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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
August 21, 1996
Date of Report (date of earliest event reported)
EVERGREEN RESOURCES, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO 0-10077 84-0834147
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
1000 WRITER SQUARE
1512 LARIMER STREET
DENVER, COLORADO 80202
(Address of Principal Executive Offices)
(303) 534-0400
(Registrant's Telephone Number, Including Area Code)
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ITEM 1: CHANGES IN CONTROL OF REGISTRANT
N/A
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On August 15, 1996, Evergreen Resources, Inc. (the "Registrant")
announced the acquisition effective August 1, 1996 of approximately 37
billion cubic feet (BCF) of proved natural gas reserves, approximately
24 BCF of which are developed, together with 25% working interest in
120,000 gross acres and 50% interest in an associated gas gathering
and marketing system. All of these assets are located on Evergreen's
present acreage position in the Raton Basin, Las Animas County,
Colorado.
The purchase price was $11.3 million, comprised of the issuance of
1,162,266 restricted shares of Evergreen common stock at $6.625 per
share ($7.7 million) and the assumption by Evergreen of $3.6 million
of long term bank debt owed to Hibernia National Bank. The debt
assumption does not impact Evergreen's present $7.5 million borrowing
base with Hibernia.
The Sellers are Powerbridge, Inc. and Energy Investors Fund, LP and
Energy Investors Fund II, LP. Powerbridge, Inc., a privately held
company, has been merged with a newly-formed wholly-owned subsidiary
of Evergreen.
Issuance of the new shares will increase Evergreen's outstanding
common shares from 5,939,736 to 7,102,002.
The acquisition of these assets increases Evergreen's interest to 100%
in all leases, reserves, production, and associated gathering
facilities on the Company's 120,000 gross acres in the Raton Basin.
At March 31, 1996, Evergreen reported 80 BCF of proved reserves, based
on an independent engineering study, which has now been updated. As
of August 1, 1996, Evergreen's proved reserves have increased to 128
BCF, through the above reported acquisition and other development
activity in the Raton Basin. Approximately 59% of these proved
reserves are developed. Present value of future net revenues
discounted at 10% has increased from $30 million at March 31, 1996, to
$51 million as of August 1, 1996.
ITEM 3: BANKRUPTCY OR RECEIVERSHIP
N/A
ITEM 4: CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
N/A
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ITEM 5: OTHER EVENTS
N/A
ITEM 6: RESIGNATIONS OF REGISTRANT'S DIRECTORS
N/A
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) and (b) Financial Statements for Powerbridge, Inc. for the
periods specified in Rule 3.05(b) of Regulation S-X as well as pro
forma financial information as to Powerbridge, Inc., and the
Registrant required pursuant to Article 11 of Regulation S-X will be
filed by amendment on Form 8 on or before October 14, 1996.
(c) Exhibits: Filed herewith pursuant to Reg. S-K Item 601
EXHIBIT NO. Description
----------- -----------
1 Agreement and Plan of Merger
dated August 14, 1996 by and
among Powerbridge, Inc.,
Evergreen Resources, Inc.
and Evergreen Raton
Properties, Inc.
2 Agreement for Acquisition of
Limited Partnership
Interests between Evergreen
Resources, Inc. and both
Energy Investors Fund LP and
Energy Investors Fund II, LP
dated August 14, 1996
3 August 14, 1996 Reserve
Report prepared by Resources
Services, International, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf of the
undersigned thereunto duly authorized.
EVERGREEN RESOURCES, INC.
By: /s/ JAMES S. WILLIAMS
----------------------------------
James S. Williams
Chairman of the Board
Dated: August 21, 1996
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EXHIBIT 1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
POWERBRIDGE, INC.
EVERGREEN RESOURCES, INC.
AND
EVERGREEN RATON PROPERTIES, INC.
_________________________________
DATED AS OF AUGUST 14, 1996
_________________________________
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of this 14th
day of August, 1996, by and between POWERBRIDGE, INC. ("PBI"), a Texas
corporation, JAMES R. CLEMENTS, F. DAVID GRAEBER, JAMES W. WILLIAMS, THE
HICKS LIVING TRUST, SANDRA MOSES, JAMES R. MACANLISS AND CHRISTOPHER VONDER
HOYA, (herein collectively called "PBI Shareholders"), EVERGREEN RESOURCES,
INC. ("Evergreen"), a Colorado corporation, and EVERGREEN RATON PROPERTIES,
INC. ("Raton"), a Colorado corporation and a wholly owned subsidiary of
Evergreen.
RECITALS:
A. Each of the Boards of Directors of PBI, Evergreen and Raton has
determined it is in the best interests of its respective shareholders for
Raton to merge with and into PBI (the "Merger"), on the terms and subject to
the conditions set forth herein;
B. Each of PBI, Evergreen and Raton desires to provide for the
consummation of the Merger and certain other transactions relating thereto,
on the terms and subject to the conditions set forth herein;
C. The parties hereto desire that Raton merge with and into PBI and
that PBI Shares (as defined herein) be converted into Evergreen Shares (as
defined herein) in the manner and subject to the terms and conditions of the
Merger as described herein; and
D. The Merger is intended to qualify, for federal income tax purposes,
as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended, (the "Code");
NOW THEREFORE, in consideration of the foregoing recitals and of the
mutual covenants, agreements, representations and warranties herein
contained, the parties do hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement the following terms shall have the following
respective meanings:
1.1 "ACTION" means any actual or threatened suit, action, arbitration,
inquiry, proceeding or investigation actually pending by or before any court,
governmental or other regulatory or administrative agency or commission.
1.2 "ASSETS" means all of PBI's right, title and interest in and to its
assets, including, without limitation, assets used or held for use primarily
in the conduct by PBI of its business including, further without limitation,
all of the assets listed on EXHIBIT A.
1.3 "CLOSING" means the consummation of the transactions contemplated
by this Agreement.
1.4 "CLOSING DATE" means the date on which the Closing occurs.
1.5 "EFFECTIVE TIME" means the date and time on which the Merger
becomes effective by both filing the Articles of Merger with the Secretary of
State of Colorado and the Articles of Merger with the Secretary of State of
the State of Texas.
1.6 "MATERIAL ADVERSE EFFECT" means a quantifiable material diminution
in the value of the Assets or business of PBI or Evergreen which, when taken
as a whole, results in or is reasonably expected to result in an adverse
change to the financial condition of PBI or Evergreen or their Assets, as
applicable, and which will have a financial impact on PBI of $10,000 or more,
and on Evergreen of $100,000 or more.
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1.7 "CLAIMS" means demands, actions, causes of action, judgments,
assessments, liabilities, damages and costs (including reasonable attorney's
fees and all other litigation expenses), whether known or unknown (as of the
date hereof), asserted (as of the date hereof), founded in contract or tort,
whether the basis is statutory or common-law.
1.8 "PBI SHARES" means all of the issued and outstanding common stock
of PBI, without par value.
1.9 "EVERGREEN SHARES" means the restricted voting common stock of
Evergreen, no par value, to be received by the PBI Shareholders pursuant to
the terms of the Merger.
1.10 "PRINCIPAL PBI SHAREHOLDERS" means James R. Clements, F. David
Graeber, James W. Williams and the Hicks Living Trust.
1.11 "SUBSIDIARIES" means all of the subsidiaries and affiliates of PBI
described on EXHIBIT G, attached hereto.
ARTICLE II
THE MERGER
2.1 THE MERGER. At the Effective Time, on the terms and subject to the
conditions of this Agreement, Raton will be merged with and into PBI in
accordance with the applicable provisions of the Texas Business Corporation
Act of the State of Texas and the law of the State of Colorado.
2.2 TRANSFER OF PROPERTY AND LIABILITIES. At the Effective Time, the
separate corporate existence of Raton shall cease, all of the outstanding PBI
Shares shall be automatically converted into Evergreen Shares and PBI shall
possess all the rights, privileges, immunities, powers, purposes, and all the
property, real and personal, causes of action, and every other asset of Raton
and shall assume and be liable for all the liabilities, obligations and
penalties of Raton in accordance with applicable law.
2.3 SURVIVING CORPORATION. Following the Merger, the existence of
Evergreen and PBI shall continue unaffected and unimpaired by the Merger,
with all the rights, privileges, immunities, and powers and subject to all
the duties and liabilities of corporations organized under the laws of the
States of Colorado and Texas. The Articles of Incorporation and Bylaws of
Raton, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation and Bylaws of PBI as the surviving corporation and
thereafter shall continue in full force and effect until the same may be
amended in accordance with applicable law and shall not be changed in any
manner by the Merger.
2.4 CONVERSION OF PBI STOCK. At the Effective Time, the PBI Shares
shall automatically be converted into 143,396 Evergreen Shares in the
aggregate. All of the PBI Shares converted into Evergreen Shares will no
longer be outstanding and will automatically be canceled and will cease to
exist, and each certificate previously representing such shares shall
thereafter represent (i) the appropriate number of whole Evergreen Shares and
(ii) the right to receive cash in lieu of fractional shares that the PBI
Shareholder would be otherwise entitled to receive. Each issued and
outstanding share of Raton will be converted into one fully paid and
non-assessable share of PBI.
2.5 [RESERVED].
2.6 NO FRACTIONAL SHARES. No fractional Evergreen Shares will be
issued in the Merger. In lieu of any such fractional shares, Evergreen shall
pay each holder of PBI Shares who would otherwise be entitled to a fraction
of an Evergreen Share upon surrender of a certificate for exchange pursuant
to this Article an amount in cash (without interest) rounded to the nearest
cent determined by multiplying the fractional interest to which such holder
would otherwise be entitled by the mutually agreed price of $6.625.
2.7 PROCEDURES. (a) At or after the Effective Time, the certificates
representing PBI Shares ("PBI Certificates") may be exchanged by the holders
thereof in the manner described below for new certificates representing the
number of Evergreen Shares into which such PBI Shares have been converted
("Evergreen Certificates").
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(b) Barry Spector shall act as the Exchange Agent (the "Exchange
Agent") to exchange PBI Certificates for Evergreen Certificates and to issue
the Evergreen Shares. After surrender to the Exchange Agent of any PBI
Certificate at the Closing, Evergreen shall cause the Exchange Agent to
distribute to the person in whose name such PBI Certificate has been issued
an Evergreen Certificate representing the number of Evergreen Shares to be
issued based upon ownership interests reflected in EXHIBIT B.
(c) Any PBI Shareholder whose PBI Certificates have been lost or
destroyed may nevertheless obtain the Evergreen Shares to which such PBI
Shareholder is entitled provided such PBI Shareholder delivers to the
Exchange Agent a statement certifying such loss or destruction and providing
for reasonable indemnity indemnifying Evergreen and the Exchange Agent
against any loss or expense either of them may incur as a result of such lost
or destroyed certificates being presented to the Exchange Agent.
2.8 CLOSING. The closing (the "Closing") of the transactions
contemplated by this Agreement will take place at the offices of Evergreen,
1512 Larimer Street, Suite 1000, Denver, Colorado, or at such other place as
shall be mutually agreeable to the parties. The Closing Date shall be August
14, 1996, at 10:00 a.m. or such other date and time as shall be mutually
agreeable to the parties. On the Closing Date, the following actions shall
occur:
(a) The PBI Shareholders shall deliver the PBI Certificates to
Evergreen, duly endorsed in blank, together with such other documents of
transfer as Evergreen may reasonably request;
(b) PBI (the "Surviving Corporation") will deliver to Evergreen a
certificate representing the shares of the Surviving Corporation's common
stock into which the issued and outstanding shares of Raton's common stock
were converted upon the surrender of the certificates representing the shares
of Raton's common stock so converted, appropriately endorsed for transfer,
which shares shall be all of the issued and outstanding shares of the
Surviving Corporation.
(c) The Evergreen and PBI Officer's Certificates (EXHIBITS H and I)
shall be exchanged;
(d) Evergreen and the Exchange Agent shall deliver the Evergreen
Certificates;
(e) Each party shall take such other actions and shall execute and
deliver such other instruments or documents as are properly required under
the terms of this Agreement.
2.9 NONASSIGNABILITY OF SHARES. Neither the right to receive the
Evergreen Shares, nor any interest received therein shall be assignable by
any PBI Shareholder except to an affiliate of such PBI Shareholder (as the
term is used in the Securities Act) or by a will or operation of law until
delivered to the Shareholder pursuant to the terms of this Article II.
ARTICLE III
REPRESENTATIONS OF PBI AND PRINCIPAL PBI SHAREHOLDERS
Each Principal PBI Shareholder and PBI (and where specifically indicated
each PBI Shareholder) hereby represent and warrant to Evergreen and Raton
that as of the Closing Date the following statements are true. In each case
where the representation or warranty relates to a Principal PBI Shareholder's
ownership interests, knowledge, or title, each Principal PBI Shareholder's
representation and/or warranty will be only with respect to his or her
ownership interests, own knowledge, and own title:
3.1 EXISTENCE: GOOD STANDING: CORPORATE AUTHORITY. PBI is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Texas. PBI is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other state of the
United States in which the character of the properties owned or leased by it
or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified or to be in good
standing would not have a Material Adverse Effect on the business, results of
operations or financial condition of PBI and its Subsidiaries taken as a
whole. PBI has all requisite corporate power and authority to own, operate
and lease its properties and carry on its business as now conducted. Each of
the Company's Subsidiaries listed on EXHIBIT G is a corporation or
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, has the
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corporate or partnership power and authority to own its properties and to
carry on its business as it is now being conducted, and is duly qualified to
do business and is in good standing in each jurisdiction in which the
ownership of its of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so
qualified or to be in good standing would not have a Material Adverse Effect.
3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENT. PBI and each of
its Subsidiaries have the requisite corporate power and authority to execute,
deliver and perform their obligations under this Agreement and to consummate
and perform the transactions contemplated hereby. The consummation and
performance of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of PBI and
each Subsidiary. Each Principal PBI Shareholder has all necessary authority
to execute, deliver and perform his or her obligations under this Agreement
and to consummate and perform the transactions contemplated hereby. This
Agreement constitutes, and all agreements and documents contemplated hereby
to be executed, delivered and performed by PBI and its Subsidiaries (when
executed and delivered pursuant hereto) shall constitute, the valid and
binding obligations of PBI and its Subsidiaries, enforceable in accordance
with their respective terms.
3.3 CAPITALIZATION. The authorized capital stock of PBI consists of
5,000,000 shares of common stock, without par value per share, 588,889 shares
of which are validly issued and outstanding, fully paid and nonassessable and
owned by the PBI Shareholders. There are no outstanding options, warrants,
calls, convertible securities or other rights, agreements, commitments or
other instruments pursuant to which PBI or any of its Subsidiaries is or may
become obligated to authorize, issue or transfer any shares of its capital
stock. EXHIBIT B is a complete and accurate list of all PBI Shareholders and
the number of shares and percentage held by each. PBI Shareholders have, and
shall have upon the transfer of the PBI Shares to Evergreen on the Closing
Date, good, absolute and marketable title to all of the PBI Shares. There
are no restrictions applicable to the PBI Shares which would affect the
transactions contemplated herein.
3.4 NO VIOLATION. Except as set forth on EXHIBIT J, neither the
execution and delivery of this Agreement by PBI or each Principal PBI
Shareholder, the consummation of the transactions contemplated hereby nor
compliance by PBI and each Principal PBI Shareholder with any provisions
hereof will: conflict with or result in any breach of the Articles of
Incorporation or Bylaws of PBI, or its Subsidiaries, as amended to date;
result in a violation or breach of any term of, or constitute (with or
without due notice or lapse of time or both) a default (or acceleration)
under any of the terms, conditions or provisions of any note, contract,
agreement, commitment, bond, mortgage, indenture, license, pledge, lease,
agreement or other instrument or obligation to which PBI, or any of its
Subsidiaries, is a party or by which PBI may be bound; violate any law,
regulation, judgment, order, writ, injunction or decree applicable to PBI or
to any of its Subsidiaries.
3.5 LEGAL PROCEEDINGS. Except as set forth in EXHIBIT C, there are no
material legal, administrative, arbitral, governmental or other proceedings,
Actions or governmental investigations of any nature pending, or to the best
knowledge of PBI and the Principal PBI Shareholders, threatened against PBI
or any Principal PBI Shareholders which could have a Material Adverse Effect.
Except as set forth in EXHIBIT C, neither PBI nor any Principal PBI
Shareholder is subject to any order, judgment, injunction, rule or decree
which has or could result in a Material Adverse Effect.
3.6 CONSENTS AND APPROVALS. Except as set forth on EXHIBIT K, no
consent, approval, order or authorization of, or registration, qualification,
or filing with any United States or other governmental authority, or any
other person is necessary to be obtained by PBI or any Principal PBI
Shareholder in connection with the consummation of the transactions
contemplated by this Agreement.
3.7 INSURANCE. EXHIBIT D lists all of the insurance policies, binders
and bonds maintained by PBI, all of which are in full force and effect. PBI
is not in default thereunder and all claims have been filed in due and timely
fashion. PBI is insured with reputable insurers against such risks
(including fire, liability and title insurance) and in such amounts as are
normally insured against by companies of the same type and in the same line
of business and as are adequate for the conduct of PBI's business.
3.8 MATERIAL CONTRACTS AND COMMITMENTS. Except described on EXHIBIT E
attached hereto, neither PBI nor any of its Subsidiaries is a party to any
written or oral agreement, contract, commitment, lease, authority for
expenditure ("AFE") or other instrument, including, without limitation, any
consulting
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agreement, loan agreement or other contract or commitment for the borrowing
or lending of money, agreement or arrangement for a line of credit, or
guaranty, pledge or undertaking of the indebtedness of any other person,
firm, corporation or entity, or commitment to expend money in connection with
proposed or ongoing operations, or sale of production, reasonably expected to
require the expenditure (by PBI, or by its Subsidiaries, net to its
respective interests), in the aggregate, considering all such agreements,
contracts, AFE's or other similar instruments, of more than $19,000. Except
as may be disclosed on EXHIBIT E, PBI and each of its Subsidiaries are in
compliance with the material provisions of each of the agreements, contracts,
AFE's, commitments, leases and other instruments, documents and undertakings
to which it is a party or to which it is otherwise bound; and except as
listed on EXHIBIT E, neither PBI nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any material obligation,
covenant or condition contained therein, and, except for the nonpayment of
amounts due that will be paid in the ordinary course, no unremedied event has
occurred which (with or without the giving of notice or lapse of time, or
both) will constitute a material default with respect to any provisions
thereunder.
3.9 TAXES. To the best of PBI's and each Principal PBI Shareholder's
knowledge, PBI and each of its Subsidiaries have filed all tax returns and
reports required to be filed, or have filed requests for extensions to file
such returns or reports which have been filed timely and granted and have not
expired, and all tax returns and reports are complete and accurate in all
respects, except to the extent that such failures to file or be complete or
accurate in all respects, as applicable, individually or in the aggregate,
would not have a Material Adverse Effect. PBI and each of its Subsidiaries
have paid or made provision for all taxes shown as due on such tax returns
and reports.
3.10 NO THIRD PARTY OPTIONS. There are no existing agreements,
options, commitments or rights with, to or in any third party to acquire any
interests, assets, or property of PBI or of any of its Subsidiaries.
3.11 STATEMENTS MADE. No representation, warranty, statement made or
information or data provided by PBI or any PBI Shareholder in or related to
this Agreement and furnished to Evergreen or Raton in connection with the
transactions contemplated hereby, contains or will contain, to the best of
PBI's or any PBI Shareholder's knowledge, any untrue statement of material
fact or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
3.12 NO PREPAYMENTS. Neither PBI nor any of its Subsidiaries is
obligated to deliver any quantities of oil, gas or other hydrocarbon
substances without thereafter receiving full payment therefor in the ordinary
course of business. Except as set forth on EXHIBIT E, no operations have been
conducted pursuant to any agreement to which PBI or any of its Subsidiaries
is a party and that would have a Material Adverse Effect upon the Assets of
PBI or its Subsidiaries or which would result in PBI or any of its
Subsidiaries relinquishing, permanently or temporarily, any interests or
ownership rights in any portion of its Assets, or under which PBI or any of
its Subsidiaries has become a "non-consenting" party.
3.13 BROKERS AND FINDERS. Neither PBI nor any Principal PBI Shareholder
has (directly or indirectly) entered into any agreement with any person, firm
or corporation for payment of any commission, brokerage or "finders fee" in
connection with the transactions contemplated herein.
3.14 COMPLIANCE WITH LAWS. The conduct of PBI's business, and the
business of each Subsidiary, has at all times been conducted and operated,
and all properties operated by PBI and its Subsidiaries maintained in
material compliance with all applicable laws, rules, orders, and regulations,
including specifically all those related to the protection of the environment
except for such noncompliance as will not have a Material Adverse Effect. To
the best knowledge of PBI and the Principal PBI Shareholders, there are no
conditions which, under existing applicable federal, state or local laws,
rules or regulations, would constitute a condition requiring any remedial or
clean-up action of PBI Assets. Neither PBI nor its Subsidiaries have received
any notification of any such noncompliance and neither PBI nor its
Subsidiaries is aware of or has authorized the use of any Hazardous Materials
(as defined below), except those which may be naturally occurring, located on
any portion of the Assets of PBI and its Subsidiaries, other than in de
minimis amounts for reasonable use in day-to-day operations, or oil and gas
being stored, pumped or transported for sale. Neither PBI nor any Principal
PBI Shareholder has received notice that any of the Assets of PBI and its
Subsidiaries are subject to any "Superfund" type liens by governmental
regulatory agencies or other third parties arising from the deposit, release
or threatened release of Hazardous Materials, as defined below, in, or about
the Assets of
<PAGE>
PBI and its Subsidiaries. For purposes of this Agreement, "Hazardous
Materials" includes, without limitation, any flammable materials, explosive,
hazardous or toxic substance, or related materials defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as now or hereafter amended (42 U.S.C. Sections 9601, ET SEQ.), the Resource
Conservation and Recovery Act, as now or hereafter amended (42 U.S.C.
Sections 6901, ET SEQ.), the Hazardous Material Transportation Act of 1975,
as amended, (49 U.S.C. Sections 1801, ET SEQ.), the Federal Water Pollution
Control Act, as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, and defined in any state environmental
laws or statutes having application to the Assets or business of PBI and its
Subsidiaries, and defined in the regulations promulgated pursuant to those
statutes and laws.
3.15 AUDITS. Neither PBI, any of the Principal PBI Shareholders, nor
any of its Subsidiaries has received notice of any third-party or
governmental audits or audit claims pending or threatened concerning or
related to PBI or its Subsidiaries.
3.16 ASSETS AND WARRANTY OF TITLE. EXHIBIT A is a true and correct
description of the material assets of PBI and of each of its Subsidiaries
("Assets"). As of the Closing Date, PBI and each Principal PBI Shareholder
hereby warrant and defend the title of PBI and/or its Subsidiaries, as
applicable, to the Assets owned by PBI and its Subsidiaries against all
persons claiming any right title or interest therein by, through or under
PBI, its Subsidiaries, or Shareholders, but not otherwise. Further, PBI and
each Principal PBI Shareholder represent that PBI and each of its
Subsidiaries will have, at Closing, good title in and to the respective
Assets owned by each of them, free and clear of all mortgages, pledges,
security agreements, security interests, liens, adverse claims and other
encumbrances except for those noted on EXHIBIT A.
3.17 LIABILITIES. EXHIBIT F is a true and complete description of all
material liabilities of PBI and its Subsidiaries for which PBI or any of its
Subsidiaries will remain liable and responsible after the Closing Date.
3.18 SECURITIES MATTERS. (a) Each PBI Shareholder understands and
acknowledges that the Evergreen Shares which will be received pursuant to the
terms of the Merger will not be registered under the Securities Act of 1933
(the "Securities Act") or the securities laws of any state at the Effective
Time and that Evergreen is relying upon exemptions from the registration
requirements of such laws, including, without limitation, a Section 4(2)
exemption, which exemptions may be affected by the bona fide investment
intent of such shareholders. Each PBI shareholder acknowledges that no state
or federal governmental entity has reviewed or approved the transfer of the
Evergreen Shares to PBI Shareholders.
(b) Each PBI Shareholder is acquiring the Evergreen Shares for its own
account and not with a view to, or for resale in connection with, any
distribution thereof or the grant of any participation therein.
(c) Each PBI Shareholder understands that its acquisition of the
Evergreen Shares is highly speculative and involves a high degree of risk.
(d) Each PBI Shareholder is an accredited investor as defined in Rule 501
of Regulation D promulgated under the Securities Act, and resides actually or
legally as identified in Section 11.5.
3.19 PBI FINANCIAL STATEMENTS; NO CHANGES; NO LIABILITIES. The audited
financial statements of PBI for each of the fiscal years 1993, 1994 and 1995,
the unaudited financial statements of PBI at and for the year to date period
ending June 30, 1996 (the "PBI Financial Statements") all of which have been
provided to Evergreen, are true, correct and complete in all material
respects and present fairly, in conformity with generally accepted accounting
principles consistently applied, the financial position of PBI at the dates
indicated and the results of is operations for each of the periods indicated,
except as otherwise set forth in the notes thereto. Since the date of the
year to date financials referenced in the prior sentence, there has been (i)
no material adverse changes in the business or operations of PBI, (ii) no
incurrence by or subjection of PBI to any obligation or liability (whether
fixed, accrued or contingent) or commitment material to PBI not referred to
in this Agreement, except such obligations or liabilities as were or may be
incurred in the ordinary course of business and which are reflected on the
PBI Financial Statements. Except for the liabilities which are disclosed in
the PBI Financial Statements or disclosed on Exhibit F, PBI has not material
liabilities or material obligations of any nature, whether absolute, accrued,
contingent or otherwise, and whether due or to become due.
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3.20 PBI FUELS, L.P. FINANCIAL STATEMENTS; NO CHANGES; NO LIABILITIES.
The audited financial statements of PBI Fuels, L.P. ("PBIF") for each of the
fiscal years 1993, 1994 and 1995, the unaudited financial statements of PBIF
at and for the year to date period ending June 30, 1996 (the "PBIF Financial
Statements") all of which have been provided to Evergreen, are true, correct
and complete in all material respects and present fairly, in conformity with
generally accepted accounting principles consistently applied, the financial
position of PBIF at the dates indicated and the results of its operations for
each of the periods indicated, except as otherwise set forth in the notes
thereto. Since the date of the year to date financials referenced in the
prior sentence, there has been (i) no material adverse change in the business
or operations of PBIF, (ii) no incurrence by or subjection of PBIF to any
obligation or liability (whether fixed, accrued or contingent) or commitment
material to PBIF not referred to in this Agreement, except such obligations
or liabilities as were or may be incurred in the ordinary course of business
and which are reflected on the PBIF Financial Statements. Except for the
liabilities which are disclosed in the PBIF Financial Statements or disclosed
on Exhibit F, PBIF has no material liabilities or material obligations of any
nature, whether absolute, accrued, contingent or otherwise, and whether due
or to become due.
3.21 SUBSIDIARIES. Each of the Subsidiaries is owned as set forth on
EXHIBIT G. There are no outstanding or pending subscriptions, warrants,
options, convertible securities or other rights (contingent or otherwise) to
purchase or acquire any shares of any of the Subsidiaries and no issuance of
any of the foregoing to any specific person or entity, or class of persons or
entities is authorized.
3.20 IMPORTANCE OF REPRESENTATIONS AND WARRANTIES. Each PBI
Shareholder acknowledges that his representations and warranties contained
herein are a prerequisite to and part of the consideration given to Evergreen
for Evergreen's agreement to enter this Agreement, complete the transactions
contemplated herein and assume the obligations provided for herein. Each PBI
Shareholder acknowledges that Evergreen is relying on all representations of
such PBI Shareholder made herein in deciding to enter this Agreement and that
the representations and warranties of each PBI Shareholder made herein are a
material inducement to Evergreen to enter this Agreement and consummate the
transactions contemplated herein.
<PAGE>
ARTICLE IV
REPRESENTATIONS OF EVERGREEN AND RATON
Evergreen and Raton represent and warrant to PBI and PBI Shareholders
that:
4.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Evergreen and Raton
are corporations duly incorporated, validly existing and in good standing
under the laws of the State of Colorado. Evergreen and Raton are duly
licensed or qualified to do business as foreign corporations and are in good
standing under the laws of any other state of the United States in which the
character of the properties owned or leased by them or in which the
transaction of their business makes such qualification necessary, except
where the failure to be so qualified or to be in good standing would not have
a Material Adverse Effect on the business, results of operations or financial
condition of Evergreen, Raton or Evergreen's other Subsidiaries taken as a
whole. Evergreen and Raton have all requisite corporate power and authority
to own, operate and lease their properties and carry on their business as now
conducted. Evergreen and its Subsidiaries, including Raton, are corporations
duly organized, validly existing and in good standing under the laws of their
jurisdiction of incorporation or organization, have the corporate authority
to own their properties and to carry on their business as it is now being
conducted, and are duly qualified to do business and in good standing in each
jurisdiction in which the ownership of their property or the conduct of their
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing would not have a
Material Adverse Effect.
4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENT. Evergreen, and
its Subsidiaries, including Raton, have the requisite corporate power and
authority to execute, deliver and perform their obligations under this
Agreement and to consummate and perform the transactions contemplated hereby.
The consummation and performance of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the
part of Evergreen and each Subsidiary, including Raton. This Agreement
constitutes, and all agreements and documents contemplated hereby to be
executed, delivered and performed by PBI and its Subsidiaries (when executed
and delivered pursuant hereto) shall constitute the valid and binding
obligations of Evergreen and its Subsidiaries, including Raton, enforceable
in accordance with their respective terms.
4.3 CAPITALIZATION. The authorized capital stock of Evergreen consists
of 50,000,000 shares of common stock, no par value, 5,939,736 shares of which
are validly issued and outstanding as of August 2, 1996, fully paid and
nonassessable, and 25,000,000 shares of preferred stock, par value $1 per
share, 7,500,000 shares of which are validly issued and outstanding as of
August 2, 1996, fully paid and nonassessable. Except as disclosed in the
proxy statement of Evergreen dated July 15, 1996, Evergreen has no knowledge
of any voting trusts, proxies, or other agreements or understandings with
respect to the voting of Evergreen common stock involving holders of more
than 5% of any class of Evergreen equity security.
4.4 NO VIOLATION. Neither the execution and delivery of this Agreement
by Evergreen and Raton, the consummation of the transactions contemplated
hereby nor compliance by Evergreen and Raton with any provisions hereof will:
conflict with or result in any breach of the Articles of Incorporation or
Bylaws of Evergreen, or its Subsidiaries, including Raton, as amended to
date; result in a violation or breach of any term of, or constitute (with or
without due notice or lapse of time or both) a default (or acceleration)
under any of the terms, conditions or provisions of any note, contract,
agreement, commitment, bond, mortgage, indenture, license, pledge, lease,
agreement or other instrument or obligation to which Evergreen, or any of its
Subsidiaries, including Raton, is a party or by which Evergreen or Raton may
be bound; violate any law, regulation, judgment, order, writ, injunction or
decree applicable to Evergreen or to any of its Subsidiaries, including Raton.
4.5 LEGAL PROCEEDINGS. Except as set forth on EXHIBIT C, there are no
material legal, administrative, arbitral, governmental or other proceedings,
actions or governmental investigations of any nature pending, or to the best
knowledge of Evergreen and Raton, threatened against Evergreen or its
Subsidiaries, including Raton, which could have a Material Adverse Effect
upon Evergreen. Neither Evergreen nor Raton is subject to any order,
judgment, injunction, rule or decree which has or could result in a Material
Adverse Effect upon Evergreen.
4.6 CONSENTS AND APPROVALS. Except as disclosed on EXHIBIT L, no
consent, approval, order or authorization of, or registration, qualification,
or filing with any United States or other governmental
<PAGE>
authority, or any other person are necessary to be obtained by Evergreen or
any of its Subsidiaries, including Raton, in connection with the consummation
of the transactions contemplated by this Agreement.
4.7 STATEMENTS MADE. No representation, warranty, statement made or
information or data provided by Evergreen or Raton in or related to this
Agreement and furnished to PBI or PBI Shareholders, in connection with the
transactions contemplated hereby contains or will contain, to the best of
Evergreen's or Raton's knowledge, any untrue statement of material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
4.8 BROKERS AND FINDERS. Evergreen and Raton have incurred no
obligation or liability, contingent or otherwise, for brokers' or finders'
fees in respect of the matters provided for in this Agreement.
4.9 COMPLIANCE WITH LAWS. The conduct of Evergreen's business, and the
business of each Subsidiary, has at all times been conducted and operated,
and all properties operated by Evergreen and its Subsidiaries maintained in
material compliance with all applicable laws, rules, orders, and regulations,
including specifically all those related to the protection of the
environment, except for such noncompliance which will not have a Material
Adverse Effect. To the best knowledge of Evergreen, there are no conditions
which, under existing applicable federal, state or local laws, rules or
regulations, would constitute a condition requiring any remediation or
clean-up action of assets or properties of Evergreen. Neither Evergreen nor
its Subsidiaries have received any notification of such noncompliance and
neither Evergreen nor its Subsidiaries is aware or has authorized the use of
any Hazardous Materials except those which may be naturally occurring,
located on any portion of the assets or properties of Evergreen and its
Subsidiaries, other than in de minimis amounts for reasonable use in
day-to-day operations, or oil and gas being stored, pumped or transported for
sale. Evergreen has not received notice that any of its assets or properties
or those of its Subsidiaries are subject to any "Superfund" type liens by
governmental regulatory agencies or other third parties arising from the
deposit, release or threatened release of Hazardous Materials in, or about
the assets or properties of Evergreen and its Subsidiaries.
4.10 IMPORTANCE OF REPRESENTATIONS AND WARRANTIES. Evergreen
acknowledges that its representations and warranties contained herein are a
prerequisite to and part of the consideration given to PBI and the Principal
PBI Shareholders for their agreement to enter this Agreement and complete the
transactions contemplated herein. Evergreen acknowledges that PBI and each
Principal PBI Shareholder are relying on all representations and warranties
made herein in deciding to enter this Agreement and that the representations
and warranties of Evergreen made herein are a material inducement to PBI and
each Principal PBI Shareholder to enter this Agreement and consummate the
transactions contemplated herein.
4.11 TAX REPRESENTATIONS. (a) Evergreen has no present plan or
intention following the Effective Time to cause PBI to issue additional
shares of stock that would result in Evergreen losing control of PBI within
the meaning of Section 368(c) of the Code.
(b) Evergreen has no present plan or intention following the Effective
Time to reacquire any shares of Evergreen Shares issued in the Merger.
(c) Evergreen has no present plan or intention following the Effective
Time to liquidate PBI, merge PBI with or into another corporation, sell or
otherwise dispose of the stock of PBI, or cause PBI to sell or otherwise
dispose of any of its assets or of any of the assets acquired by it from
Raton, except for dispositions made in the ordinary course of business or
transfers of assets to corporations controlled by PBI.
(d) Evergreen and Raton are not investment companies as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(e) Raton is wholly owned directly by Evergreen, and Raton has never
owned or held any assets and has never incurred any liabilities, except for
assets transferred to Raton in connection with its incorporation, all of
which assets will be held by the PBI immediately following the Merger;
<PAGE>
(f) neither Evergreen nor any of its subsidiaries own, nor have any of
them owned during the past five years, any capital stock of PBI;
(g) Raton will have no liabilities assumed by PBI and will not transfer
to PBI any assets subject to liabilities in the Merger; and
(h) there is no intercorporate indebtedness between PBI and Evergreen
or between PBI and Raton.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 REASONABLE BEST EFFORTS. Subject to the terms and conditions
hereof, each of the parties shall use its respective commercially reasonable
best efforts to take, or cause to be taken, all action and to do, or cause to
be done, all things necessary, proper or advisable to consummate the Merger.
5.2 ACCESS; CONFIDENTIALITY. (a) During the period from the date of
this Agreement until the Effective Time, upon reasonable notice and subject
to applicable laws relating to the exchange of information, PBI shall permit
Evergreen to have reasonable access to all books, records, documents,
instruments, correspondence, files, geophysical information, contracts, and
other information regarding PBI and its Subsidiaries in the custody or
possession of PBI Shareholders, PBI or its Subsidiaries, and shall permit
Evergreen to have reasonable access to all Assets of PBI and its
Subsidiaries. PBI Shareholders will cooperate and will cause PBI and its
Subsidiaries to cooperate in providing all reasonable access to Evergreen
pursuant to this Section. PBI and its Shareholders shall not be required to
provide access to or to disclose information where such access or disclosure
would contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the date of this
Agreement. The parties hereto shall make appropriate substitute disclosure
arrangements satisfactory to Evergreen under circumstances in which the
restrictions of the preceding sentence apply. Evergreen shall and shall cause
its agents to conduct such investigations in such a manner so as not to
unreasonably interfere with the normal operations of PBI.
(b) All information furnished by PBI and its Shareholders or any of
their representatives to Evergreen, Raton or its representatives pursuant
hereto shall be treated as the sole property of PBI and, if the Merger does
not occur, Evergreen and its representatives shall return to PBI all of such
written information and all documents, magnetic media, notes, summaries and
other materials containing, reflecting or referring to, or derived from, such
information. Evergreen shall and shall cause its representatives to maintain
the confidentiality all such information and shall use such information
solely for purposes of this Agreement and shall not directly or indirectly
use such information for any competitive or other commercial purposes.
5.3 NO SOLICITATION. From the date of this Agreement until either the
Closing Date or the termination of this Agreement, PBI Shareholders shall not
negotiate, either on a solicited or unsolicited basis, directly or
indirectly, with any other person, firm, or entity with regard to the sale,
transfer, exchange or other disposition of the PBI Shares or with regard to
the sale, transfer, or other disposition of any material assets of PBI or of
any of its Subsidiaries without the prior, express written consent of
Evergreen.
5.4 CONDUCT OF BUSINESS OF PBI. Except as contemplated by this
Agreement or with the prior written consent of Evergreen, during the period
from the date of this Agreement to the Effective Time, PBI will and will
cause each of its Subsidiaries to conduct its operations only in the ordinary
and usual course of business consistent with past practice and will use all
reasonable efforts to preserve intact its present business organization.
Without limiting the generality of the foregoing, PBI and the PBI
Shareholders expressly agree:
(a) Neither PBI nor any of its Subsidiaries shall enter any contractual
commitments or other arrangements, including AFE's, involving amounts
exceeding, in the aggregate, $10,000, or durations exceeding 30 days,
which would continue following the Closing Date and which would be
binding upon PBI or any of its Subsidiaries following the Closing Date
without the written consent of Evergreen.
<PAGE>
(b) Neither PBI nor any of its Subsidiaries shall increase in any manner
the base compensation of any employees of PBI, or of any its
Subsidiaries, or enter into any new bonus or incentive agreement or
arrangement with any of those employees.
(c) No PBI Shareholder shall sell, transfer, convey or encumber the
Shares.
(d) Neither PBI nor any of its Subsidiaries shall sell, transfer or
otherwise dispose of any of their Assets, or create or permit to exist
any new security interest, liens or encumbrances on any of the Assets.
(e) Neither PBI nor any of its Subsidiaries shall enter into any merger,
consolidation, joint venture, partnership or similar arrangement.
(f) Neither PBI nor any of its Subsidiaries shall purchase any properties
or securities from any other person, firm or entity.
(g) Neither PBI nor any of its Subsidiaries shall terminate or fail to
renew any of the insurance policies or coverages specified on EXHIBIT
D.
(h) Neither PBI nor any of its Subsidiaries shall loan any amounts of
money to any person, firm or entity, nor shall PBI or any of its
Subsidiaries be permitted to borrow any sums of money except for
amounts not exceeding an additional $10,000 under PBI's existing
credit facility with Hibernia National Bank.
5.5 EVERGREEN CAPITAL STOCK. Except for the proposed transactions
between Evergreen and Energy Investors Fund, L.P. and Energy Investors Fund
II, L.P. previously disclosed to PBI, during the period from the date of this
Agreement through the Effective Time, and except as otherwise contemplated by
this Agreement or consented to by the PBI Shareholders, Evergreen shall not
issue, sell, redeem, repurchase, recapitalize, reclassify, split or deliver
any shares of its capital stock, excluding any shares subject to a stock
option plan, or declare or pay a dividend or issue or sell any securities
convertible into, or option with respect to, or warrants to purchase or
rights to subscribe to, any shares of its capital stock.
5.6 PBI RESIGNATIONS. At the Closing, PBI shall deliver to Evergreen
and Raton the written resignations, effective as of the Closing Date, of all
officers and directors of PBI and all of PBI's Subsidiaries as identified on
EXHIBIT G.
ARTICLE VI
PBI'S CONDITIONS FOR CLOSING
The obligation of PBI to effect the Merger shall be subject to the
fulfillment or waiver at the Closing Date of the following conditions:
6.1 REPRESENTATIONS. The representations and warranties of Evergreen
and Raton contained herein shall be true and correct in all material respects
as of the Closing Date as though made on and as of that date.
6.2 PERFORMANCE. Evergreen shall have performed in all material
respects the obligations, covenants and agreements hereunder to be performed
by it at or prior to the Closing Date.
6.3 OFFICER'S CERTIFICATE. Evergreen shall have delivered to PBI an
Officer's Certificate substantially in the form and substance attached hereto
as EXHIBIT H and dated as of the Closing Date.
6.4 NO MATERIAL ADVERSE CHANGE. Since the date of this Agreement,
there shall have been no material adverse change in the business, financial
or legal condition of Evergreen, taken as a whole. None of the parties hereto
shall be subject to any order or injunction of a court of competent
jurisdiction which prohibits the consummation of the transactions
contemplated by this Agreement.
<PAGE>
6.5 BEST EFFORTS. Evergreen shall use its best efforts to satisfy,
fulfill or otherwise comply with all of the conditions precedent to PBI's
obligation to consummate the Merger.
ARTICLE VII
EVERGREEN'S CONDITIONS FOR CLOSING
The obligation of Evergreen to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Closing Date of the following
conditions:
7.1 REPRESENTATIONS. The representations and warranties of Shareholders
contained herein shall be true and correct in all material respects on the
Closing Date.
7.2 PERFORMANCE. PBI shall have performed in all material respects the
obligations, covenants and agreements hereunder to be performed by it at or
prior to the Closing Date.
7.3 OFFICER'S CERTIFICATE. PBI shall have delivered to Evergreen an
Officer's Certificate substantially in the form and substance attached hereto
as EXHIBIT I and dated as of the Closing Date.
7.4 NO MATERIAL ADVERSE CHANGE. Since the date of this Agreement,
there shall have been no material adverse change in the business, financial
or legal condition of PBI, taken as a whole. None of the parties hereto shall
be subject to any order or injunction of a court of competent jurisdiction
which prohibits the consummation of the transactions contemplated by this
Agreement.
7.5 DUE DILIGENCE. It further is expressly understood that Evergreen's
obligation to consummate the Merger on the Closing Date shall be conditioned
upon the due diligence review by Evergreen, satisfactory to Evergreen in its
reasonable judgment, of all matters reasonably affecting the PBI Shares, PBI,
its Subsidiaries, and the Assets and liabilities of PBI and its Subsidiaries,
including without limitation, the following:
(a) Review of title to all Assets of PBI and of its Subsidiaries to
confirm that the representations and warranties herein are true;
(b) Review of all contracts and agreements related to the PBI Shares and/
or to PBI and/or its Subsidiaries to confirm that the representations
and warranties herein are true;
(c) Review of all other matters and conditions to confirm the absence of
any circumstances, conditions or factors which are undisclosed in this
Agreement and which would have a Material Adverse Effect on the value
of the PBI Shares or of PBI and its Subsidiaries.
7.6 CLOSING DOCUMENTS AND RELEASES. PBI shall have delivered to
Evergreen each of the following documents in a form reasonably satisfactory
to Evergreen:
(a) Certificates (dated within thirty (30) days of the Closing Date) from
the secretary of state (or analogous agency) in the applicable state
where PBI and each of its Subsidiaries is incorporated and in each
state where PBI and each of its Subsidiaries is registered to conduct
business certifying to the corporate and tax good standing of PBI and
each of its Subsidiaries;
(b) A resignation from each present officer and director of PBI and each
of its Subsidiaries.
7.7 NO PHYSICAL DAMAGE OR CASUALTY LOSSES. There shall have been no
physical damage to any of the Assets, nor shall there have been any casualty
losses affecting the Assets, which losses would have a Material Adverse
Effect on the value of the PBI Shares or of the Assets to Evergreen. Losses
reimbursed by insurance shall not be considered in determining a Material
Adverse Effect to the extent of the insurance reimbursement.
<PAGE>
ARTICLE VIII
POST-CLOSING DATE OBLIGATIONS AND INDEMNITIES
8.1 REGISTRATION AND PIGGY-BACK RIGHTS. At Closing, the parties
hereto shall enter into a Registration Rights Agreement substantially in the
form attached hereto as Exhibit M.
8.2 TAX-FREE REORGANIZATION. (a) Evergreen and PBI shall each use
its reasonable best efforts to cause the Merger to be treated as a
reorganization within the meaning of Section 368(a) of the Code.
(b) To the extent permitted under applicable tax laws, the Merger
shall be reported as a reorganization within the meaning of Section
368(a)(1)(A) and Section 368(a)(2)(E) of the Code in all federal, state, and
local tax returns after the Effective Time.
(c) Evergreen will cause PBI to hold following the Merger at least
90% of the fair market value of its net assets and at least 70% of the fair
market value of its gross assets, and at least 90% of the fair market value
of Raton's net assets and 70% of the fair market value of Raton's gross
assets held immediately prior to the Merger. For purposes of this subsection
(c), amounts paid by PBI or Raton to PBI Shareholders who receive cash or
other property, to pay reorganization expenses, and in connection with
redemptions and distributions (except for regular, normal distributions)
will be treated as assets of PBI or Raton, respectively, immediately prior to
the Merger.
(d) Following the Merger, Evergreen will cause PBI to continue its
historic business or use a significant portion of its historic business
assets in a business.
8.3 INDEMNIFICATION BY PRINCIPAL PBI SHAREHOLDERS. (a) Each
Principal PBI Shareholder shall indemnify Evergreen against and hold
Evergreen harmless from any and all Claims arising out of or related to (i)
such Principal PBI Shareholder's ownership of the PBI Shares prior to the
Effective Time, (ii) any breach of any warranty or representation of such PBI
Shareholder contained herein, or (iii) the failure of such Principal PBI
Shareholder to perform any obligation, promise or covenant contained in this
Agreement.
(b) If a Claim is made or asserted against Evergreen, and if
Evergreen is entitled to seek indemnity with respect thereto under this
Agreement, Evergreen shall notify each affected Principal PBI Shareholder of
the claim. The affected Principal PBI Shareholder shall have 20 days after
receipt of that notice to undertake, conduct and control, through counsel of
his/their own choosing and at his/their own expense, the settlement or
defense thereof, and Evergreen shall cooperate with him/them in connection
therewith; provided, however, that the affected Principal PBI Shareholder
shall permit Evergreen to participate in such settlement or defense through
counsel chosen by Evergreen, provided that the fees and expenses of such
counsel shall be borne by Evergreen. So long as the affected Principal PBI
Shareholder is reasonably contesting any claim in good faith, Evergreen shall
not pay or settle such claim. Evergreen shall not, without the consent of
the Principal PBI Shareholder, enter into any settlement of a Claim that does
not include as an unconditional term thereof the giving by the person(s)
asserting the Claim of an unconditional release of the Principal PBI
Shareholder from all liability with respect to that claim. If the Principal
PBI Shareholder fails to notify Evergreen within 20 days after the receipt of
Evergreen's notice of a claim of indemnity hereunder that he elects to
undertake the defense thereof, Evergreen shall have the right to contest,
settle or compromise the claim but shall not thereby waive any right to
indemnity therefor pursuant to this Agreement. No Principal PBI Shareholder
shall, except with the consent of Evergreen, enter into any settlement that
does not include as an unconditional term thereof the giving by the person or
persons asserting the claims of an unconditional release to Evergreen from
all liability with respect to that claim. In the event of any claim by
Evergreen against the Principal PBI Shareholder for indemnity under this
paragraph, the affected Principal PBI Shareholder(s) shall have reasonable
access at all times to all files of PBI and its Subsidiaries, as they exist
at the Closing Date or otherwise, which are pertinent, in the Principal PBI
Shareholder's reasonable judgment, to the affected Principal PBI
Shareholder(s) in the defense of the Claim for which Evergreen seeks
indemnification. In the event of any claim by Evergreen against a Principal
PBI Shareholder or against a PBI Shareholder and which is not for indemnity
under this paragraph, or in the event of any claim by a third party against
any PBI Shareholder, the PBI Shareholders shall be afforded all reasonable
access to the files of PBI and its Subsidiaries, and any other access shall
be in accordance with the applicable rules of civil procedure and other
applicable laws and orders; provided, Evergreen expressly states that it will
<PAGE>
assert a claim of attorney-client privilege concerning any document contained
in the files of PBI or of its Subsidiaries if so requested by a PBI
Shareholder.
8.4 INDEMNIFICATION BY EVERGREEN. (a) Evergreen shall indemnify PBI
Shareholders against and hold PBI Shareholders harmless from any and all
Claims arising out of or related to Evergreen's ownership of the PBI Shares
from and after the Effective Time; any breach of representation or warranty
of Evergreen contained herein, or the failure of Evergreen to perform any
obligation, promise or covenant contained in this Agreement.
(b) If a Claim is made or asserted against a PBI Shareholder, and if
that PBI Shareholder is entitled to seek indemnity with respect thereto under
this Agreement, that PBI Shareholder shall notify Evergreen in writing of the
claim. Evergreen shall have 20 days after receipt of that notice to
undertake, conduct and control, through counsel of its own choosing and at
its own expense, the settlement or defense thereof, and the affected PBI
Shareholder shall cooperate with Evergreen in connection therewith; provided,
however, that Evergreen shall permit such PBI Shareholder to participate in
such settlement or defense through counsel chosen by such PBI Shareholder,
provided that the fees and expenses of such counsel shall be borne by that
PBI Shareholder. So long as Evergreen is reasonably contesting any claim in
good faith, the PBI Shareholder shall not pay or settle such claim. The
affected PBI Shareholder shall not, without the consent of Evergreen, enter
into any settlement of a Claim that does not include as an unconditional term
thereof the giving by the person(s) asserting the Claim of an unconditional
release of Evergreen from all liability with respect to that claim. If
Evergreen does not notify the affected PBI Shareholder within 20 days after
the receipt of such PBI Shareholder's notice of a claim of indemnity
hereunder that it elects to undertake the defense thereof, such PBI
Shareholder shall have the right to contest, settle or compromise the claim
but shall not thereby waive any right to indemnity therefor pursuant to this
Agreement. Evergreen shall not, except with the consent of the affected PBI
Shareholder, enter into any settlement that does not include as an
unconditional term thereof the giving by the person or persons asserting the
Claim(s) of an unconditional release to such PBI Shareholder from all
liability with respect to that Claim.
8.5 EVERGREEN'S ASSUMPTION OF CERTAIN LIABILITIES. [Reserved]
8.6 POST-CLOSING CONFIDENTIALITY. Following the Merger, PBI
Shareholders shall keep all proprietary information regarding the PBI Shares
and the Assets and proprietary information regarding the business activities
of PBI and of its Subsidiaries confidential and shall not disclose any
information relating to those matters to any other parties unless such
information is in the public domain, Evergreen has consented to that
disclosure, or PBI Shareholders are required by law or order of court or
governmental agency to disclose that information. This provision shall
survive Closing for two (2) years.
8.7 NAME CHANGE. As soon as reasonably practicable after the
Effective Time, Evergreen shall cause PBI to file Articles of Amendment to
the Articles of Incorporation of PBI with the Secretary of State of the State
of Texas changing the name of the corporation from PBI to Evergreen Gas
Marketing Company or such other name as Evergreen shall determine.
ARTICLE IX
TERMINATION
9.1 RIGHT OF TERMINATION. This Agreement and the transactions
contemplated hereby may be terminated at any time at or prior to the Closing
Date:
(a) By mutual written consent of the parties;
(b) By either party if the Closing Date shall not have occurred by
September 3, 1996; provided, no party may seek termination under
this paragraph if such party is then in default of any of its
obligations hereunder;
(c) By Evergreen, if there has been any material breach of any
obligation of PBI contained herein and such breach shall not have
been remedied within five days after receipt by PBI of notice in
writing specifying the nature of such breach and requesting that it
be remedied.
<PAGE>
(d) By PBI, if there has been any material breach of any obligation of
Evergreen contained herein and such breach shall not have been
remedied within five days after receipt by Evergreen or Raton of
notice in writing specifying the nature of such breach and
requesting that it be remedied.
9.2 EFFECT OF TERMINATION. If this Agreement is terminated, for any
reasons stated in 9.1, this Agreement shall become void and of no further
force or effect; provided, however, that (a) the provisions relating to
confidentiality shall survive any such termination, and (b) also no such
termination shall relieve any party from liability for any willful breach of
this Agreement.
ARTICLE X
EMPLOYEE MATTERS
10.1 TERMINATION OF PBI EMPLOYEES. Prior to the Closing Date, PBI
shall terminate the employment of all of its employees and the employees of
each of its Subsidiaries, to the extent and as permitted by applicable law.
ARTICLE XI
MISCELLANEOUS
11.1 GOVERNING LAW AND JURISDICTION. This Agreement and all
instruments executed in accordance with it shall be governed by and
interpreted in accordance with the laws of the State of Colorado, without
giving effect to the principles of conflict of laws thereof.
11.2 ENTIRE AGREEMENT. This Agreement (together with the Exhibits
hereto which are incorporated in this Agreement by this reference)
constitutes the entire agreement between the parties and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, amendment, alteration, modification,
waiver or termination of this Agreement shall be binding unless executed in
writing by the parties hereto, and neither this nor any document delivered in
connection with this Agreement confers upon any person not a party hereto any
rights or remedies hereunder.
11.3 WAIVER. No waiver of any of the provisions of this Agreement
shall be deemed to 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.
11.4 HEADINGS. The headings 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. The terms "herein",
"hereof", and the like refer to the entire Agreement, not just one specific
paragraph.
11.5 NOTICES. Any notice provided or permitted to be given under
this Agreement shall be in writing and shall be given (and shall be deemed to
have been duly received if so given) by delivery by cable, telegram, telex,
telecopy, by personal delivery or by depositing same in the mail, postage
prepaid and registered or certified with return receipt requested, addressed
to the party to be notified at the address specified in writing by that party
as follows:
If to PBI Shareholders:
James R. Clements
1062 La Tierra Nueva
Santa Fe, NM 87501
Telephone No. 505/820-1896
F. David Graeber
9635 Hillview Drive
Dallas, TX 75231
Telephone No. 214/341-4324
<PAGE>
James W. Williams
4 Windwood Court
Austin, TX 78738
Telephone No. 512/261-5501
The Hicks Living Trust,
Roxanne Hicks, Trustee
4516 Staten Island Court
Plano, TX 75024
Telephone No. 214/526-4181
Sandra H. Moses
3730 Truesdell Place
Dallas, TX 75244-7032
Telephone No. 214/241-0736
James R. Macanliss
3505 St. Johns
Dallas, TX 75205
Telephone No. 214/520-2884
Christopher Vonder Hoya
P.O. Box 8301
Waco, TX 76714
Telephone No. 817/741-9999
IF TO EVERGREEN:
Evergreen Resources, Inc.
1512 Larimer Street, Suite 1000
Denver, Colorado 80202
Attention: Mr. Mark Sexton
Telecopy No. 303-534-0408
Each party shall have the right, upon giving ten days' prior notice to the
other in the manner hereinabove provided, to change its address for purposes
of notice.
11.6 EXPENSES. Except as otherwise provided herein, each party shall
be solely responsible for all expenses incurred by it in connection with this
transaction (including, without limitation, fees and expenses of its own
legal counsel and accountants).
11.7 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced under any rule or law, all
other conditions and provisions of this Agreement shall nevertheless remain
in full force and effect.
11.8 SURVIVAL. The representations, warranties, indemnities, and
covenants set forth in this Agreement shall be deemed to have been relied
upon by the party to whom they are made and shall survive the Closing for a
period of two years.
11.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.10 ASSIGNMENT. This Agreement may not be assigned by any party
hereto without the prior written consent of all other parties hereto.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
POWERBRIDGE, INC.
By: /s/ F. David Graeber
----------------------------
Name: F. David Graeber
Title: President
PBI SHAREHOLDERS:
/s/ James R. Clements
-------------------------------
James R. Clements
/s/ F. David Graeber
-------------------------------
F. David Graeber
/s/ James W. Williams
-------------------------------
James W. Williams
/s/ Roxanne Hicks
-------------------------------
The Hicks Living Trust
BY: Roxanne Hicks, Trustee
/s/ Sandra Moses
-------------------------------
Sandra Moses
/s/ James P. Macanliss
-------------------------------
James P. Macanliss
/s/ Christopher Vonder Hoya
-------------------------------
Christopher Vonder Hoya
<PAGE>
EVERGREEN RESOURCES, INC.
By: /s/ Mark S. Sexton
-----------------------------
Name: Mark S. Sexton
Title: President
EVERGREEN RATON PROPERTIES, INC.
By: /s/ Mark S. Sexton
-----------------------------
Name: Mark S. Sexton
Title: President
<PAGE>
LIST OF EXHIBITS
EXHIBIT A SCHEDULE OF ASSETS OF PBI AND ITS SUBSIDIARIES
EXHIBIT B PBI SHAREHOLDERS AND OWNERSHIP
EXHIBIT C PBI LEGAL PROCEEDINGS
EXHIBIT D PBI INSURANCE
EXHIBIT E PBI MATERIAL CONTRACTS/STATUS
EXHIBIT F LIST OF LIABILITIES
EXHIBIT G PBI SUBSIDIARIES
EXHIBIT H EVERGREEN OFFICER'S CERTIFICATE
EXHIBIT I POWERBRIDGE OFFICER'S CERTIFICATE
EXHIBIT J PBI VIOLATIONS, CONFLICTS, BREACHES
EXHIBIT K PBI CONSENTS AND APPROVALS
EXHIBIT L EVERGREEN CONSENTS AND APPROVALS
EXHIBIT M REGISTRATION RIGHTS AGREEMENT
<PAGE>
EXHIBIT "A" -- SCHEDULE OF ASSETS OF PBI AND ITS SUBSIDIARIES
ASSETS
1. Raton Gas Company, L.L.C.
All working interests in undeveloped and developed leasehold and wells in
Las Animas County, Colorado described on the following pages of this
Exhibit A.
2. PBI Gas Gathering Company, L.L.C.
Fifty percent (50%) undivided interest in Primero Gas Marketing Company, a
joint venture between Evergreen Resources, Inc. and PBI Gas Gathering
Company, L.L.C.
3. Far West Installment Note, principal balance $79,731.86.
4. Accounts Receivable from Evergreen through 07/31/96.
5. Prepaid well costs to Evergreen as of 07/31/96.
6. Distribution from Primero Gas Gathering Company as 07/31/96.
7. Cheverolet Suburban Lease receivable as of 07/31/96.
8. Miscellaneous Office Furniture and Equipment.
<PAGE>
EXHIBIT "A"
The following properties located in Las Animas County, Colorado.
All right, title and interest in the Mortgagor, whether now owned or hereafter
acquired, in and to the Oil and Gas Leases described below; insofar as they
cover the land described below:
1) GOV'T-MORT 42-11 WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 11: SE/4NE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated August 1, 1985 from U.S. Department of
Interior, Bureau of Land Management Lease Serial No. C-36013, Lessor,
to Leonard Minerals Co, Lessee, recorded in Book 905, Page 143, of the
records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .400000 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and
operating such land for the production of oil and gas (including but
not limited to gas producible from coal-bearing formations).
2) TAYLOR 22-7 WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 7: SE/4NW/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated January 19, 1984 from LDS, Inc., Lessor,
to Amoco Production Company, Lessee, recorded in Book 863, Page
858 and Book 832, Page 617, of the records of Las Animas County,
Colorado.
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 855,
Page 125 and Book 852, Page 250, of the records of Las Animas
County, Colorado.
Oil and Gas Lease dated June 29, 1987 from Joseph M. Bonacquista,
aka Joseph Martin Bonacquista, and G. June Bonacquista, husband
and wife, Lessors to Miller & Kennedy, Inc., Lessee, recorded in
Book 853, Page 651, of the records of Las Animas County, Colorado.
Oil and Gas Lease dated June 29, 1987 from Martha Menapace
Bonacquista aka Martha M. Bonacquista aka Martha Bonacquista and
Joe Bonacquista, wife and husband, Lessors, to Miller & Kennedy,
Inc., Lessee, recorded in Book 854, Page 408, of the records of
Las Animas County, Colorado.
<PAGE>
Oil and Gas Lease dated June 29, 1987 from Mary Z. Menapace aka
Mary Zena Menapace, a widow, Lessor, to Miller & Kennedy, Inc.,
Lessee, recorded in Book 854, Page 405, of the records of Las
Animas County, Colorado.
Oil and gas Lease dated June 29, 1987 from Richard P. Bonacquista,
aka Richard Paul Bonacquista, and Melissa R. Bonacquista, husband
and wife, Lessors, to Miller & Kennedy, Inc., Lessee, recorded in
Book 854, Page 411, of the records of Las Animas County, Colorado.
Oil and Gas Lease dated July 6, 1987 from Henry W. Blackburn, a
married man dealing in his sole and separate property, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 853, Page 641, of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated June 25, 1987 from David G. Shier, a
married man dealing in his sole and separate property, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 853, Page 639, of
the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
3) OZZELLO 42-1 WELL
OZZELLO 42-1 TR WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 1: SE/4NE/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated March 26, 1988, effective January 1, 1989
from Tano E. Ozzello and Mary R. Ozzello, husband and wife, Lessors,
to Amoco Production Company, Lessee, recorded in Book 861, Page 546
of the records of Las Animas County, Colorado.
Oil and Gas Lease dated March 26, 1988, effective January 1, 1989
from Tano E. Ozzello, Jr. and Ginger L. Ozzello, husband and wife,
Lessors, to Amoco Production Company, Lessee, recorded in book 861,
Page 548 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated March 26, 1988, effective January 1, 1989
from Lori Jean Lamb and Robert Lamb, wife and husband, Lessors, to
Amoco Production Company, Lessee, recorded in Book 861, Page 550 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated March 26, 1988, effective January 1, 1989
from Gary Lee Ozzello and Nancy Ozzello, husband and wife, Lessors, to
Amoco Production Company, Lessee, recorded in Book 861, Page 552 of
the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and
<PAGE>
expenses of developing and operating such land for the production of oil
and gas (including but not limited to gas producible from coal-bearing
formations).
4) TAYLOR 44-1 WELL
TAYLOR 44-1 TR WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 1: SE/4SE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor, and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 250 and Book 855, Page 125 of the records of Las Animas County,
Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
5) TAYLOR 42-10 WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 10: SE/4NE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor, and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 250 and Book 855, Page 125 of the records of Las Animas County,
Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
6) TAYLOR 42-7 WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 7: SE/4NE/4
<PAGE>
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor, and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 250 and Book 855, Page 125 of the records of Las Animas County,
Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
7) TAYLOR 12-8 WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 8: SW/4NW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor, and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 250 and Book 855, Page 125 of the records of Las Animas County,
Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
8) TAYLOR 32-17 WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 17: SW/4NE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor, and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 250 and Book 855, Page 125 of the records of Las Animas County,
Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
<PAGE>
9) HAGLER 11-12 WELL
a) LAND
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 12: NW/4NW/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated April 13, 1987 from Florence Hagler, a
single woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in
Book 852, Page 491 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 10, 1987 from Marjorie Northcutt, a
single person, Lessor, to Miller & Kennedy, Inc., Lessee, recorded
in Book 852, Page 64 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marie Northcutt, a
single woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded
in Book 851, Page 924 of the records of Las Animas County,
Colorado.
Oil and Gas Lease dated April 13, 1987 from Lois Gerity, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book
851, Page 926 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 14, 1987 from Audrey Jadden, a
married woman dealing in her sole and separate property, Lessor,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 489
of the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 13, 1987 from Florence N. Seccombe
and James C. Seccombe, Jr., wife and husband, and Florence N.
Seccombe, Attorney in Fact for Forrest C. Northcutt under than
certain General Power of Attorney dated February 4, 1981, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 483
of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marjorie S. Kolstad, a
married woman dealing in her sole and separate property, Lessor,
to Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 485
of the records of Las Animas County, Colorado.
Oil and Gas Lease dated November 6, 1987 from Barbara N. Hays,
also known as Barbara Hays, and Rolla R. Hays, wife and husband,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 856,
Page 489 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated July 24, 1987 from Elizabeth Bell Taylor,
as Successor Trustee of the Estate of Joseph C. Bell, deceased,
Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 855,
Page 815 and Book 856, Page 977 of the records of Las Animas
County, Colorado.
Oil and Gas Lease dated November 13, 1987 from Donald Hagler, also
known as Donald O. Hagler, as Agent and Attorney in Fact for Emily
Northcutt under that certain Power of Attorney dated January 18,
1987, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book
856, Page 973 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .43750 in the
form of a net revenue interest of the oil and gas (including but not
limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and
<PAGE>
produced from such Land, and (ii) obligate Mortgagor to bear and pay
not in excess of .500000 of the costs and expenses of developing and
operating such land for the production of oil and gas (including but
not limited to gas producible from coal-bearing formations).
10) GARCIA 14-30 WELL
a) LAND:
TOWNSHIP 32 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 30: Lot 4 (SW/4SW/4)
b) OIL AND GAS LEASE:
Oil and Gas Lease dated June 24, 1987 from Filbert Garcia and
Alice May Garcia, husband and wife, and John E. Garcia and Mary
Garcia, husband and wife, Lessors, to Miller & Kennedy, Inc., Lessee,
recorded in Book 853, Page 714 of the records of Las Animas County,
Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
11) GROSSO 23-21 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 21: NE/4SW/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated December 22, 1993 from Steve P. Grosso,
a.k.a. Steve Grosso, a single man, and Ida Grosso, a single woman,
Lessors, to Evergreen Resources, Inc., Lessee, recorded in Book 902,
Page 853 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated December 22, 1993 from John J. Minna and
Teresa Minna, Trustees of the Revocable Living Trust named the
Revocable Living Trust of John J. Minna and Teresa Minna dated
September 26, 1990, Lessors, to Evergreen Resources, Inc., Lessee,
recorded in Book 903, Page 133 of the records of Las Animas County,
Colorado.
Oil and Gas Lease dated December 22, 1993 from John G. Sanders, Sr.
and Antonette Sanders, as Trustees of the John G. Sanders, Sr. and
Antonette Sanders Living Trust dated November 2, 1991, Lessors, to
Evergreen Recources, Inc., Lessee, recorded in Book 902, Page 858 of
the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
<PAGE>
12) JAN H STATE 14-16 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 16: SW/4SW/4
b) OIL AND GAS LEASE:
State of Colorado Oil and Gas Lease No. OG 92/9063-S dated June 18,
1992, State of Colorado, Lessor, to John D. Buckley, Lessee, recorded
in Book 908, Page 175 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
13) RUDY BO 12-16 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 16: SW/4NW/4
b) OIL AND GAS LEASE:
State of Colorado Oil and Gas Lease No. OG 92/9063-S dated June 18,
1992, State of Colorado, Lessor, to John D. Buckley, Lessee, recorded
in Book 908, Page 175 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
14) LAURA 41-12 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 12: NE/4NE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated April 13, 1987 from Florence Hagler, a
single woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in
Book 852, Page 491 of the records of Las Animas County, Colorado.
<PAGE>
Oil and Gas Lease dated April 10, 1987 from Marjorie Northcutt, a
single person, Lessor, to Miller & Kennedy, Inc., Lessee, recorded
in Book 852, Page 64 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marie Northcutt, a
single woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded
in Book 851, Page 924 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Lois Gerity, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book
851, Page 926 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 14, 1987 from Audrey Jadden, a
married woman dealing in her sole and separate property, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 489 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 13, 1987 from Florence N. Seccombe
and James C. Seccombe, Jr., wife and husband, and Florence N.
Seccombe, Attorney in Fact for Forrest C. Northcutt under than
certain General Power of Attorney dated February 4, 1981, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 483
of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marjorie S. Kolstad, a
married woman dealing in her sole and separate property, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 485 of
the ecords of Las Animas County, Colorado.
Oil and Gas Lease dated November 6, 1987 from Barbara N. Hays, also
known as Barbara Hays, and Rolla R. Hays, wife and husband,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 856,
Page 89 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated July 24, 1987 from Elizabeth Bell Taylor,
as Successor Trustee of the Estate of Joseph C. Bell, deceased,
Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 855,
Page 15 and Book 856, Page 977 of the records of Las Animas
County, Colorado.
Oil and Gas Lease dated November 13, 1987 from Donald Hagler, also
known as Donald O. Hagler, as Agent and Attorney in Fact for Emily
Northcutt under that certain Power of Attorney dated January 18,
1987, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book
856, Page 73 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
15) JACKS 24-6 WELL
JACKS 24-6 TR WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 6: SE/4SW/4
<PAGE>
b) OIL AND GAS LEASE:
Oil and Gas Lease dated August 1, 1989 from Marilyn Jo Maes
Breedlove, aka M. J. Breedlove, a married woman, and Gerald K.
Maes, aka G. K. Maes, a married man; both dealing in their sole
and separate property; AND as cosignatories of that certain Power
of Attorney for Gilbert Maes, a widower, Lessors, to Amoco
Production Company, Lessee, recorded in Book 869, Page 286, of the
records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
16) DON 44-7 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 7: SE/4SE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor, and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 250 and Book 855, Page 125 of the records of Las Animas
County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
17) KATHY 21-11 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 11: NE/4NW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor,
also known as Warren Taylor, and Dorothy Taylor, husband and wife,
Lessors, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 250 and Book 855, Page 125 of the records of Las Animas
County, Colorado.
which rights, titles and interest are represented and warranted to (i)
vest in Mortgagor and entitle it to receive not less than .437500 in
the form of a net revenue interest of the oil and gas (including but
not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced
from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .500000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited
to gas producible from coal-bearing formations).
<PAGE>
18) STEPH 23-1 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 1: NE/4SW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated April 13, 1987 from Florence Hagler, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book
852, Page 491 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 10, 1987 from Marjorie Northcutt, a
single person, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in
Book 852, Page 64 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marie Northcutt, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book
851, Page 924 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Lois Gerity, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book
851, Page 926 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 14, 1987 from Audrey Jadden, a married
woman dealing in her sole and separate property, Lessor, to Miller &
Kennedy, Inc., Lessee, recorded in Book 852, Page 489 of the records
of Las Animas County, Colorado.
Oil and Gas Lease dated August 13, 1987 from Florence N. Seccombe and
James C. Seccombe, Jr., wife and husband, and Florence N. Seccombe,
Attorney in Fact for Forrest C. Northcutt under than certain General
Power of Attorney dated February 4, 1981, Lessors, to Miller &
Kennedy, Inc., Lessee, recorded in Book 855, Page 483 of the records
of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marjorie S. Kolstad, a
married woman dealing in her sole and separate property, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 485 of the
records of Las Animas County, Colorado.
Oil and Gas Lease dated November 6, 1987 from Barbara N. Hays, also
known as Barbara Hays, and Rolla R. Hays, wife and husband, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 856, Page 489 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated July 24, 1987 from Elizabeth Bell Taylor, as
Successor Trustee of the Estate of Joseph C. Bell, deceased, Lessor,
to Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 815 and
Book 856, Page 977 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated November 13, 1987 from Donald Hagler, also
known as Donald O. Hagler, as Agent and Attorney in Fact for Emily
Northcutt under that certain Power of Attorney dated January 18, 1987,
Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 856, Page
973 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .21875 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and
<PAGE>
produced from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .250000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited to
gas producible from coal-bearing formations).
19) PONDEROSA 22-6 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 6: SE/4NW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated August 1, 1989 from Marilyn Jo Maes Breedlove,
aka M. J. Breedlove, a married woman, and Gerald K. Maes, aka G. K.
Maes, a married man; both dealing in their sole and separate property;
AND as cosignatories of that certain Power of Attorney for Gilbert
Maes, a widower, Lessors, to Amoco Production Company, Lessee, recorded
in Book 869, Page 286, of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .437500 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and produced from such Land, and (ii)
obligate Mortgagor to bear and pay not in excess of .500000 of the costs
and expenses of developing and operating such land for the production of
oil and gas (including but not limited to gas producible from coal-bearing
formations).
20) BUD 34-6 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 6: SW/4SE/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated August 9, 1993, from Donald O. Hagler,
individually and as Attorney-in-Fact for Emily J. Northcutt, a widow;
and Judith H. Hagler, wife of Donald O. Hagler, Lessors, to Rush Creek
Resources, Ltd., Lessee, recorded in Book 901, Page 585 of the records
of Las Animas County, Colorado.
Oil and Gas Lease dated August 9, 1993, from Dorothy M. Hodgson, a
widow, Lessor, to Rush Creek Resources, Ltd., Lessee, recorded in Book
901, Page 582 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 9, 1993, from Yvonne Hickey, a widow,
Lessor, to Rush Creek Resources, Ltd., Lessee, recorded in Book 901,
Page 579 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 9, 1993, from Barbara N. Hayes, a
married woman dealing in her sole and separate property, Lessor, to
Rush Creek Resources, Ltd., Lessee, recorded in Book 901, Page 576 of
the records of Las Animas County, Colorado.
<PAGE>
Oil and Gas Lease dated August 9, 1993, from Florence N. Seccombe, a
married woman dealing in her sole and separate property, Lessor, to
Rush Creek Resources, Ltd., Lessee, recorded in Book 901, Page 573 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 9, 1993, from Marjorie Smith Kolstad, a
married woman dealing in her sole and separate property, Lessor, to
Rush Creek Resources, Ltd., Lessee, recorded in Book 901, Page 570 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 9, 1993, from William N. Hagler,
individually and Attorney-in-Fact for Florence Hagler, a widow, Lessor,
to Rush Creek Resources, Ltd., Lessee, recorded in Book 901, Page 588
of the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 9, 1993, from Audrey Smith Jadden, a
married woman dealing in her sole and separate property, Lessor, to
Rush Creek Resources, Ltd., Lessee, recorded in Book 901, Page 1006 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated July 30, 1993, from Gerity Children's Trust as
established under the Will of Lois Northcutt Gerity, Lessor, to Rush
Creek Resources, Ltd., Lessee, recorded in Book 901, Page 1003 of the
records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .21875 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and produced from such Land, and (ii)
obligate Mortgagor to bear and pay not in excess of .25000 of the costs and
expenses of developing and operating such land for the production of oil
and gas (including but not limited to gas producible from coal-bearing
formations).
21) LIS 14-5 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 5: SW/4SW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .21875 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and produced from such Land, and (ii)
obligate Mortgagor to bear and pay not in excess of .25000 of the costs and
expenses of developing and operating such land for the production of oil
and gas (including but not limited to gas producible from coal-bearing
formations).
22) SPUNKY 23-8 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 8: NE/4SW/4
<PAGE>
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .21875 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and produced from such Land, and (ii)
obligate Mortgagor to bear and pay not in excess of .25000 of the costs
and expenses of developing and operating such land for the production of
oil and gas (including but not limited to gas producible from coal-bearing
formations).
23) BOWMAN 44-8 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 8: SE/4SE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated July 22, 1993 from John J. Bowman and Rudolph
Bowman, a.k.a. Rudy Bowman, both as single men, Lessors, to Rush Creek
Resources, Ltd., Lessee, recorded in Book 897, Page 339, of the records
of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .21875 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and produced from such Land, and (ii)
obligate Mortgagor to bear and pay not in excess of .25000 of the costs and
expenses of developing and operating such land for the production of oil
and gas (including but not limited to gas producible from coal-bearing
formations).
24) DOUG 11-17 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 17: NW/4NW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .87500 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and produced from such Land, and (ii)
obligate Mortgagor to bear and pay not in excess of 1.00000 of the costs
and expenses of developing and operating such land for the production of
oil and gas (including but not limited to gas producible from coal-bearing
formations).
<PAGE>
25) SPARKY 33-17 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 17: NW/4SE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
26) SHARON 33-11 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 11: NW/4SE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
27) DOROTHY 34-2 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 2: SW/4SE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
<PAGE>
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
28) BARR 13-11 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 11: NW/4SW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated August 7, 1989 from First Bank and Trust as
personal representative of the estate of Catherine Liggett Barr,
deceased, Lessors, to Amoco Production Company, Lessee, recorded in
Book 870, Page 23 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
29) MADRID 14-12 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 12: SW/4SW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated April 13, 1987 from Florence Hagler, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 491 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 10, 1987 from Marjorie Northcutt, a
single person, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in
Book 852, Page 64 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marie Northcutt, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 851,
Page 924 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Lois Gerity, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 851,
Page 926 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 14, 1987 from Audrey Jadden, a married
woman dealing in her sole and separate property, Lessor, to Miller &
Kennedy, Inc., Lessee, recorded in Book 852, Page 489 of the records of
Las Animas County, Colorado.
<PAGE>
Oil and Gas Lease dated August 13, 1987 from Florence N. Seccombe and
James C. Seccombe, Jr., wife and husband, and Florence N. Seccombe,
Attorney in Fact for Forrest C. Northcutt under than certain General
Power of Attorney dated February 4, 1981, Lessors, to Miller & Kennedy,
Inc., Lessee, recorded in Book 855, Page 483 of the records of Las
Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marjorie S. Kolstad, a
married woman dealing in her sole and separate property, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 485 of the
records of Las Animas County, Colorado.
Oil and Gas Lease dated November 6, 1987 from Barbara N. Hays, also
known as Barbara Hays, and Rolla R. Hays, wife and husband, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 856, Page 489 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated July 24, 1987 from Elizabeth Bell Taylor, as
Successor Trustee of the Estate of Joseph C. Bell, deceased, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 815 and Book
856, Page 977 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated November 13, 1987 from Donald Hagler, also
known as Donald O. Hagler, as Agent and Attorney in Fact for Emily
Northcutt under that certain Power of Attorney dated January 18, 1987,
Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 856, Page
973 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
30) WISER 41-6 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 6: NE/4NE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated August 31, 1989, from Elfriede A. Grimes, a
widow, Lessor, to Amoco Production Company, Lessee, recorded in Book
870, Page 254, of the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 31, 1989, from Halden G. Parrish and
LaVina P. Parrish, husband and wife, Lessors, to Amoco Production
Company, Lessee, recorded in Book 870, Page 252, of the records of Las
Animas County, Colorado.
Oil and Gas Lease dated June 30, 1994, from Mary F. Kjerstad and Kem K.
Kjerstad, her husband, Lessors, to Evergreen Resources, Inc., Lessee,
recorded in Book 907, Page 855, of the records of Las Animas County,
Colorado.
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .21875 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and
<PAGE>
produced from such Land, and (ii) obligate Mortgagor to bear and pay not in
excess of .25000 of the costs and expenses of developing and operating such
land for the production of oil and gas (including but not limited to gas
producible from coal-bearing formations).
31) ROCKY 12-5 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 5: SW/4NW/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated April 21, 1994, from Marilyn Jo Breedlove, also
known as Marilyn J. Breedlove and M. J. Breedlove, and Clyde W.
Breedlove, wife and husband, Lessors, to Evergreen Resources, Inc.,
Lessee, recorded in Book 907, Page 865, of the records of Las Animas
County, Colorado.
Oil and Gas Lease dated April 21, 1994, from Gerald K. Maes, also known
as G. K. Maes, and Jo Ann Maes, husband and wife, Lessors, to Evergreen
Resources, Inc., Lessee, recorded in Book 907, Page 879, of the records
of Las Animas County, Colorado.
Oil and Gas Lease dated May 3, 1989, from William H. Wacker and James
N. Oaks, Sr., Trustees of the Wacker Minerals Trust, Lessors, to Amoco
Production Company, Lessee, recorded in Book 869, Page 293, of the
records of Las Animas County, Colorado.
Oil and Gas Lease dated May 3, 1989, from Gerald Dixon, Trustee of the
Dixon Minerals Trust, Lessor, to Amoco Production Company, Lessee,
recorded in Book 869, Page 278, of the records of Las Animas County,
Colorado.
Oil and Gas Lease dated February 7, 1994, from Veronica M. Goodrich,
also known as Veronica Goodrich, a married woman dealing in her sole
and separate property, Lessor, to Evergreen Resources, Inc., Lessee,
recorded in Book 905, Page 39, of the records of Las Animas County,
Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.21875 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.25000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
32) BOX CANYON 34-5 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 5: SW/4SE/4
b) OIL AND GAS LEASE:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
<PAGE>
which rights, titles and interest are represented and warranted to (i) vest
in Mortgagor and entitle it to receive not less than .21875 in the form of
a net revenue interest of the oil and gas (including but not limited to gas
producible from coal-bearing formations) and all substances produced in
association therewith in, under and produced from such Land, and (ii)
obligate Mortgagor to bear and pay not in excess of .25000 of the costs and
expenses of developing and operating such land for the production of oil
and gas (including but not limited to gas producible from coal-bearing
formations).
33) STEVE 41-20 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 20: NE/4NE/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated December 22, 1993 from Steve P. Grosso, a.k.a.
Steve Grosso, a single man, and Ida Grosso, a single woman, Lessors, to
Evergreen Resources, Inc., Lessee, recorded in Book 902, Page 853 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated December 22, 1993 from John J. Minna and Teresa
Minna, Trustees of the Revocable Living Trust named the Revocable
Living Trust of John J. Minna and Teresa Minna dated September 26,
1990, Lessors, to Evergreen Resources, Inc., Lessee, recorded in Book
903, Page 133 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated December 22, 1993 from John G. Sanders, Sr. and
Antonette Sanders, as Trustees of the John G. Sanders, Sr. and
Antonette Sanders Living Trust dated November 2, 1991, Lessors, to
Evergreen Recources, Inc., Lessee, recorded in Book 902, Page 858 of
the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
34) ANNETTE 21-21 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 21: NE/4NW/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated December 22, 1993 from Steve P. Grosso,
Lessor, to Evergreen Recources, Inc., Lessee, recorded in Book 902,
Page 849 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and
<PAGE>
produced from such Land, and (ii) obligate Mortgagor to bear and pay not
in excess of .00000 of the costs and expenses of developing and operating
such land for the production of oil and gas (including but not limited to
gas producible from coal-bearing formations).
35) DONKEY 32-18 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST
Section 18: SW/4NE/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
36) WARREN 23-7 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 7: NE/4SW/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
37) BLU 42-2 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 2: SE/4NE/4
b) OIL AND GAS LEASES:
<PAGE>
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
38) MEDIDA 44-10 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 10: SE/4SE/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 7, 1989 from First Bank and Trust as
personal represenative of the estate of Catherine Liggett Barr,
deceased, Lessors, to Amoco Production Company, Lessee, recorded in
Book 870, Page 23 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
39) NORTHCUTT 33-12 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 12: NW/4SE/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated April 13, 1987 from Florence Hagler, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 852,
Page 491 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 10, 1987 from Marjorie Northcutt, a
single person, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in
Book 852, Page 64 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marie Northcutt, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 851,
Page 924 of the records of Las Animas County, Colorado.
<PAGE>
Oil and Gas Lease dated April 13, 1987 from Lois Gerity, a single
woman, Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 851,
Page 926 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated April 14, 1987 from Audrey Jadden, a married
woman dealing in her sole and separate property, Lessor, to Miller &
Kennedy, Inc., Lessee, recorded in Book 852, Page 489 of the records of
Las Animas County, Colorado.
Oil and Gas Lease dated August 13, 1987 from Florence N. Seccombe and
James C. Seccombe, Jr., wife and husband, and Florence N. Seccombe,
Attorney in Fact for Forrest C. Northcutt under than certain General
Power of Attorney dated February 4, 1981, Lessors, to Miller & Kennedy,
Inc., Lessee, recorded in Book 855, Page 483 of the records of Las
Animas County, Colorado.
Oil and Gas Lease dated April 13, 1987 from Marjorie S. Kolstad, a
married woman dealing in her sole and separate property, Lessor, to
Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 485 of the
records of Las Animas County, Colorado.
Oil and Gas Lease dated November 6, 1987 from Barbara N. Hays, also
known as Barbara Hays, and Rolla R. Hays, wife and husband, Lessors, to
Miller & Kennedy, Inc., Lessee, recorded in Book 856, Page 489 of the
records of Las Animas County, Colorado.
Oil and Gas Lease dated July 24, 1987 from Elizabeth Bell Taylor, as
Successor Trustee of the Estate of Joseph C. Bell, deceased, Lessor,
to Miller & Kennedy, Inc., Lessee, recorded in Book 855, Page 815 and
Book 856, Page 977 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated November 13, 1987 from Donald Hagler, also
known as Donald O. Hagler, as Agent and Attorney in Fact for Emily
Northcutt under that certain Power of Attorney dated January 18, 1987,
Lessor, to Miller & Kennedy, Inc., Lessee, recorded in Book 856, Page
973 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
40) GROSSO 13-17 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 17: NW/4SW/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated December 22, 1993 from Steve P. Grosso, a.k.a.
Steve Grosso, a single man, and Ida Grosso, a single woman, Lessors, to
Evergreen Resources, Inc., Lessee, recorded in Book 902, Page 853 of
the records of Las Animas County, Colorado.
Oil and Gas Lease dated December 22, 1993 from John J. Minna and Teresa
Minna, Trustees of the Revocable Living Trust named the Revocable
Living Trust of John J. Minna and Teresa Minna dated
<PAGE>
September 26, 1990, Lessors, to Evergreen Resources, Inc., Lessee,
recorded in Book 903, Page 133 of the records of Las Animas County,
Colorado.
Oil and Gas Lease dated December 22, 1993 from John G. Sanders, Sr. and
Antonette Sanders, as Trustees of the John G. Sanders, Sr. and
Antonette Sanders Living Trust dated November 2, 1991, Lessors, to
Evergreen Recources, Inc., Lessee, recorded in Book 902, Page 858 of
the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
41) BONCARBO 33-31 WELL
a) LAND:
TOWNSHIP 32 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 31: NW/4SE/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated August 31, 1989, from Elfriede A. Grimes, a
widow, Lessor, to Amoco Production Company, Lessee, recorded in Book
870, Page 254, of the records of Las Animas County, Colorado.
Oil and Gas Lease dated August 31, 1989, from Halden G. Parrish and
LaVina P. Parrish, husband and wife, Lessors, to Amoco Production
Company, Lessee, recorded in Book 870, Page 252, of the records of Las
Animas County, Colorado.
Oil and Gas Lease dated June 30, 1994, from Mary F. Kjerstad and Kem K.
Kjerstad, her husband, Lessors, to Evergreen Resources, Inc., Lessee,
recorded in Book 907, Page 855, of the records of Las Animas County,
Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
42) 3 BEAR 32-8 WELL
a) LAND:
TOWNSHIP 33 SOUTH, RANGE 65 WEST, 6TH P.M.
Section 8: SW/4NE/4
b) OIL AND GAS LEASES:
<PAGE>
Oil and Gas Lease dated March 31, 1987 from Paul Warren Taylor, also
known as Warren Taylor, and Dorothy Taylor, husband and wife, Lessors,
to Miller & Kennedy, Inc., Lessee, recorded in Book 852, Page 250 and
Book 855, Page 125 of the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.00000 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.00000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
43) NATIONS #1 31-26 WELL
a) LAND:
TOWNSHIP 31 SOUTH, RANGE 66 WEST, 6TH P.M.
Section 26: NW/4SW/4
b) OIL AND GAS LEASES:
Oil and Gas Lease dated September 15, 1993 from Lawrence E. Cher,
Lessor, to Evergreen Resources, Inc., Lessee, recorded in Book 905,
Page 27 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated March 2, 1994 from Carolyn L. Shogrin, Lessor,
to Evergreen Resources, Inc., Lessee, recorded in Book 905, Page 31
of the records of Las Animas County, Colorado.
Oil and Gas Lease dated September 15, 1994 from Thomas Allen Briggs,
III, Lessor, to Evergreen Resources, Inc., Lessee, recorded in Book
915, Page 661 of the records of Las Animas County, Colorado.
Oil and Gas Lease dated January 31, 1994 from Wells Fargo Bank, Lessor,
to Evergreen Resources, Inc., Lessee, recorded in Book 911, Page 214 of
the records of Las Animas County, Colorado.
which rights, titles and interest before payout are represented and
warranted to (i) vest in Mortgagor and entitle it to receive not less than
.21875 in the form of a net revenue interest of the oil and gas (including
but not limited to gas producible from coal-bearing formations) and all
substances produced in association therewith in, under and produced from
such Land, and (ii) obligate Mortgagor to bear and pay not in excess of
.25000 of the costs and expenses of developing and operating such land for
the production of oil and gas (including but not limited to gas producible
from coal-bearing formations).
END OF EXHIBIT "A"
<PAGE>
EXHIBIT "B" -- PBI SHAREHOLDERS AND OWNERSHIP
Shareholder PBI Shares
----------- ----------
James R. Clements 262,500
F. David Graeber 222,500
James W. Williams 58,889
Hicks Living Trust, Roxanne Hicks, Trustee 25,000
Christopher Vonder Hoya 7,500
James R. Macanliss 7,500
Sandra H. Moses 5,000
-------
TOTAL SHARES 588,889
<PAGE>
EXHIBIT "C" -- PBI LEGAL PROCEEDINGS
LITIGATION
None
<PAGE>
EXHIBIT "D" -- PBI INSURANCE
INSURANCE
Insured's Name: Powerbridge Inc.
3625 N. Hall Street #620
Dallas, TX 75219
214/520-8177
Producer's Name: Alexander & Alexander of Texas, Inc.
2711 N. Haskell Avenue #800 LB8
Dallas, TX 75204
214/880-0321
Policy #: 96 3710 47 70
Policy Period: From 08/26/95 to 08/26/96
Insurance: General Liability
Property Insurance
Mobile Equipment
<PAGE>
EXHIBIT "E" -- PBI MATERIAL CONTRACTS/STATUS
CONTRACTS
1. Gas Purchase Contract between Raton Gas Company, L.L.C. and Primero Gas
Marketing Company dated May 31, 1996.
2. Option for right of Operatorship on a power plant developed by Picketwire
Power, L.L.C. to Lone Star Development Company.
3. Contingent Fees to Dr. Ted Guth for environmental services for Picketwire
Power, L.L.C. for a potential power plant in Las Animas County, Colorado.
<PAGE>
EXHIBIT "F"
LIST OF LIABILITIES
1. Bingham Dana & Gould, L.L.P. $7,500.00
150 Federal Street
Boston, MA 02110-1726
2. Chadbourne & Parke 74,879.38
30 Rockefeller Plaza
New York, NY 10112-0127
3. Kuntz Bonesio, L.L.P. 7,000.00
1717 Main Street #4050, LB39
Dallas, TX 75201
4. Thorp Reed & Armstrong 22,410.87
One Riverfront Center
Pittsburgh, PA 15222-4895
5. Hibernia National Bank Revolving Note 3,596,000.00
313 Carondelet Street
New Orleans, LA 70130
6. Evergreen Operating Corporation 31,241.67
1512 Larimer Street #1000
Denver, CO 80202
7. Park Creek Place 78,995.80
c/o Ecom Real Estate Management Inc.
3141 Hood Street #200
P.O. Box 191348
Dallas, TX 75219
8. Lanier Worldwide, Inc. 3,112.90
2401 E. Randol Mill Road #473
Arlington, TX 76011
9. Graybar Financial Services 5,499.45
201 West Big Beaver Road #800
Troy, MI 48084
10. Alco Capital Resource, Inc. 752.35
P.O. Box 9115
Macon, GA 31298-2099
TOTAL ASSUMED LIABILITIES $3,827,392.42
-------------
-------------
<PAGE>
EXHIBIT "G" - PBI SUBSIDIARIES
STATE OF
SUBSIDIARY OWNERSHIP ORGANIZATION
---------- --------- ------------
PBI Capital, L.P. Powerbridge, Inc.; Delaware
Energy Investors Fund, L.P.;
Energy Investors Fund II, L.P.
PBI Fuels, L.P. Powerbridge, Inc.; Delaware
Energy Investors Fund, L.P.;
Energy Investors Funds II, L.P.
PBI Gas Gathering Powerbridge, Inc.; Delaware
Company, L.L.C. PBI Fuels, L.P.
Raton Gas Company, Powerbridge, Inc.; Delaware
L.L.C. PBI Fuels, L.P.
Picketwire Power, James R. Clements; Wyoming
L.L.C. PBI Capital, L.P.
PBI Pennsylvania, L.P. Powerbridge, Inc.; Delaware
PBI Capital, L.P.
Homer City Power, L.P. PBI Pennsylvania, L.P. Delaware
Allegheny Energy Resources, Inc.
<PAGE>
EXHIBIT "H"
EVERGREEN RESOURCES, INC.
OFFICERS' CERTIFICATE
We, Mark S. Sexton and J. Keither Martin, as President and Secretary,
respectively, of Evergreen Resources, Inc., a Colorado corporation
("Evergreen"), do hereby jointly and severally certify as follows:
1. In accordance with Section 6.3 of the Merger Agreement dated on or
about August 14, 1996 (the "Agreement"), between Evergreen, Evergreen Raton
Properties, Inc. ("Raton") and Powerbridge, Inc. ("PBI"), this certificate is
provided as a condition under the Agreement. Capitalized terms used herein
and not otherwise defined shall have the same meanings ascribed to them in
the Agreement.
2. As of the date hereof, there has not been any material adverse
change in the condition, financial or otherwise, or the earnings, affairs or
business prospectus of Evergreen and its Subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business.
3. Each of the representations and warranties of Evergreen contained
in the Agreement is true and correct as of the date hereof with the same
force and effect as though made on this date.
4. Attached hereto as EXHIBIT 1 is a true, correct and complete copy
of the resolutions of the Evergreen Board of Directors duly adopted by the
Board of Directors of August 14, 1996, approving the Agreement, Merger and
related transactions by and among Evergreen, Raton and PBI. Such resolutions
have not been amended, modified, supplemented, annulled or revoked, are in
full force and effect in the form adopted, and are the only resolutions
relating to the Agreement, Merger and related transactions.
5. Attached hereto as EXHIBIT 2 is a true, correct and complete copy
of the resolutions of the Raton Board of Directors duly adopted by the Board
of Directors on August 14, 1996, approving the Agreement, Merger and related
transactions by and among Evergreen, Raton and PBI. Such resolutions have not
been amended, modified, supplemented, annulled or revoked, are in full force
and effect in the form adopted, and are the only resolutions relating the
Agreement, Merger and related transactions.
6. Attached hereto as EXHIBIT 3 is a true, correct and complete copy
of the Consent of the Sole Shareholder of Raton, Evergreen, dated August 14,
1996, approving the Agreement, Merger and related transactions by and among
Evergreen, Raton and PBI. Such consent has not been amended, modified,
supplemented, annulled or revoked, is in full force and effect in the form
adopted, and is the only consent relating to the Agreement, Merger and
related transactions.
<PAGE>
7. No vote of the Shareholder of Evergreen is required to effect the
Agreement, Merger and related transactions.
Dated this 14th day of August, 1996.
/s/ Mark S. Sexton
--------------------------------
Mark S. Sexton
President
/s/ J. Keither Martin
--------------------------------
J. Keither Martin
Secretary
<PAGE>
Exhibit 1
CERTIFICATE OF PASSAGE OF RESOLUTIONS AT DIRECTORS'
MEETING, WITH ACKNOWLEDGMENT
EVERGREEN RESOURCES, INC.
AUGUST 14, 1996
At a duly constituted meeting of the Board of Directors of Evergreen
Resources, Inc. held on August 14, 1996, the following resolutions were
adopted:
RESOLVED: The Company has formed a new wholly-owned subsidiary, named
Evergreen Raton Properties, Inc., a Colorado Corporation, for the
purpose of acquiring Raton Basin oil and gas properties and assets by
merging into Powerbridge, Inc ("PBI"). Evergreen Raton Properties, Inc.,
will not survive the merger in which Powerbridge becomes a wholly-owned
subsidiary of Evergreen Resources, Inc.
There will initially be three Directors and three Officers:
Mark S. Sexton, President and a Director
Kevin R. Collins, Treasurer and a Director
J. Keither Martin, Secretary and a Director
An initial 1,000 shares of no par value common stock will be
authorized. Initially, 100 shares will be outstanding.
RESOLVED: That Evergreen Resources, Inc., as sole shareholder of PBI
following the resignation of the existing Officers and Directors
of PBI, hereby elects the following as new Directors of PBI:
Dennis R. Carlton
Kevin R. Collins
J. Keither Martin
Mark S. Sexton
I, the undersigned, hereby certify that the foregoing is a true copy
of the resolutions adopted by the Board of Directors of the abovementioned
Corporation at a meeting of the said Board held on the aforementioned date,
and entered upon the regular minute book of said Corporation, and now in full
force and effect, and that the Board of Directors of the Corporation has, and
at the time of the adoption of said resolutions had, full power and lawful
authority to adopt said resolutions and to confer the powers thereby granted
to the officers therein named, who have full power and lawful authority to
exercise the same.
/s/ J. Keither Martin
--------------------------------
J. Keither Martin
Secretary
Evergreen Resources, Inc.
(Corporate Seal)
<PAGE>
Exhibit 2
CERTIFICATE OF PASSAGE OF RESOLUTIONS AT DIRECTORS'
MEETING, WITH ACKNOWLEDGMENT
EVERGREEN RATON PROPERTIES, INC.
AUGUST 14, 1996
At a duly constituted meeting of the Board of Directors of Evergreen
Raton Properties, Inc. held on August 14, 1996, the following resolution was
adopted:
RESOLVED: That effective as of August 1, 1996, Evergreen Raton
Properties, Inc., will merge into Powerbridge, Inc. ("PBI") causing PBI
to become a wholly-owned subsidiary of Evergreen Resources, Inc. The
principal PBI asset being acquired is general partnership and limited
partnership interests in PBI Fuels, LP ("PBIF"). The merger will be
effected pursuant to the terms of the Agreement and Plan of Merger by
and among PBI, Evergreen Resources, Inc., and the company dated as of
August 14, 1996.
I, the undersigned, hereby certify that the foregoing is a true copy
of the resolutions adopted by the Board of Directors of the abovementioned
Corporation at a meeting of the said Board held on the aforementioned date,
and entered upon the regular minute book of said Corporation, and now in full
force and effect, and that the Board of Directors of the Corporation has, and
at the time of the adoption of said resolutions had, full power and lawful
authority to adopt said resolutions and to confer the powers thereby granted
to the officers therein named, who have full power and lawful authority to
exercise the same.
/s/ J. Keither Martin
--------------------------------
J. Keither Martin
Secretary
Evergreen Raton Properties, Inc.
<PAGE>
Exhibit 3
CONSENT OF EVERGREEN RESOURCES, INC.
We, Mark S. Sexton and J. Keither Martin, as President and Secretary
of Evergreen Resources, Inc. ("ERI"), hereby confirm that ERI, as the sole
shareholder of Evergreen Raton Properties, Inc. ("ERPI"), consents to ERPI
executing and carrying out its responsibilities under the Agreement and Plan
of Merger by and among Powerbridge, Inc., ERI, and ERPI.
/s/ Mark S. Sexton
--------------------------------
Mark S. Sexton, President
/s/ J. Keither Martin
--------------------------------
J. Keither Martin, Secretary
<PAGE>
EXHIBIT "I"
POWERBRIDGE, INC.
OFFICERS' CERTIFICATE
We, F. David Graeber and James W. Williams, as President and Secretary,
respectively, of Powerbridge, Inc., a Texas corporation ("PBI"), do hereby
jointly and severally certify as follows:
1. In accordance with Section 7.3 of the Merger Agreement dated on or
about August 14, 1996 (the "Agreement"), between Evergreen Resources, Inc.
("Evergreen"), Evergreen Raton Properties, Inc. ("Raton") and PBI, this
certificate is provided as a condition under the Agreement. Capitalized terms
used herein and not otherwise defined shall have the same meanings ascribed
to them in the Agreement.
2. As of the date hereof, there has not been any material adverse
change in the condition, financial or otherwise, or the earnings, affairs or
business prospectus of PBI and its Subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business.
3. Each of the representations and warranties of PBI contained in the
Agreement is true and correct as of the date hereof with the same force and
effect as though made on this date.
4. Attached hereto as EXHIBIT 1 is a true, correct and complete copy of
the Unanimous Written Consent of the PBI Board of Directors duly adopted by
the Board of Directors on August 9, 1996 approving the Agreement, Merger and
related transactions by and among Evergreen, Raton and PBI. Such resolutions
have not been amended, modified, supplemented, annulled or revoked, are in
full force and effect in the form adopted, and are the only resolutions
relating to the Agreement, Merger and related transactions.
5. Attached hereto as EXHIBIT 2 is a true, correct and complete copy of
the Unanimous Written Consent of Shareholders of PBI duly adopted on August
12, 1996. Such Shareholders' Consent has not been amended, modified,
supplemented, annulled or revoked, is in full force and effect in the form
adopted, and is the only consent adopted by the PBI Shareholders related to
the Agreement, Merger and related transactions.
Dated this 14th day of August, 1996.
/s/ F. David Graeber
--------------------------------
F. David Graeber
President
/s/ James W. Williams
--------------------------------
James W. Williams
Secretary
<PAGE>
EXHIBIT 1
UNANIMOUS WRITTEN CONSENT OF DIRECTORS
IN LIEU OF SPECIAL MEETING
Pursuant to the provisions of Articles 9.09 and 9.10B of the Texas
Business Corporation Act (the "Act") the undersigned being all the members of
the Board of Directors of Powerbridge, Inc. (the "Company"), hereby waive
notice of the time, place and purpose of a special meeting and unanimously
consent to and confirm the taking of the following actions by the Board of
Directors of the Company by the written consent of the members thereof, such
written consent to be evidence of the actions taken by the members of the
Board of Directors on the date indicated below and filed by the Secretary of
the Company with the minutes of the meetings of the Board of Directors;
WHEREAS, Evergreen Resources, Inc. ("Evergreen") is a corporation duly
organized and existing under the laws of the State of Colorado;
WHEREAS, Evergreen Raton Properties, Inc. ("Raton") is a corporation
duly organized and existing under the laws of the State of Colorado;
WHEREAS, the Company is a corporation duly organized and existing under
the laws of the State of Texas;
WHEREAS, the parties desire to effect a merger of Raton with and into
the Company (the "Merger"), with the Company being the surviving corporation
(the "Surviving Corporation") to be governed by the Texas Business
Corporation Act;
WHEREAS, the Board of Directors of the Company has reviewed an Agreement
and Plan of Merger by and among Evergreen, Raton and the Company (the
"Agreement"), which specifies the terms and conditions of the Merger;
WHEREAS, the Board of Directors of the Company deems that it is
advisable and in the best interests of the Company that Raton be merged with
and into the Company, with the Company the Surviving Corporation, and with
the shareholders of the Company receiving shares of Common Stock of Evergreen
and Warrants for Common Stock of Evergreen in exchange for their PBI Shares;
RESOLVED, that the Agreement be submitted and recommended by the Board
of Directors of the Company to the shareholders of the Company for approval.
FURTHER RESOLVED, that subject to obtaining the approval of the
shareholders of the Company to the Agreement, the form, terms and provisions
of the Agreement, and the transactions and other acts contemplated by or
incident to such Agreement be, and they hereby are, authorized and approved.
FURTHER RESOLVED, that, subject to obtaining the approval of the
shareholders of the Company to the Agreement, the officers of the Company are
authorized to negotiate and conclude the Agreement with such changes therein
and/or additions thereto as such officers may in their discretion deem
appropriate, the execution thereof to be conclusive evidence of such approval.
<PAGE>
FURTHER RESOLVED, that the officers of the Company are authorized to
execute any and all documents and do any and all things that they may deem
necessary or advisable in order to consummate the Merger and the Agreement in
accordance with their terms.
FURTHER RESOLVED, that the officers of the Company hereby are
authorized, for and on behalf of the Company to execute, acknowledge, and
file with the Secretary of State of the States of Texas and Colorado articles
of merger as required by applicable law, incorporating the terms and purposes
of these resolutions.
FURTHER RESOLVED, that the merger of Raton into the Company shall be
effective upon the filing of both: (a) the Articles of Merger with the Texas
Secretary of State and (b) the Articles of Merger with the Colorado Secretary
of State.
FURTHER RESOLVED, that the officers of the Company, and each of such
officers, hereby are authorized, for and on behalf of the Company, to
execute, deliver, and file such documents, take such steps, and perform such
acts, including, without limitation, the making, execution, and filing of the
Articles of Merger and all appropriate filings as may, in their judgment, be
necessary or incidental or convenient to the implementation of the
transaction contemplated by or to fulfill the purposes of the resolutions
hereby adopted, and any such documents executed, delivered, and filed or
actions taken by them or any of them shall be conclusive evidence of their
authority in so doing.
FURTHER RESOLVED, that all actions by the officers of the Company in
furtherance of the purposes of these resolutions and the Merger and Agreement
be, and hereby are, ratified, adopted and approved.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Unanimous Written
Consent of Directors as of this 9th day of August, 1996.
/s/ James R. Clements
--------------------------------
James R. Clements
/s/ F. David Graeber
--------------------------------
F. David Graeber
/s/ James W. Williams
--------------------------------
James W. Williams
/s/ Roxanne Hicks
--------------------------------
Roxanne Hicks
<PAGE>
EXHIBIT 2
UNANIMOUS WRITTEN CONSENT OF
SHAREHOLDERS OF POWERBRIDGE, INC.
Pursuant to the provisions of Articles 9.09 and 9.10A of the Texas
Business Corporation Act (the "Act") the undersigned being all the holders of
all issued and outstanding shares of capital stock of Powerbridge, Inc., a
Texas corporation (the "Company"), hereby waive notice of the time, place and
purpose of a special meeting and unanimously consent to and approve in
writing the adoption of the resolutions contained herein with the same force
and effect as if adopted at a formal meeting of the Shareholders of the
Corporation:
WHEREAS, Evergreen Resources, Inc. ("Evergreen") is a corporation duly
organized and existing under the laws of the State of Colorado;
WHEREAS, Evergreen Raton Properties, Inc. ("Raton") is a corporation
duly organized and existing under the laws of the State of Colorado;
WHEREAS, the Company is a corporation duly organized and existing under
the laws of the State of Texas;
WHEREAS, the Board of Directors of the Company has determined that it is
advisable and in the best interests of the Company that Raton be merged with
and into the Company, with the Company being the surviving corporation;
RESOLVED, that the Company is authorized to enter into the Agreement and
Plan of Merger (the "Agreement") dated on or about August 14, 1996, by and
among the Company, Evergreen and Raton, and the transactions and other acts
contemplated by or incident to such Agreement be, and they hereby are,
authorized and approved.
FURTHER RESOLVED, that the officers of the Company are authorized to
negotiate and conclude the Agreement and Plan of Merger with such changes
therein and/or additions thereto as such officers may in their discretion
deem appropriate, the execution thereof to be conclusive evidence of such
approval.
FURTHER RESOLVED, that the officers of the Company are authorized to
execute any and all documents and do any and all things that they may deem
necessary or advisable in order to consummate the Agreement and Plan of
Merger in accordance with its terms.
FURTHER RESOLVED, that the officers of the Company are authorized, for
and on behalf of the Company, to execute, acknowledge, and file with the
Secretary of State of the State of Texas and the Secretary of State of any
other required states articles of merger (the "Articles of Merger") as
required by Article 5.04 of the Texas Business Corporation Act and Title 7,
Article 111-105 of the Colorado Business Corporation Act, incorporating the
terms and purposes of these resolutions.
<PAGE>
FURTHER RESOLVED, that the merger of Raton with and into the Company
shall be effective upon the filing of the Articles of Merger with the
Secretary of State of the State of Texas and the Secretary of State of the
State of Colorado.
FURTHER RESOLVED, that the officers of the Company, and each of such
officers, hereby are authorized, for and on behalf of the Company, to
execute, deliver, and file such documents, take such steps, and perform such
acts, including, without limitation, the making, execution, and filing of the
Articles of Merger and all appropriate filings as may, in their judgment, be
necessary or incidental or convenient to the implementation of the
transaction contemplated by or the purposes of the resolutions hereby
adopted, and any such documents executed, delivered, and filed or actions
taken by them or any of them shall be conclusive evidence of their authority
in so doing.
FURTHER RESOLVED, that all actions taken by the officers and directors
of the Company in furtherance of the purposes of the Merger and Agreement be,
and hereby are, ratified, adopted and approved.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Unanimous Written
Consent of Directors as of this 12th day of August, 1996.
/s/ James R. Clements
--------------------------------
James R. Clements
/s/ F. David Graeber
--------------------------------
F. David Graeber
/s/ James W. Williams
--------------------------------
James W. Williams
/s/ Roxanne Hicks
--------------------------------
The Hicks Living Trust
By: Roxanne Hicks
/s/ Sandra H. Moses
--------------------------------
Sandra H. Moses
/s/ James R. Macanliss
--------------------------------
James R. Macanliss
/s/ Christopher Vonder Hoya
--------------------------------
Christopher Vonder Hoya
<PAGE>
EXHIBIT "J" -- PBI VIOLATIONS, CONFLICTS, BREACHES
None.
<PAGE>
EXHIBIT "K" -- PBI CONSENTS AND APPROVALS
1. Hibernia National Bank, pursuant to Revolving Note.
2. Energy Investors Funds, L.P., pursuant to Agreements.
3. Energy Investors Funds II, L.P., pursuant to Agreements.
<PAGE>
EXHIBIT "L" -- EVERGREEN CONSENTS AND APPROVALS
1. Evergreen will file a Current Report on Form 8-K pursuant to Section 13 or
15(d) of the Exchange Act of 1934.
<PAGE>
EXHIBIT "M"
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of this ____ day of August, 1996 by and between Evergreen Resources, Inc.
("ERI") and the PBI Shareholders set forth on the Signature Page hereof
(collectively, the "Shareholders").
WHEREAS the Shareholders, on the date hereof, have received 143,396
shares of ERI's no par value common stock, all as contemplated in that
certain Merger Agreement dated the date hereof and entered into between
(among other parties) the parties hereto (the "Merger Agreement");
WHEREAS ERI desires to grant to the Shareholders the registration rights
set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. For purposes of this Agreement, except as
otherwise specifically provided herein, the following capitalized terms (in
their singular and plural forms as applicable) shall have the meanings set
forth below:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Lock-up Period" means the 90 day period following the effectiveness of
the Pending Offering.
"Majority in Interest" means the Shareholders, their successors and
assigns holding a majority of the then outstanding Registrable Securities,
determined on the basis of the aggregate number of shares of Registrable
Securities held by the Shareholders.
"Pending Offering" means the secondary offering of securities currently
contemplated by ERI. The Pending Offering shall be deemed terminated if the
initial filing of the registration statement to be filed with the Commission
has not been made by December 31, 1996.
The terms "register," "registered," and "registration" refer to a
registration effected by preparing the filing of a registration statement in
compliance with the Securities Act, and the declaration or order by the
Commission of the effectiveness of such registration statement.
"Registrable Securities" means the shares of ERI Common Stock issued
pursuant to the Merger Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Underwritten Public Offering" means a public offering of Common Stock
for cash which is offered and sold in a registered transaction pursuant to an
agreement between ERI and one or more underwriters.
SECTION 2. REGISTRATION RIGHTS. (a) SELLING SHAREHOLDER REGISTRATION. As
soon as reasonably practicable following the end of the Lock-Up Period and
the request of a Majority in Interest, ERI shall use its best efforts to file
a Registration Statement on Form S-3 which registers all or any part of the
Registrable Securities outstanding and then held by all Shareholders. The
Shareholders shall be entitled to demand registration under this Section 2(a)
only on one occasion. Upon receipt of notice of such demand (and, as
applicable, a determination that the proposed offering may reasonably meet
such minimum criteria), ERI agrees to:
(i) promptly give written notice of the proposed registration to all
other Shareholders; and
(ii) use its best efforts to effect, as soon as practicable, such
registration (including, without limitation, the execution of an undertaking
to file post-effective amendments, appropriate qualifications under the
applicable blue sky or other state securities laws and appropriate compliance
with exemptive regulations issued under the Securities Act and any other
governmental requirements or
<PAGE>
regulations) as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such requesting Shareholders'
Registrable Securities as is specified in the request by the Shareholder to
ERI, together with all or such portion of the Registrable Securities of any
other Shareholders joining in such request as is specified in further
requests received by ERI within thirty (30) days after such written notice is
given.
(b) CERTIFICATES. Notwithstanding anything to the contrary herein, ERI
shall not be obligated to effect any registration contemplated herein unless
the Shareholders provide ERI with such certificates and indemnification as it
may reasonably requested to the effect that the Shareholders' registration
and sale of the Registrable Securities will be made in compliance with
applicable federal and state securities laws.
(c) PIGGYBACK REGISTRATION. If, after the end of the Lock-up Period,
the Shareholders shall not have exercised their rights under Section 2(a) and
ERI shall register any shares of Common Stock, other than pursuant to Section
2(a) or pursuant to a registration statement on Form S-4 or S-8 (or similar
form), it shall promptly give to each Shareholder written notice thereof
(which shall include, to the extent available, a list of the jurisdictions in
which ERI intends to attempt to qualify the offer and sale of such securities
under the applicable blue sky or other state securities laws) and shall use
its reasonable efforts to include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
Underwritten Public Offering associated therewith, all the Registrable
Securities specified in any written request or requests by any Shareholders
received by ERI within thirty (30) days after such written notice is given,
except as and to the extent that, in the opinion of the managing underwriter
or underwriters (if such method of disposition shall be an Underwritten
Public Offering), such inclusion would result in more than fifty percent
(50%) of the Common Stock proposed to be sold by ERI being excluded from the
offering or would materially adversely affect the marketing of such Common
Stock proposed to be sold (as reasonably determined by managing underwriters).
(d) REGISTRATION EXPENSES. All expenses of any registrations permitted
pursuant to this Agreement and of all other offerings by ERI (including, but
not limited to, the expenses of any interim audit required by any
underwriters in the event of an offering requested pursuant to Section 2(a)
or 2(c) hereof, any qualifications under the blue sky or other state
securities laws, compliance with governmental requirements of preparing and
filing any post-effective amendments required for the lawful distribution of
any securities to the public in connection with registration, of supplying
prospectuses, offering circular or other documents but excluding fees of any
special counsel retained by the Shareholders and underwriting fees and
discounts and selling commissions applicable to the sale of the Registrable
Securities) will be paid by ERI.
(e) REGISTRATION PROCEDURES. In the case of such registration,
qualification or compliance effected by ERI pursuant to this Agreement in which
any Shareholder's Registrable Securities are included pursuant to this
Agreement, ERI will, at its expense:
(i) prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become and remain effective for such period as
may be reasonably necessary to effect the sale of the Registrable Securities,
not to exceed nine (9) months;
(ii) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such
period as may be reasonably necessary to effect the sale of such Registrable
Securities, not to exceed nine (9) months;
(iii) furnish to the Shareholders participating in such
registration and to the underwriters of Registrable Securities being
registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such
underwriters may reasonably request in order to facilitate the public
offering of such Registrable Securities;
(iv) use its diligent good faith efforts to register or qualify
the Registrable Securities covered by such registration statement under such
state securities or blue sky laws of such jurisdictions as such participating
Shareholders may reasonably request in writing within twenty (20) days
following the original filing of such registration statement; provided,
however, that in the case of an Underwritten Public Offering, the managing
underwriter or underwriters shall advise ERI with respect to blue sky
qualification and related matters;
<PAGE>
(v) notify counsel for the Shareholders participating in such
registration, promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(vi) notify counsel for such Shareholders promptly of any request
by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(vii) prepare and file with the Commission, promptly upon the
request of any Shareholders, any amendments or supplements to such
registration statement or prospectus which, in the opinion of counsel for
such Shareholders (and concurred in by counsel for ERI), is required under
the Securities Act or the rules and regulations thereunder in connection with
the distribution of the Common Stock other than an amendment or supplement
required solely as a result of a change by such Shareholder in the method of
distribution of the Registrable Securities.
(viii) prepare and promptly file with the Commission and promptly
notify counsel for such Shareholders of the filing of such amendment or
supplement to such registration statement or prospectus as may be necessary
to correct any statements or omissions if, at the time when a prospectus
relating to such Registrable Securities is required to be delivered under the
Securities Act, any event other than a change in the method of distribution
of the Registrable Securities selected by the Shareholders shall have
occurred as the result of which any such prospectus or any other prospectus
as then in effect would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading.
(f) RELATED REGISTRATION MATTERS. If the Shareholders secure an
underwriter, ERI will enter into an underwriting agreement in connection with
any registration subject to the provisions of Section 2(a) in which any
Registrable Securities are included, which agreement shall be reasonably
acceptable to ERI and contain such terms, provisions and agreements which are
customary and appropriate for such registration. In connection with any
Underwritten Public Offering in which any Registrable Securities are included,
to the extent not provided in the underwriting agreement related to such
offering, ERI shall use its reasonable efforts to:
(i) list the shares of Common Stock included in such offering on
any national securities exchange on which the Common Stock has previously
been approved for listing;
(ii) engage a bank or other company to act as transfer agent and
registrar for the Common Stock, unless ERI has already engaged a transfer
agent and registrar;
(iii) cause customary opinions of counsel, comfort letters of
accountants and other appropriate documents to be delivered by
representatives of ERI; and
(iv) as soon as practicable after the effective date of the
registration statement, and, in any event, within sixteen (16) months
thereafter, make "generally available to its securities holders" (within the
meaning of Rule 158 under the Securities Act) an earnings statement (which
need not be audited) complying with Section 11(a) of the Securities Act and
covering a period of at least twelve (12) consecutive months beginning after
the effective date of the registration statement.
(g) INFORMATION BY SHAREHOLDERS. Each Shareholder requesting to be
included in any registration shall furnish to ERI such information regarding
such Shareholder and the distribution proposed by such Shareholder as ERI may
reasonably require in connection with any registration, qualification or
compliance referred to in Section 2.
(h) ASSIGNMENT. The rights to cause ERI to register Registrable
Securities under this Section 2 are personal and may not be assigned.
(i) NOTICE REQUIREMENTS. Any notice from a holder of Registrable
Securities requesting registration of some or all of such Registrable
Securities pursuant to Sections 2(a) and 2(c) shall (A) specify the number of
shares of Registrable Securities intended to be included in such
registration; (B) describe the nature and method of the proposed offering and
sale; (D) include an undertaking to provide all information and materials
concerning such holder and the method of distribution and to take any other
actions reasonably requested by ERI to enable ERI to comply with the
Securities Act, any state securities law and/or the applicable requirements
of the Commission or any state securities commissioner or similar agency or
official.
SECTION 3. IMPLEMENTATION. (a) EFFECT OF SALE. Any Shareholder who
sells all of its Registrable Securities pursuant to the terms of this
Agreement shall cease to have any further rights under this Agreement.
<PAGE>
(b) PRIORITY. Nothing herein shall preclude ERI from granting
registration rights on parity with the registration rights set forth in
Section 2(c) hereof. The parties acknowledge the existence of the
registration rights agreement between ERI and Energy Investors Fund I and
Energy Investors Fund II (dated the date hereof) and that such agreement is
on parity with this Agreement. In the event that a "cutback" is required by
the underwriters as contemplated in Section 2(c) hereof, such cutback will be
pro rata based on the respective parties' ownership of Registrable
Securities (under their respective agreements).
(c) AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended from time to time by an instrument in writing signed by ERI and a
Majority in Interest. Any receipt of benefit of the Shareholders hereunder
may be waived by a Majority in Interest.
(d) ADJUSTMENTS. In the event ERI shall declare a stock split, stock
dividend or other distribution of capital stock in respect of, or issue
capital stock in replacement of or exchange for, any Registrable Securities,
such Registrable Securities shall be subject to this Agreement and the
provisions of this Agreement providing for calculations based on the number
of shares of Registrable Securities shall be adjusted accordingly to account
for the shares issued in respect of the Registrable Securities.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Evergreen Resources, Inc.
By: /s/ Mark S. Sexton
--------------------------------
President
SHAREHOLDERS:
/s/ F. David Graeber
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
<PAGE>
EXHIBIT 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT FOR ACQUISITION OF
LIMITED PARTNERSHIP INTERESTS
BY AND AMONG
ENERGY INVESTORS FUND, L.P.
ENERGY INVESTORS FUND II, L.P.
AND
EVERGREEN RESOURCES, INC.
---------------------------
DATED AS OF AUGUST 14, 1996
---------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
AGREEMENT FOR ACQUISITION OF LIMITED PARTNERSHIP INTERESTS
THIS AGREEMENT FOR ACQUISITION OF LIMITED PARTNERSHIP INTERESTS
("Agreement") is made as of this 14th day of August, 1996, by and between
ENERGY INVESTORS FUND, L.P. and ENERGY INVESTORS FUND II, L.P. (herein
collectively "EIF") and EVERGREEN RESOURCES, INC., (herein called
"Evergreen").
RECITALS:
A. EIF desires to sell and convey to Evergreen and Evergreen desires to
purchase and acquire all of limited partnership interests of EIF in that
certain limited partnership known as PBI Fuels, LP, ("PBIF") all on the terms
and conditions as provided in this Agreement.
NOW THEREFORE, Evergreen and EIF agree to that exchange and transfer on
the following terms and conditions:
ARTICLE I
DEFINITIONS
As used in this Agreement the following terms shall have the following
respective meanings:
1.1. "Action" shall mean any actual or threatened action, suit,
arbitration, inquiry, proceeding or investigation by or before any court,
governmental or other regulatory or administrative agency or commission.
1.2. "Interests" shall mean all of EIF's limited partnership interests
and all right, title and interest related thereto in PBIF, being not less
than 50% of the limited partnership interests in PBIF.
1.3. "Cash Consideration" means the payment by EIF to Evergreen of Two
Hundred Thousand Dollars ($200,000).
1.4. "Closing" shall mean the consummation of the transactions
contemplated by this Agreement.
1.5. "Effective Date" means 7:00 a.m. Mountain time on August 1, 1996.
1.6. "Material Adverse Effect" means a quantifiable material diminution
in the value of the assets or business of PBIF or Evergreen (as applicable)
which, when taken as a whole, results in or is reasonably expected to result
in an adverse change to the financial condition of PBIF or Evergreen or their
assets, as applicable, and which will have a financial impact on PBIF of
$10,000 or more, and on Evergreen of $100,000 or more.
1.7. "Claims" means demands, claims, actions, causes of action,
judgments, assessments, losses, liabilities, damages, and costs (including
reasonable attorney's fees and all other litigation expenses), whether known
or unknown (as of the date hereof), asserted or unasserted (as of the date
hereof), founded in contract or tort, and whether statutory or common-law.
1.8. "Losses" means demands, claims, causes of action, judgments,
assessments, fines, damages penalties, losses, liabilities, and reasonable
costs and attorneys' fees.
1.9. "Evergreen Common Stock" means the common stock of Evergreen, no
par value per share.
1.10. "Evergreen Shares" means the Evergreen Common Stock to be
transferred to EIF in accordance with Section 2.1, below.
<PAGE>
ARTICLE II
ACQUISITION OF THE INTERESTS
2.1 CONVEYANCE. EIF agrees to transfer to Evergreen on the Closing Date
(as hereinafter defined) the Interests and the Cash Consideration in exchange
for an aggregate of 1,018,868 of the Evergreen Shares, to be transferred at
the Closing, to be distributed to the parties comprising EIF in accordance
with the amounts specified on EXHIBIT A.
2.2 DELIVERY OF INTERESTS BY EIF. The transfer of the Interests by EIF
shall be effected by the delivery to Evergreen at the Closing of an
Assignment and Conveyance of Limited Partnership Interests in the form
attached hereto as EXHIBIT B.
2.3 FURTHER ASSURANCES. At the Closing and from time to time
thereafter, EIF shall execute such additional instruments and take such other
action as Evergreen may request to transfer and assign the transferred
Interests and to confirm Evergreen's title thereto.
2.4 REGISTRATION. At Closing, the parties hereto shall enter into a
Registration Rights Agreement substantially in the form attached hereto as
Exhibit D.
2.5 CHANGES IN EVERGREEN'S CAPITALIZATION. If between the date of this
Agreement and the Closing, the outstanding shares of Evergreen Common Stock
are increased, changed into or exchanged for a different number or kind of
shares or securities of Evergreen through reorganization, reclassification,
stock dividend, stock split, reverse stock split or similar change in
Evergreen's capitalization, Evergreen will issue and deliver at Closing, in
addition to or in lieu of the Evergreen Shares specified in Section 2.1,
voting stock of Evergreen in equitably adjusted amounts ("Adjusted Shares").
2.6 NONASSIGNABILITY OF SHARES. Neither the right to receive the
Evergreen Shares, nor any interest therein shall be assignable by EIF except
by a will or operation of law until delivered to EIF under Section 2.1. Until
the deliveries under Section 2.1, above, this Agreement shall extend to the
heirs of any EIF hereunder.
ARTICLE III
REPRESENTATIONS OF EIF
EIF hereby represents and warrants to Evergreen that as of the date
hereof and the Closing Date the following:
3.1 ORGANIZATION, GOOD STANDING AND POWER. Each of Energy Investors
Fund, L.P. and Energy Investors Fund II, L.P. is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to carry on its
business as it has been and is now being conducted, and to own the Interests.
3.2 LIMITED PARTNERSHIP INTERESTS. The Interests represent not less
than 50% of all of the limited partnership interests in PBIF and to the best
knowledge of EIF, without any independent duty of investigation, the only
other general and/or limited partnership interests of PBIF are owned by
Powerbridge Inc. There are no outstanding rights (contingent or otherwise) to
purchase or acquire the Interests and no issuance of any of the foregoing to
any specific person or entity, or class of persons or entities is authorized.
There are no restrictions applicable to the Interests which would affect the
transactions contemplated herein, except for the restriction contained in the
Limited Partnership Agreement of PBIF, dated as of April 30, 1993, as
amended, requiring certain consents of partners of PBIF as to the transfer of
partnership interests, which have been obtained.
3.3 AUTHORIZATION. EIF has all necessary power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate and perform the transactions contemplated hereby. Assuming
Evergreen's due execution and delivery of this Agreement, and EIF's receipt
of the consideration provided for herein, this Agreement and each instrument
required hereby
<PAGE>
to be executed and delivered by EIF will constitute the legal, valid and
binding obligation of EIF, enforceable against EIF in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, liquidation, probate, conservatorship and other similar laws
(including court decisions) now or hereafter in effect and affecting the
rights of creditors generally and by general principles of equity (regardless
of whether such validity or enforceability is considered in a proceeding in
equity or at law).
3.4 NO VIOLATION. Neither the execution and delivery of this Agreement
by EIF, the consummation of the transactions contemplated hereby nor
compliance by EIF with any provisions hereof will: (a) conflict with or
result in any breach of the Certificates of Limited Partnership or Agreements
of Limited Partnership of EIF, as amended to date; (b) result in a violation
or breach of any term of, or constitute (with or without due notice or lapse
of time or both) a default (or acceleration) under any of the terms,
conditions or provisions of any note, contract, agreement, commitment, bond,
mortgage, indenture, license, pledge, lease, agreement or other instrument or
obligation to which EIF is a party; or (c) violate any law, regulation,
judgment, order, writ, injunction or decree applicable to EIF.
3.5 LITIGATION. Except as disclosed on EXHIBIT C, EIF has not received
service of process or any other written or oral notice with respect to any
litigation, arbitration, governmental investigation or other proceeding
pending, threatened, or as yet unasserted (but required to be disclosed
according to STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 5) against EIF
or PBIF or the transactions contemplated by this Agreement, which, if
determined adversely to either EIF or PBIF would have a Material Adverse
Effect. EIF is not a party to, or, to the best of EIF's knowledge, after due
inquiry, subject to the provisions of, any judgment, order, writ, injunction,
or decree of any court or of any governmental official, agency or
instrumentality which would have a Material Adverse Effect.
3.6 CONSENT. No consent, approval, order or authorization of, or
registration, qualification, or filing with any United States or other
governmental authority, or any other person is required on the part of EIF in
connection with the consummation of the transactions contemplated by this
Agreement, except for such consents as have been obtained by EIF.
3.7 FULL DISCLOSURE. No representation or warranty by EIF in this
Agreement, or otherwise made in writing in connection with the negotiation,
execution, or performance of this Agreement, or in any document to be
delivered to Evergreen or its attorneys by EIF, to Evergreen or its attorneys
in connection the negotiation, execution, or performance of this Agreement,
and no written statement by EIF furnished or to be furnished to Evergreen
pursuant to this Agreement contains any untrue statement of a material fact,
or omits, or will omit, as of Closing, any material fact necessary to make
any statement herein or therein not materially misleading.
3.8 BROKERS. EIF has not (directly or indirectly) entered into any
agreement with any person, firm or corporation for payment of any commission,
brokerage or "finders fee" in connection with the transactions contemplated
herein.
3.9 INTERESTS AND WARRANTY OF TITLE. As of the Closing Date, EIF shall
warrant and forever defend the title to the Interests against all persons
claiming any right title or interest therein by, through or under EIF, but
not otherwise. Further, EIF represents that it shall have, at Closing, good
title in and to the Interests, free and clear of all mortgages, pledges,
security agreements, security interests, liens, adverse claims and other
encumbrances ("Liens").
3.10 SECURITIES MATTERS.
3.10.1 EIF UNDERSTANDS THAT THE EVERGREEN SHARES WILL NOT BE
REGISTERED BY EVERGREEN UNDER THE FEDERAL SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SUCH LAWS, INCLUDING WITHOUT LIMITATION, THOSE PROVIDED BY SECTION
4(2) OF THE ACT, WHICH EXEMPTIONS
<PAGE>
DEPEND UPON, AMONG OTHER THINGS, THE BONA FIDE NATURE OF THE
INVESTMENT INTENT OF EIF AS EXPRESSED HEREIN. EIF FURTHER
UNDERSTANDS THAT NO STATE OR FEDERAL GOVERNMENTAL ENTITY HAS
REVIEWED OR APPROVED THE TRANSFER OF THE EVERGREEN SHARES TO EIF
OR THE FORMATION OR OPERATIONS OF EVERGREEN.
3.10.2 EIF is acquiring the Evergreen Shares for its own account for
investment purposes only and not with a view to, or for resale in
connection with, any distribution thereof or the grant of any
participation therein.
3.10.3 EIF understands that its acquisition of the Evergreen Shares is
highly speculative and involves a high degree of risk.
3.10.4 EIF is an accredited investor as defined in Rule 501 of Regulation D
promulgated under the Act.
3.11 IMPORTANCE OF REPRESENTATIONS AND WARRANTIES. EIF acknowledges
that its representations and warranties contained herein are a prerequisite
to and part of the consideration given to Evergreen for Evergreen's agreement
to enter this Agreement, complete the transactions contemplated herein and
assume the obligations provided for herein. EIF acknowledges that Evergreen
is relying on all representations and warranties of EIF made herein in
deciding to enter this Agreement and that the representations and warranties
of EIF made herein are a material inducement to Evergreen to enter this
Agreement and close the transactions contemplated herein.
ARTICLE IV
REPRESENTATIONS OF EVERGREEN
Evergreen represents and warrants to EIF that:
4.1 ORGANIZATION, STANDING, ETC. OF EVERGREEN. Evergreen is a
corporation duly organized, validly existing and in good standing under the
laws of Colorado and has all requisite corporate power and authority to own,
lease and operate its properties, to carry on its business as now conducted,
to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. No approval of the stockholders of
Evergreen or any class thereof is required in connection herewith.
4.2 SUBSIDIARIES. (a) SCHEDULE 4.2 attached hereto is a complete and
correct list of Evergreen's subsidiaries (corporate or other) (each, a
"Subsidiary" and collectively, the "Subsidiaries")..
(b) Each Subsidiary of Evergreen is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case may be, and has
all requisite corporate or other power and authority to own, lease and
operate its properties ad to carry on its business as now conducted and now
proposed to be conducted. All of the outstanding shares of stock (or
interests, as the case may be) of each Subsidiary of Evergreen have been
validly issued and are fully paid and non-assessable, and all of such shares
owned by Evergreen and/or another Subsidiary of Evergreen, unless stated
otherwise on SCHEDULE 4.2 attached hereto, are so owned of record and
beneficially free of any Lien. All of such outstanding shares of stock (or
interests, as the case may be) have been offered, issued and sold in
compliance with all applicable law.
4.3 QUALIFICATION. Each of Evergreen and its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased or the
nature of the activities conducted makes such qualification or licensing
necessary, except for those jurisdictions in which the character of the
properties owned or leased or the nature of the activities conducted makes
such qualification or licensing unnecessary, and except for those
jurisdictions in which the failure to be so qualified or licensed or to be in
good standing has not resulted in, and could not reasonably be expected to
result in, a Material Adverse Effect.
<PAGE>
4.4 BUSINESS, ETC. Evergreen and its Subsidiaries are engaged in the
business of the exploration for, and acquisition, development, production and
sale of oil and gas, as further described in the periodic filings of
Evergreen file with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended. (the "Periodic
Filings").
4.5 CAPITAL STOCK.
(a) The authorized capital stock of Evergreen consists of 50,000,000
shares of common stock, no par value per share, 5,939,736 shares of which are
validly issued and outstanding as of August 2, 1996, fully paid and
nonassessable, and 25,000,000 shares of preferred stock, par value $1 per
share, 7,500,000 shares of which are validly issued and outstanding as of
August 2, 1996, fully paid and nonassessable. Except as disclosed in the
proxy statement of Evergreen dated July 15, 1996, Evergreen has no knowledge
of any voting trusts, proxies, or other agreements or understandings with
respect to the voting of Evergreen common stock involving holders of more
than 5% of any class of Evergreen equity security. All of the outstanding
shares of capital stock of Evergreen, including all Evergreen Shares to be
issued pursuant to this Agreement will be, when so issued, validly issued,
fully paid and non-assessable and not subject to preemptive rights on the
part of the holders of any securities of Evergreen, and all such shares have
been (or will have been) offered, issued and sold by Evergreen in material
compliance with all applicable laws.
(b) Except as set forth on Schedule 4.5 or in the Periodic Filings or
except as otherwise expressly disclosed in writing to EIF (the "Periodic
Filings, together with the these other documents, which shall include this
Agreement and the purchase agreement between Energy Investors Fund II, L.P.
and Evergreen with respect to the purchase and sale of the Evergreen
preferred stock dated as of December 8, 1994 (the "Preferred Stock Purchase
Agreement"), being hereinafter referred to as the "Disclosure Documents"),
(i) there are no outstanding rights, options, warrants or agreements for the
purchase from, or sale or issuance by, Evergreen or any Subsidiary of any
capital stock or equity interests or securities convertible into or
exercisable or exchangeable for such stock or equity interests; (ii) there
are no agreements on the part of Evergreen or any Subsidiary to issue, sell
or distribute any securities or equity interests or any assets of Evergreen
or any Subsidiary; (iii) neither Evergreen nor any Subsidiary has any
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its securities or equity interests or any interest therein or to pay
any dividend or make any distribution in respect thereof; and (iv) no person
is entitled to (A) any preemptive or similar right with respect to the
issuance of any securities or equity interests of Evergreen or any Subsidiary
or (B) any rights with respect to the registration of any securities or
equity interests of Evergreen or any Subsidiary under the Securities Act.
4.6 FINANCIAL STATEMENTS. The financial statements set forth in the
Periodic Filings and any subsequent financial statements furnished to you are
complete and correct in all material respects (as of their purported dates)
(subject, in the case of any unaudited financial statements, to normal
year-end and audit adjustments), have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby and
present fairly in all material respects the financial position and the
results of operations and cash flows of the person(s) purported to be covered
thereby as at the respective dates and for the respective periods indicated
in conformity with GAAP (subject, in the case of any unaudited financial
statements, to normal year-end and audit adjustments).
4.7 CHANGES, SOLVENCY, ETC. Since March 31, 1996, there has been no
material adverse change in the assets, liabilities, business, prospects or
financial condition of Evergreen and its Subsidiaries on a consolidated
basis, except for changes in the ordinary course of business that have not
been, either in any case or in the aggregate, materially adverse, and no
condition or event has occurred that could reasonably be expected to result
in a Material Adverse Effect. Each of Evergreen and its Subsidiaries is
Solvent (as such term is defined in the Preferred Stock Purchase Agreement).
4.8 TAX RETURNS AND PAYMENTS. Evergreen and its Subsidiaries have filed
all tax returns required by law to be filed and have paid all taxes,
assessments and other governmental charges shown to be due on such returns
and/or otherwise levied upon any of their respective properties,
<PAGE>
assets, income, franchises or sales other than those not yet delinquent. The
federal and state income tax liability of Evergreen and its Subsidiaries has
been finally determined by all applicable governmental authorities and
satisfied, or the time for audit has expired, for all fiscal years through
the fiscal year ended March 31, 1991. Neither Evergreen nor any of its
Subsidiaries has executed any waiver or waivers that would have the effect of
extending the applicable statute of limitations in respect of income tax
liabilities. The charges, accruals and reserves in the financial statements
of Evergreen and its Subsidiaries in respect of taxes for all fiscal periods
are adequate in the opinion of Evergreen, and Evergreen knows of no unpaid
assessments for additional taxes for any fiscal period or of any basis
therefor.
4.9 INDEBTEDNESS. Except as set forth in the Disclosure Documents,
since the date of the Preferred Stock Purchase Agreement, Evergreen has not
incurred any debt outside the ordinary course of business in excess of
$100,000.
4.10 TITLE TO PROPERTIES; LIENS; LEASES. Evergreen and its
Subsidiaries have good and marketable title to all of their respective
properties and assets except for such Liens as do not materially impair the
operation of their businesses, viewed in the aggregate. Each of Evergreen and
its Subsidiaries enjoys peaceful and undisturbed possession under all leases
under which it will operate on and after the Closing, and all of such leases
are valid, subsisting and in full force and effect.
4.11 LITIGATION, ETC. Except as set forth on SCHEDULE 4.11 attached
hereto, there is no action, proceeding or investigation pending or threatened
(or any basis therefor known to Evergreen), or any outstanding judgment,
decree or other, related to Evergreen or any of its Subsidiaries or any of
their respective properties or assets, and none of such actions, proceedings,
investigations, judgments, decrees or orders described on such SCHEDULE 4.11
questions the validity of this Agreement or the transactions contemplated
hereby has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
4.12 VALID AND BINDING OBLIGATIONS; COMPLIANCE WITH LAWS; OTHER
INSTRUMENTS, BORROWING RESTRICTIONS, ETC.
(a) This Agreement and other agreements executed by Evergreen in
connection herewith have been duly authorized, executed and delivered by
Evergreen and constitute the valid and legally binding obligations of
Evergreen enforceable against Evergreen in accordance with their respective
terms.
(b) Neither Evergreen nor any of its Subsidiaries is in violation of or
in default under any term of its charter, by-laws or other organizational
document, or of any agreement, document, instrument, judgment, decrees,
order, law, statute, rule or regulation applicable to Evergreen or any of its
Subsidiaries or any of their respective properties and assets in any way
which has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect. Without limiting the generality of the foregoing,
Evergreen and each of its Subsidiaries is in compliance with (and neither
Evergreen, any such Subsidiary, nor any of their respective predecessors in
interest has received any notice to the contrary) and there is no reasonable
possibility of any liability of or any judgment, decree or order binding upon
or applicable to Evergreen or any of its Subsidiaries or any of their
respective properties or assets under or on account of any Environmental Laws
(as defined in the Preferred Stock Purchase Agreement) except where the same
has not resulted in, and could not reasonably be expected to result in, a
Material Adverse Effect.
(c) The execution, delivery and performance of and the consummation of
the transactions contemplated herein will not violate or constitute a default
under, or permit any person to accelerate or to require the prepayment or
repurchase of any indebtedness or security of Evergreen or any of its
Subsidiaries or to terminate any material lease or agreement of Evergreen or
any of its Subsidiaries pursuant to, or result in the creation of any Lien,
other than immaterial Liens, upon any of the properties or assets of
Evergreen or any of its Subsidiaries pursuant to, any term of the charter,
by-laws or other organizational document of Evergreen or any of its
Subsidiaries or of any agreement, document, instrument, judgment, decree,
order, law, statute, rule or regulation applicable to Evergreen or any of its
Subsidiaries or any of such properties and assets.
<PAGE>
(d) Except as set forth in the Disclosure Documents, neither Evergreen
nor any of its Subsidiaries is a party to or bound by or subject to any
charter, by-law or other organizational document, or any agreement, document,
instrument, judgment, decree, order, law, statute, rule or regulation (i)
which restricts its right or ability to issue any security; or (ii) which
restricts its right or ability to pay dividends and/or to make any other
distributions in respect of its capital stock.
4.13 ERISA (The defined terms in this Section 4.13 not otherwise defined
in this Agreement have the same meanings as in the Preferred Stock Purchase
Agreement.)
(a) Each Employee Benefit Plan is in compliance with the applicable
provisions of ERISA and the Code, except for any noncompliance which has not
resulted in, and could not reasonably be expected to result in, a Material
Adverse Effect. No Termination Event has occurred or is reasonably expected
to occur, nor does any condition exist nor has any event occurred that could
result in any Termination Event, which has resulted in or which could
reasonably be expected to result in a Material Adverse Effect. If any
Employee Benefit Plan were terminated, neither Evergreen nor any ERISA
Affiliate would incur any liability which could reasonably be expected to
result in a Material Adverse Effect. No Employee Benefit Plan which is
subject to section 302 of ERISA or section 412 of the Code has incurred any
"accumulated funding deficiency" (as defined in such sections), whether or
not waived, as of the end of the most recent fiscal year of such plan ended
prior to the date hereof. No Employee Benefit Plan provides death or medical
benefits (including insured benefits) to employees beyond their retirement or
other termination of service, except death or medical benefits required by
law or death benefits under a plan qualified under section 401(a) of the Code
or death benefits under a deferred compensation arrangement accrued as
liabilities on the books of Evergreen or any ERISA Affiliate.
(b) Evergreen and its ERISA Affiliates have made all required
contributions to Multiemployer Plans. Neither Evergreen nor any ERISA
Affiliate has incurred, nor would reasonably expect to incur, any Withdrawal
Liability upon a complete or partial withdrawal from any Multiemployer Plan.
To the best of Evergreen's knowledge, no Multiemployer Plan is, or is
reasonably expected to be, insolvent, in reorganization or terminated within
the meaning of Title IV of ERISA.
(c) Neither Evergreen, nor any ERISA Affiliate, nor any person entitled
to indemnification or reimbursement from Evergreen or any ERISA Affiliate,
nor any Employee Benefit Plan nor, to Evergreen's best knowledge, any
Multiemployer Plan, has engaged in any transaction or conduct that could,
directly or indirectly, result in any material liability of Evergreen or any
ERISA Affiliate pursuant to section 409, 502(a)(2), 502(i) or 4069 of ERISA
or section 4971, 4975,4976 or 4980B of the Code.
(d) The consummation of the transactions contemplated by the Operative
Documents will not result in any prohibited transactions described in section
406 of ERISA or section 4975 of the Code for which an exemption is not
available.
4.14. CONSENTS, ETC. No consent, approval or authorization of, or
declaration or filing with, or other action by, any person is required as a
condition precedent to the valid execution, delivery and performance of and
the consummation of the transactions contemplated herein.
4.15. PROPRIETARY RIGHTS; LICENSES. Each of Evergreen and its
Subsidiaries has all proprietary rights and licenses as are adequate in the
opinion of Evergreen for the conduct of their respective businesses as now
conducted and now proposed to be conducted, without any conflict known to it
with the rights of others.
4.16. OFFER OF SECURITIES; INVESTMENT BANKERS, ETC. Neither Evergreen
nor any person acting on its behalf has directly or indirectly offered the
Common Stock issued hereunder (the "Securities") or any similar securities
for issue or sale to, or solicited any offer to buy any of the same from,
anyone other than EIF and Powerbridge Inc. and its shareholders. Neither
Evergreen nor any person acting on its behalf has taken or will take any
action which would bring the issuance and sale of the
<PAGE>
Securities within the provisions of Section 5 of the Securities Act or the
registration or qualification provisions of any applicable blue sky or other
securities laws.
4.17. GOVERNMENT REGULATION. Neither Evergreen nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of
1940, the Investment Advisers Act of 1940, or the Interstate Commerce Act.
4.18. DISCLOSURE. Neither this Agreement nor any other document,
certificate or written statement furnished to EIF by or on behalf of
Evergreen in connection with the transactions contemplated herein, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein not
misleading in the light of the circumstances under which such statements were
made, it being understood that, except as set forth in Section 4.6, no
representation or warranty is made with respect to any projections or other
prospective financial information. There is no fact known to Evergreen which
has resulted in, or could reasonably be expected to result in, a Material
Adverse Effect which has not been set forth in the Disclosure Documents.
4.19. LABOR RELATIONS; SUPPLIERS AND CUSTOMERS. No dispute involving
employees of Evergreen or any of its Subsidiaries or any of the relationships
of Evergreen or any of its Subsidiaries with their respective employees has
resulted in, or could reasonable be expected to result in, a Material Adverse
Effect. The relationships with the suppliers to and customers of Evergreen
and its Subsidiaries are satisfactory commercial working relationships.
4.20. VOTING PROVISIONS. Neither the Articles of Incorporation,
by-laws, other organizational document nor any other agreement binding on
Evergreen or any of its Subsidiaries or the holders of the capital stock of
Evergreen contains any provision requiring a higher voting requirement with
respect to action taken (and/or to be taken) by the Board of Directors of
Evergreen or such holders than that which would apply in the absence of such
provision.
4.21 SECURITIES MATTERS.
4.21.1 EVERGREEN UNDERSTANDS THAT THE INTERESTS WILL NOT BE
REGISTERED BY PBIF OR EIF UNDER THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE, IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SUCH LAWS, INCLUDING WITHOUT LIMITATION, THOSE
PROVIDED BY SECTION 4(2) OF THE ACT, WHICH EXEMPTIONS DEPEND
UPON, AMONG OTHER THINGS, THE BONA FIDE NATURE OF THE INVESTMENT
INTENT OF EVERGREEN AS EXPRESSED HEREIN. EVERGREEN FURTHER
UNDERSTANDS THAT NO STATE OR FEDERAL GOVERNMENTAL ENTITY HAS
REVIEWED OR APPROVED THE TRANSFER OF THE INTERESTS TO EVERGREEN
OR THE FORMATION OR OPERATIONS OF PBIF.
4.21.2 Evergreen is acquiring the Interests for its own account for
investment purposes only and not with a view to, or for resale in
connection with, any distribution thereof or the grant of any
participation therein.
4.21.3 Evergreen understands that its acquisition of the Interests
is highly speculative and involves a high degree of risk.
4.21.4 Evergreen is an accredited investor as defined in Rule 501
of Regulation D promulgated under the Act.
<PAGE>
ARTICLE V
OBLIGATIONS AND COVENANTS PRIOR TO CLOSING
5.1 ACCESS. From the date of this Agreement until Closing, EIF shall
permit Evergreen to have reasonable access to all books, records, documents,
instruments, correspondence, files, geophysical information, contracts, and
other information regarding the Interests in the custody or possession of EIF.
5.2 QUIET PERIOD. From the date of this Agreement until either Closing
or the termination of this Agreement, EIF agree that they shall not
negotiate, either on a solicited or unsolicited basis, directly or
indirectly, with any other person, firm, or entity with regard to the sale,
transfer, exchange or other disposition of the Interests without the prior,
express written consent of Evergreen.
5.3 CLOSING CONDITIONS. Each party shall use its respective best
efforts to satisfy, fulfill or otherwise comply with all of the other party's
conditions precedent to Closing.
ARTICLE VI
EIF'S CONDITIONS FOR CLOSING
EIF's obligation to consummate the transactions provided for herein is
subject to the satisfaction by Evergreen or waiver by EIF of the following
conditions:
6.1 REPRESENTATIONS. The representations and warranties of Evergreen
contained herein shall be true and correct in all material respects on the
Closing Date as though made on and as of that date.
6.2 PERFORMANCE. Evergreen shall have performed in all material
respects the obligations, covenants and agreements hereunder to be performed
by it at or prior to the Closing Date.
6.3 PENDING MATTERS. No suit, action, or other proceeding by a third
party or a governmental authority shall be pending or threatened which seeks
to enjoin the performance of this Agreement or substantial damages from
Evergreen; or which seeks substantial damages from EIF in connection with, or
seeks to restrain, enjoin or otherwise prohibit, the consummation of the
transactions contemplated by this Agreement; or which would otherwise have a
Material Adverse Effect on value of the Evergreen Shares or of the value of
any of the assets of Evergreen.
6.4 CONSENTS TO TRANSFER. All requisite (governmental or otherwise)
consents, waivers, authorizations, and other approvals or authority to
transfer the Interests and the EIF Shares have been obtained.
6.5 CLOSING DOCUMENTS AND RELEASES. As a condition for EIF to Close
hereunder, Evergreen shall have delivered to EIF each of the following
documents in a form reasonably satisfactory to EIF:
(a) A certificate executed by Evergreen certifying to the fulfillment of
the conditions in this Section 6; and
(b) Certificates (dated within thirty (30) days of the Closing Date) from
the secretary of state (or analogous agency) in the applicable state where
Evergreen is organized certifying to the good standing of Evergreen.
ARTICLE VII
EVERGREEN'S CONDITIONS FOR CLOSING
Evergreen's obligation to consummate the transactions provided for
herein is subject to the satisfaction by EIF or the waiver by Evergreen of
the following conditions:
<PAGE>
7.1 REPRESENTATIONS. The representations and warranties of EIF
contained herein shall be true and correct in all material respects on the
Closing Date as though made on and as of that date.
7.2 PERFORMANCE. EIF shall have performed in all material respects the
obligations, covenants and agreements hereunder to be performed by it at or
prior to the Closing Date.
7.3 PENDING MATTERS. No suit, action, or other proceeding by a third
party or a governmental authority shall be pending which seeks substantial
damages from EIF; or which seeks substantial damages from Evergreen in
connection with, or seeks to restrain, enjoin or otherwise prohibit, the
consummation of the transactions contemplated by this Agreement; or which
would otherwise have a Material Adverse Effect on value of the Interests, or
of PBIF or of the value of any of the assets of PBIF, nor shall EIF or PBIF
have received any threats of suit or governmental action by a governmental
authority seeking to enjoin the performance of this Agreement or substantial
damages related to the performance of this Agreement.
7.4 DUE DILIGENCE. It further is expressly understood that Evergreen's
obligation to make the payment on the Closing Date, as provided below, shall
be conditioned upon the due diligence review by Evergreen, satisfactory to
Evergreen in its reasonable judgment, of all matters affecting the Interests,
PBIF, and the assets and liabilities of PBIF, including without limitation,
the following:
(a) Review of title to the Interests to confirm that the
representations and warranties herein are true, with results
satisfactory to Evergreen in Evergreen's reasonable judgment;
(b) Review of all contracts and agreements related to the
Interests;
(c) Review of all other matters and conditions to confirm the
absence of any circumstances, conditions or factors which are
undisclosed in this Agreement and which would have a Material Adverse
Effect on the value of the Interests or of PBIF with results
satisfactory to Evergreen in Evergreen's reasonable judgment.
7.5 CONSENTS TO TRANSFER. All requisite (governmental or otherwise)
consents, waivers, authorizations, and other approvals or authority to
transfer the Interests and the Evergreen Shares have been obtained.
7.6 CLOSING DOCUMENTS AND RELEASES. As a condition for Evergreen to
Close hereunder, EIF shall have delivered to Evergreen each of the following
documents in a form reasonably satisfactory to Evergreen:
(a) A certificate executed by EIF certifying to the fulfillment of the
conditions in this Section 7; and
(b) Certificates (dated within thirty (30) days of the Closing Date) from
the secretary of state (or analogous agency) in the applicable state where
EIF is organized certifying to the good standing of EIF;
<PAGE>
ARTICLE VIII
CLOSING DATE
8.1 TIME AND PLACE OF CLOSING. If the conditions to Closing have been
satisfied or waived, the consummation of the transactions contemplated hereby
(the "Closing") shall be on or before August 15, 1996, at Evergreen's
offices, Denver, Colorado.
8.2 CLOSING OBLIGATIONS. On the Closing Date:
(a) Evergreen shall transfer the Evergreen Shares to EIF in the
amounts specified in Article II; and,
(b) EIF shall deliver to Evergreen the Assignment of Limited
Partnership Interest in the form attached as EXHIBIT B; and the Cash
Consideration, and
(c) Evergreen and EIF shall execute such other instruments and
take such other action as may be necessary to carry out their
respective obligations under this Agreement.
ARTICLE IX
POST-CLOSING DATE OBLIGATIONS
AND INDEMNITIES
9.1 INDEMNIFICATION BY EIF. (a) EIF agrees to indemnify Evergreen
against and hold Evergreen harmless from any and all Claims arising out of or
related to (i) EIF's ownership of the Interests prior to the Effective Date,
(ii) any breach of any warranty or representation contained herein, or (iii)
the failure of EIF to perform any obligation, promise or covenant contained
in this Agreement.
(b) If a Claim is made or asserted against Evergreen, and if Evergreen
is entitled to seek indemnity with respect thereto under this Agreement,
Evergreen shall notify EIF of the claims. EIF shall have twenty (20) days
after receipt of that notice to undertake, conduct and control, through
counsel of its own choosing and at its own expense, the settlement or defense
thereof, and Evergreen shall cooperate with EIF in connection therewith;
provided, however, that EIF shall permit Evergreen to participate in such
settlement or defense through counsel chosen by Evergreen, provided that the
fees and expenses of such counsel shall be borne by Evergreen. So long as EIF
is reasonably contesting any claim in good faith, Evergreen shall not pay or
settle any that claim. Evergreen shall not, without the consent of EIF, enter
into any settlement of a Claim that does not include as an unconditional term
thereof the giving by the person(s) asserting the Claim of an unconditional
release of EIF from all liability with respect to that claim. If EIF does not
notify Evergreen within twenty (20) days after the receipt of Evergreen's
notice of a claim of indemnity hereunder that he elects to undertake the
defense thereof, Evergreen shall have the right to contest, settle or
compromise the claim but shall not thereby waive any right to indemnity
therefor pursuant to this Agreement. EIF shall not, except with the consent
of Evergreen, enter into any settlement that does not include as an
unconditional term thereof the giving by the person or persons asserting the
claim of unconditional release to Evergreen from all liability with respect
to that claim. In the event of any claim by Evergreen against EIF for
indemnity under this paragraph, Evergreen agrees EIF shall have reasonable
access at reasonable times to all files of PBIF, as they exist at the Closing
Date, which are pertinent, in EIF's reasonable judgment, to EIF in the
defense of the Claim for which Evergreen seeks indemnification. In the event
of any claim by Evergreen against EIF which is not for indemnity under this
paragraph, or in the event of any claim by a third party against EIF access
to the files of PBIF shall be in accordance with the applicable rules of
civil procedure and other applicable laws and orders; provided, Evergreen
expressly states that it will not assert an attorney-client privilege
concerning any document contained in the files of PBIF as of the Closing Date.
9.2 INDEMNIFICATION BY EVERGREEN. (a) Evergreen agrees to indemnify EIF
against and hold EIF harmless from any and all Claims arising out of or
related to: (i) Evergreen's ownership of the Interests from and after the
Effective Date; (ii) any breach of representation or warranty of
<PAGE>
Evergreen contained herein, or (iii) the failure of Evergreen to perform any
obligation, promise or covenant contained in this Agreement.
(b) If a Claim is made or asserted against EIF, and if EIF is entitled
to seek indemnity with respect thereto under this Agreement, EIF shall notify
Evergreen of the claims. Evergreen shall have twenty (20) days after receipt
of that notice to undertake, conduct and control, through counsel of its own
choosing and at its own expense, the settlement or defense thereof, and EIF
shall cooperate with Evergreen in connection therewith; provided, however,
that Evergreen shall permit EIF to participate in such settlement or defense
through counsel chosen by EIF, provided that the fees and expenses of such
counsel shall be borne by EIF. So long as Evergreen is reasonably contesting
any claim in good faith, EIF shall not pay or settle that claim. EIF shall
not, without the consent of Evergreen, enter into any settlement of a Claim
that does not include as an unconditional term thereof the giving by the
person(s) asserting the Claim of an unconditional release of Evergreen from
all liability with respect to that claim. If Evergreen does not notify EIF
within twenty (20) days after the receipt of EIF's notice of a claim of
indemnity hereunder that it elects to undertake the defense thereof, EIF
shall have the right to contest, settle or compromise the claim but shall not
thereby waive any right to indemnity therefor pursuant to this Agreement.
Evergreen shall not, except with the consent of EIF, enter into any
settlement that does not include as an unconditional term thereof the giving
by the person or persons asserting the claim of unconditional release to EIF
from all liability with respect to that claim.
9.3 POST-CLOSING CONFIDENTIALITY. Following Closing, EIF agrees keep all
proprietary information regarding the Interests and proprietary information
regarding the business activities of PBIF confidential and to not disclose
any information relating to those matters to any other parties unless (i)
that information is in the public domain, (ii) Evergreen has consented to
that disclosure, or (iii) EIF is required by law or order of court or
governmental agency to disclose that information. This provision shall
survive Closing for two (2) years.
ARTICLE X
TERMINATION
10.1 RIGHT OF TERMINATION. This Agreement and the transactions
contemplated hereby may be terminated at any time at or prior to the Closing
Date:
(a) By Evergreen or EIF, pursuant to the provisions of Article
VI or VII, as applicable;
(b) By mutual consent of the parties;
(c) By either party if the Closing Date shall not have occurred
by August 16, 1996; provided, no party may seek termination under this
paragraph (c) if that party is then in default of any of its
obligations hereunder.
10.2 EFFECT OF TERMINATION. (a) If this Agreement is terminated, for any
reasons stated in 10.1, this Agreement shall become void and of no further
force or 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, such defaulting party shall continue to be liable to the
other party for damages in respect of such default, and such liability shall
not be affected by the termination; and, all indemnities contained herein
shall continue in force.
(b) In the event that either party defaults in its obligation to
close, the aggrieved party, in addition to all other rights or remedies it
may have, may elect to enforce this Agreement by specific performance.
<PAGE>
ARTICLE XI
MISCELLANEOUS
11.1 GOVERNING LAW. This Agreement and all instruments executed in
accordance with it shall be governed by and interpreted in accordance with
the laws of the State of Colorado.
11.2 ENTIRE AGREEMENT. This Agreement (together with the Exhibits
attached hereto which are incorporated in this Agreement by this reference
and together with any other documents executed on the date hereof regarding
the subject matter hereof) constitutes the entire agreement between the
parties and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. No supplement,
amendment, alteration, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the parties hereto.
11.3 WAIVER. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
11.4 CAPTIONS; TERMINOLOGY. 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. The terms
"herein", "hereof", and the like refer to the entire Agreement, not just one
specific paragraph.
11.5 NOTICES. Any notice provided or permitted to be given under this
Agreement shall be in writing, and may be served by personal delivery or by
depositing same in the mail, addressed to the party to be notified at the
address specified in writing by that party, postage prepaid, and registered
or certified with a return receipt requested. Notice deposited in the mail,
as described, shall be deemed to have been given and received on if and when
actually received by the addressee. Each party shall have the right, upon
giving ten (10) days' prior notice to the other in the manner hereinabove
provided, to change its address for purposes of notice.
11.6 EXPENSES. Except as otherwise provided herein, each party shall be
solely responsible for all expenses incurred by it in connection with this
transaction (including, without limitation, fees and expenses of its own
counsel and accountants).
11.7 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any rule or law, all
other conditions and provisions of this Agreement shall nevertheless remain
in full force and effect.
11.8 SURVIVAL. The representations, warranties, indemnities,
covenants and obligations of the parties under this Agreement shall survive
the Closing and the exchange of the Interests and of the Evergreen Shares.
11.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
ENERGY INVESTORS FUND, L.P., ENERGY INVESTORS FUND II, L.P., a
a Delaware limited partnership Delaware limited partnership
By: Energy Investors Management, Inc., By: Energy Investors Management
its Authorized Agent Company, its Authorized Agent
By: /s/ Mark A. Tarini By: /s/ Mark A. Tarini
------------------------- -------------------------
Name: Mark A. Tarini Name: Mark A. Tarini
Title: Managing Director Title: Managing Director
EVERGREEN RESOURCES, INC., a
Colorado corporation
By: /s/ Mark S. Sexton
-------------------------
Name: Mark S. Sexton
Title: President and CEO
<PAGE>
LIST OF EXHIBITS
EXHIBIT A DISTRIBUTION OF EVERGREEN SHARES
EXHIBIT B FORM OF ASSIGNMENT AND CONVEYANCE
EXHIBIT C LITIGATION
EXHIBIT D REGISTRATION RIGHTS AGREEMENT
SCHEDULES
Schedule 4.2 - Subsidiaries
Schedule 4.5 - Capitalization Exceptions
Schedule 4.11 - Litigation
<PAGE>
EXHIBIT A
DISTRIBUTION OF EVERGREEN SHARES
To Energy Investors Fund, L.P.: 294,499 shares
To Energy Investors Fund II, L.P.: 724,369 shares
----------------
TOTAL Share Issuance: 1,018,868 shares
<PAGE>
EXHIBIT B
<PAGE>
EXHIBIT C - LITIGATION
NONE
<PAGE>
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of this ____day of August, 1996 by and between Evergreen Resources, Inc.
("ERI") and Energy Investors Fund I, L.P. and Energy Investors Fund II, L.P.
(each a "Fund," collectively, the "Funds").
WHEREAS the Funds, on the date hereof, have received 1,018,868 of ERI's
no par value common stock, all as contemplated in that certain Agreement for
Acquisition of Limited Partnership Interests dated the date hereof and
entered into between the parties hereto (the "Acquisition Agreement");
WHEREAS ERI desires to grant to the Funds the registration rights set
forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. DEFINITIONS. For purposes of this Agreement, except as
otherwise specifically provided herein, the following capitalized terms (in
their singular and plural forms as applicable) shall have the meanings set
forth below:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Lock-up Period" means the 90 day period following the effectiveness of
the Pending Offering.
"Majority in Interest" means the Funds, their successors and assigns
holding a majority of the then outstanding Registrable Securities, determined
on the basis of the aggregate number of shares of Registrable Securities held
by the Funds.
"Pending Offering" means the secondary offering of securities currently
contemplated by ERI. The Pending Offering shall be deemed terminated if the
initial filing of the registration statement to be filed with the Commission
has not been made by December 31, 1996.
The terms "register," "registered," and "registration" refer to a
registration effected by preparing the filing of a registration statement in
compliance with the Securities Act, and the declaration or order by the
Commission of the effectiveness of such registration statement.
"Registrable Securities" means the shares of ERI Common Stock issued
pursuant to the Acquisition Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Underwritten Public Offering" means a public offering of Common Stock
for cash which is offered and sold in a registered transaction pursuant to an
agreement between ERI and one or more underwriters.
Section 2. REGISTRATION RIGHTS. (a) SELLING SHAREHOLDER REGISTRATION.
After the expiration of the Lock-Up Period and upon the request of a Majority
in Interest, ERI shall use its best efforts to file a Registration Statement
on Form S-3 (or, if Form S-3 is not available, on Form S-1 or Form S-2) which
registers all or at least 30% of the Registrable Securities outstanding and
then held by the
<PAGE>
Funds. The Funds shall be entitled to demand registration under this Section
2(a) on three occasions. Upon receipt of notice of such demand (and, as
applicable, a determination that the proposed offering may reasonably meet
such minimum criteria), ERI agrees to:
(i) promptly give written notice of the proposed registration to the
non-requesting Fund, if any; and
(ii) use its best efforts to effect, as soon as practicable, such
registration (including, without limitation, the execution of an undertaking
to file post-effective amendments, appropriate qualifications under the
applicable blue sky or other state securities laws and appropriate compliance
with exemptive regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
requesting Fund's or Funds' Registrable Securities as is specified in the
request by such Fund to ERI, together with all or such portion of the
Registrable Securities of the non-requesting Fund, if any, joining in such
request as is specified in further requests received by ERI within thirty
(30) days after such written notice is given.
(b) [Reserved]
(c) PIGGYBACK REGISTRATION. If ERI shall register any shares of Common
Stock, other than in connection with the Pending Offering, pursuant to
Section 2(a), or pursuant to a registration statement on Form S-4 or S-8 (or
similar form), it shall promptly give to each Fund written notice thereof
(which shall include, to the extent available, a list of the jurisdictions in
which ERI intends to attempt to qualify the offer and sale of such securities
under the applicable blue sky or other state securities laws) and shall use
its reasonable efforts to include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
Underwritten Public Offering associated therewith, all the Registrable
Securities specified in any written request or requests by either Fund (or
both) received by ERI within thirty (30) days after such written notice is
given, except as and to the extent that, in the opinion of the managing
underwriter or underwriters (if such method of disposition shall be an
Underwritten Public Offering), such inclusion would result in more than fifty
percent (50%) of the Common Stock proposed to be sold by ERI being excluded
from the offering or would materially adversely affect the marketing of such
Common Stock proposed to be sold (as reasonably determined by ERI or its
investment advisors).
(d) REGISTRATION EXPENSES. All expenses of any registrations permitted
pursuant to this Agreement and of all other offerings by ERI (including, but
not limited to, the expenses of any interim audit required by any
underwriters in the event of an offering requested pursuant to Section 2(a)
or 2(c) hereof, any qualifications under the blue sky or other state
securities laws, compliance with governmental requirements of preparing and
filing any post-effective amendments required for the lawful distribution of
any securities to the public in connection with registration, of supplying
prospectuses, offering circular or other documents but excluding fees of any
special counsel retained by the Funds and underwriting fees and discounts and
selling commissions applicable to the sale of the Registrable Securities)
will be paid by ERI.
(e) REGISTRATION PROCEDURES. In the case of such registration,
qualification or compliance effected by ERI pursuant to this Agreement in which
any Fund's Registrable Securities are included pursuant to this Agreement, ERI
will, at its expense:
(i) prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become and remain effective for such period as
may be reasonably necessary to effect the sale of the Registrable Securities,
not to exceed nine (9) months;
(ii) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such
period as may be reasonably necessary to effect the sale of such Registrable
Securities, not to exceed nine (9) months;
(iii) furnish to the Funds participating in such registration and
to the underwriters of Registrable Securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters
may reasonably request in order to facilitate the public offering of such
Registrable Securities;
<PAGE>
(iv) use its diligent good faith efforts to register or qualify
the Registrable Securities covered by such registration statement under such
state securities or blue sky laws of such jurisdictions as such participating
Funds may reasonably request in writing within twenty (20) days following the
original filing of such registration statement; provided, however, that in
the case of an Underwritten Public Offering, the managing underwriter or
underwriters shall advise ERI with respect to blue sky qualification and
related matters;
(v) notify counsel for the Funds participating in such
registration, promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(vi) notify counsel for such Funds promptly of any request by the
Commission for the amending or supplementing of such registration statement
or prospectus or for additional information;
(vii) prepare and file with the Commission, promptly upon the
request of any Funds, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such Funds (and
concurred in by counsel for ERI), is required under the Securities Act or the
rules and regulations thereunder in connection with the distribution of the
Common Stock other than an amendment or supplement required solely as a
result of a change by such Fund in the method of distribution of the
Registrable Securities; and
(viii) prepare and promptly file with the Commission and promptly
notify counsel for such Funds of the filing of such amendment or supplement
to such registration statement or prospectus as may be necessary to correct
any statements or omissions if, at the time when a prospectus relating to
such Registrable Securities is required to be delivered under the Securities
Act, any event other than a change in the method of distribution of the
Registrable Securities selected by the Funds shall have occurred as the
result of which any such prospectus or any other prospectus as then in effect
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.
(f) RELATED REGISTRATION MATTERS. If the Funds secure an underwriter, ERI
will enter into an underwriting agreement in connection with any registration
subject to the provisions of Section 2(a) in which any Registrable Securities
are included, which agreement shall be reasonably acceptable to ERI and contain
such terms, provisions and agreements which are customary and appropriate for
such registration. In connection with any Underwritten Public Offering in which
any Registrable Securities are included, to the extent not provided in the
underwriting agreement related to such offering, ERI shall use its reasonable
efforts to:
(i) list the shares of Common Stock included in such offering on
any national securities exchange on which the Common Stock has previously
been approved for listing;
(ii) engage a bank or other company to act as transfer agent and
registrar for the Common Stock, unless ERI has already engaged a transfer
agent and registrar;
(iii) cause customary opinions of counsel, comfort letters of
accountants and other appropriate documents to be delivered by
representatives of ERI; and
(iv) as soon as practicable after the effective date of the
registration statement, and, in any event, within sixteen (16) months
thereafter, make "generally available to its securities holders" (within the
meaning of Rule 158 under the Securities Act) an earnings statement (which
need not be audited) complying with Section 11(a) of the Securities Act and
covering a period of at least twelve (12) consecutive months beginning after
the effective date of the registration statement.
(g) INFORMATION BY FUNDS. Each Fund requesting to be included in any
registration shall furnish to ERI such information regarding such Fund and
the distribution proposed by such Fund as ERI may reasonably require in
connection with any registration, qualification or compliance referred to in
Section 2.
(h) ASSIGNMENT. The rights to cause ERI to register Registrable
Securities under this Section 2 relate solely to the Funds and may not be
assigned, except that either or both Funds may assign its interests hereunder
to its partners in connection with a distribution to its partners of the
Registrable Securities (it being acknowledged the furhter assignment of the
registration rights referenced herein by such partners is prohibited).
<PAGE>
(i) NOTICE REQUIREMENTS. Any notice from a holder of Registrable
Securities requesting registration of some or all of such Registrable
Securities pursuant to Sections 2(a) and 2(c) shall (A) specify the number of
shares of Registrable Securities intended to be included in such
registration; (B) describe the nature and method of the proposed offering and
sale; (D) include an undertaking to provide all information and materials
concerning such holder and the method of distribution and to take any other
actions reasonably requested by ERI to enable ERI to comply with the
Securities Act, any state securities law and/or the applicable requirements
of the Commission or any state securities commissioner or similar agency or
official.
Section 3. IMPLEMENTATION. (a) EFFECT OF SALE. Any Fund that sells all
of its Registrable Securities pursuant to the terms of this Agreement (or
otherwise) shall cease to have any further rights under this Agreement.
(b) PRIORITY. Nothing herein shall preclude ERI from granting
registration rights on parity with the registration rights set forth in
Section 2(c) hereof. The parties acknowledge the existence of the
registration rights agreement between ERI and the former Powerbridge Inc.
shareholders (dated the date hereof) and that such agreement is on parity
with this Agreement. In the event that a "cutback" is required by the
underwriters as contemplated in Section 2(c) hereof, such cutback will be pro
rata based on the respective parties' ownership of Registrable Securities
(under their respective agreements).
(c) AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended from time to time by an instrument in writing signed by ERI and a
Majority in Interest. Any receipt of benefit of the Funds hereunder may be
waived by a Majority in Interest.
(d) ADJUSTMENTS. In the event ERI shall declare a stock split, stock
dividend or other distribution of capital stock in respect of, or issue
capital stock in replacement of or exchange for, any Registrable Securities,
such Registrable Securities shall be subject to this Agreement and the
provisions of this Agreement providing for calculations based on the number
of shares of Registrable Securities shall be adjusted accordingly to account
for the shares issued in respect of the Registrable Securities.
(e) INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement pursuant to Section 2 hereof:
(i) To the extent permitted by law, ERI will indemnify and hold
harmless each Fund, the partners, officers, agents, employees and managers of
each Fund, any person, if any, who controls such Fund or underwriter within
the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities (joint or several) to which they may become
subject under the Securities Act or the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively, a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by ERI of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any
state securities law; and ERI will reimburse each such Fund, partner,
officer, agent, employee or manager, underwriter or controlling person for
any legal or other expenses reasonably incurred, as incurred, by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this section shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is
effected without the consent of ERI, which consent shall not be unreasonably
withheld, nor shall ERI be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based
upon a Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by any such Fund, underwriter or controlling person.
<PAGE>
(ii) To the extent permitted by law, each selling Fund will
indemnify and hold harmless ERI, each of its officers, directors, agents or
employees, each person, if any, who controls ERI within the meaning of the
Securities Act, any underwriter and any other Fund selling securities in such
registration statement or any of its partners, agents, employees, managers or
officers or any person who controls such Fund, against any losses, claims,
damages or liabilities (joint or several) (to which ERI or any such director,
agent, employee, officer, controlling person, or underwriter, or other such
Fund or manager, officer, partner, agent, employee or controlling person of
such other Fund may become subject, under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following Violations: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation by such Fund of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law (in the cases of
(A) and (B) only to the extent that such Violation occurs in reliance upon
and in conformity with written information furnished by such Fund expressly
for use in connection with such registration, and furthermore a violation of
(i)(A) and (i)(B) above shall not be considered to be a violation of
(ii)(C)); and each such Fund will reimburse any legal or other expenses
reasonably incurred, as incurred, by ERI or any such agent, employee,
director, officer, controlling person, underwriter or other Fund or manager,
officer, partner, agent, employee or controlling person of such other Fund,
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this section shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Fund, which consent shall not be
unreasonably withheld; and provided, further, that each selling Fund shall be
liable under this section for only that amount of losses, claims, damages and
liabilities as does not exceed the proceeds to such selling Fund as a result
of such registration.
(iii) Promptly after receipt by an indemnified party under this
section of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this section,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent that the indemnifying party so desires, jointly with any
other indemnifying party similarly notified, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if, in the opinion of
counsel for the indemnifying party, representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due
to actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable
period of time of the commencement of any such action shall relieve such
indemnifying party of any liability to the indemnified party under this
section to the extent materially prejudicial to its ability to defend such
action, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this section.
(e) REPORTS UNDER THE EXCHANGE ACT. With a view to making available to
the Funds the benefits of Commission Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any
time permit a Fund to sell securities of ERI to the public without
registration or pursuant to a registration on Form S-3, ERI agrees as follows:
(i) to make and keep public information available, as those terms
are understood and defined in Commission Rule 144, at all times while the
Funds hold any securities of ERI;
(ii) to take such action as is necessary to enable the Funds to
utilize Form S-3 for the sale of their Registrable Securities;
(iii) to file with the SEC in a timely manner all reports and
other documents required of ERI under the Securities Act and the Exchange
Act; and
(iv) to furnish to any Fund, so long as the Fund owns any
Registrable Securities, forthwith upon request (i) a written statement by ERI
that it has complied with the reporting
<PAGE>
requirements of Commission Rule 144 (at all times while the Funds hold any
securities of ERI), the Securities Act and the Exchange Act, or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of ERI and such other reports and documents so filed by ERI,
and (iii) such other information as may be reasonably requested in availing
any Fund of any rule or regulation of the SEC that permits the selling of any
such securities without registration or pursuant to such form.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Evergreen Resources, Inc.
By: /s/ Mark S. Sexton
----------------------------------
Mark S. Sexton, President
ENERGY INVESTORS FUND, L.P., Energy Investors Fund II, L.P., a
a Delaware limited partnership Delaware limited partnership
By: Energy Investors Management, By: Energy Investors Management Company,
Inc., its Authorized Agent its Authorized Agent
By: /s/ Mark A. Tarini By: /s/ Mark A. Tarini
--------------------------- -------------------------------
Mark A. Tarini, Mark A. Tarini,
Managing Director Managing Director
<PAGE>
SCHEDULE 4.2 - SUBSIDIARIES
1. Evergreen Operating Corporation
2. Evergreen Resources (UK), Ltd.
3. Primero Gas Marketing Company - 50% Joint Venture
4. Evergreen Raton Properties, Inc.
<PAGE>
SCHEDULE 4.11 - LITIGATION
NONE
<PAGE>
SCHEDULE 4.5 - CAPITALIZATION EXCEPTIONS
NONE
<PAGE>
EXHIBIT 3
August 14, 1996
Evergreen Resources, Inc.
1000 Writer Square
1512 Larimer Street
Denver, Colorado 80202
Gentlemen:
We have reviewed and compiled the estimates, prepared by Evergreen
Resources, Inc. ("Evergreen"), and Resource Services, International, Inc.
(RSII), of the extent and value of the proved reserves of natural gas for
certain interests in properties currently owned and for additional properties
to be acquired by Evergreen as of August 1, 1996. The interests to be
acquired are for properties located in the Spanish Peaks Unit, Raton Basin,
Las Animas, Colorado. All interests to be acquired are for additional
interests in properties which are currently owned by Evergreen. The remaining
properties, which are currently owned by Evergreen, are located in the Rosa
Unit, Rio Arriba, New Mexico. This appraisal presents the value of
Evergreen's interests in these properties with the additional acquired
interests.
Evergreen's estimates of proved reserves, future net revenue, and
present value of net proved reserves summarized in this report are intended
to be submitted to the Securities and Exchange Commission ("SEC"). The
reserve estimates are prepared according to applicable SEC rules and
utilize conventional and generally accepted engineering methods.
Our review of Evergreen's reserve estimates is based upon a study of
Evergreen's properties. During this investigation, we consulted with the
officers and employees of Evergreen and were given access to such accounts,
records, geological and engineering reports, and other data as were desired
for examination. We previously have prepared studies of oil and gas
properties in areas where Evergreen's properties are located. Property
interests currently owned, interests to be acquired, production from such
properties, current prices for production, agreements relating to current and
future operations and sale of production, gas tax credit sales agreements,
and various other information and data were furnished to RSII by Evergreen
and are accepted as factual without independent verification of such facts.
We did not make a field examination of the operations or physical condition
of the appraised properties.
Natural gas reserves included in this report are classified as proved
and are judged to be economically producible in future years from known
reservoirs under existing economic and operating conditions, assuming
continuation of the current regulatory practices, and using conventional
production methods and equipment.
Definitions of proved reserves used in this evaluation are those set
forth in Rule 4-10(a) of Regulation S-X, as adopted by the SEC:
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Evergreen Resources, Inc.
August 14, 1996
Page 2
"PROVED OIL AND GAS RESERVES. Proved oil and gas reserves are the
estimated quantities of crude oil, natural gas, and natural gas liquids
which geological and engineering data demonstrate with reasonable certainty
to be recoverable in future years from known reservoirs under existing
economic and operating conditions, i.e., prices and costs as of the date
the estimate is made. Prices include consideration of changes in existing
prices provided only by contractual arrangements, but not on escalations
based upon future conditions.
"(I) Reserves are considered proved if economic producibility is
supported by either actual production or conclusive formation tests. The
area of a reservoir considered proved includes (A) that portion delineated
by drilling and defined by gas-oil and/or oil-water contacts, if any, and
(B) the immediately adjoining portions not yet drilled, but which can be
reasonably judged as economically productive on the basis of available
geological and engineering data. In the absence of information on fluid
contacts, the lowest known structural occurrence of hydrocarbons controls
the lower proved limit of the reservoir.
"(ii) Reserves which can be produced economically through application
of improved recovery techniques (such as fluid injection) are included in
the 'proved' classification when successful testing by a pilot project, or
the operation of an installed program in the reservoir, provides support
for the engineering analysis on which the project or program was based.
"(iii) Estimates of proved reserves do not include the following: (A)
oil that may become available from known reservoirs but is classified
separately as 'indicated additional reserves'; (B) crude oil, natural gas,
and natural gas liquids, the recovery of which is subject to reasonable
doubt because of uncertainty as to geology, reservoir characteristics, or
economic factors; -C- crude oil, natural gas, and natural gas liquids, that
may occur in undrilled prospects; and (D) crude oil, natural gas, and
natural gas liquids, that may be recovered from oil shales, gilsonite and
other such sources.
"PROVED DEVELOPED OIL AND GAS RESERVES. Proved developed oil and gas
reserves are reserves that can be expected to be recovered through existing
wells with existing equipment and operating methods. Additional oil and gas
expected to be obtained through the application of fluid injection or other
improved recovery techniques for supplementing the natural forces and
mechanisms of primary recovery should be included as 'proved developed
reserves' only after testing by a pilot project or after the operation of
an installed program has confirmed through production response that
increased recovery will be achieved.
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Evergreen Resources, Inc.
August 14, 1996
Page 3
"PROVED UNDEVELOPED OIL AND GAS RESERVES. Proved undeveloped oil and
gas reserves are reserves that are expected to be recovered from new wells
on undrilled acreage, or from existing wells where a relatively major
expenditure is required for recompletion. Reserves on undrilled acreage
shall be limited to those drilling units offsetting productive units that
are reasonably certain of production when drilled. Proved reserves for
other undrilled units can be claimed only where it can be demonstrated with
certainty that there is continuity of production from the existing
productive formation. Under no circumstances should estimates for proved
undeveloped reserves be attributable to any acreage for which an
application of fluid injection or other improved recovery technique is
contemplated unless such techniques have been proved effective by actual
tests in the area and in the same reservoir."
Estimated net proved reserves of natural gas as of August 1, 1996 for
interests which will be owned by Evergreen after the acquisition of the
additional interests are:
Natural Gas, MMCF
Total Proved Developed Producing Reserves
Spanish Peaks Unit 48,276.220
Rosa Unit 4,867.670
Total Proved Developed Non-Producing Reserves
Behind Pipe 3,553.840
Total Proved Developed Non-Producing Reserves 18,570.020
Total Proved Undeveloped Reserves 52,761.070
TOTAL PROVED RESERVES 128,028.820
Natural gas volumes are expressed at standard conditions of temperature
and pressure applicable in the area the gas is purchased.
Value of net proved reserves is expressed in terms of estimated future
net revenue and present value of future net revenue. Future net revenue is
calculated by deducting estimated operating expenses, future development
costs, and severance and ad valorem taxes from the future gross revenue.
Present value of future net revenue is calculated by discounting the
future net revenue at the arbitrary rate of 10 percent per year compounded
monthly over the expected period of realization. Present value, as expressed
herein, should not be construed as fair market value since no consideration
has been given to many factors which influence the prices at which petroleum
properties are traded, such as taxes on operating profits, allowance for
return on the investment, and normal risks incident to the oil business.
Evergreen hedges natural gas prices, and as a result, natural gas prices
included in this appraisal reflect Evergreen's expected prices as of August
1, 1996. Gas prices used in the Raton Basin are based on existing gas sales
contracts. Current average operating costs are used to estimate future costs
required to operate the properties.
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Evergreen Resources, Inc.
August 14, 1996
Page 4
Estimated future net revenue and net present value of future net revenue
from proved natural gas reserves, as of August 1, 1996, for total interests
which will be owned by Evergreen after the acquisition of the additional
reserves are:
10% Disc.
Future Net Future Net
Revenue Revenue
$ $
Total Proved Developed Producing Reserves
Spanish Peaks Unit 56,267,380 25,409,060
Rosa Unit 4,361,545 2,021,099
Total Proved Developed Non-Producing Reserves
Behind Pipe 3,570,826 941,265
Total Proved Developed Non-Producing Reserves 19,766,640 6,855,611
Total Proved Undeveloped Reserves 53,865,040 15,987,290
TOTAL PROVED RESERVES 137,831,431 51,214,325
The production rates presented in this appraisal reflect actual field
and sales conditions which require Evergreen to restrict the production rates
of individual wells. As of August 1, 1996, the gas gathering system which
collects natural gas in the Spanish Peaks Unit is operating at full capacity,
and as a result, well head pressures are higher than required for optimal
production. Further, the high well head pressures restrict flow of water into
the well, lengthening the de-watering period.
All of the appraised interests are for coal gas reserves located in the
Spanish Peaks Unit, Raton Basin, Las Animas Colorado and the Rosa Unit
located in Rio Arriba, New Mexico. Projection of coalbed methane gas reserves
is generally more complicated than projection of conventional hydrocarbon
reservoirs due to complex reservoir properties and the de-watering process
required to develop producible natural gas reservoirs. Therefore, reserve
estimates and gas production rates for coalbed methane wells are modified
frequently as gas and water production data becomes available.
The producing wells in the Spanish Peaks Unit are completed in the
Vermejo and Raton coal intervals. Most of the wells are currently completed
only in the Vermejo interval but contain the Raton Coal section above the
producing Vermejo Coal zone. Gas reserves in the Raton Coal interval in the
currently drilled wells are classified as Proved Developed Non-Producing
(Behind Pipe), due to relatively small expenditures required to complete the
Raton Coal in the existing well bore.
Certain Spanish Peaks Unit wells are candidates for refracturing. The
production rates of these wells are expected to increase to the level
reflected in the projections. These projections are based on high rates
observed after successful refracture operations performed on the Taylor #44-1
and Taylor #12-8 wells.
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Evergreen Resources, Inc.
August 14, 1996
Page 5
The estimates of reserves, future net revenue, and net present value are
determined according to our understanding of applicable regulations of the
Securities and Exchange Commission. These estimates have not been filed with
any other federal authority or agency.
Resource Services International, Inc. and its principals are unrelated
to Evergreen, its officers, shareholders, and properties evaluated in this
report. We do not own a direct or indirect financial interest in Evergreen or
its properties.
Submitted,
RESOURCE SERVICES INTERNATIONAL, INC.
