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PURCHASE AND SALE AGREEMENT
BETWEEN
GENESIS GAS & OIL, LLC
AS SELLER
AND
TBI PRODUCTION COMPANY
AS PURCHASER
DATED AS OF OCTOBER 1, 1997
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the 'Agreement'), dated as of
October 1, 1997, is made and entered into by and between GENESIS GAS & OIL,
LLC, a Kansas limited liability company ('Seller'), whose address is 14
Corporation Woods, 8717 W. 110th Street, Suite 420, Overland Park, Kansas
66210, and TBI PRODUCTION COMPANY, a Delaware corporation ('Purchaser'), whose
address is 508 W. Wall Street, Suite 500, Midland, Texas 79702.
RECITALS:
A. Seller owns various oil and gas properties, either of record
or beneficially;
B. Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller the assets, properties and rights of Seller hereinafter
described, in the manner and upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, representations, warranties, covenants, conditions and agreements
contained herein, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to
be legally bound by the terms hereof, agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 PURCHASE AND SALE. Subject to the terms and conditions of
this Agreement, Seller agrees to sell and convey to Purchaser and Purchaser
agrees to purchase, accept and pay for the Assets (as defined in Section 1.2).
1.2 ASSETS. As used herein, the term 'Assets' means the following:
(a) All of Seller's right, title and interest in and to
(i) the estates and mineral rights created by the oil and gas leases and
mineral estates (the 'Leases'), described in Exhibit 'A', and (ii) all oil,
gas, water disposal and other wells located on the Leases or on lands pooled
therewith (the 'Wells'), including, but not limited to, the wells set forth in
Exhibit 'A', together with all of Seller's interest in the rights and
appurtenances incident thereto;
(b) The Overriding Royalty (as defined in Section 5.15
below);
(c) All of Seller's rights in, to and under, and
obligations arising from, all agreements relating to the Leases or Wells,
including, but not limited to, joint operating agreements,
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unitization agreements, pooling agreements, farmout agreements, drilling
agreements, exploration agreements, oil or gas product purchase and sale
contracts, gas processing or transportation agreements, leases, permits,
rights-of-way, easements, licenses, options, orders and decisions of state and
federal regulatory authorities establishing units which appear of record or in
the Records or which have been otherwise disclosed to Purchaser;
(d) All of Seller's interest in fixtures, personal
property, facilities and equipment, used or held for use or charged to the
Leases or Wells for the production, treatment, transportation, sale or disposal
of hydrocarbons or water produced therefrom or attributable thereto; and
(e) All books, files, data and records in Seller's
possession relating to the Leases or Wells, or the maintenance or operation
thereof, that Seller is not otherwise precluded from transferring to a third
party by proscription of contract (the 'Records'); reserving, however, the
rights with respect to such Records granted to Seller in Section 1.5 hereof.
1.3 EFFECTIVE TIME. Possession of the Assets shall be transferred
from Seller to Purchaser at the Closing, but ownership shall be effective as of
7:00 A.M. (local time where the Assets are located) on June 1, 1997 (the
'Effective Time'). Seller shall be entitled to any production revenues or
other amounts realized from and accruing to the Assets prior to the Effective
Time, and shall be liable for the payment of all expenses attributable to the
Assets prior to the Effective Time except expenses attributable to obligations
assumed by Purchaser in Section 9.3. Purchaser shall be entitled to any
production revenues or other amounts realized from and accruing to the Assets
and arising subsequent to the Effective Time, and shall be liable for the
payment of all expenses attributable to the Assets subsequent to the Effective
Time and attributable to pre-Effective Time obligations assumed by Purchaser in
Section 9.3.
1.4 GAUGING AND STRAPPING. Seller has caused the oil storage
facilities on, or utilized in connection with, the Assets to be gauged or
strapped as of the Effective Time. The production in such storage facilities
as of the Effective Time is owned by Seller and production placed in such
storage facilities thereafter shall belong to Purchaser.
1.5 RECORDS. In all other cases, Seller shall deliver the original
Records to Purchaser at Closing or within a reasonable amount of time after
Closing; however, Purchaser (for a period of four (4) years after Closing)
shall make available to Seller (at the location of such original Records in
Purchaser's organization), access to the original Records, upon written request
of Seller during normal business hours, and Seller shall have the right to copy
and retain such copies of the original Records as are necessary and reasonable.
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ARTICLE II
PURCHASE PRICE
2.1 PURCHASE PRICE. The cash purchase price for the Assets shall
be Thirty-Five Million Dollars ($35,000,000) (the 'Purchase Price') subject to
adjustment as set forth in Section 2.2.
2.2 ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price for the
Assets shall be adjusted as follows and the resulting amount shall be referred
to herein as the 'Adjusted Purchase Price':
(a) Reduced by the aggregate amount of the following
described proceeds received by Seller between the Effective Time and the
Closing Date (with the full period between the Effective Time and the Closing
Date referred to as the 'Adjustment Period'): (i) for the sale of oil, gas,
liquids or other associated minerals (net of any applicable royalties or other
lease burdens, marketing, gathering and transportation costs and production,
severance or sales taxes not reimbursed to Seller by the purchaser of
production) produced from the Assets during the Adjustment Period, and (ii) for
the sale, salvage or other disposition during the Adjustment Period of any
property, equipment or rights included in the Assets without Purchaser having
received full payment therefor;
(b) Reduced by an amount established pursuant to Section
10.4 for ad valorem and similar production taxes payable with respect to the
Assets for all periods ending on or prior to the Effective Time or prorated to
the Effective Time to the extent not paid prior to the Closing Date, if and
only if Purchaser expressly assumes the responsibility for and agrees to pay
such taxes when due and indemnifies Seller therefrom;
(c) Reduced by an amount equal to the value of any
Exclusion Adjustment or Defect Adjustment as defined in Section 3.4(b) or 3.5 ;
(d) Reduced with respect to each Well that is
overproduced relative to the other undivided interests in such Well as set
forth on Schedule 5.8, by an amount equal to the overproduced volumes as of the
Effective Time multiplied by $1.00 per thousand cubic feet or per million
british thermal units;
(e) Increased by the amount of all costs listed below
paid by Seller during the Adjustment Period: (i) all costs of the ordinary
course of Seller's exploration, development or production operations directly
related to the Assets, (ii) all costs for the normal maintenance of any Assets,
and (iii) otherwise from the ownership of the Assets during the Adjustment
Period;
(f) Increased by the amount equal to the value of all
merchantable oil in storage above the pipeline connection at the Effective Time
that is credited to the Assets (value to be market or contract price in effect
as of the Effective Time net of any production royalties, transportation costs
and of any production, severance or sales taxes);
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(g) Increased by the amount of property taxes, if any,
paid by Seller relating to the Assets for any period of time after the
Effective Time;
(h) Increased with respect to each Well that is
underproduced relative to the other undivided interests in such Well as set
forth on Schedule 5.8, by an amount equal to the underproduced volumes as of
the Effective Time multiplied by $1.00 per thousand cubic feet or per million
british thermal units; and
(i) Further adjusted by any other amount agreed upon by
Seller and Purchaser.
2.3 PAYMENT OF ADJUSTED PURCHASE PRICE. The Adjusted Purchase
Price shall be paid as follows:
(a) Purchaser shall pay to Seller at Closing, the amount
mutually agreed upon at least three (3) business days prior to Closing as an
estimate of the final computation of the Adjusted Purchase Price in excess of
the amount of Two Hundred Thousand Dollars ($200,000) which shall be held in
trust by legal counsel for Seller, Payne & Jones, to accommodate any final
adjustments to the Purchase Price as described below. Payment of such amount
held in trust shall be made by Payne & Jones in the manner agreed to or as
decided in Section 2.3(b).
(b) As soon as reasonably practicable after the Closing
but not later than ninety (90) days following the Closing Date, Purchaser shall
prepare and deliver to Seller a statement setting forth each final adjustment
to the Purchase Price (including a credit to Seller in the amount held out of
the payment made pursuant to Section 2.3(a) above) and showing the calculation
of each such adjustment. As soon as reasonably practicable but not later than
twenty (20) days following receipt of Purchaser's statement hereunder and any
substantiating records reasonably requested by Seller within such time, Seller
shall deliver to Purchaser a written report containing any changes that Seller
proposes be made to such statement. The parties shall undertake to agree on
the final statement of the Purchase Price no later than one hundred twenty
(120) days after the Closing Date and the required payments indicated thereon
shall be remitted no later than such time. In the event that the parties
cannot reach agreement within such period of time, they shall designate an
independent accounting firm mutually acceptable to both parties whose decision
as to adjustments shall be binding upon both parties and whose costs shall be
shared equally between Purchaser and Seller.
(c) All such payments shall be by electronic funds
transfer of immediately available funds to an account designated by the payee,
unless otherwise instructed.
2.4 ALLOCATION OF PURCHASE PRICE. Schedule 2.4 sets forth the
allocation of the Purchase Price among certain of the Assets (known as the
'Allocated Values' of the respective Assets). Seller and Purchaser are
obligated to recognize or give effect to such Allocated Values, or any
allocation of the Purchase Price that may be extrapolated from assignment of
such values with respect to Sections 3.4 and 3.5 and Article V.
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ARTICLE III
TITLE MATTERS
3.1 SELLER'S TITLE.
(a) Except as set forth on Schedule 3.1, Seller
represents that Seller's title to the Assets as of the Effective Time is (and
as of the Closing shall be) Defensible Title as defined in Section 3.2. Except
for the special warranty of title set forth in Section 3.1(b) which shall
survive Closing, the foregoing title representation shall not survive Closing.
(b) The conveyance to be delivered by Seller to Purchaser
shall be substantially in the form of Exhibit 'B' and shall be without warranty
of title other than against the claims of third parties claiming the same or
any part thereof by, through and under Seller. As reasonably requested by
Purchaser, Seller also agrees to execute and deliver at and after Closing such
other assignments, bills of sale and other documents which are appropriate to
transfer the Assets to Purchaser.
3.2 DEFINITION OF DEFENSIBLE TITLE. As used in this Agreement, the
terms 'Defensible Title' shall mean:
(a) As to each Lease that title of Seller which:
(i) is filed of record and free from reasonable
doubt such that a prudent person engaged in the business of
the ownership, development and operation of producing oil and
gas properties, with knowledge of all the facts and their
legal effect, would be willing to accept the same; and
(ii) is free and clear (except for Permitted
Encumbrances as defined in Section 3.3 below) of all liens,
encumbrances, obligations or defects which are of record prior
to Closing.
(b) As to each Well that title of Seller which:
(i) entitles Seller to own at least the 'Net
Revenue Interest' for the Wells identified on Schedule 2.4 as
being associated with such Wells, without reduction,
suspension or termination throughout the productive life of
such Well, except for any reduction, suspension or termination
as set forth in Schedule 2.4;
(ii) requires Seller to bear no greater 'Working
Interest' than the Working Interest for each of the Wells
identified on Schedule 2.4 as being associated with such
Wells, without increase throughout the productive life of such
Well, except for any increase as set forth in Schedule 2.4; and
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(iii) is free and clear (except for Permitted
Encumbrances as defined in Section 3.3 below) of all liens,
encumbrances, obligations or defects.
(c) As to the Assets other than each Lease, that title of
Seller which grants to Seller the benefits and burdens of ownership therein to
the following extent: (i) with respect to personal property, facilities and
equipment located on the Leases, that title of Seller that is free and clear of
all liens, encumbrances and defects arising by, through or under Seller, except
for Permitted Encumbrances, and (ii) with respect to all other personal
property, facilities and equipment included in the Assets, all of Seller's
right, title and interest therein.
As used in this Agreement, the term 'Title Defect' shall mean any
defect which causes Seller not to have Defensible Title.
3.3 DEFINITION OF PERMITTED ENCUMBRANCES. As used herein, the term
'Permitted Encumbrances' shall mean:
(a) Lessor's royalties, overriding royalties other than
the Overriding Royalty, reversionary interests and similar burdens of record;
(b) Division orders and sales contracts;
(c) Preferential rights to purchase and required
third-party consents and similar agreements, all of which are set forth on
Schedule 3.5, with respect to which waivers or consents are obtained from the
appropriate parties or the appropriate time period for asserting the right has
expired without an exercise of the rights;
(d) All rights to consent by, required notices to,
filings with, or other actions by governmental entities in connection with the
sale or conveyance of oil and gas leases or interests therein if they are
customarily obtained subsequent to the sale or conveyance;
(e) Conventional rights of reassignment prior to release
of a leasehold interest requiring ninety (90) days or less notice to the
holders of the rights;
(f) Easements, rights-of-way, servitudes, permits,
surface leases and other rights in respect of surface operations;
(g) All rights reserved to or vested in any governmental,
statutory or public authority to control or regulate any of the Leases or Wells
in any manner, and all applicable laws, rules and orders of governmental
authority;
(h) Any encumbrance on or affecting the Assets which is
assumed or paid by Purchaser at or prior to Closing or which is discharged at
or prior to Closing; and
(i) Any Title Defects that Purchaser shall have expressly
waived in writing or which are deemed to have been waived by operation of
Section 3.4.
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3.4 TITLE FAILURE; DEFECT ADJUSTMENTS.
(a) 'Defective Interests' shall mean that portion of the
value of any of the Assets as described on Schedule 2.4 affected by a Title
Defect or that Purchaser is otherwise entitled under Section 3.4 or 3.5 to
treat as Defective Interests, and of which Seller has been given notice by
Purchaser on or before a date which is three (3) business days prior to the
Closing Date. Such notice shall be in writing and shall include (i) a
description of the Defective Interests, (ii) the basis for the defect that
Purchaser believes causes such Assets to be treated as Defective Interests,
(iii) the Allocated Values of the Defective Interests, and (iv) the amount by
which Purchaser reasonably believes the Allocated Values of the Defective
Interests has been reduced and the computations and information upon with
Purchaser's belief is based. Purchaser shall be deemed to have waived all
Title Defects and any Defective Interests of which Seller has not been given
such notice; provided, however that such waiver shall not apply with respect to
any defect under Section 3.5(a) if such defect did not exist on or before the
date such notice is due, but arose after such date.
(b) Subject to subsection (d) of this Section 3.4,
Defective Interests shall be excluded from the Assets to be purchased by
Purchaser hereunder and the Purchase Price shall be reduced in accordance with
Section 2.2(c) by an amount equal to the Allocated Values thereof as agreed
upon by Seller and Purchaser (which reduction shall be called an 'Exclusion
Adjustment' unless (i) prior to the Closing, the basis for treating such Assets
as Defective Interests has been removed to the mutual satisfaction of the
parties, (ii) Seller agrees to provide Purchaser an indemnity acceptable to
Purchaser indemnifying Purchaser against all losses, costs, expenses and
liabilities with respect to such Defective Interests arising from the defect or
basis for such Assets being treated as Defective Interests, or (iii) Purchaser
and Seller agree to an amount by which the Allocated Values of the Defective
Interests has been reduced and the Purchase Price is reduced by such amount in
accordance with Section 2.2(c), the amount of which reduction will in no event
exceed the Allocated Value amount set forth on Schedule 2.4 (which reduction
shall be called a 'Defect Adjustment').
(c) In determining which portion of the Assets are
Defective Interests, it is the intent of the parties to include, when
practical, only that portion of the Assets materially affected by the defect or
the basis for such Assets being treated as Defective interests.
(d) If the aggregate Allocated Values of all Defective
Interests at the Closing exceed ten percent (10%) of the Purchase Price,
Purchaser or Seller shall have the additional right to terminate this Agreement
without penalty pursuant to Section 8.1(b).
3.5 IDENTIFICATION OF ADDITIONAL DEFECTIVE INTERESTS.
(a) CONSENTS. On or prior to Closing, Seller shall
furnish to Purchaser copies of all written waivers or consents to the sale and
transfer of the Assets which have been obtained from any third party. If any
third party waiver or consent to the sale and transfer of the Assets set forth
on
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Schedule 3.5 is not obtained prior to the Closing, Purchaser may elect to treat
that portion of the Assets subject to such consent requirement as Defective
Interests by giving Seller notice thereof on or before Closing.
(b) PREFERENTIAL RIGHTS. If any preferential right to
purchase set forth on Schedule 3.5 is exercised on or before Closing, that
portion of the Assets affected by the exercise of or notice of the intent to
exercise such preferential right shall be treated as Defective Interests.
(c) CASUALTY LOSS. As used herein, the term 'Casualty
Loss' shall mean, with respect to all or any portion of any of the Assets, any
destruction by fire, blowout, storm or other casualty prior to Closing. Seller
shall promptly notify Purchaser of any Casualty Loss of which Seller becomes
aware. Purchaser shall assume any Casualty Loss which occurs during the
Adjustment Period as to any Asset operated by Purchaser and Seller shall
transfer to Purchaser all rights to insurance proceeds, claims, awards and
other payments arising out of such Casualty Loss. If any Casualty Loss occurs
during the Adjustment Period to any of the Assets not operated by Purchaser and
such Casualty Loss may be repaired prior to Closing and, when repaired, the
value of such Asset shall not be materially diminished, then Seller may repair
such Casualty Loss prior to Closing and shall immediately notify Purchaser of
such election. If Seller elects to repair such Casualty Loss in respect of an
Asset not operated by Purchaser and such repair is not completed prior to
Closing or the repair completed by Seller does not cause the value of such
Asset to be substantially the same as such value prior to the Casualty Loss, or
Seller does not elect to repair the Casualty Loss, then Purchaser may elect to
(i) cause Seller to retain the Asset affected by the Casualty Loss, and to
treat the Casualty Loss as a Defective Interest, in which case Seller shall
retain all insurance proceeds relating to the Casualty Loss or (ii) require
Seller to (1) transfer to Purchaser such Asset notwithstanding such Casualty
Loss, (2) transfer to Purchaser all rights to unpaid insurance proceeds,
claims, awards and other payments arising out of such Casualty Loss, and (3)
pay to Purchaser all sums paid to Seller as insurance proceeds, awards or other
payment arising out of such Casualty Loss.
ARTICLE IV
PRE-CLOSING, AND CLOSING ACTIONS
4.1 TIME AND PLACE OF CLOSING.
(a) The parties hereto shall use their best efforts to
consummate the purchase and sale transaction as contemplated by this Agreement
(the 'Closing') at the law firm of Holme, Roberts & Owen, Denver, Colorado on
October 21, 1997 or as soon thereafter that the conditions to Closing set forth
in this Agreement are satisfied, but in no event shall Closing occur after
October 30, 1997 unless otherwise agreed to in writing by Purchaser and Seller.
(b) The date on which the Closing occurs is herein
referred to as the 'Closing Date'. The Conveyance shall be effective as of the
Effective Time.
4.2 ACCESS TO RECORDS. Between the date of this Agreement and the
Closing Date, Seller shall, subject to Section 4.8 hereof, give Purchaser and
its representatives access to, and the right to
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copy, at Purchaser's expense, the Records in Seller's possession directly
relating to the Assets, but only to the extent that Seller may do so without
violating any confidentiality or contractual obligation to a third party and to
the extent that Seller has authority to grant such access. Such access by
Purchaser shall be limited to Seller's normal business hours, by appointment
only, and shall be without disruption of Seller's normal and usual operations.
4.3 GOVERNMENT REVIEWS. Seller and Purchaser shall in a timely
manner (a) make all required filings, if any, with and prepare applications to
and conduct negotiations with, each governmental agency as to which such
filings, applications or negotiations are necessary or appropriate in the
consummation of the transactions contemplated hereby, and (b) provide such
information as each may reasonably request to make such filings, prepare such
applications and conduct such negotiations. Each party shall cooperate with
and use all reasonable efforts to assist the other with respect to such
filings, applications and negotiations.
4.4 PRE-CLOSING ACTION. Seller and Purchaser shall use all
reasonable efforts to cause all of the conditions precedent to the consummation
of the transactions contemplated by this Agreement applicable to each of them
to be met as promptly as possible and to take all such other actions as may be
reasonably necessary to effect the consummation of the transactions
contemplated by this Agreement.
4.5 LETTERS-IN-LIEU, ASSIGNMENTS AND NOTICES.
(a) Seller shall execute on the Closing Date Letters in
Lieu of Division and Transfer Orders relating to the Assets on forms prepared
by Purchaser and reasonably satisfactory to Seller to reflect the transactions
contemplated hereby.
(b) Purchaser shall prepare and Seller and Purchaser
shall execute on the Closing Date all assignments necessary to convey to
Purchaser the Assets, which assignments shall be substantially in the form of
Exhibit 'B'.
(c) Purchaser shall prepare and Seller and Purchaser
shall execute on the Closing Date all assignments necessary to convey to
Purchaser all federal, state or Indian leases in the form as prescribed by the
applicable governmental body.
4.6 PUBLIC ANNOUNCEMENTS. Each party hereto shall consult with the
other party hereto prior to any public announcement by such party regarding the
existence of this Agreement, the contents hereof or the transactions
contemplated hereby.
4.7 INDEMNITY REGARDING ACCESS. Purchaser agrees to indemnify,
defend and hold harmless Seller, its directors, officers, employees, agents and
representatives from and against any and all claims, liabilities, losses, costs
and expenses (including, without limitation, court costs, expenses of
litigation and reasonable attorneys' fees) in connection with personal
injuries, including death or property damage arising out of or relating to the
access of Purchaser, its officers, employees, and representatives to the Assets
and to the records and other related information as permitted under this
Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
5.1 DISCLAIMERS. Except as specifically set forth in this Article
V and Section 3.1, Seller makes no warranties or representations, express or
implied, in connection with the Assets, and expressly disclaims any warranties
or representations with regard to any information or data disclosed or provided
by them, their agents, representatives, employees or advisors to Purchaser or
Purchaser's agents, representatives, employees, or advisors. Subject to this
Section 5.1, Seller makes the warranties and representations set forth in
Sections 5.2 through 5.15. SELLER EXPRESSLY DISCLAIMS ANY WARRANTY AS TO THE
CONDITION OF ANY PERSONAL PROPERTY, FIXTURES AND ITEMS OF MOVABLE PROPERTY
COMPRISING ANY PART OF THE ASSETS INCLUDING (a) ANY IMPLIED OR EXPRESS WARRANTY
OF MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS
OR SAMPLES OF MATERIALS, (d) ANY RIGHTS OF PURCHASER UNDER APPLICABLE STATUTES
TO CLAIM DIMINUTION OF CONSIDERATION, AND (e) ANY CLAIM BY PURCHASER FOR
DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, IT BEING EXPRESSLY
UNDERSTOOD BY PURCHASER THAT THE PERSONAL PROPERTY, FIXTURES AND ITEMS ARE
BEING CONVEYED TO PURCHASER AS IS, WHERE IS, WITH ALL FAULTS, AND IN THEIR
PRESENT CONDITION AND STATE OF REPAIR AND THAT PURCHASER HAS MADE OR CAUSED TO
BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE.
5.2 EXISTENCE. Seller is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Kansas and
is duly registered to do business as a foreign limited liability company in
the states where the Assets are located.
5.3 POWER. Seller has the power to enter into and perform this
Agreement and the transactions contemplated by this Agreement. Subject to
preferential purchase rights and restrictions on assignment of the type
generally found in the oil and gas industry, and 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, the execution, delivery and performance of this Agreement by
Seller, and the transactions contemplated by this Agreement, will not violate
(a) any provision of the certificate or agreement of formation of Seller, (b)
any material agreement or instrument to which Seller is a party or by which
Seller or any of the Assets are bound, (c) any judgment, order, ruling, or
decree applicable to Seller as a party in interest, or (d) any law, rule or
regulation applicable to Seller relating to the Assets other than a violation
which would not have a material adverse effect on Seller or the Assets.
5.4 AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance of this Agreement, and the transaction contemplated hereby, have
been duly and validly authorized by all necessary action on the part of Seller.
This Agreement constitutes the valid and binding obligation of
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Seller, enforceable in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy or other similar laws affecting the
rights and remedies of creditors generally as well as to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
5.5 LIABILITY FOR BROKERS' FEES. Purchaser shall not directly or
indirectly incur any liability or expense, as a result of undertakings or
agreements of Seller, for brokerage fees, finder's fees, agent's commissions or
other similar forms of compensation in connection with this Agreement or any
agreement or transaction contemplated hereby.
5.6 CLAIMS AND LITIGATION. To the actual knowledge of Seller,
there are no claims, actions, suits or proceedings pending or threatened
against Seller which, if determined adversely to Seller, would have a material
adverse affect on the Assets or which would materially and adversely affect
Seller's ability to perform its obligations under this Agreement.
5.7 TAXES AND ASSESSMENTS. To the actual knowledge of Seller, all
material ad valorem, production, severance, excise, and similar taxes and
assessments based upon or measured by the ownership of or the production of
hydrocarbons from the Assets which have become due and payable have been
properly paid or are being challenged in good faith by Seller, all applicable
tax returns have been filed, and Seller knows of no claim by any applicable
taxing authority against Seller in connection with the payment of such taxes.
5.8 PRODUCTION IMBALANCES. Schedule 5.8 sets forth all of the
estimated production imbalances net to Seller's working interest with respect
to certain wells as of the Effective Time, and Purchaser expressly assumes any
and all obligations attributable to the production imbalances. The value
determined by mutual agreement of the parties hereto of all production
imbalances as set forth on Schedule 5.8 shall be adjustments to the Purchase
Price in accordance with Section 2.2.
5.9 CONSENTS AND PREFERENTIAL RIGHTS. All required notices in
respect of consents to assignment and preferential rights to purchase relating
to the Assets set forth on Schedule 3.5 shall be prepared by Purchaser for
execution by Seller on forms customarily used in the industry and shall be
furnished to Purchaser at Closing. Seller shall use its best efforts to cause
such consents and preferential rights to purchase to be obtained and delivered
on or before Closing. Purchaser shall cooperate with the Seller in seeking to
obtain such consents and preferential rights. Should a third party fail to
exercise its preferential right to purchase as to any portion of the Assets
prior to Closing, such portion of the Assets shall be conveyed to Purchaser
subject to such right and Purchaser agrees to perform the obligations of Seller
with respect to such preferential rights.
5.10 ENVIRONMENTAL LAWS. To the actual knowledge of Seller and as
to that portion of the Assets not operated by Purchaser, (i) such Assets are in
compliance in all material respects with all Environmental Laws (as hereinafter
defined) and all orders or requirements of any court or federal, state, or
local governmental authority, and possess and are in compliance with all
required permits, licenses, or similar authorizations, (ii) such Assets and
related operations are not subject to any existing or threatened suit,
investigation, or proceeding related to any obligation under any Environmental
Law, and (iii) there is no liability (contingent or otherwise) in connection
with the release or threatened
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release into the environment of any Hazardous Substance (as defined below) as a
result of or in connection with such Assets or the operations related thereto.
As used in this Agreement, the term 'Environmental Laws' shall mean any and all
laws, regulations, ordinances and judicial interpretations pertaining the
prevention, abatement or elimination of pollution or to the protection of
public health or the environment that are in effect in all jurisdictions in
which any of the Assets or related operations are located or conducted,
including, without limitation, the federal Comprehensive Environmental
Response, Compensation and Liability Act ('CERCLA'), the Resource Conservation
and Recovery Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substance Control Act, the Hazardous Materials Act and the Clean Air Act and
the term 'Hazardous Substance' shall have the meaning described under Section
101 of CERCLA at 42 U.S.C. Section 9601(14), except that it shall also include
petroleum, natural gas, natural gas liquids, nitrous oxide, carbon monoxide and
sulphur oxide.
5.11 SALE OF PRODUCTION. Except as set forth on Schedule 5.11 and
as to that portion of the Assets not operated by Purchaser, no hydrocarbons
produced from such Assets or existing as in-ground reserves in such Assets are
subject to a sales contract (other than a contract or division order
terminable upon no more than 30 days notice), and no person or entity other
than a lessor under the Leases has any call upon, option to purchase or similar
rights with respect to production from such Assets. Except as set forth on
Schedule 5.11, Seller is receiving proceeds from the sale of production from
the Wells from the production purchasers or from operator(s) of the Assets in a
timely manner, and the proceeds payable to Seller are not being held in
suspense by any production purchaser or operator.
5.12 LEASES. To the actual knowledge of Seller, the Leases are in
full force and effect and are valid and existing documents covering the entire
estates which they purport to cover; all royalties, rentals and other payments
due under the Leases which are the responsibility of Seller to pay have been
fully, properly and timely paid; no party to any Lease is in breach of any
provision thereof; no such breach has been alleged by any lessor; the Leases,
other than federal Leases, do not contain express development obligations; and
all conditions necessary to keep the Leases in force have been performed.
5.13 FURTHER ASSURANCES. From the date of execution of this
Agreement, without the prior written consent of Purchaser, Seller will not: (i)
enter into any new agreements or commitments with respect to the Assets; (ii)
incur any liabilities other than in the ordinary course for normal operating
expenses associated with individual Wells; (iii) abandon, or consent to
abandonment of, any producing or shut-in Well or any injection well located on
the premises associated with the Assets, nor release or abandon all or any
portion of the Leases; (iv) modify or terminate any of the agreements relating
to the Assets or waive any right thereunder; (v) encumber, sell or otherwise
dispose of any of the Assets other than personal property which is replaced
with equivalent property or consumed in the ordinary course of operation of the
Assets and other than hydrocarbons sold in the ordinary course of business;
and (vi) purchase any additional interests.
5.14 MATERIAL AGREEMENTS. All agreements with respect to which
Seller is a party and Purchaser is not a party and that are material to the
ownership or value of the Assets are set forth on Schedule 5.14 and, as to such
agreements, (i) all are in full force and effect; (ii) all payments due
thereunder have been made by Seller; (iii) Seller is not in breach or default
thereunder; (iv) no other party is in breach or default with respect to its
obligations thereunder; and (v) neither Seller nor any
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other party to any such contract has given or threatened to give notice of any
action to terminate, cancel, rescind or procure a judicial reformation of any
such contract. [note: schedule to include loan agreement]
5.15 BURDENS. Schedule 3.1 identifies (and sets forth all
recording and filing information to the extent recorded or filed) all liens,
encumbrances or other burdens on the Assets whether recorded or unrecorded as
of the Effective Time. Such liens, encumbrances or other burdens have not
changed since the Effective Time and no additional liens, encumbrances or other
burdens have been incurred since the Effective Time in respect of any of the
Assets. Seller has assigned of record an overriding royalty interest equal to
ten percent (10%), proportionately reduced, of the net revenue interest owned
by Seller in the Leases (the 'Overriding Royalty') to Endowment Energy
Co-Investment Partnership, a Delaware general partnership (the 'Royalty
Owner'), which is identified on Schedule 3.1. The Overriding Royalty is
included in the net revenue interests set forth on Schedule 2.4 and Seller
shall assign, or cause Royalty Owner to assign, the interests represented by
the Overriding Royalty to Purchaser at Closing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller the following:
6.1 EXISTENCE. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business as a foreign corporation in the state(s) where
the Assets are located, except where the failure to so qualify would not have a
material adverse effect on Purchaser or its properties.
6.2 POWER. Purchaser has the corporate power to enter into and
perform this Agreement and the transactions contemplated by this Agreement.
Subject to preferential purchase rights and restrictions on assignment of the
type generally found in the oil and gas industry, and 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, the execution, delivery and performance of this Agreement by
Purchaser, and the transactions contemplated by this Agreement, will not
violate (a) any provision of the certificate of incorporation or bylaws of
Purchaser, (b) any material agreement or instrument to which Purchaser is a
party or by which Purchaser or any of the Assets are bound, (c) any judgment,
order, ruling, or decree applicable to Purchaser as a party in interest, or (d)
any law, rule or regulation applicable to Purchaser relating to the Assets
other than a violation which would not have a material adverse effect on
Purchaser.
6.3 AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance of this Agreement, and the transaction contemplated hereby, have
been duly and validly authorized by all necessary action on the part of
Purchaser. This Agreement constitutes the valid and binding obligation of
Purchaser, enforceable in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy or other similar laws
affecting the rights and remedies of creditors generally as
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well as to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
6.4 LIABILITY FOR BROKERS' FEES. Seller shall not directly or
indirectly incur any liability or expense, as a result of undertakings or
agreements of Purchaser, for brokerage fees, finder's fees, agent's commissions
or other similar forms of compensation in connection with this Agreement or any
agreement or transaction contemplated hereby.
6.5 DISTRIBUTION. Purchaser is an experienced and knowledgeable
investor in the oil, gas and mineral resources industry that has previously
expended substantial amounts in the acquisition and development of oil and gas
properties. Prior to entering into this Agreement, Purchaser has been advised
by its counsel and such other persons as it has deemed appropriate concerning
this Agreement. The Assets to be acquired by Purchaser pursuant to this
Agreement are being acquired by Purchaser for its own account, for investment
and not with a view to distribution or resale within the meaning of the
Securities Act of 1933, as amended, or any other applicable securities law,
rule, regulation or order.
6.6 CLAIMS AND LITIGATION. To the actual knowledge of Purchaser,
there are no claims, actions, suits, or proceedings pending or threatened
against Purchaser which, if determined adversely to Purchaser, would materially
and adversely affect Purchaser's ability to perform its obligations under this
Agreement.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 CONDITIONS OF SELLER TO CLOSING. The obligations of Seller to
consummate the transaction contemplated by this Agreement are subject, at the
option of Seller, to the satisfaction on or prior to Closing of each of the
following conditions:
(a) REPRESENTATIONS. The representations and warranties
of Purchaser set forth in this Agreement herein shall be true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date.
(b) PERFORMANCE. Purchaser shall have performed all
obligations, covenants and agreements hereunder and shall have complied with
all covenants and conditions applicable to it contained in this Agreement prior
to or on the Closing Date.
(c) PENDING MATTERS. No suit, action or other proceeding
by a third party or a governmental authority shall be pending or threatened
which seeks to restrain, enjoin or otherwise prohibit, the consummation of the
transactions contemplated by this Agreement.
(d) OPINION. Purchaser shall have delivered to Seller an
opinion of its legal counsel in form and substance reasonably satisfactory to
Seller, dated as of the date of Closing, to the effect that:
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(i) Purchaser 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 States of Wyoming, Colorado and Texas;
(ii) 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; and
(iii) This Agreement and all documents and
instruments executed by Purchaser at Closing have been duly
executed and delivered on behalf of Purchaser and constitute
legal, valid and binding obligations of Purchaser enforceable
in accordance with their terms and, subject to obtaining
required consents to assignment and the exercise of
preferential rights to purchase, do not violate any contract,
order or agreement to which Purchaser is a party or is
subject.
In giving this opinion, Purchaser's counsel may rely upon certificates
of governmental officials and of Purchaser's officers as to matters of fact,
and may qualify the opinion with such other assumptions and exceptions as are
reasonable under the circumstances.
7.2 CONDITIONS OF PURCHASER TO CLOSING. The obligations of
Purchaser to consummate the transaction contemplated by this Agreement are
subject, at the option of Purchaser, to the satisfaction on or prior to Closing
of each of the following conditions:
(a) REPRESENTATIONS. The representations and warranties
of Seller set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date.
(b) PERFORMANCE. Seller shall have performed all
obligations, covenants and agreements hereunder and shall have complied with
all covenants and conditions applicable to it contained in this Agreement prior
to or on the Closing Date and shall have executed and delivered the Conveyance
on the Closing Date.
(c) PENDING MATTERS. No suit, action or other proceeding
by a third party or governmental authority shall be pending or threatened to
restrain, enjoin or otherwise prohibit, the consummation of the transactions
contemplated by this Agreement.
(d) OPINION. Seller shall have delivered to Purchaser an
opinion of Seller's legal counsel, in form and substance reasonably
satisfactory to Purchaser, dated as of the date of Closing, to the effect that:
(i) Seller is a limited liability company duly
organized, validly existing and in good standing under the
laws of the State of Kansas and is duly qualified to carry on
its business in the States of Wyoming, Colorado and Texas;
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(ii) The execution, delivery and performance of
this Agreement and the transactions contemplated hereby have
been duly and validly authorized by all requisite action on
the part of Seller; and
(iii) This Agreement and all documents and
instruments executed by Seller at Closing have been duly
executed and delivered on behalf of Seller and constitute
legal, valid and binding obligations of Seller enforceable in
accordance with their terms and, subject to obtaining required
consents to assignment and the exercise of preferential rights
to purchase, do not violate any contract, order or agreement
to which Seller is a party or is subject.
In giving this opinion, Seller's counsel may rely upon
certificates of governmental officials and of Seller's officers as to
matters of fact, and may qualify the opinion with such other
assumptions and exceptions as are reasonable under the circumstances.
7.3 OBLIGATIONS OF SELLER AT CLOSING. At the Closing, upon the
terms and subject to the conditions of this Agreement, Seller shall execute and
deliver or cause to be executed and delivered to Purchaser, among other things,
the following:
(a) Conveyances of the Assets, in sufficient original
counterparts to allow recording;
(b) Assignments, on appropriate forms, of state and
federal leases comprising portions of the Assets;
(c) Assignments of the Overriding Royalty, in sufficient
original counterparts to allow recording;
(d) Letters-in-lieu of transfer orders covering the
Assets;
(e) Copies of all consents, waivers and approvals of the
third parties set forth on Schedule 3.5, other than unexercised preferential
rights;
(f) Opinion of legal counsel set forth in Section 7.2(d);
(g) Certificate by an authorized member of Seller dated
as of Closing, certifying on behalf of Seller that the conditions set forth in
Sections 7.2(a) and 7.2(b) have been fulfilled; and
(h) Mortgage releases, financing statement terminations
and any other releases or documentation sufficient to remove the liens,
encumbrances or other burdens set forth on Schedule 3.1, in sufficient original
counterparts to allow full recording and filing.
7.4 OBLIGATIONS OF PURCHASER AT CLOSING. At the Closing, upon the
terms and subject to the conditions of this Agreement, Purchaser shall execute
and deliver or cause to be executed and delivered to Seller, among other
things, the following:
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(a) A wire transfer of the Adjusted Purchase Price, as
required hereunder;
(b) Opinion of legal counsel set forth in Section 7.1(d);
and
(c) Certificate by an authorized attorney-in-fact or
corporate officer of Purchaser dated as of Closing, certifying on behalf of
Purchaser that the conditions set forth in Sections 7.1(a) and 7.1(b) have been
fulfilled.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date: (a) by the mutual prior written consent of Seller
and Purchaser, (b) by Purchaser or Seller if the provisions of Section 3.4(d)
give it the right to terminate, (c) at the option of the non-breaching party if
the other party is in material default of its obligations under this Agreement,
or (d) by Seller, if Closing has not occurred by [October 31], 1997. Any party
shall exercise a right of termination provided above by written notice to the
other party.
8.2 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 8.1(a), (b) or (d), this Agreement shall become void and of
no further force or effect (except for the provisions of Section 4.7 which
shall continue in full force and effect); provided, however, that if either
party is in material default of its obligations under this Agreement at the
time this Agreement is so terminated pursuant to Section 8.1(c), such
defaulting party shall continue to be liable to the other party for damages or
specific performance relating to such default and such liability shall not be
affected by such termination.
ARTICLE IX
POST-CLOSING OBLIGATIONS
9.1 STATEMENT OF ADJUSTED PURCHASE PRICE. Seller and Purchaser
shall agree on a final statement of the Purchase Price and make any payments
required thereby in accordance with the provisions of Section 2.3 above.
9.2 RECEIPTS AND CREDITS. Following final adjustment of the
Purchase Price, all monies, proceeds, receipts, credits and income attributable
to the Assets for all periods of time subsequent to the Effective Time shall be
the sole property and entitlement of Purchaser, and, to the extent received by
Seller, Seller shall fully disclose, account for and transmit the same promptly
to Purchaser. Following final adjustment of the Purchase Price, all monies,
proceeds, receipts and income attributable to the Assets, except as otherwise
provided in this Agreement, for all periods of time prior to the Effective
Time, shall be the sole property and entitlement of Seller and, to the extent
received by
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Purchaser, Purchaser shall fully disclose, account for and transmit the same
promptly to Seller. Except as otherwise provided in this Agreement, all costs,
expenses, disbursements, obligations and liabilities attributable to the Assets
for periods of time prior to the Effective Time, 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 and hold Purchaser
harmless from and against same. All costs, expenses, disbursements,
obligations, and liabilities attributable to the Assets for periods of time
subsequent to the Effective Time, regardless of when due or payable, shall be
the sole obligation of the Purchaser and Purchaser shall promptly pay, or if
paid by Seller, promptly reimburse Seller for and hold Seller harmless from and
against same. 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 Time.
9.3 ASSUMPTION AND INDEMNITY. If the Closing occurs,
(a) Purchaser assumes all obligations that are
attributable to the Assets from and after the Effective Time including, but not
limited to, any obligation to cash balance or to allow third parties to make-up
gas according to the terms and conditions of the applicable gas balancing or
other contracts or governing law, rule or regulation, all obligations to
properly plug and abandon all wells now or thereafter located on the Leases and
restore the surface of the Leases in accordance with applicable lease or other
agreements and governmental (including environmental) laws, orders, and
regulations (regardless of whether any such obligation to plug, abandon and
restore is attributable to periods of time prior to or after the Effective
Time) and the obligation to pay ad valorem and similar production taxes with
respect to the Assets as set forth in Sections 10.4 and 2.2(b);
(b) Purchaser agrees to indemnify, defend and hold
harmless Seller, its affiliates, officers, directors, agents and
representatives from and against any and all claims, liabilities, losses, costs
and expenses (including, without limitation, court costs, expenses of
litigation and reasonable attorneys' fees) that are attributable to the Assets
after the Effective Time (including, without limitation, (i) the obligation to
cash balance or to allow third parties to make-up gas according to the terms
and conditions of the applicable gas balancing or other contracts or governing
law, rule or regulation, (ii) the obligation to properly plug and abandon all
wells now or hereafter located on the Leases, (iii) the obligation to restore
the surface of the Leases in accordance with applicable lease or other
agreements and governmental laws, orders and regulations, and (iv) damage to
property, or injury to or death of persons attributable to the Assets and
occurring after the Effective Time). Notwithstanding the foregoing, Purchasers'
indemnification obligations exclude liabilities in respect of Environmental
Laws as to the Assets and to conditions that existed prior to the Effective
Time;
(c) Seller agrees to indemnify, defend and hold harmless
Purchaser, its affiliates, officers, directors, agents and representatives from
and against any and all claims, liabilities, losses, costs and expenses
(including, without limitation, court costs, expenses of litigation and
reasonable attorneys' fees) that are attributable to the Assets before the
Effective Time (other than (i) the obligation to cash balance or to allow third
parties to make-up gas according to the terms and conditions of the applicable
gas balancing or other contracts or governing law, rule or regulation, (ii) the
obligation to properly plug and abandon wells now or hereafter located on the
Leases, (iii) the obligation to restore the surface of the Leases in accordance
with applicable lease or other agreements
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and governmental laws, orders and regulations, and (iv) damage to property, or
injury to or death of persons attributable to the Assets and occurring after
the Effective Time). Notwithstanding the foregoing, Seller's indemnification
obligations include liabilities in respect of Environmental Laws as to the
Assets and to conditions that existed prior to the Effective Time; and
(d) The indemnity, defense and hold harmless obligations
set forth above shall not apply to (i) any amount, other than as set forth in
Section 9.2, that was taken into account as an adjustment to the Purchase Price
pursuant to the provisions of this Agreement, (ii) any liability of one party
to the other party under the provisions of this Agreement, (iii) any liability
Purchaser would ordinarily have vis-a-vis Seller under the terms of applicable
operating agreements, and (iv) either party's costs and expenses with respect
to the negotiation and consummation of this Agreement and the purchase and sale
of the Assets.
9.4 RECORDING. As soon as practicable after Closing, Purchaser
shall record the conveyances in the appropriate counties.
9.5 FURTHER ASSURANCES. After Closing, Seller and Purchaser agree
to take such further actions and to execute, acknowledge and deliver all such
further documents that are necessary or useful in carrying out the purposes of
this Agreement or of any document delivered pursuant to this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original instrument, but all
such counterparts together shall constitute but one agreement.
10.2 NOTICE. All notices which are required or may be given
pursuant to this Agreement shall be sufficient in all respects if given in
writing and delivered personally, by overnight courier, by telecopy or by
registered or certified mail, postage prepaid, as follows:
If to Seller:
Genesis Gas & Oil, LLC
14 Corporation Woods
8717 W. 110th Street, Suite 420
Overland Park, Kansas 66210
Attention: G. H. Mohajir
Telephone: (913) 345-8117
Telecopy: (913) 345-9094
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If to Purchaser:
Tom Brown, Inc.
508 West Wall, Suite 500
Midland, TX 79701
Attention: General Counsel
Telephone: (915) 682-9715
Telecopy: (915) 688-9598
All notices shall be deemed to have been duly given at the time of receipt by
the party to which such notice is addressed.
10.3 SALES TAX, RECORDING FEES AND SIMILAR COSTS. Purchaser shall
bear any tax, recording fees and similar costs incurred and imposed upon, or
with respect to, the property transfers contemplated hereby.
10.4 AD VALOREM TAXES. All unpaid ad valorem and similar taxes that
are payable with respect to the Assets for all periods ending on or prior to
the Effective Time shall be as estimated by the parties and shall be an
adjustment to the Purchase Price. In the case of tax periods that included but
did not end on the Effective Time, taxes shall be prorated to the Effective
Time and be an adjustment to the Purchase Price. Purchaser shall pay all such
taxes payable for all such periods which are adjusted or prorated.
10.5 EXPENSES. All expenses incurred by Seller in connection with
or related to the authorization, preparation or execution of this Agreement,
the Conveyance and the Exhibits and Schedules hereto and thereto, and all other
matters related to the Closing, including without limitation, all fees and
expenses of counsel, accountants and financial advisers employed by Seller,
shall be borne solely and entirely by Seller; and all such expenses incurred by
Purchaser shall be borne solely and entirely by Purchaser.
10.6 GOVERNING LAW. This Agreement and the legal relations between
the parties shall be governed by and construed in accordance with the laws of
the State of Colorado without regard to principles of conflicts of laws
otherwise applicable to such determinations. In the event any dispute arises
with respect to this Agreement, the parties hereby consent to jurisdiction and
litigation of such disputes in the State of Colorado.
10.7 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.
10.8 WAIVERS. Any failure by any party or parties to comply with
any of its or their obligations, agreements or conditions herein contained may
be waived in writing, but not in any other manner, by the party or parties to
whom such compliance is owed. No waiver of, or consent to a change in, any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of, or consent to a change in, other provisions hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
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10.9 ASSIGNMENT. No party shall assign all or any part of this
Agreement, nor shall any party assign or delegate any of its rights or duties
hereunder, without the prior written consent of the other party and any
assignment made without such consent shall be void except as otherwise provided
in this Section.
10.10 ENTIRE AGREEMENT. This Agreement and the documents to be
executed hereunder and the Exhibits and Schedules attached hereto constitute
the entire agreement between the parties pertaining to the subject matter
hereof, and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties pertaining to the subject
matter hereof.
10.11 SURVIVAL. The representations and warranties of Seller and
Purchaser set forth in Articles V and VI of this Agreement shall survive the
Closing and shall only be applicable for one hundred eighty (180) days
thereafter.
10.12 AMENDMENT.
(a) At any time prior to the Closing Date this Agreement
may be amended or modified in any respect by the parties by an agreement in
writing executed in the same manner as this Agreement.
(b) No supplement, modification, waiver or termination of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby.
10.13 EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached to
or referred to in this Agreement are incorporated into and made a part of this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been signed by each of the
parties hereto, all as of the date above written.
Seller:
GENESIS GAS & OIL, LLC
By:___________________________________
Jaffer A. Mohajir
Manager
Purchaser:
TBI PRODUCTION COMPANY
By:___________________________________
Peter R. Scherer
Executive Vice President
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EXHIBIT 'A'
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
LIST OF LEASES
EXHIBIT 'A'
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
LIST OF WELLS
EXHIBIT 'B'
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
AGREEMENT, ASSIGNMENT AND BILL OF SALE
GENESIS GAS & OIL, LLC, a Kansas limited liability company, 14
Corporation Woods, 8717 W. 110th Street, Suite 420, Overland Park, Kansas 66210
('Assignor'), for the payment of Ten and no/100 Dollars ($10.00) and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and subject to the terms and conditions hereof, hereby grants,
sells, assigns, and conveys to TBI PRODUCTION COMPANY, a Delaware corporation
('Assignee'), 555 Seventeenth Street, Suite 1850, Denver, Colorado 80202, all
of Assignor's right, title and interest (including, without limitation,
overriding royalties and royalties) in and to the following:
(a) The estates and rights created by the oil and gas leases and
mineral estates described on Exhibit 'A' attached hereto (the 'Leases'),
subject to any other royalties, overriding royalties, production payments or
other similar interests burdening the Leases;
(b) All oil, gas, water disposal and other wells (whether
producing or non-producing) (the 'Wells') located on the Leases or on lands
pooled therewith, together with all of Assignor's interest in the rights and
appurtenances incident thereto, including, but not limited to, all of
Assignor's interest in fixtures, personal property (including pits and ponds),
facilities and equipment, used or held for use or charged to the Leases or
Wells for the production, treatment, sale, or disposal of hydrocarbons or water
produced therefrom or attributable thereto;
(c) The oil, natural gas liquids or condense inventory, including
'line fill' and inventory below the pipeline connection in tanks as of 7:00
a.m., local time, June 1, 1997 (the 'Effective Time'); and
(d) All of Assignor's rights in, to and under, and obligations
arising from, all agreements relating to the Leases or Wells, including, but
not limited to, joint operating agreements, unitization agreements, pooling
agreements, farmout agreements, drilling agreements, exploration agreements,
oil or gas product purchase and sale contracts, gas processing or
transportation agreements, leases, permits, rights-of-way, easements, licenses,
options, orders and decisions of State and Federal regulatory authorities
establishing units.
It is Assignor's express intent herein that Assignor's right, title
and interest in and to the Leases shall include any and all overriding royalty
interests in favor of Endowment Energy Co-Investment Partnership which have
been reassigned to Assignor prior to the Effective Time.
Assignor will, at any time and from time to time after the date
hereof, upon Assignee's request, execute, acknowledge and deliver or cause to
be executed and delivered, all further documents or instruments necessary to
effect the transaction embodied in this Agreement, Assignment and Bill of Sale.
Assignor makes no representation or warranty of title to the interests
assigned hereby other than against the claims of third parties claiming the
same, or any part thereof, by, through or under Assignor but through no other
party. The personal property and equipment assigned hereby are sold AS IS AND
WHERE IS, WITH ALL FAULTS, AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR
WITHOUT WARRANTY OF MERCHANTABILITY, CONDITION OR FITNESS FOR PARTICULAR
PURPOSE, AND ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESSED OR IMPLIED, ARE
HEREBY EXPRESSLY DENIED. This conveyance is made with full substitution and
subrogation of Assignee, its successors and assigns, to the rights of Assignor
under, in and to all warranties made by others with respect to the rights,
titles and interests being conveyed hereunder.
To have and to hold the same unto Assignee, its successors and assigns
forever.
EXECUTED to be effective for all purposes as of the Effective Time.
Assignor:
GENESIS GAS & OIL, LLC
By:___________________________________
Jaffer A. Mohajir
Manager
Assignee:
TBI PRODUCTION COMPANY
By:___________________________________
Richard B. Porter
Vice President
ACKNOWLEDGEMENTS
STATE OF KANSAS )
) ss.
COUNTY OF ___________ )
Be it known, that on this ______ day of the month _____________, 1997,
before me, the undersigned authority, personally came and appeared
_____________________, to me personally known and known by me to be the person
whose genuine signature is affixed to the foregoing document, who signed said
document before me and who acknowledged, in my presence, that he signed the
above foregoing document as his own free act and deed and for the uses and
purposes therein set forth and apparent.
In witness whereof, the said appeared has signed these presents and I
have hereunto affixed my hand and seal on the day and date first above written.
My Commission Expires: _____________________________________________
Notary Public in and for the State of Kansas
(Seal)
ACKNOWLEDGEMENTS
STATE OF TEXAS )
) ss.
COUNTY OF MIDLAND )
Be it known, that on this ______ day of the month _____________, 1997,
before me, the undersigned authority, personally came and appeared
_____________________, to me personally known and known by me to be the person
whose genuine signature is affixed to the foregoing document, who signed said
document before me and who acknowledged, in my presence that he signed the
above foregoing document as his own free act and deed and for the uses and
purposes therein set forth and apparent.
In witness whereof, the said appearer has signed these presents and I
have hereunto affixed my hand and seal on the day and date first above written.
My Commission Expires: _____________________________________________
Notary Public in and for the State of Texas
(Seal)
PLEASE RETURN RECORDED INSTRUMENT TO:
TBI Production Company
555 Seventeenth Street, Suite 1900
Denver, Colorado 80202-3918
SCHEDULE 2.4
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
ALLOCATED VALUES
SCHEDULE 3.1
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
TITLE BURDENS
SCHEDULE 3.5
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
CONSENTS AND PREFERENTIAL RIGHTS
SCHEDULE 5.8
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
GAS BALANCING
SCHEDULE 5.11
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
GAS CONTRACTS/PROCEEDS
SCHEDULE 5.14
TO PURCHASE AND SALE AGREEMENT
BETWEEN GENESIS GAS & OIL, LLC
AND TBI PRODUCTION COMPANY
MATERIAL CONTRACTS
Purchase and Sale Agreement - Genesis Gas & Oil LLC and TBI Production Co.
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