SALE, BY PURCHASER, SELLER, OR OTHER PARTIES,
OR FOR ANY ACT OR OMISSION BY PURCHASER OR BY SELLER UNDER ANY AGREEMENT ASSUMED
BY PURCHASER, OR FOR ANY ACT OR OMISSION OF PURCHASER UNDER THIS AGREEMENT
INCLUDING, BUT NOT LIMITED TO, CLAIMS, DEMANDS, AND CAUSES OF ACTION ASSERTED BY
THIRD PARTIES, ANY LOCAL, STATE, OR FEDERAL GOVERNMENT, AGENCY OR BODY THEREOF,
AND PERSONS HOLDING
13
RIGHTS UNDER ANY AGREEMENT ASSUMED BY PURCHASER FOR DEATH, INJURY, DAMAGE TO
PROPERTY, OR FAILURE TO COMPLY WITH THE EXPRESS OR IMPLIED TERMS OF THIS
AGREEMENT AND FOR ANY COSTS AND EXPENSES ARISING OUT OF, OR IN CONNECTION WITH,
THE PLUGGING AND ABANDONING OF ANY WELLS, REMOVAL OR MODIFICATION (INCLUDING
PIPELINES) AND RESTORATION OF THE OCEAN FLOOR SURFACE, REGARDLESS OF WHETHER THE
OBLIGATION TO PLUG, REMOVE, MODIFY OR RESTORE AROSE PRIOR TO OR SUBSEQUENT TO
THE EFFECTIVE DATE. PURCHASER'S INDEMNIFICATION OF SELLER SHALL EXTEND TO AND
INCLUDE, WITHOUT LIMITATION, CLAIMS, CAUSES OF ACTION OR DEMANDS BASED ON (i)
THE NEGLIGENCE OF PURCHASER, SELLER, OR THIRD PARTIES, WHETHER SUCH NEGLIGENCE
IS ACTIVE OR PASSIVE, JOINT, CONCURRENT, OR SOLE, OR (ii) STRICT LIABILITY. THE
FOREGOING INDEMNIFICATION SHALL NOT APPLY TO CLAIMS ASSERTED BY SELLER'S
EMPLOYEES FOR INJURIES SUFFERED WITH RESPECT TO THE INTERESTS PRIOR TO THE
EFFECTIVE DATE.
PURCHASER UNDERSTANDS AND AGREES THAT THIS PURCHASE AND SALE IS MADE ON
AN "AS IS, WHERE IS" BASIS, AND PURCHASER RELEASES SELLER FROM ANY LIABILITY
WITH RESPECT TO THE INTERESTS BEING PURCHASED AND SOLD HEREUNDER WHETHER OR NOT
CAUSED BY OR ATTRIBUTABLE TO SELLER'S NEGLIGENCE AND WHETHER OR NOT ARISING
DURING THE PERIOD OF, OR FROM, OR IN CONNECTION WITH SELLER'S OWNERSHIP OF THE
INTERESTS. WITHOUT LIMITING THE ABOVE, PURCHASER WAIVES ITS RIGHT TO RECOVER
FROM SELLER AND FOREVER RELEASES AND DISCHARGES SELLER AND AGREES TO HOLD SELLER
HARMLESS FROM ANY AND ALL DAMAGES, CLAIMS, LOSSES, LIABILITIES, PENALTIES,
FINES, LIENS, JUDGMENTS, COSTS, AND EXPENSES WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS' FEES AND COSTS), WHETHER DIRECT OR INDIRECT, KNOWN OR
UNKNOWN, FORESEEN OR UNFORESEEN, THAT MAY ARISE ON ACCOUNT OF OR IN ANY WAY BE
CONNECTED WITH THE PHYSICAL CONDITION OF THE SUBJECT PROPERTIES AND THE WELLS 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. SECTIONS 9601 ET SEQ.), THE RESOURCES CONSERVATION AND
RECOVERY ACT OF 1976 (42 U.S.C. SECTION 6901 ET SEQ.), THE CLEAN WATER ACT (33
U.S.C. SECTIONS 466 ET SEQ.). THE SAFE DRINKING WATER ACT (14 U.S.C. SECTIONS
1401-1450), THE HAZARDOUS MATERIALS TRANSPORTATION ACT (49 U.S.C. SECTIONS 1801
ET SEQ.), THE TOXIC SUBSTANCE CONTROL ACT (15 U.S.C. SECTIONS 2601-2629), THE
14
CLEAN AIR ACT (42 U.S.C. SECTION 7401 ET SEQ.) AS AMENDED, THE CLEAN AIR ACT
AMENDMENTS OF 1990, AND ALL OTHER FEDERAL LAWS.
PURCHASER, ITS SUCCESSORS AND ASSIGNS, HEREBY AGREE TO INDEMNIFY, HOLD
HARMLESS, AND DEFEND SELLER, ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND REPRESENTATIVES SUCCESSORS AND ASSIGNS, FROM AND AGAINST ALL DAMAGES,
LOSSES, CLAIMS, DEMANDS, AND CAUSES OF ACTION (INCLUDING BUT NOT LIMITED TO ANY
CIVIL FINES, PENALTIES, EXPENSES, COSTS OF COSTS OF REMOVAL OR MODIFICATION OF
FACILITIES ON THE LEASE ASSIGNED HEREUNDER, AND PLUGGING LIABILITIES FOR ANY AND
ALL WELLS) BROUGHT BY ANY AND ALL PERSONS (INCLUDING BUT NOT LIMITED TO,
PURCHASER'S AND SELLER'S EMPLOYEES, AGENTS, OR REPRESENTATIVES AND ANY PRIVATE
CITIZENS, PERSONS, ORGANIZATIONS, AND ANY AGENCY, BRANCH OR REPRESENTATIVE OF
FEDERAL, STATE, OR LOCAL GOVERNMENT), ON ACCOUNT OF ANY PERSONAL INJURY, DEATH,
DAMAGE, DESTRUCTION, LOSS OF PROPERTY, OR CONTAMINATION OF NATURAL RESOURCE
(INCLUDING SOIL, AIR, SURFACE WATER OR GROUND WATER) RESULTING FROM, ARISING OUT
OF, CAUSED BY, OR CONNECTED WITH ANY ENVIRONMENTAL CONDITION OF THE INTEREST OR
PROPERTY ON OR AFTER THE EFFECTIVE DATE OF THIS ASSIGNMENT, INCLUDING, BUT NOT
LIMITED TO, THE PRESENCE, DISPOSAL, OR RELEASE OF ANY MATERIAL OF ANY KIND, IN,
ON, OR UNDER THE PROPERTY OR OTHER PROPERTY (WHETHER NEIGHBORING OR OTHERWISE)
OR CAUSED BY OR CONNECTED WITH ACTS OR OMISSIONS OF PURCHASER, ITS EMPLOYEES,
REPRESENTATIVES, OR AGENTS WITH REGARD TO ITS USE, OWNERSHIP, OR OPERATION OF
THE INTERESTS OR THE SUBJECT PROPERTIES. PURCHASER'S INDEMNIFICATION SHALL
EXTEND TO AND INCLUDE, BUT NOT BE LIMITED TO (i) THE NEGLIGENCE OF PURCHASER,
AND THIRD PARTIES, WHETHER SUCH NEGLIGENCE IS ACTIVE OR PASSIVE, JOINT, SOLE OR
CONCURRENT, (ii) SELLER'S STRICT LIABILITY, AND (iii) SELLER'S LIABILITY OR
OBLIGATIONS UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND
LIABILITY ACT OF 1980, AS AMENDED (42 U.S.C. SECTIONS 9601 ET SEQ.), THE
RESOURCES CONSERVATION AND RECOVERY ACT OF 1976 (42 U.S.C. SECTION 6901 ET
SEQ.), THE CLEAN WATER ACT (33 U.S.C. SECTIONS 466 ET SEQ.). THE SAFE DRINKING
WATER ACT (14 U.S.C. SECTIONS 1401-1450), THE HAZARDOUS MATERIALS TRANSPORTATION
ACT (49 U.S.C. SECTIONS 1801 ET SEQ.), THE TOXIC SUBSTANCE CONTROL ACT (15
U.S.C. SECTIONS 2601-2629), THE CLEAN AIR ACT (42 U.S.C. SECTION 7401 ET SEQ.)
AS AMENDED, THE CLEAN AIR ACT AMENDMENTS OF 1990, AND ALL OTHER FEDERAL LAWS.
THIS INDEMNIFICATION SHALL BE IN ADDITION TO ANY OTHER INDEMNITY
15
PROVISIONS CONTAINED IN THIS AGREEMENT, AND IT IS EXPRESSLY UNDERSTOOD AND
AGREED THAT ANY TERMS OF THIS PROVISION SHALL CONTROL WITH REFERENCE TO ANY
CONFLICTING OR CONTRADICTORY TERMS OR PROVISIONS CONTAINED IN THIS AGREEMENT.
IT IS THE INTENTION OF THE PARTIES THAT PURCHASER'S INDEMNITY OF SELLER
SHALL NOT EXTEND TO ANY CLAIMS, DEMANDS OR CAUSES OF ACTION KNOWN TO SELLER AS
OF THE EFFECTIVE DATE.
9.3. PLUGGING AND ABANDONMENT. PURCHASER RECOGNIZES AND SPECIFICALLY
ASSUMES THE OBLIGATION TO PROPERLY PLUG AND ABANDON ANY AND ALL WELLS AND REMOVE
ALL EQUIPMENT AND FACILITIES, INCLUDING, BUT NOT LIMITED TO, PIPELINES AND
TREATMENT FACILITIES ASSOCIATED WITH THE SUBJECT PROPERTIES WHEN APPROPRIATE AND
IN ACCORDANCE WITH THE RULES, REGULATIONS, AND REQUIREMENTS OF ANY GOVERNMENTAL
AUTHORITY HAVING JURISDICTION THEREOF AND IN ACCORDANCE WITH ALL OBLIGATIONS,
EXPRESS OR IMPLIED, IN ANY AGREEMENT ASSUMED BY PURCHASER. PURCHASER SHALL PAY
ALL COSTS AND EXPENSES ASSOCIATED WITH ANY SUCH PLUGGING AND ABANDONING OR
REMOVAL.
9.4 INSURANCE; COUNSEL'S OPINION. AT THE CLOSING PURCHASER SHALL
FURNISH (i) CERTIFICATE(S) OF INSURANCE NAMING SELLER AS AN ADDITIONAL INSURED
ON ITS POLICY FOR AS LONG AS PURCHASER OWNS THE INTERESTS, IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO SELLER, WITH RESPECT TO PURCHASER'S POST-CLOSING
OBLIGATIONS AS SET FORTH IN SECTIONS 9.2 AND 9.3 HEREOF; AND (ii) THE OPINION OF
PURCHASER'S COUNSEL, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO SELLER, WITH
RESPECT TO PURCHASER'S POST-CLOSING OBLIGATIONS AS SET FORTH IN SECTION 9.3
HEREOF.
9.5 FURTHER ASSURANCES. AFTER CLOSING, SELLER AND PURCHASER SHALL TAKE
SUCH FURTHER ACTIONS AND TO EXECUTE, ACKNOWLEDGE AND DELIVER ALL SUCH FURTHER
DOCUMENTS NECESSARY OR USEFUL IN CARRYING OUT THE PURPOSES OF THIS AGREEMENT OR
ANY DOCUMENT DELIVERED PURSUANT HERETO.
X. TERMINATION
10.1 RIGHT OF TERMINATION. THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY MAY BE TERMINATED AT ANY TIME AT OR PRIOR TO THE CLOSING:
(a) BY MUTUAL CONSENT OF THE PARTIES; OR
(b) BY EITHER SELLER OR PURCHASER IF THE CONDITIONS PRECEDENT TO
SUCH PARTY'S OBLIGATION TO CLOSE, AS SET FORTH IN ARTICLES VI
AND VII HEREOF, RESPECTIVELY, SHALL NOT HAVE BEEN MET.
16
10.2 EFFECT OF TERMINATION. IF TERMINATED PURSUANT TO THIS ARTICLE X,
THIS AGREEMENT SHALL BECOME VOID AND OF NO FURTHER FORCE OR EFFECT; EACH PARTY
SHALL BEAR ALONE ITS RESPECTIVE COSTS AND EXPENSES INCURRED PRIOR TO SUCH
TERMINATION; AND NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY ACTUAL,
CONSEQUENTIAL, OR INCIDENTAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST
PROFITS. UPON TERMINATION OF THIS AGREEMENT PURSUANT TO THIS ARTICLE X, SELLER
SHALL BE FREE TO IMMEDIATELY ENJOY ALL EXISTING RIGHTS OF OWNERSHIP OF THE
INTERESTS AND SUBJECT PROPERTIES AND TO SELL, TRANSFER, ENCUMBER OR OTHERWISE
DISPOSE OF THE INTERESTS TO ANY PARTY WITHOUT ANY RESTRICTIONS UNDER THIS
AGREEMENT.
XI. TAXES
11.1 SALES TAXES. THE PURCHASE PRICE PROVIDED FOR HEREUNDER IS NET OF
ANY SALES TAXES OR OTHER TRANSFER TAXES IN CONNECTION WITH THE SALE OF THE
INTERESTS. PURCHASER SHALL BE LIABLE FOR ANY SALES TAX OR OTHER TRANSFER TAX, AS
WELL AS ANY APPLICABLE CONVEYANCE, TRANSFER AND RECORDING FEES, AND REAL ESTATE
TRANSFER STAMPS OR TAXES IMPOSED ON THE TRANSFER OF INTERESTS PURSUANT TO THIS
AGREEMENT. PURCHASER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER WITH
RESPECT TO THE PAYMENT OF ANY OF THOSE TAXES, INCLUDING ANY INTEREST OR
PENALTIES ASSESSED THEREON.
11.2 OTHER TAXES. ALL PRODUCTION, SEVERANCE, EXCISE, CONSERVATION FEES
AND OTHER SUCH SIMILAR TAXES OR FEES (OTHER THAN INCOME TAXES) RELATING TO
PRODUCTION OF SUBSTANCES ATTRIBUTABLE TO THE INTERESTS PRIOR TO THE EFFECTIVE
DATE SHALL BE PAID BY SELLER, AND ALL SUCH TAXES RELATING TO SUCH PRODUCTION ON
OR AFTER THE EFFECTIVE DATE SHALL BE PAID BY PURCHASER.
11.3 COOPERATION. EACH PARTY TO THIS AGREEMENT SHALL:
(a) PROVIDE THE OTHER PARTY WITH REASONABLE ACCESS TO ALL RELEVANT
DOCUMENTS, DATA AND OTHER INFORMATION WHICH MAY BE REQUIRED BY
THE OTHER PARTY FOR THE PURPOSE OF PREPARING TAX RETURNS AND
RESPONDING TO ANY AUDIT BY ANY TAXING JURISDICTION AND
COOPERATE WITH ALL REASONABLE REQUESTS OF THE OTHER PARTY MADE
IN CONNECTION WITH CONTESTING THE IMPOSITION OF TAXES;
PROVIDED, HOWEVER, THAT NEITHER PARTY SHALL BE REQUIRED AT ANY
TIME TO DISCLOSE TO THE OTHER PARTY ANY TAX RETURNS OR OTHER
CONFIDENTIAL TAX INFORMATION; AND
(b) COOPERATE WITH THE OTHER PARTY TO PROVIDE INFORMATION REQUIRED
BY THE INTERNAL REVENUE SERVICE ON ASSET SALES AND
ACQUISITIONS.
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XII. INDEPENDENT INVESTIGATION AND DISCLAIMER
12.1 PURCHASER ACKNOWLEDGES THAT IN MAKING THE DECISION TO ENTER INTO
THIS AGREEMENT AND CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, IT HAS
RELIED SOLELY ON THE BASIS OF ITS OWN INDEPENDENT INVESTIGATION OF THE INTERESTS
AND MATTERS RELATED THERETO AND UPON THE REPRESENTATIONS, WARRANTIES AND
COVENANTS IN THIS AGREEMENT. ACCORDINGLY, PURCHASER ACKNOWLEDGES THAT SELLER HAS
NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE, OR OTHERWISE
RELATING TO (i) THE CONDITION OF THE INTERESTS OR THE SUBJECT PROPERTIES
(INCLUDING WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS
OR SAMPLES OF MATERIALS) AND (ii) ANY INFORMATION, DATA OR OTHER MATERIALS
(WRITTEN OR ORAL) FURNISHED TO PURCHASER BY OR ON BEHALF OF SELLER (INCLUDING,
WITHOUT LIMITATION, THE EXISTENCE OR EXTENT OF OIL, GAS OR OTHER MINERAL
RESERVES, THE RECOVERABILITY OF OR THE COST OF RECOVERING ANY SUCH RESERVES, THE
VALUE OF SUCH RESERVES, ANY PRODUCT PRICING ASSUMPTIONS, PRESENT OR PAST
PRODUCTION RATES, COMPLIANCE WITH LEASE TERMS, THE CONDITION OF ANY WELL, AND
THE ABILITY TO SELL OIL OR GAS PRODUCTION AFTER CLOSING); PROVIDED, HOWEVER,
THAT THE FOREGOING DISCLAIMER AND NEGATION OF REPRESENTATIONS AND WARRANTIES
SHALL NOT AFFECT OR IMPAIR THE REPRESENTATIONS AND WARRANTIES OF SELLER SET
FORTH IN ARTICLE III HEREOF.
XIII. MISCELLANEOUS
13.1 GOVERNING LAW. THIS AGREEMENT AND ALL ASSIGNMENTS AND OTHER
INSTRUMENTS EXECUTED IN ACCORDANCE WITH IT SHALL BE GOVERNED BY AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
13.2 DECEPTIVE TRADE PRACTICES ACT. IF APPLICABLE, PURCHASER EXPRESSLY
WAIVES THE PROVISIONS OF CHAPTER XVII, SUBCHAPTER E, SECTIONS 17.41 THROUGH
17.63, INCLUSIVE (OTHER THAN SECTION 17.55a) VERNON'S TEXAS CODE ANNOTATED,
BUSINESS AND COMMERCE CODE (THE "DECEPTIVE TRADE PRACTICES ACT").
13.3 ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN THE PARTIES AND SUPERSEDES ALL PRIOR AGREEMENTS, UNDERSTANDINGS,
NEGOTIATIONS AND DISCUSSIONS, WHETHER ORAL OR WRITTEN, OF THE PARTIES. NO
SUPPLEMENT, AMENDMENT, ALTERATION, MODIFICATION, WAIVER OR TERMINATION OF THIS
AGREEMENT SHALL BE BINDING UNLESS EXECUTED IN WRITING BY THE PARTIES HERETO.
18
13.4 WAIVER. NO WAIVER OF ANY OF THE PROVISIONS OF THIS AGREEMENT SHALL
BE DEEMED OR SHALL CONSTITUTE A WAIVER OF ANY OTHER PROVISIONS HEREOF (WHETHER
OR NOT SIMILAR), NOR SHALL SUCH WAIVER CONSTITUTE A CONTINUING WAIVER UNLESS
OTHERWISE EXPRESSLY PROVIDED.
13.5 CAPTIONS. THE CAPTIONS IN THIS AGREEMENT ARE FOR CONVENIENCE ONLY
AND SHALL NOT BE CONSIDERED A PART OF OR AFFECT THE CONSTRUCTION OR
INTERPRETATION OF ANY PROVISION OF THIS AGREEMENT.
13.6 NOTICES. ANY NOTICE PROVIDED OR PERMITTED TO BE GIVEN UNDER THIS
AGREEMENT SHALL BE IN WRITING, AND MAY BE SERVED BY PERSONAL DELIVERY OR BY
DEPOSITING SAME IN THE UNITED STATES MAIL, ADDRESSED TO THE PARTY TO BE
NOTIFIED, POSTAGE PREPAID, AND REGISTERED OR CERTIFIED WITH A RETURN RECEIPT
REQUESTED. NOTICE DEPOSITED IN THE MAIL IN THE MANNER HEREIN ABOVE DESCRIBED
SHALL BE DEEMED TO HAVE BEEN GIVEN AND RECEIVED ON THE DATE OF THE DELIVERY AS
SHOWN ON THE RETURN RECEIPT. NOTICE SERVED IN ANY OTHER MANNER SHALL BE DEEMED
TO HAVE BEEN GIVEN AND RECEIVED ONLY IF AND WHEN ACTUALLY RECEIVED BY THE
ADDRESSEE. FOR PURPOSES OF NOTICE, THE ADDRESSES OF THE PARTIES SHALL BE AS
GIVEN IN THE PREAMBLE TO THIS AGREEMENT.
EACH PARTY SHALL HAVE THE RIGHT, UPON GIVING TEN (10) DAYS' PRIOR
NOTICE TO THE OTHER, IN THE MANNER HEREIN ABOVE PROVIDED, TO CHANGE ITS ADDRESS
FOR PURPOSES OF NOTICE.
13.7 EXPENSES. EXCEPT AS OTHERWISE PROVIDED HEREIN, EACH PARTY SHALL BE
SOLELY RESPONSIBLE FOR ALL EXPENSES INCURRED BY IT IN CONNECTION WITH THIS
TRANSACTION (INCLUDING, WITHOUT LIMITATION, FEES AND EXPENSES OF ITS OWN COUNSEL
AND ACCOUNTANTS).
13.8 SEVERABILITY. IF ANY TERM OR OTHER PROVISION OF THIS AGREEMENT IS
HELD INVALID, ILLEGAL OR INCAPABLE OF BEING ENFORCED UNDER ANY RULE OF LAW, ALL
OTHER CONDITIONS AND PROVISIONS OF THIS AGREEMENT SHALL NEVERTHELESS REMAIN IN
FULL FORCE AND EFFECT SO LONG AS THE ECONOMIC OR LEGAL SUBSTANCE OF THE
TRANSACTIONS CONTEMPLATED HEREBY IS NOT AFFECTED IN A MATERIALLY ADVERSE MANNER
WITH RESPECT TO EITHER PARTY.
13.9 PUBLICITY. SELLER AND PURCHASER SHALL CONSULT WITH EACH OTHER WITH
REGARD TO ALL PUBLICITY AND OTHER RELEASES ISSUED AT OR PRIOR TO THE CLOSING
CONCERNING THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND, EXCEPT
AS REQUIRED BY APPLICABLE LAW OR THE APPLICABLE RULES OR REGULATIONS OF ANY
GOVERNMENTAL BODY OR STOCK EXCHANGE, NEITHER PARTY SHALL ISSUE ANY PUBLICITY OR
OTHER RELEASE WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY.
19
13.10 CONSEQUENTIAL DAMAGES. THE PARTIES WAIVE ANY RIGHTS TO
INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM A BREACH OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS.
13.11 SURVIVAL. THE REPRESENTATIONS, WARRANTIES, COVENANTS AND
OBLIGATIONS OF THE PARTIES UNDER ARTICLE III, ARTICLE IV, ARTICLE IX, ARTICLE
XI, AND ARTICLE XII OF THIS AGREEMENT SHALL SURVIVE THE CLOSING.
13.12 COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
DULY EXECUTED.
SELLER:
IMC GLOBAL INC.
BY: /s/ BRAD JAMES
---------------------------------------
BRAD JAMES, CFO
WITNESSES:
-----------------------------
-----------------------------
PURCHASER:
TEXAS STANDARD OIL COMPANY
WITNESSES:
-----------------------------
-----------------------------
BY: /s/ TIMOTHY M. ROBERSON
--------------------------------------
TIMOTHY M. ROBERSON, PRESIDENT
20
EXHIBIT A
WEST CAMERON BLOCK 498
An undivided 23.07693% interest in and to Oil and Gas lease No. OCS-G 3520 dated
effective August 1, 1977, between the United States of America, as Lessor, and
Transco Exploration Company et al., as Lessee, covering all of Block 498, West
Cameron Area, South Addition, as shown on OCS Official Leasing Map, Louisiana
Map No. 1B, containing 5,000 acres, more or less, subject to the following:
1. Offshore Operating Agreement dated August 1, 1977, between Transco
Exploration Company, as Operator, and Freeport Oil Company, et al., as
Non-Operators, as amended;
2. Unit Agreement for West Cameron Block 494 Unit dated September 1, 1979,
between Transco Exploration Company, Freeport Oil Company et al., as
amended;
3. Unit Operating Agreement, West Cameron Block 494 Unit, dated September 1,
1979, between Transco Exploration Company, as Operator, and Freeport Oil
Company et al., as Non-Operators, as amended;
4. Gas Gathering Agreement dated effective January 1, 1998, between ANR
Production Company, IMC Global, Inc. and Coastal Field Services Company;
5. Oil Transportation Agreement dated December 10, 1997, between Coastal
states Trading, Inc. and Freeport-McMoRan Oil & Gas Co.; and
6. Overriding Royalty Conveyance dated September 28, 1983, from
McMoRan-Freeport Oil Company to McMoRan Oil & Gas Co.
Revenue Interests:
-------------------
Lease:
------
W.I. 23.07693%
N.R.I. 19.23077%
Block 494 Unit:
---------------
W.I. 11.16647%
N.R.I. 09.30538%
Facilities:
-----------
Platform "A" with 12 platform wells and associated equipment;
Platform "B" with 10 platform wells and associated equipment; and
Platform "C" with 2 platform wells and associated equipment.
WEST DELTA BLOCK 34
An undivided 30% interest in and to Oil and Gas lease No. OCS-G 3414 dated
effective January 1, 1977, between the United States of America, as Lessor, and
Transco Exploration Company et al., as Lessee, covering the N 1/2 of Block 34,
West Delta Area, as shown on OCS Official Leasing Map, Louisiana Map No. 8,
containing 2,500 acres, more or less, subject to the following:
1. Offshore Operating Agreement dated January 3, 1977, between Transco
Exploration Company, as Operator, and Freeport Oil Company, et al., as
Non-Operators, as amended;
2. Overriding Royalty Conveyance dated September 28, 1983, from
McMoRan-Freeport Oil Company to McMoRan Oil & Gas Co.
Revenue Interests:
------------------
Lease:
------
W.I. 30.00%
N.R.I. 25.00%
Facilities:
-----------
Platform "A" with 3 platform wells and 3 satellite wells with associated
equipment, production facilities and flowlines;
HIGH ISLAND BLOCK A-552
An undivided 35% interest in and to Oil and Gas Lease No. OCS-G 3949 dated
effective March 1, 1979, between the United States of America, as Lessor, and
Transco Exploration Company et al., as Lessee, covering all of Block A-552, High
Island Area, South Addition, as shown on OCS Official Leasing Map, Texas Map No.
7B, containing 5,760 acres, more or less, subject to the following:
1. Offshore Operating Agreement dated March 1, 1979, between Transco
Exploration Company, as Operator, and Freeport Oil Company, et al., as
Non-Operators, as amended;
2. Overriding Royalty Conveyance dated September 28, 1983, from
McMoRan-Freeport Oil Company to McMoRan Oil & Gas Co.
Revenue Interests:
------------------
Lease:
------
W.I. 35.00000%
N.R.I. 29.16667%
B-5ST and B-6 Wells Only:
-------------------------
O.R.R.I. 2.1875%
Facilities:
-----------
Platform "A" with 5 platform wells and associated equipment.
EXHIBIT B
ASSIGNMENT & BILL OF SALE
-------------------------
KNOW ALL MEN BY THESE PRESENTS that IMC Global, Inc. ("Assignor"), a
Delaware corporation whose address is 100 South Saunders Road, Suite 300, Lake
Forest, Illinois 60045-2581, for and in consideration of One Hundred Dollars
($100.00) and other good and valuable consideration, receipt of which is hereby
acknowledged, does hereby SELL, ASSIGN, TRANSFER, GRANT, CONVEY and DELIVER
unto Texas Standard Oil Company ("Assignee"), a Texas corporation whose mailing
address is 6371 Richmond Ave., Suite 100, Houston, Texas 77057, the following
described property (the "Interests"):
SEE ATTACHED EXHIBIT I
TO HAVE AND TO HOLD the said property unto Assignee, its successors and
assigns, forever. Assignor hereby agrees to warrant and forever defend all and
singular the property to Assignee, its successors, and assigns, against every
person whomsoever lawfully claiming or to claim the same or any part thereof,
by through or under Assignor, but not otherwise.
Assignee hereby unconditionally assumes the terms, conditions and
obligations of all applicable and valid agreements, joint operating agreements,
oil and gas sales contracts, processing agreements, easements and rights-of-way,
existing lease burdens (including, but not limited to, royalties or similar
burdens and plugging and abandonment liabilities attributable to the Interests)
and duties imposed on Assignor by governmental regulation including
specifically and without limitation of the foregoing the agreements listed in
the attached Exhibit I.
ASSIGNOR UNDERSTANDS AND AGREES THAT THIS PURCHASE AND SALE IS MADE ON AN
"AS IS, WHERE IS" BASIS, AND ASSIGNOR RELEASES ASSIGNEE FROM ANY LIABILITY WITH
RESPECT TO THE INTERESTS BEING PURCHASED AND SOLD HEREUNDER WHETHER OR NOT
CAUSED BY OR ATTRIBUTABLE TO ASSIGNEE'S NEGLIGENCE AND WHETHER OR NOT ARISING
DURING THE PERIOD OF, OR FROM, OR IN CONNECTION WITH ASSIGNEE'S OWNERSHIP OF THE
INTERESTS. WITHOUT LIMITING THE ABOVE, ASSIGNEE WAIVES ITS RIGHT TO RECOVER FROM
ASSIGNOR AND FOREVER RELEASES AND DISCHARGES ASSIGNOR AND AGREES TO HOLD
ASSIGNOR HARMLESS FROM ANY AND ALL DAMAGES, CLAIMS, LOSSES, LIABILITIES,
PENALTIES, FINES, LIENS, JUDGMENTS, COSTS, AND EXPENSES WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, ATTORNEYS' FEES AND COSTS), WHETHER DIRECT OR INDIRECT,
KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, THAT MAY ARISE ON ACCOUNT OF OR IN ANY
WAY BE CONNECTED WITH THE PHYSICAL CONDITION OF THE SUBJECT PROPERTIES AND THE
WELLS 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. Sections 9601 et seq.), THE RESOURCES
CONSERVATION AND RECOVERY ACT OF 1976 (42 U.S.C. SECTION 6901 et seq.), THE
CLEAN WATER ACT (33 U.S.C. SECTIONS 466 et seq.). THE SAFE DRINKING WATER ACT
(14 U.S.C. SECTIONS 1401-1450), THE HAZARDOUS MATERIALS TRANSPORTATION ACT (49
U.S.C. SECTIONS 1801 et seq.), THE TOXIC SUBSTANCE CONTROL ACT (15 U.S.C.
SECTIONS 2601-2629), THE CLEAN AIR ACT (42 U.S.C. SECTION 7401 et seq.) AS
AMENDED, THE CLEAN AIR ACT AMENDMENTS OF 1990, AND ALL OTHER FEDERAL LAWS.
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment effective as of 7:00 a.m., local time, January 1, 2001, on this _____
day of __________, 2001.
ASSIGNOR: ASSIGNEE:
IMC GLOBAL, INC. TEXAS STANDARD OIL COMPANY
By: By:
------------------------------ ------------------------------
Name: Timothy M. Roberson
Title: President
ACKNOWLEDGMENTS
Dates Referenced Herein and Documents Incorporated by Reference
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