ASSET PURCHASE AND SALE AGREEMENT
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This Asset Purchase and Sale Agreement (the "Agreement") is made and
entered into this 22st day of November 2000, by and between Penn Virginia Oil &
Gas Corporation, a Virginia corporation ("Seller"), and Energy Corporation of
America, a West Virginia corporation ("Buyer") or its designated affiliate.
BACKGROUND
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WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, the Assets (as defined in Section 1 hereof) in accordance with the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and mutual covenants and
conditions contained herein, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. SALE AND PURCHASE OF THE ASSETS. On the Closing Date (as defined in
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Section 11 hereof), Seller shall sell, assign, convey and deliver to Buyer, and
Buyer shall purchase and acquire from Seller, all of Seller's right, title and
interest in and to the following assets (collectively, the "Assets"):
a. OIL AND GAS LEASES. The oil, gas and mineral leases and the leasehold
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estates created thereby, described on Schedule 1(a) hereto (collectively, the
"Leases"), insofar as the Leases cover and relate to the land and depths
described therein (the "Lands"), together with corresponding interests in and to
all the property and rights incident thereto, including all rights in any
royalties other than those described on Schedule 1(a)(1), overriding royalties,
pooled or unitized acreage by virtue of the Lands being a part thereof, all
production from the pool or unit allocated to any such Lands, and all interests
in any Wells (as defined in Section 1(b) hereof) within the pool or unit
associated with the Lands;
b. WELLS. All producing, non-producing and shut-in oil and gas wells,
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injection wells and water wells located on the Lands, or lands pooled or
unitized therewith, which wells are described in Schedule 1(b) hereto
(collectively, the "Wells"), and all personal property, equipment, fixtures, and
improvements located on and appurtenant to the Lands insofar as they are
used or were obtained in connection with the operation of the Leases insofar as
they cover the Lands or relate to the exploration for, development, production,
treatment, transportation, sale or disposal of hydrocarbons or water produced
therefrom or attributable thereto;
c PIPELINES. All of those certain pipelines and related separating
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equipment and meter stations, compressors and compressor stations, valves,
pumps, and other equipment, personal property and fixtures described on Schedule
1(c) hereto (collectively the "Pipelines");
d. CONTRACTS. All contracts and contractual rights, obligations and
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interests, including all farmout and farmin agreements, operating agreements,
production sales and purchase contracts, surface leases, gas purchase
agreements, transportation agreements, gathering agreements, marketing
agreements and other similar agreements, and other contracts or agreements
covering or affecting any or all of the Assets, including the Pipelines, which
contracts and agreements are described in Schedule 1(d) hereto;
e. CERTAIN PARTNERSHIP INTERESTS. All of the general partnership, limited
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partnership and other interests of Seller in those partnerships and other
entities described in Schedule 1(e) hereto;
f. RIGHTS - OF - WAY. All of the rights-of-way, easements, surface deeds,
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surface use agreements and other similar agreements described on Schedule 1(f)
hereto;
g. RECORDS. All books, files, records, maps, correspondence, studies,
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surveys, reports and other data in the possession of Seller and relating to the
Assets (the "Records") as described in Section 18 hereof;
h. SECTION 29 TAX CREDITS. All of Seller's interest and rights to Section
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29 Tax Credits relating to the Assets; and
i. CERTAIN FEE INTERESTS. Those certain oil and gas fee estates and surface
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fee estates described on Schedule 1(i) hereto.
2. PURCHASE PRICE. The total purchase price for the Assets shall be (a)
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Fifty-Eight Million Six Hundred Thousand Dollars ($58,600,000.00) payable in
cash plus (b) the assumption by Buyer of all of Seller's obligations under that
certain Agreement (the "Roberts Project Agreement") dated January 11, 1993
between Seller (as successor to C. D. & G. Development Company) and C. D.
Roberts, d/b/a The Roberts Project (the "Purchase Price"), subject to any
applicable adjustments as hereinafter provided. The parties agree that the
Purchase Price shall be allocated among the Assets in the manner described on
Schedule 2 hereto.
a. DEPOSIT. Upon execution of this Agreement, Buyer shall tender to Seller
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by wire transfer into an interest bearing joint control account to be
established at Suntrust Bank, East Tennessee, N.A. (the "Bank") styled "Penn
Virginia/Energy Corp Account" that amount equal to 10% of the cash portion of
the Purchase Price as a performance deposit (the "Deposit"). In the event the
transaction contemplated hereby is consummated in accordance with the terms
hereof, the Deposit, including interest, shall be applied to the Purchase Price
to be paid by Buyer at the Closing (as defined in Section 11 hereof). In the
event this Agreement is terminated, the Deposit, including interest, shall be
returned to Buyer or retained by Seller as provided in Sections 9(f) or 16
hereof.
b. ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price shall be increased or
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decreased, as the case may be, in accordance with the following:
i. EXPENSES, TAXES, ETC. Appropriate adjustments shall be made to the
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Purchase Price so that (A) Buyer will bear all expenses which are incurred in
respect of the Assets after the Effective Date (as defined in Section 11 hereof)
and Buyer will receive all proceeds in respect of the Assets attributable
to the period after the Effective Date and (B) Seller will bear all expenses
which are incurred in respect of the Assets before the Effective Date, and
Seller will receive all proceeds collectible in respect of the Assets
attributable to the period prior to the Effective Date (regardless of whether
such proceeds are received prior to or after the Effective Date). It is agreed
that, in making such adjustments, all property and other taxes attributable to
the Assets shall be apportioned on a calendar year basis as of the Effective
Date based upon 2000 taxes assessed on the Assets. Furthermore, notwithstanding
anything to the contrary set forth in Section 2(b)(i) hereof, Seller shall
retain (A) any administrative cost reimbursements payable with respect to the
Assets at any time prior to Closing, which reimbursements shall not be less than
that amount equal to (x) $150 times (y) the number of Wells transferred to Buyer
in connection herewith times (z) the number of months, or any portion thereof,
existing between the Effective Date and Closing and (B) any damages or other
proceeds payable to Seller in connection with that certain claim entitled Penn
Virginia Oil & Gas Corporation v. Virginia Gas Exploration Company; and
ii. TITLE DEFECTS. Appropriate adjustments shall also be made to the
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Purchase Price to account for Title Defects (as defined in Section 9(b)(i)
hereof) determined to exist in accordance with Section 9 hereof.
3. ASSUMPTION OF LIABILITIES. Buyer shall assume and discharge (a) all
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liabilities and obligations of Seller for all currently existing and future
liabilities arising with respect to the Assets under any Environmental Law (as
defined in section 9(b)(iv) hereof) and (b) all liabilities and obligations of
Seller pertaining to the Assets which are attributable to the ownership and/or
operation of the Assets from and after the Effective Date.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants
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to Buyer as follows:
a. ORGANIZATION. Seller is a corporation duly organized, validly existing
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and in good standing under the laws of the Commonwealth of Virginia and is
qualified or registered as a foreign entity in each jurisdiction where it is
required to be so qualified and registered except where the failure to so
qualify would not have a material adverse effect on the Seller's ownership,
operation or value of the Assets.
b. AUTHORITY. Seller has full power and authority and has taken all
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requisite action, corporate or otherwise, to authorize Seller to carry on
Seller's business as presently conducted, to own the Assets, to enter into this
Agreement and to perform Seller's obligations under this Agreement. Neither the
execution and delivery of this Agreement nor the performance by Seller of
its obligations hereunder will (i) violate Seller's Articles of Incorporation or
Bylaws, (ii) violate or constitute a default under any law, regulation,
contract, agreement, consent, decree or judicial order by which Seller or any of
its officers, directors or shareholders are bound or (iii) result in the
creation of any Title Defect upon the Assets.
c. ENFORCEABILITY. This Agreement has been duly executed and delivered on
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behalf of Seller and constitutes the legal, valid and binding obligation of
Seller enforceable in accordance with its terms, except as limited by bankruptcy
or other laws applicable generally to creditor's rights and as limited by
general equitable principles. At the Closing, all documents required hereunder
to be executed and delivered by Seller shall be duly authorized, executed and
delivered and shall constitute legal, valid and binding obligations of Seller
enforceable in accordance with their respective terms, except as limited by
bankruptcy or other laws applicable generally to creditor's rights and as
limited by general equitable principles.
d. CONTRACTS. Schedules 1(a), 1(d), 1(e) and 1(f) contain a list of all
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material contracts affecting the Assets. Seller has received no notice of its
default under any of such contracts. Such contracts are in full force and
effect and have not been modified or amended subsequent to the date hereof.
e. PREFERENTIAL PURCHASE RIGHTS/CONSENTS. Schedule 4(e) sets forth all
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consents, approvals, waivers and authorizations (collectively, "Consents"), and
all preferential purchase rights required to be obtained ("Pref Rights"), in
connection with the sale of the Assets to Buyer.
f. LITIGATION AND CLAIMS. Except as described on Schedule 4(f), no claim,
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demand, filing, cause of action, administrative proceeding, lawsuit or other
litigation is pending or, to Seller's knowledge, threatened with respect to
Seller or the Assets that could now or hereafter materially adversely affect the
ownership, operation or value of the Assets.
g. FINDER'S FEES. Seller has not incurred any liability, contingent or
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otherwise, for brokers' or finders' fees in respect to this transaction for
which Buyer shall have any responsibility whatsoever.
h. COMPLIANCE WITH LAWS. Seller has no actual knowledge, and has not
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received any notice from any federal, state or municipal authority that the
Assets or Seller's use thereof in its business, are not in material compliance
with all laws, rules, regulations and permits relating to the Assets except for
such non-compliance and violations which, individually or in the aggregate,
would not have a material adverse effect on the ownership, operation or value of
the Assets. Seller will promptly notify Buyer upon receipt of any such
notice.
i. TITLE. Seller owns the Assets free and clear of all liens and
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encumbrances (except as disclosed in the Schedules hereto) arising by, through
or under Seller.
j. ENVIRONMENTAL ISSUES.
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To the best of its knowledge, Seller has complied in all material respects
with all Environmental Laws (as defined in Section 9(b)(iv) hereof) and with the
terms of all permits, licenses, orders, decrees and agreements thereunder.
Except as set forth in Schedule 4(j), Seller is not aware of, and has not
received notice from any person or entity asserting or alleging (i) any
non-compliance with the Environmental Laws by Seller relating to the operation
and ownership of the Assets; (ii) any liability in connection with the release,
spill, discharge, storage, disposal or presence of any pollutants,
contaminations, chemicals, industrial, toxic or hazardous substances or wastes,
petroleum, petroleum products or wastes and natural gas by-products, liquids or
wastes (collectively, "Hazardous Materials"), including but not limited to
liability under the federal Comprehensive Environmental Response, Compensation
and Liability Act or similar state "Superfund" laws, relating in any way to the
Assets; or (iii) the release, discharge or presence of any Hazardous Materials
at, on, under or from any of the Assets requiring cleanup or other remedial
action pursuant to the Environmental Laws.
k. Financial Data. To Seller's knowledge, all financial data provided by
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Seller to Buyer relating to the Assets is true and accurate in all material
respects.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
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to Seller as follows:
a. ORGANIZATION. Buyer is a West Virginia corporation duly organized,
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validly existing and in good standing under the laws of the state of its
organization and is qualified or registered as a foreign entity in each
jurisdiction where it is required to be so qualified and registered except where
the failure to so qualify would not have a material adverse effect on
Buyer's business.
b. AUTHORITY. Buyer has full power and authority and has taken all
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requisite action, corporate or otherwise, to authorize Buyer to carry on Buyer's
business as presently conducted, to enter into this Agreement, to purchase
the Assets on the terms described in this Agreement and to perform its
obligations under this Agreement. Neither the execution and delivery of this
Agreement nor the performance by Buyer of its obligations hereunder will (i)
violate Buyer's Articles of Incorporation or Bylaws or (ii) violate or
constitute a default under any law, regulation, contract, agreement, consent,
decree or judicial order by which Buyer or any of its directors, officers or
shareholders are bound.
c. ENFORCEABILITY. This Agreement has been duly executed and delivered on
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behalf of Buyer and constitutes the legal, valid and binding obligation of Buyer
enforceable in accordance with its terms except as limited by bankruptcy or
other laws applicable generally to creditor's rights and as limited by general
equitable principles. At the Closing, all documents required hereunder to be
executed and delivered by Buyer shall be duly authorized, executed and delivered
and shall constitute legal, valid and binding obligations of Buyer enforceable
in accordance with their respective terms, except as limited by bankruptcy or
other laws applicable generally to creditor's rights and as limited by general
equitable principles.
d. STATUS OF BUYER. Buyer represents that by reason of its knowledge and
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experience in the evaluation, acquisition, and operation of oil and gas
properties, Buyer has performed, or will perform before Closing, a due diligence
review of the Assets and will have evaluated the merits and risks of
purchasing the Assets from Seller and has formed an opinion as to the value and
purchase of the Assets based solely on Buyer's knowledge and experience and not
on any representations or warranties by Seller except as otherwise provided in
this Agreement Buyer is acquiring the Assets for its own account and without a
view to the distribution thereof within the meaning of the Securities Act of
1933, as amended.
e. FINDER'S FEES. Buyer has not incurred any liability, contingent or
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otherwise, for brokers' or finders' fees in respect to this transaction for
which Seller shall have any responsibility whatsoever.
6. COVENANTS OF SELLER.
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a. CONDUCT OF BUSINESS PENDING CLOSING. Seller covenants that from the date
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hereof to the Closing Date, Seller will:
i. ORDINARY COURSE OF BUSINESS, ETC. Not (A) act in any manner with respect
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to the Assets other than in the normal, usual and customary manner,
consistent with prior practice; (B) dispose of, encumber or relinquish any of
the Assets (other than in the ordinary course of business or as a result of the
expiration of Leases or other agreements or contracts that Seller has no right
or option to renew); (C) waive, compromise or settle any material right or claim
with respect to any of the Assets; (D) make capital or workover expenditures
with respect to the Assets in an amount which exceeds $25,000 without Buyer's
consent, except when required by an emergency when there shall have been
insufficient time to obtain advance consent; (E) abandon any Well unless
required to do so by a governmental or regulatory agency or (F) modify or
terminate any Lease or other material agreement or contract.
ii. PERMITS, ETC. Cooperate with Buyer in the notification of all
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applicable governmental regulatory authorities of the transactions contemplated
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hereby and cooperate with Buyer in obtaining the issuance by each such authority
of such permits, licenses and authorizations as may be necessary for Buyer
to own and operate the Assets following the consummation of the transactions
contemplated by this Agreement.
iii. PREFERENTIAL RIGHTS AND CONSENTS. Use commercially reasonable efforts,
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consistent with industry practices in transactions of this type, to
identify, with respect to all material Assets, (i) all Pref Rights and
requirements that Consents be obtained which would be applicable to the
transactions contemplated hereby and (ii) the names and addresses of parties
holding such rights; in attempting to identify such Pref Rights and Consents,
and the names and addresses of such parties holding the same, Seller shall in no
event be obligated to go beyond its own records. Seller will request, from the
parties so identified (and in accordance with the documents creating such Pref
Rights and Consents), execution of Consents and/or waivers of Pref Rights so
identified. If any holder of any right to Consent does not respond (a
"Non-response Consent Holder") to Seller's notice by 15 days after the date of
such notice, the Consent of such holder shall be deemed to have been obtained on
that 15th day (a "Non-response Consent").
b. ACCESS. Seller shall afford to Buyer and its authorized representatives
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reasonable access, at Buyer's sole risk and expense, from the date hereof until
the Closing Date during normal business hours, to (i) the Assets operated by
Seller, provided, however, that Buyer shall indemnify and hold harmless Seller
from and against any and all Damages (as defined in section 14 hereof) arising
from Buyer's inspection of the Assets, and (ii) Seller's Records.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. The obligations of
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Seller to be performed at the Closing are subject to the fulfillment (or waiver
by Seller in its sole discretion), before or at the Closing, of each of the
following conditions:
a. REPRESENTATIONS AND WARRANTIES. The representations and warranties by
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Buyer set forth in this Agreement shall be true and correct in all material
respects at and as of the Closing as though made at and as of the Closing and
Buyer shall have delivered a certificate to such effect to Seller; and Buyer
shall have performed and complied with in all material respects all covenants
and agreements required to be performed and satisfied by it at or prior to
Closing.
b. NO LITIGATION. There shall be no suits, actions or other proceedings
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pending or threatened to enjoin the consummation of the transactions
contemplated by this Agreement or seeking substantial damages against Seller or
Buyer in connection therewith.
c. PURCHASE PRICE. Buyer shall have delivered the cash portion of the
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Purchase Price to Seller in immediately available funds by wire transfer and
shall have executed and delivered to Seller an agreement assuming Seller's
obligations under the Roberts Project Agreement in form mutually acceptable to
Seller and Buyer
d. CONVEYANCE DOCUMENTS. Buyer shall have executed and delivered to Seller
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(i) instruments of assignment and deeds in forms mutually acceptable to Buyer
and Seller effectuating the transfer of the Assets as contemplated herein (the
"Transfer Documents"), (ii) division orders, transfer orders or letters in lieu
thereof directing all purchasers of production from the Assets to make payment
of proceeds attributable to such production occurring on or after the Effective
Date to Buyer and (iii) all appropriate state or local forms required to be
executed to effect the administrative change of operator of such Assets from
Seller to Buyer.
e. CERTIFICATES. Buyer shall deliver to Seller the following certificates:
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i. SECRETARY'S CERTIFICATE. A certificate signed by the Secretary or
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Assistant Secretary of Buyer certifying as to the truthfulness, completeness and
accuracy of the attached copies of Buyer's Articles of Incorporation and
resolution of its Board of Directors and, if necessary, shareholders authorizing
all actions of Buyer contemplated hereunder; and
ii. GOOD STANDING CERTIFICATE. A good standing certificate of Buyer issued
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by the state of Buyer's incorporation and a certificate of qualification for
Buyer to do business in the states of Kentucky and West Virginia and the
Commonwealth of Virginia.
f. DEFECT VALUE. The adjustments made to the Purchase Price on account of
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Title Defects, if any, shall not, in the aggregate, exceed 35% of the Purchase
Price.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER. The obligations of
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Buyer to be performed at the Closing are subject to the fulfillment (or waiver
by Buyer in its sole discretion), before or at the Closing, of each of the
following conditions:
a. REPRESENTATIONS AND WARRANTIES. The representations and warranties by
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Seller set forth in this Agreement shall be true and correct in all material
respects at and as of the Closing as though made at and as of the Closing and
Seller shall have delivered a certificate to such effect to Buyer; and Seller
shall have performed and complied with in all material respects all covenants
and agreements required to be performed and satisfied by it at or prior to
Closing.
b. NO LITIGATION. There shall be no suits, actions or other proceedings
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pending or threatened to enjoin the consummation of the transactions
contemplated by this Agreement or seeking substantial damages against Seller or
Buyer in connection therewith.
c. CONVEYANCE DOCUMENTS. Seller shall have executed and delivered to Buyer
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(i) the Transfer Documents, (ii) division orders, transfer orders or letters in
lieu thereof directing all purchasers of production from the Assets to make
payment of proceeds attributable to such production occurring on or after the
Effective Date to Buyer and (iii) all appropriate state or local forms required
to be executed to effect the administrative change of operator of such Assets
from Seller to Buyer.
d. CERTIFICATES. Seller shall deliver to Buyer the following certificates:
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i. SECRETARY'S CERTIFICATE. A certificate signed by the Secretary or
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Assistant Secretary of Seller certifying as to the truthfulness, completeness
and accuracy of the attached copies of Seller's Articles of Incorporation and
resolution of its Board of Directors and, if necessary, shareholders authorizing
all actions of Seller contemplated hereunder; and
ii. GOOD STANDING CERTIFICATE. A good standing certificate of Seller issued
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by the Commonwealth of Virginia and a certificate of qualification for
Seller to do business in the states of Kentucky and West Virginia and the
Commonwealth of Virginia.
e. DEFECT VALUE. The adjustments made to the Purchase Price on account of
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Title Defects, if any, shall not, in the aggregate, exceed 35% of the
Purchase Price.
9. TITLE MATTERS.
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a. TITLE ADJUSTMENT. Buyer shall notify Seller in writing of any claimed
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Title Defects promptly upon Buyer's discovery thereof and in no event later than
ten (10) business days prior to Closing ("Title Defects Notice"). The
Title Defects Notice shall set forth in reasonable detail (i) the Well, Lease or
other Asset with respect to which a claimed Title Defect is made, (ii) the
nature of such claimed Title Defect and (iii) Buyer's calculation of the value
of each claimed Title Defect in accordance with the guidelines set forth in
Section 9(d) hereof. Any Title Defect that is not identified in the Title
Defects Notice shall thereafter be forever waived and expressly assumed by Buyer
and shall be deemed to have become a Permitted Encumbrance; provided, however,
that nothing contained herein shall be deemed to limit Buyer's right to
indemnification under Sections 14(b)(ii) and 30 hereof.
b. DEFINITIONS. The following terms shall have the following meanings for
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purposes of this Agreement:
i. "TITLE DEFECT" shall mean, with respect to Seller's interest in each of
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the Wells listed on Schedule 1(b) any (A) lien, mortgage, pledge (other than
liens, mortgages and pledges to be released at Closing), claim, charge, option
or other defect which would materially affect or interfere with the operation,
use, ownership or value of such Well other than Permitted Encumbrances and which
results in (1) Seller being entitled to receive a percentage of all
proceeds of production therefrom less than the Net Revenue Interest of Seller
set forth on Schedule 1(b) for such Well, or (2) Seller being obligated to pay
costs and expenses relating to the operations on and the maintenance and
development of such Well in an amount greater than the Working Interest set
forth in Schedule 1(b), without a corresponding increase in the Net Revenue
Interest for such Well, (B) any requirement for consent to assignment or other
defect which if not obtained or cured would materially affect or interfere with
the operation, use, ownership or value of such Well or (C) any Adverse
Environmental Condition.
ii. "NET REVENUE INTEREST" shall mean Seller's interest in and to all
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production of oil, gas and other minerals saved, produced and sold from any Well
after giving effect to all valid lessor's royalties, overriding royalties,
production payments, carried interests, liens and other encumbrances or charges
against production therefrom.
iii. "WORKING INTEREST" shall mean, with respect to any Well, Seller's
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interest in and to the full and entire leasehold estate created under and by
virtue of the Leases held in connection with such Well and all rights and
obligations of every kind and character appurtenant thereto or arising
therefrom, without regard to any valid lessor's royalty, overriding royalties,
production payments, carried interests, liens, or other encumbrances or charges
against production therefrom insofar as such interest in said leasehold estate
is burdened with the obligation to bear and pay costs of operations.
iv. "ADVERSE ENVIRONMENTAL CONDITION" shall mean (A) any contamination or
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condition exceeding currently-allowed regulatory limits and not otherwise
permanently authorized by permit or law, resulting from any discharge, release,
disposal, production, storage, treatment, seepage, escape, leakage, emission,
emptying, leaching or any other activities on, in or from any of the Lands, or
the migration or transportation from other lands to any of the Lands, prior to
the Effective Date, of any wastes, pollutants, contaminants, hazardous materials
or other materials or substances subject to regulation relating to the
protection of the environment under current or future federal, state or local
laws or statutes ("Environmental Laws") and (B) any such contamination or
condition temporarily authorized by permit, fee agreement or other arrangement.
v. "PERMITTED ENCUMBRANCES" shall mean:
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A. Lessors' royalties, overriding royalties, reversionary interests and
similar burdens if the cumulative effect of the burdens does not operate to
reduce the interest of Seller with respect to all oil and gas produced from any
Well below the Net Revenue Interest for such Well set forth in Schedule 1(b);
B. Division orders and sales contracts terminable without penalty upon no
more than 90 days notice to the purchaser except as set forth on Schedule
9(d)(v);
C. Materialman's, mechanic's, repairman's, employee's, contractor's,
operator's , tax, and other similar liens or charges arising in the ordinary
course of business for obligations that are not delinquent or that will be paid
and discharged in the ordinary course of business or if delinquent, that are
being contested in good faith by appropriate action of which Buyer is notified
in writing before Closing;
D. All Non-response Consents and 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
routinely obtained subsequent to the sale or conveyance;
E. Easements, rights-of-way, servitudes, permits, surface leases and other
rights in respect of surface operations that do not materially interfere with
the oil and gas operations to be conducted with respect to the Assets;
F. All operating agreements, unit agreements, unit operating agreements,
pooling agreements and pooling designations affecting the Assets;
G. Conventional rights of reassignment prior to release or surrender
requiring notice to the holders of the rights;
H. All rights reserved to or vested in any governmental, statutory or public
authority to control or regulate any of the Assets in any manner, and all
applicable laws, rules and orders of governmental authority;
I. The terms and conditions of the Leases, and of all other agreements
affecting the Assets; and
J. Any Title Defects Buyer may have expressly waived in writing or which are
deemed to have become Permitted Encumbrances under section 9(a).
Nothing contained in this Section 9(v) shall be deemed to limit Buyer's
right to indemnification under Sections 14(b)(ii) and 30 hereof.
vi. "DEFECT VALUE" shall mean the amount which is determined in accordance
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with Section 9(d) below with respect to each Title Defect which is accepted by
Seller or determined to be a Title Defect pursuant to section 9(c).
c. DETERMINATION OF TITLE DEFECTS AND DEFECT VALUES. Within five (5)
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business days after Seller's receipt of the Title Defects Notice, Seller shall
notify Buyer whether Seller agrees with Buyer's claimed Title Defects and/or the
proposed Defect Values therefor ("Seller's Response"). If Seller does not
agree with any claimed Title Defect and/or the proposed Defect Value therefor,
then the parties shall enter into good faith negotiations and shall attempt to
agree on such matters. If the parties cannot reach agreement concerning either
the existence of a Title Defect or a Defect Value prior to Closing, upon either
party's written request, the parties shall retain a mutually agreed upon and
appropriate independent consultant in the state in which the Asset affected by
the claimed Title Defect is located to resolve all points of disagreement
relating to Title Defects and Defect Values. If within 10 days after the date
of such written request, the parties have not chosen such consultant, each party
shall retain such a consultant and those two consultants shall retain a third
such consultant. The cost of any such consultants shall be borne 50% by Seller
and 50% by Buyer. Each party shall present a written statement of its position
on the Title Defect and/or Defect Value in question to the consultants within
five (5) business days after the third consultant is selected, and the
consultants shall make a determination of all points of disagreement in
accordance with the terms and conditions of this Agreement within ten (10)
business days of receipt of such position statements. The determination by the
consultants shall be conclusive and binding on the parties, and shall be
enforceable against any party in any court of competent jurisdiction. If
necessary, the Closing Date shall be deferred only as to those Assets affected
by any unresolved disputes regarding the existence of a Title Defect and/or the
Defect Value until the consultants have made a determination of the disputed
issues with respect thereto; provided, however, that, unless Seller and Buyer
mutually agree to the contrary, the Closing Date shall not be deferred with
respect to any Assets subject to unresolved disputes in any event for more than
thirty (30) days beyond the original Closing Date. All Assets as to which no
such dispute(s) exist shall be conveyed to Buyer subject to the terms of this
Agreement at Closing. Once the consultants' determination has been expressed to
both parties, Seller shall have five (5) business days in which to advise Buyer
in writing which of the options available to Seller under section 9(e) below
Seller elects regarding each of the Assets as to which the consultant has made a
determination.
d. CALCULATION OF DEFECT VALUE.
------------------------------
i. DIFFERENT INTERESTS. If a Title Defect is based upon Buyer's notice that
-------------------
Seller owns a lesser interest, or the notice is from Seller to Buyer to the
effect that Seller owns a greater interest in any Well than that shown on
Schedule 1(b), then the Purchase Price shall be reduced or increased, as
appropriate, by an amount equal to the product of:
(A) (1) if all of Seller's interests in such Well are affected, the
allocated value of such Well as set forth on Schedule 2 or (2) if less than all
of Seller's interests in such Well are affected, that portion of the allocated
value of such Well as set forth on Schedule 2 as is attributable to the affected
interest, times
(B) a fraction, the numerator of which is the amount of lesser or greater
interest set forth in the notice and the denominator of which is the respective
interest set forth on Schedule 1(b).
ii. PREF RIGHTS; CONSENTS. In the event a third party exercises an
-----------------------
applicable Pref Right or fails to grant a Consent necessary to transfer the
Assets to Buyer, the Purchase Price shall be reduced by the amount allocated to
the affected Asset as set forth on Schedule 2 or a prorata portion thereof
calculated in accordance with Section 9(d)(i) above if the Pref Right affects
less than 100% of an Asset.
iii. LIENS. If a Title Defect is a lien, encumbrance or other charge upon
-----
an Asset which is liquidated in amount, then the adjustment shall be the sum
necessary to be paid to the obligee to remove the Title Defect from the affected
Asset, and Seller shall pay such sum to obligee at Closing. However,
Seller reserves the right to retain the obligation of this Title Defect and
elect to challenge the validity of any such Title Defect or any portion thereof,
and Buyer shall extend reasonable cooperation to Seller in such efforts at no
risk or expense to Buyer. If a Title Defect represents an obligation or burden
upon the affected Asset for which the economic detriment to Buyer is not
liquidated but can be estimated with reasonable certainty, the adjustment shall
be the sum Seller and Buyer mutually agree upon as necessary to compensate Buyer
at Closing for the adverse economic effect which such Title Defect will have on
the affected Asset.
iv. ADVERSE ENVIRONMENTAL CONDITION. If a Title Defect is an Adverse
---------------------------------
Environmental Condition, the Purchase Price shall be reduced by the cost to
remediate such condition, and any penalties imposed by any governmental agency
payable as a result of such condition.
e. REMEDIES FOR TITLE DEFECT. Seller shall have the right, but not the
----------------------------
obligation, to cure any Title Defect accepted by Seller or determined to be a
Title Defect pursuant to Section 9(c) above. With respect to Title Defects
involving lack of a leasehold interest, such Defect shall be considered cured if
Seller acquires the leasehold or rights to acquire the leasehold by the
drilling of a well within a six month period. With respect to any Title Defect
that Seller elects not to cure or that Seller fails to cure at or prior to
Closing, the following shall occur:
i. DEFECTS OTHER THAN ADVERSE ENVIRONMENTAL CONDITIONS. In the event the
------------------------------------------------------
Title Defect is a defect other than an Adverse Environmental Condition, Seller
shall have the option to:
A. EXCLUDE ASSET. Exclude the Asset subject to the Title Defect from this
--------------
Agreement, in which event the Purchase Price shall be reduced by the value
allocated to the affected Asset as set forth on Schedule 2; or
B. SELL ASSET SUBJECT TO DEFECT. Sell the Asset subject to such Title
--------------------------------
Defect to Buyer, in which event the Purchase Price shall be reduced by the
Defect Value for such Title Defect.
ii. ADVERSE ENVIRONMENTAL CONDITIONS. In the event the Title Defect is an
----------------------------------
Adverse Environmental Condition, Seller shall have the option to:
A. REMEDIATION. Agree to remediate such Adverse Environmental Condition at
-----------
Seller's sole cost in accordance with applicable Environmental Laws, and there
shall be no adjustment to the Purchase Price in respect of the remediation of
such Adverse Environmental Condition and the provisions of section 14(a)(ii)
hereof shall thereafter apply in all respects. If Seller elects this option
Seller will exercise all reasonable efforts and diligence to complete
remediation within six (6) months of the Closing Date, but any failure to
complete its efforts by such time shall not relieve Seller of its duty to
satisfy its obligation hereunder. Buyer shall allow Seller and its agents and
representatives such access to the Assets as is reasonably necessary for
performance of remediation work. Seller will conduct such work so as not to
unreasonably interfere with Buyer's operations;
B. REDUCE PURCHASE PRICE. Reduce the Purchase Price by the applicable
-----------------------
Defect Value of the Asset affected by such Adverse Environmental Condition, in
which event Seller shall have no other or further obligation or liability in
respect of such Adverse Environmental Condition and the provisions of Section
14(a)(ii) shall thereafter apply in all respects; or
C. EXCLUDE ASSET. Exclude the Asset which contains the Adverse
--------------
Environmental Condition from this Agreement in which event the Purchase Price
shall be reduced by the value allocated to the affected Asset as set forth in
Schedule 2.
Notwithstanding the foregoing, no downward adjustment of the Purchase Price on
account of Title Defects shall occur unless the aggregate amount of the Defect
Values determined in accordance with this Section 9 exceeds Three Hundred Fifty
Thousand Dollars ($350,000) ("Title Basket Value"), and the amount of downward
adjustment shall be the aggregate amount of Defect Values counted after reaching
the Title Basket Value.
f. TERMINATION AS A REMEDY. In the event the aggregate sum of the Defect
--------------------------
Values exceeds thirty-five percent (35%) of the Purchase Price, either Buyer or
Seller may elect to terminate this Agreement, in which case neither party shall
have any further liability or obligation to the other hereunder except as to (i)
Seller's obligation to return the Deposit to Buyer and (ii) all obligations
of Seller and Buyer imposed by any confidentiality agreement, which shall
survive such termination and be enforceable in accordance with the terms
thereof.
10. SUSPENSE FUNDS HELD BY SELLER. At Closing, Seller shall provide to
---------------------------------
Buyer a listing showing all proceeds from production attributable to the Assets
that are currently held in suspense and shall transfer to Buyer all such
suspended proceeds. Buyer shall be responsible for proper distribution of all
the suspended proceeds to the parties lawfully entitled to them, and hereby
agrees to indemnify, defend, and hold harmless Seller from and against any and
all losses arising out of or relating to Buyer's retention or distribution of
such suspended proceeds. Seller represents and warrants that, to its knowledge,
the amounts in such suspense accounts are materially sufficient to cover
all claims thereunder.
11. CLOSING. The purchase and sale of the Assets pursuant to this Agreement
-------
shall be consummated ("Closing") in Duffield, Virginia, at the offices of
Seller on December 29, 2000 (the "Closing Date"), but effective as of October 1,
2000 (the "Effective Date"). If Closing is not consummated on the Closing Date
due to Buyer's willful failure to satisfy one or more of the conditions to
Closing, Seller's sole remedy shall be to retain the Deposit as liquidated
damages. If the Closing fails to occur for any other reason, Buyer shall be
entitled to receive the Deposit.
12. CLOSING STATEMENT AND POST-CLOSING ADJUSTMENTS.
--------------------------------------------------
a. CLOSING STATEMENT. Seller shall deliver to Buyer, by not later than five
-----------------
(5) days prior to the Closing Date, a statement (the "Statement") which
Seller has prepared in accordance with this Agreement and with generally
accepted accounting principles consistently applied setting forth each
adjustment to the Purchase Price necessary in accordance herewith and showing
the calculation of such adjustments in accordance with Section 2(b) hereof. By
one day prior to the Closing Date, Buyer shall provide written notice to Seller
of any objections of Buyer to any item on the Statement showing the calculations
resulting in such objections. Buyer and Seller shall attempt in good faith to
resolve their differences. If they are unable to do so, Closing will be based
on the Statement and any disagreements registered by Buyer will be reserved for
the Final Settlement Statement.
b. FINAL SETTLEMENT STATEMENT. After the Closing Date, Seller shall
----------------------------
prepare, in accordance with this Agreement and with generally accepted
accounting principles consistently applied, a statement (the "Final Settlement
Statement"), a copy of which shall be delivered by Seller to Buyer no later than
one hundred twenty (120) days after the Closing Date, setting forth each
adjustment to the Purchase Price necessary in accordance herewith and showing
the calculation of such adjustments in accordance with Section 2(b) hereof.
Buyer shall have forty-five (45) days after receipt of the Final Settlement
Statement to review such statement and to provide written notice to Seller of
Buyer's objection to any item on the statement. Buyer's notice shall clearly
identify the item(s) objected to and the reasons and support for the
objection(s). If Buyer does not provide written objection(s) within the 45-day
period, the Final Settlement Statement shall be deemed correct and shall not be
subject to further adjustment. If Buyer provides written objection(s) within
the 45-day period, the Final Settlement Statement shall be deemed correct as to
the items with respect to which no objections were made. Buyer and Seller shall
meet to negotiate and resolve the objections within fifteen (15) days of Buyer's
receipt of Seller's objections. If Buyer and Seller agree on all objections the
adjusted Final Settlement Statement shall be deemed correct and shall not be
subject to further adjustment. Any items not agreed to at the end of the 15-day
period may, at either party's request, be resolved by arbitration in accordance
with Section 12 (c) below.
c. ARBITRATION. If Seller and Buyer cannot agree upon the Final Settlement
-----------
Statement, the parties shall chose a mutually agreeable big six accounting firm
to act as an arbitrator and decide all points of disagreement with respect
to the Final Settlement Statement by not later than twenty (20) days following
the parties retention of such consultant for such purpose. The decision of such
accounting firm on all such points shall be binding upon the parties. The costs
and expenses of such accounting firm shall be borne 50% by Seller and 50% by
Buyer.
d. PAYMENT OF FINAL PURCHASE PRICE. Any amounts owing from Seller to Buyer
--------------------------------
or Buyer to Seller as determined by the Final Settlement Statement shall be paid
within five (5) days of the date the Final Settlement Statement is agreed
upon or the final decision of the accounting firm, as the case may be.
13. LIMITATION OF WARRANTIES. Except as otherwise set forth in Section 4
--------------------------
hereof, the Assets constituting personal property are being sold by Seller to
Buyer without recourse, covenant, or warranty of any kind, express, implied, or
statutory. WITHOUT LIMITATION OF THE GENERALITY OF THE IMMEDIATELY PRECEDING
SENTENCE, SELLER CONVEYS SUCH PERSONAL PROPERTY AS-IS, WHERE-IS AND WITH ALL
FAULTS AND EXPRESSLY DISCLAIMS AND NEGATES (a) ANY IMPLIED OR EXPRESS WARRANTY
OF MERCHANTABILITY, (b) ANY IMPLED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE AND (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS. SELLER ALSO EXPRESSLY DISCLAIMS AND NEGATES ANY
IMPLIED OR EXPRESS WARRANTY AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING
TO THE ACCURACY OF ANY OF THE INFORMATION FURNISHED WITH RESPECT TO THE
EXISTENCE OR EXTENT OF RESERVES OR THE VALUE OF THE ASSETS BASED THEREON OR THE
CONDITION OR STATE OF REPAIR OF ANY OF THE ASSETS; THIS DISCLAIMER AND DENIAL OF
WARRANTY ALSO EXTENDS TO THE EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO
THE PRICES BUYER AND SELLER ARE OR WILL BE ENTITLED TO RECEIVE FROM PRODUCTION
OF OIL, GAS OR OTHER SUBSTANCES FROM THE ASSETS, IT BEING UNDERSTOOD THAT ALL
RESERVE, PRICE, AND VALUE ESTIMATES UPON WHICH BUYER HAS RELIED OR IS RELYING
HAVE BEEN DERIVED BY THE INDIVIDUAL EVALUATION OF BUYER.
14. INDEMNIFICATION. Except as expressly limited elsewhere in this
---------------
Agreement:
a. BUYER'S INDEMNIFICATION. Buyer agrees to indemnify and hold harmless
------------------------
Seller, its officers, directors, employees, shareholders and any entity which
controls, is controlled by or is under common control with Seller and each of
their respective successors and assigns (the "Indemnified Parties") from and
against any and all liability, loss, cost and expense (including, without
limitation, court costs and reasonable attorneys' fees) (collectively,
"Damages") incurred by any Indemnified Party and arising directly or indirectly
out of or resulting from:
i. any liability attributable to the Assets which is incurred with respect
to any period of time after the Effective Date;
ii. any liability resulting from the condition of the Assets arising at any
time prior to or after the Effective Date under any Environmental Law; and/or
iii. any breach by Buyer of any of its representations, warranties,
covenants or agreements hereunder, subject to Section 30 hereof, it being
acknowledged that Seller's right to indemnification for breach of any
representation and warranty of Buyer shall terminate simultaneously with the
termination of such representation and warranty at the time described in Section
30 hereof.
b. SELLER'S INDEMNIFICATION. Seller agrees to indemnify and hold harmless
-------------------------
Buyer, its officers, directors, employees, shareholders and any entity which
controls, is controlled by or is under common control with Buyer and each of
their respective successors and assigns (the "Buyer Indemnified Parties") from
and against any and all Damages incurred by any Buyer Indemnified Party and
arising directly or indirectly out of or resulting from
i. any liability (other than a liability from which Seller is indemnified
pursuant to Section 14(a)(ii) hereof) attributable to the Assets which is
incurred with respect to any period of time on or before the Effective Date;
ii. any breach by Seller of any of its representations, warranties,
covenants or agreements hereunder, subject to Section 30 hereof, it being
acknowledged that Buyer's right to indemnification for breach of any
representation and warranty of Seller shall terminate simultaneously with the
termination of such representation and warranty at the time set forth in Section
30 hereof; and
iii. any Damages incurred by Buyer arising directly or indirectly out of or
resulting from Seller's failure to obtain a Consent from any Non-response
Consent Holder, but only if Buyer provides written notice of such Damages to
Seller prior to December 29, 2001.
c. LIMITS ON INDEMNIFICATION. The respective indemnity and hold harmless
---------------------------
obligations of the parties hereto shall be limited as follows: (i)
indemnification shall not apply to (A) any amount that was taken into account as
an upward or downward adjustment of the Purchase Price pursuant to the
provisions hereof, but only to the extent of such adjustments or (B) either
party's costs and expenses with respect to the negotiation and consummation of
this Agreement and the purchase and sale of the Assets; (ii) Buyer shall not be
permitted to enforce any claim for indemnification hereunder until the aggregate
amount of all such claims exceeds One Hundred Fifty Thousand Dollars ($150,000)
(the "Deductible Amount"), in which event Buyer shall be entitled to receive
indemnification payments only to the extent its aggregate Damages exceed the
Deductible Amount; (iii) the aggregate liability of Seller hereunder shall not
exceed the Purchase Price; and (iv) no party hereto shall be liable for
consequential or incidental damages incurred by the other party.
15. RISK OF LOSS. No adjustment to the Purchase Price shall be made if,
--------------
after the date hereof and prior to the Closing, any part of the Assets shall be
destroyed or harmed by fire or any other casualty or cause or shall be taken by
condemnation or the exercise of eminent domain, but Buyer shall be entitled to
any applicable insurance proceeds (to the extent actually received by Seller and
not payable from a captive insurance carrier or subject to reimbursement or
repayment by Seller or its affiliates) or condemnation awards.
16. TERMINATION AND REMEDIES.
--------------------------
a. TERMINATION. If the Closing has not occurred on or prior to the Closing
-----------
Date on account of any failure of Buyer to perform its obligations hereunder and
Seller has fully complied and performed pursuant to the provisions of this
Agreement, Seller may terminate this Agreement and retain the Deposit as
liquidated damages, in which case Buyer shall give written instructions to the
Bank to deliver the Deposit, including interest, to Seller. THE PARTIES HEREBY
ACKNOWLEDGE THAT THE EXTENT OF DAMAGES TO SELLER OCCASIONED BY THE FAILURE OF
THIS TRANSACTION TO BE CONSUMMATED WOULD BE IMPOSSIBLE OR EXTREMELY DIFFICULT TO
ASCERTAIN AND THAT THE AMOUNT OF THE DEPOSIT IS A FAIR AND REASONABLE ESTIMATE
OF SUCH DAMAGES UNDER THE CIRCUMSTANCES AND DOES NOT CONSTITUTE A PENALTY.
b. SOLE REMEDY OF BUYER PRIOR TO CLOSING. If, any time prior to Closing, it
-------------------------------------
is determined that any of the representations and warranties made herein by
Seller are materially incorrect or if Seller fails to fully and timely comply
with any of Seller's obligations as set forth herein or as required by
applicable law, Buyer's sole and exclusive remedy against Seller shall be to
terminate this Agreement, and within five (5) business days after Seller
receives written notice of such election by Buyer, Seller shall give written
instructions to the Bank to return the Deposit, including interest, to Buyer.
17. FURTHER ASSURANCES. After the Closing, Seller and Buyer shall execute,
-------------------
acknowledge and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be necessary or advisable to
carry out their obligations under this Agreement and under any exhibit,
document, certificate or other instrument delivered pursuant hereto.
18. ACCESS TO RECORDS BY SELLER. Within thirty (30) days after Closing,
-------------------------------
Seller shall deliver to Buyer the originals of all Records, except that Seller
shall retain (a) the originals of all Records which relate to properties other
----
than the Assets being sold herein, and (b) the originals of all accounting
Records, subject to the right of Buyer to copy selected portions of such
accounting Records at Buyer's expense and with minimal disruption of Seller's
ongoing business. For a period of six (6) years after the date of Closing,
Buyer will retain the Records delivered to it pursuant hereto and will make such
Records available to Seller upon reasonable notice at Buyer's headquarters
at reasonable times and during office hours. Buyer shall notify Seller in
writing within thirty (30) days of the sale to a third party of all or any part
of the Assets which involves the transfer of any of the Records of the name and
address of the buyer(s) in any such sale. Buyer shall require as part of any
such sales transaction that such third party assume the obligations imposed on
Buyer in this Section.
19. NOTICES. All notices required or permitted under this Agreement shall
-------
be in writing and shall be delivered personally or by certified mail, postage
prepaid and return receipt requested or by telecopier as follows:
Buyer John Mork, President and CEO
Energy Corporation of America
4643 South Ulster Street, Suite 1100
Denver, CO 80237
Telephone: 303-694-2667
Telecopier: 303-694-2763
With copies to:
Thomas R. Goodwin, Esquire
Tammy J. Owen, Esquire
Goodwin & Goodwin, LLP
300 Summers Street, Suite 1500
Charleston, WV 25301
Telephone: 304-346-7000
Telecopier: 304-344-9692
Seller James D. McKinney
Penn Virginia Oil & Gas Corporation
6907 Duff-Patt Road, P.O. Box 386
Duffield, VA 24244
Telephone: 540-431-4511
Telecopier: 540-431-2407; and
With copies to:
James O. Idiaquez
Penn Virginia Oil & Gas Corporation
11757 Katy Freeway, Suite 300
Houston, Texas 77079
Telephone: 281-966-3861
Telecopier: 281-966-3870; and
Nancy M. Snyder
General Counsel
Penn Virginia Corporation
One Radnor Corporate Center, Suite 200
100 Matsonford Road
Radnor, PA 19087
Telephone: (610) 687-8900
Telecopier: (610) 687-3688
or to such other place within the United States of America as either party may
designate as to itself by written notice to the other. All notices given by
personal delivery or mail shall be effective on the date of actual receipt at
the appropriate address. Notices given by telecopier shall be effective upon
actual receipt if received during recipient's normal business hours or at the
beginning of the next business day after receipt if received after the
recipient's normal business hours. All notices by telecopier shall be confirmed
in writing on the day of transmission by either mailing by postage prepaid
certified mail with return receipt requested, or by personal delivery.
20. ARBITRATION. If at any time any dispute shall arise between Buyer and
-----------
Seller under this Agreement or under any of the terms and provisions hereof
(other than any dispute to be decided by an accounting firm pursuant to section
9 hereof) which cannot be agreed upon by the parties hereto, then such dispute
shall be referred to a board of arbitrators (the "Board"). Such Board shall be
composed of a representative of Buyer and a representative of Seller, to be
selected by them, respectively, and a third arbitrator who shall be chosen by
the two (2) arbitrators herein provided for. In case the two (2) arbitrators
are unable to agree within ten (10) days upon a third arbitrator, then the
American Arbitration Association shall designate a disinterested person to act
as such arbitrator; and, in case either of the parties should, for a period of
ten (10) days after receipt of the notice below referred to, fail to select and
make known in writing to the other party the arbitrator selected by it, the said
American Arbitration Association shall designate two (2) disinterested
persons, who together with the person selected by the party desiring the
arbitration, shall constitute the Board. Either party may at any time serve
upon the other a notice setting forth the point or points upon which the
decision of said Board is desired and the other party may, within ten (10) days
thereafter, serve a counter-notice specifying any additional points or
differences arbitrable hereunder upon which such other party may desire a
decision. The Board shall give ten (10) days written notice of the time and
place of hearing to the respective parties, and shall determine questions
submitted to it for arbitration, and make its decision and award in writing.
The decision and award of a majority of the arbitrators shall be final,
conclusive and obligatory upon the parties to this Agreement, their successors
and assigns, and without appeal, and each party hereto agrees to abide by and
comply with every such decision and award. Those costs of any such arbitration
shall in the first instance be paid by the party requesting the same, but if
such party substantially prevails therein it shall be reimbursed therefore by
the other party, and this question of costs shall in each case be determined by
the Board when it renders its decision on the question or questions submitted to
it.
21. GOVERNING LAW. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the Commonwealth of Virginia.
22. ASSIGNMENT. This Agreement shall be binding upon and shall inure to the
----------
benefit of the Parties hereto and their respective permitted successors and
assigns. Notwithstanding the preceding sentence, Buyer shall not assign this
Agreement or its rights or obligations hereunder without Seller's written
consent which consent shall not be unreasonably withheld or delayed; provided,
however that Buyer may assign its rights and obligations hereunder to Eastern
American Energy Corporation without such consent.
23. ENTIRE AGREEMENT; AMENDMENTS; WAIVERS. This Agreement constitutes the
---------------------------------------
entire Agreement between the parties hereto with respect to the subject matter
hereof, superseding all prior negotiations, discussions, agreements and
understandings, whether oral or written, relating to such subject matter. This
Agreement may not be amended and no rights hereunder may be waived except by a
written document signed by the party to be charged with such amendment or
waiver. No waiver of any of the provisions of the 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.
24. SEVERABILITY. If a court of competent jurisdiction determines that any
------------
clause or provision of this Agreement is void, illegal, or unenforceable, the
other clauses and provisions of the Agreement shall remain in full force and
effect and the clauses and provisions which are determined to be void, illegal,
or unenforceable shall be limited so that they shall remain in effect to the
extent permissible by law.
25. PRESS RELEASES. Seller and Buyer shall consult with each other prior to
--------------
the issuance of any press releases or other public announcements concerning
this transaction.
26. HEADINGS. The headings of the Sections of this Agreement are for
--------
guidance and convenience of reference only and shall not limit or otherwise
affect any of the terms or provisions of this Agreement.
27. COUNTERPARTS. This Agreement may be executed by Buyer and Seller in any
------------
number of counterparts, each of which shall be deemed an original
instrument, but all of which together shall constitute but one and the same
instrument. This Agreement will be binding upon the parties who do sign whether
or not all parties sign the Agreement.
28. EXPENSES, FEES AND TAXES. Each of the parties hereto shall pay its own
-------------------------
fees and expenses incident to the negotiation and preparation of this Agreement
and consummation of the transactions contemplated hereby, including broker fees.
Buyer shall be responsible for the cost of all fees for the recording of
transfer documents. All other costs shall be borne by the party incurring them.
Notwithstanding anything to the contrary herein, it is acknowledged and agreed
by and between Seller and Buyer that the Purchase Price excludes any sales taxes
or other taxes in connection with the sale of property pursuant to this
Agreement. If a determination is ever made that a sales tax or other transfer
tax applies, Buyer shall be liable for such tax as well as any applicable
conveyance, transfer and recording fees, and real estate transfer stamps or
taxes imposed on any transfer of property pursuant to this Agreement. Buyer
shall indemnify and hold Seller harmless with respect to the payment of any of
such taxes, including any interest or penalties assessed thereon. The indemnity
and hold harmless obligation contained in the preceding sentence shall survive
the Closing.
29. BUSINESS DAYS. The term "business day" when referred to herein shall
--------------
mean any day (other than a day which is a Saturday, Sunday or legal holiday) in
the state of Virginia.
30. Survival of Representations and Warranties. The representations and
warranties included in Sections 4, 5 and 10 hereof shall survive until the
Closing Date except that the representations and warranties included in
a. Section 4(i) shall survive with respect to any Asset until the later to
occur of (i) the date on which Seller or its permissible assignee ceases to own
such Asset or (ii) December 29, 2005; and
b. Section 4(j) shall survive until June 29, 2001.
IN WITNESS WHEREOF, the parties hereto have caused their duly elected officers
to execute this Agreement on the date first above written.
PENN VIRGINIA OIL & GAS CORPORATION
By: /s/ James O. Idiaquesz
-----------------------------------------
James O. Idiaquez
Vice President
ENERGY CORPORATION OF AMERICA
By: /s/ Joseph E. Casabona
-----------------------------------------
Joseph E. Casabona
Executive Vice President
