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EXHIBIT 10.23
PURCHASE AND SALE AGREEMENT
BETWEEN
ENERGY PARTNERS, LTD.
A DELAWARE CORPORATION
AND
VASTAR RESOURCES, INC.
A DELAWARE CORPORATION
EFFECTIVE
JANUARY 1, 2000
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made this 20th day of April,
2000, between ENERGY PARTNERS, LTD., a Delaware corporation, whose address is
201 St. Charles Avenue, Suite 3400, New Orleans, Louisiana 70170 ("Seller") and
VASTAR RESOURCES, INC., a Delaware corporation, whose address is 15375 Memorial
Drive, Houston, Texas 77079 ("Purchaser"). As utilized herein, the term "Party"
means Seller or Purchaser, and the term "Parties" means Seller and Purchaser.
RECITALS
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller on the terms and conditions set forth in this Agreement
certain oil and gas interests, properties and related rights.
NOW, THEREFORE, for good and valuable consideration and the covenants and
agreements contained herein, Seller and Purchaser agree as follows:
I.
PURCHASE AND SALE
1.1 EFFECTIVE DATE AND ASSETS AND DISCLAIMER OF REPRESENTATIONS AND
WARRANTIES: Subject to the terms and conditions of this Agreement,
Seller shall sell and Purchaser shall purchase and pay for at Closing
(as defined herein), effective as of 7:00 a.m. C.S.T. on January 1,
2000 (as the context may require, such time on such date is sometimes
referred to herein as the "Effective Date"), ON AN "AS IS, WHERE IS,
WITH ALL FAULTS" BASIS, WITHOUT ANY REPRESENTATION OR WARRANTY OF
TITLE, EXCEPT AS SET FORTH IN SECTION 1.4, WHATSOEVER, EITHER EXPRESS
OR IMPLIED, EVEN FOR THE RETURN OF THE PURCHASE PRICE, AND WITHOUT ANY
OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY
OF TITLE, FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, OR FREEDOM
FROM HIDDEN VICES OR DEFECTS OF THE MATERIAL, EQUIPMENT OR FACILITIES
CONVEYED, AND WITHOUT WARRANTY OF ANY KIND OR NATURE WHATSOEVER, the
following:
An undivided fifty percent (50%) of Seller's right, title and interest
in and to:
(a) The oil, gas and mineral leases described on Exhibit "A"
attached hereto, including any and all record title, operating
rights, leasehold interests, oil and gas leasehold estates,
royalties, overriding royalties and other mineral rights and
mineral interests, including, but not limited to those set
forth in Exhibit "A" attached hereto and made a part hereof,
whether or not specifically described on said exhibit,
together with all of Seller's rights with respect to any
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pooled, communitized, or unitized acreage of which any such
interest is a part ("Leasehold Property");
(b) All of the real, personal and mixed property of Seller, or in
which Seller owns an interest, that is attributable or
allocable to the Leasehold Property and used or held for use
in connection with the exploration, development, operation or
maintenance of any of the Leasehold Property or the
production, treatment, measurement, storage, gathering,
transportation or marketing of oil, gas or other hydrocarbons
attributable to the Leasehold Property (or the interests of
others therein), including, without limitation: (i) all wells,
platforms, equipment and facilities that, as of the Effective
Date, were used or held for use in connection with the
exploration, development, operation or maintenance of any
Leasehold Property or the production, treatment, measurement,
storage, gathering, transportation or marketing of oil, gas or
other hydrocarbons attributable to the Leasehold Property,
including, without limitation, the wells described in Exhibit
"A," any other wells (including saltwater disposal wells, if
any), well equipment, casing, tanks, gas separation and field
processing units, portable and permanent well test equipment,
buildings, tubing, pumps, motors, fixtures, machinery,
materials, supplies, inventory, telephone and communication
equipment, computing equipment and other equipment, pipelines,
gathering systems, power lines, telephone and telegraph lines,
vehicles, gas processing plants and other property used in the
operation thereof; (ii) all oil and gas and other hydrocarbons
produced on or after the Effective Date; and (iii) all other
rights, privileges, benefits, powers, tenements, hereditaments
and appurtenances conferred upon Seller or the owner and
holder of the Leasehold Property, including, without
limitation, all rights, privileges, benefits and powers of
Seller with respect to the use and occupation of the surface
of, and subsurface depths under, the land covered by each
Leasehold Property, which may be necessary, convenient or
incidental to the possession and enjoyment of such Leasehold
Property (the "Other Property");
(c) Any easements, rights of way, permits, licenses, surface
leases, use agreements, and servitudes to the extent
assignable, applicable or used in connection with operation of
the Leasehold Property, including, but not limited to, those
listed on Exhibit "B" together with all of Seller's rights and
interests in and to all units, pooling and unitization
agreements, operating agreements, farmin or farmout
agreements, seismic or geophysical agreements, platform use
agreements, processing agreements, production handling
agreements, gas balancing agreements, gas sales contracts and
other agreements and instruments to the extent that they
directly relate to or are associated with the exploration for,
or the development, production, storage, gathering, treatment,
transportation, processing, sale or disposal of, oil, gas,
other hydrocarbons, other minerals, water, brine or other
substances from any Leasehold Property or any units of which
they are a part; except any insurance contracts or bonds held
by Seller or its parent, subsidiary or affiliated corporations
for Seller's benefit and any employment, consulting, office
lease or accounting service contracts (the "Contracts"); and
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(d) All other miscellaneous interests or other assets on or used
in connection with the Leasehold Property, including copies of
all files, records, data, information and documentation of
Seller at the expense of Purchaser pertaining to or evidencing
Seller's use, ownership or operation of any of the Assets (as
such term is hereinafter defined), or the maintenance or
operation thereof, or to any units in which any of the
Leasehold Property may be included or to the producing,
treating, measuring, processing, storing, gathering,
transporting or marketing of oil and gas attributable to the
Leasehold Property or such units and water, brine or other
minerals and products produced in association therewith,
including, without limitation, platform records, lease files,
land files, well files and logs, production sales agreement
files, division order files, title opinions and abstracts,
legal records, tax records, financial and accounting records,
governmental, regulatory filings and permits, environmental
records, geological and geophysical data (proprietary or
speculative), seismic records, production reports,
interpretive maps, contour maps, isopach maps, other maps and
computer software, but excluding data or information: (i)
prohibited by third party agreement from being transferred;
(ii) covered by attorney-client privilege; (iii) which is
proprietary or trade secret records, including, without
limitation, such records stored on any medium; or (iv)
reflecting the consideration paid for the Assets
(collectively, the "Records"). THIS AGREEMENT BY SELLER TO
CONVEY COPIES OF THE AFOREMENTIONED RECORDS IS GRANTED BY
SELLER TO THE EXTENT THAT SELLER HAS AUTHORITY TO DO SO
WITHOUT VIOLATING ANY CONFIDENTIALITY OBLIGATIONS TO A THIRD
PERSON, IS MADE WITHOUT WARRANTY AS TO THE ACCURACY OR
COMPLETENESS OF THE INFORMATION DELIVERED (PROVIDED, HOWEVER,
THAT SELLER WARRANTS THAT IT SHALL DELIVER TO PURCHASER COPIES
OF ALL AFORE-DESCRIBED RECORDS IN ITS POSSESSION WHICH IT HAS
THE AUTHORITY TO DELIVER), AND ALL COPIES MADE OF SUCH
RECORDS SHALL BE AT PURCHASER'S SOLE EXPENSE.
The Leasehold Property, Other Property, Contracts and Records are
hereinafter collectively referred to as the "Subject Property." Said
fifty percent (50%) of Seller's right, title and interest in the
foregoing rights, interests and properties, excluding the Excluded
Assets, as such term is hereinafter defined, and the agreements
contemplated therein, are hereinafter collectively referred to as the
"Assets."
It is specifically agreed that Seller is not selling and Purchaser is
not purchasing the following assets ("Excluded Assets"):
(i) Those interests in pipelines, facilities, contract
rights and surface access agreements that are
identified on Exhibit "C";
(ii) any right to use Seller's name, marks or insignia, or
to use the name of any other subsidiary of Seller and
all of Seller's intellectual property, including, but
not limited to patents, trade secrets, copyrights,
trade marks and service marks;
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(iii) all amounts due or payable to Seller as adjustments
or refunds under any contracts affecting the Assets
for all periods of time prior to the Effective Date,
specifically including, without limitation, amounts
recoverable from audits under operating agreements;
(iv) all rights, titles, claims and interests of Seller or
its affiliates, which accrued prior to the Effective
Date, to or under any policy or agreement of
insurance or indemnity, any bond or to any insurance
proceeds or awards or under any employment,
consulting, office lease or accounting service
contract;
(v) all claims and choose in action of Seller arising
from acts, omissions or events, or damages to or
destruction of property, occurring prior to the
Effective Date;
(vi) all proceeds, benefits, refunds, settlement, income
or revenue accruing and attributable to the Assets
prior to the Effective Date, and any claims of Seller
for refunds of or losses carried forward with respect
to taxes attributable to the Assets for any period
prior to the Effective Date;
(vii) Seller's remaining fifty percent (50%) undivided
interest in the Subject Property; and
(vii) the overriding royalty interest described in Section
2.6, below.
1.2 CLOSING: If the conditions referred to in Article VII of this Agreement
have been satisfied or waived and the items described in Article VIII
of this Agreement are delivered by the Parties, then the transactions
contemplated by this Agreement shall occur ("Closing") at or before
10:00 a.m. on or before April 20, 2000 ("Closing Date"), at Seller's
office located at Suite 3400, 201 St. Charles Avenue, New Orleans,
Louisiana 70170, or at such other place, date and time as may be
mutually agreed upon by the Parties.
1.3 ASSUMPTION OF OBLIGATIONS: From and after the Effective Date, except
for those matters specifically retained by Seller in this Agreement and
those matters set forth on Exhibit "D", for which Seller retains
liability ("Retained Matters"), Purchaser shall personally assume, pay
for, discharge, be responsible for, perform and comply with all duties,
liabilities and obligations of Seller, express or implied, Accruing (as
such term is hereinafter defined) after the Effective Date (provided,
however, that the assumption by Purchaser in this Section 1.3 shall be
limited solely to the extent of the undivided ownership interest sold
and transferred in the Subject Property to Purchaser pursuant to this
Agreement, and that nothing contained herein shall release Seller from
its obligations with respect to the undivided interest in the Subject
Property not sold hereby):
(a) arising from (i) the Union PSA; and (ii) the Shell PSA, as
specifically described on Exhibit "G";
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(b) arising from or by virtue of the contracts, agreements and
documents specifically described on Exhibit "E";
(c) arising under any permit, statute, rule, regulation or order
of any governmental authority with jurisdiction over the
Assets; and
(d) all Assumed Liabilities (as such term is hereinafter defined).
For purposes of this Section 1.3, the following terms shall have the
following respective definitions:
"ASSUMED LIABILITIES" means all General Liabilities, Purchaser's
Plugging and Abandonment Obligations, and other liabilities and
obligations assumed by Purchaser under the terms of this Agreement.
"GENERAL LIABILITIES" means all obligations, duties, losses,
liabilities, claims, fines, expenses, damages, costs (including
attorneys fees and expenses) or penalties created by, related to, or
arising out of ownership or operation of the Assets, any contractual
relationship, or any applicable law, order, rule, regulation, judgment
or decree of any federal, state, county or municipal governing
authority having jurisdiction over the Assets or the Parties, whether
Accruing on or after the Effective Date and attributable in whole to
actions, events or conditions existing or occurring on or after the
Effective Date; provided, however, Purchaser's responsibilities for
General Liabilities shall exclude those obligations, duties or
liabilities for the payment of royalties, overriding royalties and
taxes which Accrued prior to the Effective Date and Retained Matters.
"ACCRUING" or "ACCRUED" means, with respect to any obligation, duty,
loss, liability, claim, fine, expense, damage, cost or penalty, the
occurring or happening of any event which causes such obligation, duty,
loss, liability, claim, fine, expense, damage, cost or penalty to
become demandable, requirable, assertible, enforceable, due and owing,
incurred or occurring, as the case may be.
"PURCHASER'S PLUGGING AND ABANDONMENT OBLIGATIONS" means, to the extent
of the Purchaser's proportionate share of ownership of the Leasehold
Property, Purchaser shall be responsible for the proper plugging and
abandonment of all wells, platforms, lines, structures and equipment
now located on or hereafter drilled on the Assets, and any surface
restoration or environmental clean-up associated therewith.
1.4 TITLE: Seller and Purchaser recognize and acknowledge that the Assets
are part of the properties acquired by Seller from: (i) Shell Offshore
Inc., Shell Oil & Gas Investment Limited Partnership, Shell
Consolidated Energy Resources Inc., and Shell Frontier Oil & Gas Inc.
pursuant to the Shell PSA (as such term is defined in Exhibit "G"); and
(ii) Union Oil Company of California pursuant to the Union PSA (as such
term is defined in Exhibit "G"). Seller will convey the Assets to
Purchaser without warranty of title, express, statutory or implied,
EXCEPT that Seller specifically: (i) warrants and agrees to defend
Purchaser's title to the Assets against any and all lawful claims and
demands of every person claiming an interest (including an encumbrance)
in the Assets by,
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through and under Seller but not otherwise; and with full substitution
and subrogation to all rights and actions of warranty against all
former owners and vendors; and (ii) warrants, binds and obligates
itself, its successors and assigns to forever defend title to the
Assets to be free and clear of any assignment of production, mortgage,
lien, encumbrance and security interests created by the following: (a)
Act of Mortgage, Assignment of Production, Security Agreement, Fixture
Filing and Financing Statement dated June 23, 1999, between Energy
Income Fund, L.P., as Mortgagor, and Bank One, Texas, N.A., as
Mortgagee, recorded in Mortgage Book 817, at Folio 650, under Entry No.
855564 of the records of Lafourche Parish, Louisiana, or wherever else
recorded; (b) Act of Mortgage, Assignment of Production, Security
Agreement, Fixture Filing and Financing Statement dated June 23, 1999,
between Energy Partners, Ltd., as Mortgagor, and Bank One, Texas, N.A.,
as Mortgagee, recorded in Mortgage Book 817, at Folio 623, under Entry
No. 855563 of the records of Lafourche Parish, Louisiana, or wherever
else recorded; and (c) Act of Mortgage, Assignment of Production,
Security Agreement, Fixture Filing and Financing Statement dated March
30, 2000, between Energy Partners, Ltd., as Mortgagor, and Bank One,
Texas, N.A., as Mortgagee, recorded in Mortgage Book 846, at Folio 565,
under Entry No. 870754 of the records of Lafourche Parish, Louisiana,
or wherever else recorded.
II.
CONSIDERATION
2.1 PURCHASE PRICE: Subject to the terms and conditions of this Agreement,
Purchaser shall purchase the Assets at Closing for: (i) payment to
Seller of FORTY MILLION AND NO/100 DOLLARS ($40,000,000) ("Purchase
Price"), in cash, subject to the adjustments provided in Section 2.2
below and other amounts provided elsewhere herein; and (ii) the
reservation by Seller of the overriding royalty described in Section
2.6.
2.2 ADJUSTED PURCHASE PRICE: The net price which Purchaser shall pay for
the Assets ("Adjusted Purchase Price") shall be:
(a) The Purchase Price as set forth in Section 2.1 above;
(b) Plus the amount of all reasonable expenditures made by Seller
that are attributable to ownership or operation of the Assets
for the period between the Effective Date and Closing,
including, without limitation, royalties, rentals and similar
charges and expenses, including those billed under applicable
operating agreements, and all prepaid expenses (but excluding
income taxes and franchise taxes and other general corporate
taxes);
(c) Plus the value of all oil in storage at 7:00 a.m. on the
Effective Date that is credited to the Assets (value to be the
market or contract price in effect as of Effective Date less
royalties, other lease burdens, taxes on production, and
transportation and other charges which would normally be
incurred for transporting such oil to the point of sale) which
has not been sold prior to Closing;
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(d) Less the amount of the proceeds from the sale of production
from the Assets received by Seller (including, without
limitation, the actual monetary consideration received by
Seller whether by purchase price adjustment under the Unocal
PSA, or otherwise) between the Effective Date and Closing that
are attributable to the Assets after the Effective Date, net
of any royalties, other lease burdens and any production,
severance, sales or windfall profit taxes not reimbursed to
Seller by the Purchaser;
(e) Less taxes apportioned to Seller pursuant to Article X hereof;
and
(f) Less or plus any other amounts mutually agreed upon in writing
by the Parties.
2.3 PAYMENT OF ADJUSTED PURCHASE PRICE: Seller shall prepare and deliver to
Purchaser, at least three (3) "Business Days" (which term shall mean
any day except a Saturday, Sunday or other day on which commercial
banks in New York, New York, or Houston, Texas are required or
authorized by law to be closed) prior to the Closing Date, Seller's
estimate of the Adjusted Purchase Price to be paid at Closing, together
with a statement setting forth Seller's estimate of the amount of each
adjustment to the Purchase Price to be made pursuant to Section 2.2 and
such backup or supporting information as may be necessary to permit
Purchaser to understand how Seller determined such estimates. The
Parties shall negotiate in good faith and attempt to agree on such
estimated adjustments prior to Closing. In the event any estimated
adjustment amounts are not agreed upon prior to Closing, the estimate
of the Adjusted Purchase Price for purposes of Closing shall be
calculated based on Seller's and Purchaser's agreed upon estimated
adjustments and Purchaser's good faith estimation of any disputed
amounts. At Closing, Purchaser shall pay to Seller the estimated
Adjusted Purchase Price determined as set forth in this Section by wire
transfer of cash in United States currency, in a manner specified in
writing by Seller and submitted to Purchaser no later than three (3)
Business Days prior to Closing (such estimated Adjusted Purchase Price
being herein referred to as the "Estimated Adjusted Purchase Price").
Within five Business Days after the final determination of the Adjusted
Purchase Price in accordance with Section 9.1, Purchaser shall pay to
Seller or Seller shall pay to Purchaser, as the case may be, the amount
by which such final Adjusted Purchase Price is greater than or less
than, respectively, the Estimated Adjusted Purchase Price.
2.4 LIKE KIND EXCHANGE OPTION:
(a) Seller and Purchaser hereby agree that Seller, in lieu of the
sale of the Assets to Purchaser for the cash consideration
provided herein, shall have the right at any time prior to
Closing to assign all or a portion of its rights under this
Agreement to a qualified intermediary in order to accomplish
the transaction in a manner that will comply, either in whole
or in part, with the requirements of a like kind exchange
pursuant to Section 1031 of the Internal Revenue Code of 1986,
as amended. In the event Seller assigns its rights under this
Agreement pursuant to this Section 2.4, agrees to notify
Purchaser in writing of such assignment at or before Closing.
If Seller assigns its rights under this Agreement, Purchaser
agrees to: (i) acknowledge Seller's assignment of its rights
in this Agreement in the form attached hereto
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as Exhibit 2.4(a); and (ii) deposit the Estimated Adjusted
Purchase Price with the qualified escrow or qualified trust
account at Closing; and
(b) Seller hereby acknowledges that any assignment of its rights
pursuant to this Section 2.4 shall in no way relieve Seller
from any of its obligations under this Agreement and that
Purchaser shall have no liability to any party arising out of
Seller's exercise of its rights under this Section 2.4 and
Seller agrees to fully protect and indemnify Purchaser from
any and all claims, liabilities, losses, costs and expenses
(including, without limitation, court costs and reasonable
attorneys' fees, but excluding any amounts reimbursed from
third person insurance) associated with a like-kind exchange
pursuant to Section 2.4.
2.5 ALLOCATION OF PURCHASE PRICE: Seller and Purchaser agree to the
following allocation of the Purchase Price among the Assets sold
hereunder based upon the estimated value for federal income tax
purposes of the Assets as of the Closing Date:
<TABLE>
<S> <C>
Interests relating to leasehold other than
tangible equipment and facilities ("Leasehold"): 75%
Interests relating to tangible equipment
and facilities ("Tangibles"): 25%
Total Allocation: 100%
</TABLE>
Any adjustments to the Purchase Price under Section 2.2 shall ratably
adjust the allocation to Leasehold and Tangibles.
2.6 OVERRIDING ROYALTY: Seller will reserve from its assignment of the
Assets (the "Assignments") an overriding royalty of 2% of 8/8ths,
proportionately reduced and payable to Seller in the proportion that
the interests in the Leasehold Property assigned by Seller to Purchaser
as a result of the transaction contemplated by this Agreement bears to
the entire leasehold estate, of all oil, gas and other minerals
attributable to the Leasehold Property and produced, saved and marketed
from, or attributable to: (i) New Wells, as such term is defined
hereinafter; and/or (ii) wells drilled to the Cayenne Prospect, as such
term is defined hereinafter (the "Overriding Royalty"). The Overriding
Royalty shall burden the Assets and be paid by Purchaser to Seller in
accordance with the terms of Exhibit "H" (Record Title Assignment) and
Exhibit "H-1" (General Assignment). For the purposes of this section,
the term "New Wells" is defined as wells which are spud on or after
January 1, 2001, and which subsequently meet the requirements of
qualifying under 30 CFR 250.111 as a wells capable of production. It is
understood and agreed by the Parties that the term "New Wells" does not
include wells existing or commenced prior to January 1, 2001, or the
recompletion, sidetracking, deepening or other use of such wells,
whether or not such wells or wellbores are currently productive. For
the purposes of this section, the "Cayenne Prospect" is defined as from
the surface of the earth through 100' below the stratigraphic
equivalent of the "O" Sand within the geographic confines of the Joint
Development Area. For the purposes of this section, the "O" Sand is
defined as the stratigraphic equivalent of that certain sand reservoir
as seen
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and encountered on the electric log for the South Timbalier Block 26,
OCS-G 01870 No. D-3 Well, having a top of sand at 11,860' (measured
depth) and a base of sand at 12,010' (measured depth). For the purposes
of this section, the Joint Development Area is defined as that
geographic area as depicted on Exhibit "O" hereto (the "Plat"). The
Parties recognize that the Plat is intended to conform to the plat
which is ultimately attached as Exhibit "B" to the Joint Development
Agreement to be entered into among the Parties and El Paso Exploration
GOM Inc. (the "JDA"). In the event the plat attached to the JDA, as
executed (the "JDA Plat"), varies from the Plat, the Parties agree that
the Plat shall be amended to conform to the JDA Plat, and the
Overriding Royalty shall be amended accordingly, and the Parties
further agree to execute such amendments to the Assignments as
are necessary to revise the definition of Cayenne Prospect to cover and
apply only to the lands as shown on the Plat, as revised, subject to
the depth limitation described above.
III.
TITLE EXAMINATION
3.1 ACCESS TO TITLE INFORMATION: Prior to the execution of this Agreement,
Seller has granted and will continue to grant through Closing, at
Purchaser's request, access to the Records available to Purchaser at
Seller's office located at Suite 3400, 201 St. Charles Avenue, New
Orleans, Louisiana 70170, or such other place as deemed appropriate by
Seller, during normal business hours for examination by Purchaser.
Seller shall not be obligated to perform any additional title work, and
any additional abstracts and title opinions will not be made current by
Seller. EXCEPT AS OTHERWISE PROVIDED SECTION 1.4, NO WARRANTY OR
REPRESENTATION OF ANY KIND IS MADE BY SELLER AS TO THE INFORMATION SO
SUPPLIED, AND PURCHASER AGREES THAT ANY CONCLUSIONS DRAWN THEREFROM
SHALL BE THE RESULT OF ITS OWN INDEPENDENT REVIEW AND JUDGMENT.
SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT, PURCHASER ASSUMES
THE RISK OF ANY TITLE DEFECTS OR CONFLICTING ADVERSE RIGHT(S), TITLE(S)
OR INTEREST(S) WHICH A RECORD TITLE CHECK OR PHYSICAL INSPECTION
REVEALS OR WOULD HAVE REVEALED.
3.2 CONSENTS TO AND APPROVALS OF ASSIGNMENT: Prior to and following
Closing, Seller shall use best efforts to obtain any and all consents
and governmental approvals required for the transfer of the Assets to
Purchaser, except those consents and approvals customarily obtained by
a purchaser.
IV.
ENVIRONMENTAL CONDITION
4.1 NO ADMISSION AGAINST INTEREST: Nothing contained in this Article IV, or
elsewhere in this Agreement, shall be construed to be an admission
against interest as to Seller or Purchaser. Seller and Purchaser have
not included environmental liability related provisions herein due to
any
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perceived liability and specifically disclaim the existence of any such
liability to third parties (including governmental entities) based on
contract, tort, statute or otherwise.
4.2 PHYSICAL CONDITION OF THE ASSETS: The Assets have been used for oil and
gas drilling and production operations, related oil field operations
and, possibly, for the storage and disposal of waste materials or
hazardous substances. Physical changes in or under the Leasehold
Properties or adjacent lands may have occurred as a result of such
uses. The Assets also may contain buried pipelines and other equipment,
whether or not of a similar nature, the locations of which may not now
be known by Seller nor readily apparent by a physical inspection of the
property. Purchaser understands that Seller does not have the requisite
information with which to determine the exact nature or condition of
the Assets nor the effect any such use has had on the physical
condition of the Assets. Pursuant to the Safe Water Drinking and Toxic
Enforcement Act of 1986, Purchaser is hereby notified and assumes the
risk that detectable amounts of chemicals known to cause cancer, birth
defects and other reproductive harm may be found in, on or around the
Assets. In addition, Purchaser acknowledges that some oil field
production equipment may contain asbestos and/or naturally-occurring
radioactive material ("NORM"). In this regard, Purchaser expressly
understands that NORM may affix or attach itself to the inside of
wells, materials and equipment as scale or in other forms, and that
wells, materials and equipment located on the Assets described herein
may contain NORM and that NORM-containing materials may be buried or
have been otherwise disposed of on or under the Assets. Purchaser also
expressly understands that special procedures may be required for the
removal and disposal of asbestos and NORM from the Assets where it may
be found, and that Purchaser assumes all liability and responsibility
for such activities when and if performed.
4.3 ENDANGERED SPECIES, CRITICAL HABITAT, WETLANDS, GEOLOGIC HAZARDS AND
FLOODING: "Endangered Species" as used herein shall have the same
meaning as "endangered species" is defined pursuant to 16 U.S.C.
1532(6) or the laws of the state in which the Leasehold Property is
located; as "threatened species" is defined pursuant to 16 U.S.C.
1533(30) or the laws of the state in which the Leasehold Property is
located; and/or, as a candidate species for such listing under federal
or state law. "Critical Habitat" as used herein shall have the meaning
as defined pursuant to 16 U.S.C. 1532(5). "Wetland" as used herein
shall have the meaning as defined in 40 Code of Federal Regulations
Section 230.3(a), or under the laws of the state in which the Leasehold
Property is located. "Geologic Hazards" as used herein shall include
seismic hazard and any earth slides or other earth movement "Flooding"
as used herein shall include the risks associated with a flood plain,
flood way or restriction zone and any diminution in the value of the
Leasehold Property or restriction of its use by reason of the risk of
water entering or remaining thereon. WITHOUT IN ANY WAY LIMITING ANY
OTHER DISCLAIMERS OF WARRANTY HEREIN AND NOTWITHSTANDING ANY
DISCLOSURES MADE BY SELLER TO PURCHASER, SELLER DISCLAIMS ANY EXPRESS
OR IMPLIED WARRANTY OR REPRESENTATION AS OF THE DATE OF THIS AGREEMENT
AND/OR AS OF THE CLOSING OF THE COMPLETENESS OF ANY SUCH DISCLOSURE OR
THAT THE PROPERTY IS FREE FROM ANY ENDANGERED SPECIES OR THAT ALL OR
ANY PART OF THE PROPERTY IS NOT A CRITICAL HABITAT OR A WETLAND, OR
THAT ANY PART OF THE ASSETS DOES NOT INCLUDE A GEOLOGIC HAZARD, OR THAT
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ANY PART OF THE PROPERTY IS NOT SUBJECT TO FLOODING. Notwithstanding
any knowledge that could be imputed to Seller, Purchaser has the
obligation to ascertain the presence of and extent of any Endangered
Species, Critical Habitat, Wetland, Geologic Hazards and the risk of
Flooding on the Property.
4.4 "AS IS, WHERE IS" PURCHASE: Purchaser shall acquire the Assets in their
"AS IS, WHERE IS, WITH ALL FAULTS" condition and shall assume the risks
that the Assets may contain waste materials, contaminants or hazardous
substances, that adverse physical conditions, including, but not
limited to, the presence of waste materials, contaminants or hazardous
substances or the presence of unknown abandoned oil and gas wells,
water wells, pits, sumps and pipelines may not have been revealed by
Purchaser's investigation, including, but not limited to, any and all
Environmental Liabilities and other Assumed Liabilities. Except as
otherwise set forth herein, on and after the Effective Date, all
responsibility and liability related to all such adverse environmental
conditions of the Assets, whether known or unknown, shall be
transferred to and borne solely by Purchaser.
4.5 ASSUMPTION AND INDEMNIFICATION OF ENVIRONMENTAL RISK AND ENVIRONMENTAL
LIABILITIES:
(a) Except as otherwise set forth in this Section 4.5(a) and
Section 4.5(b), from and after the Effective Date and to the
extent Accruing at and after the Effective Date, Purchaser
shall assume full responsibility for, and agrees to comply
with and perform all environmentally-related duties and
obligations of Seller with respect to the Assets and TO
INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER, ITS DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES AND AFFILIATED OR
PARENT COMPANIES (WHICH ADDITIONAL PARTIES ARE HEREINAFTER
COLLECTIVELY REFERRED TO AS "SELLER'S AGENTS"), from and
against all demands, losses, liabilities, causes of action,
damages, liens, penalties, fines, settlements, judgments
expenses, attorney's fees, court costs and claims (hereinafter
referred to collectively as "Claims") caused by or arising out
of the violation of any rule, order, permit, statute or
regulation of a governmental authority applicable to any waste
material, contaminant or hazardous substance on or included
with the Assets or the presence, disposal, release or
threatened release of any waste material, contaminant or
hazardous substance from the Assets into the atmosphere or
into or upon land or any water course or body of water,
including ground water, whether or not such Claims are
attributable to Seller's activities or the activities of third
persons and whether or not Seller or the Seller's Agents were
or are aware of such activities, including, but not limited
to, any and all Environmental Liabilities. This
indemnification and assumption of responsibility shall also
apply to liability for voluntary environmental response
actions undertaken pursuant to the Comprehensive Environmental
Response Compensation and Liability Act ("CERCLA") or any
other federal, state or local law, regulation or order. THE
ASSUMPTION AND INDEMNIFICATION OF ALL ENVIRONMENTAL
LIABILITIES BY PURCHASER UNDER THIS SECTION 4.5(a) SHALL
APPLY REGARDLESS OF WHETHER SUCH LIABILITIES ARE KNOWN OR
UNKNOWN, DISCLOSED OR UNDISCLOSED AT CLOSING, AND
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REGARDLESS OF WHETHER ATTRIBUTABLE (IN WHOLE OR IN PART) TO
THE ACTIONS, SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT
LIABILITY, BREACH OF CONTRACT, PRODUCTS LIABILITY,
ENVIRONMENTAL LIABILITY, OR OTHER FAULT, LIABILITY OR
RESPONSIBILITY OF SELLER, THE SELLER'S AGENTS OR ANY OTHER
PERSON, AND REGARDLESS OF WHETHER ASSERTED UNDER ANY THEORY OF
LIABILITY; PROVIDED, HOWEVER, THAT THIS ASSUMPTION AND
INDEMNIFICATION BY PURCHASER SHALL NOT COVER OR INCLUDE CLAIMS
OR LIABILITIES DIRECTLY RELATING TO THOSE WASTE MATERIALS,
CONTAMINANTS OR HAZARDOUS SUBSTANCES WHICH HAVE BEEN
TRANSPORTED FOR DISPOSAL PRIOR TO THE EFFECTIVE DATE BY SELLER
OFF OF THE ASSETS TO PROPERTIES OWNED BY SELLER OR THIRD
PERSONS (INSOFAR AS SUCH WASTE MATERIALS, CONTAMINANTS OR
HAZARDOUS SUBSTANCES ARE REGULATED BY GOVERNMENTAL AGENCIES
UNDER CURRENT, APPLICABLE ENVIRONMENTAL LAWS), AND SELLER
RETAINS SUCH LIABILITY AND SHALL INDEMNIFY PURCHASER FOR SAME.
(b) To the extent Accruing before the Effective Date, Seller shall
assume full responsibility for, and agrees to comply with and
perform, all environmentally-related duties and obligations of
Seller with respect to the Assets and TO INDEMNIFY, DEFEND AND
HOLD HARMLESS PURCHASER, ITS DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, REPRESENTATIVES AND AFFILIATED OR PARENT COMPANIES
(WHICH ADDITIONAL PARTIES ARE HEREINAFTER COLLECTIVELY
REFERRED TO AS "PURCHASER'S AGENTS"), from and against all
Claims caused by or arising out of the violation of any rule,
order, permit, statute or regulation of a governmental
authority applicable to any waste material, contaminant or
hazardous substance on or included with the Assets or the
presence, disposal, release or threatened release of any waste
material, contaminant or hazardous substance from the Assets
into the atmosphere or into or upon land or any water course
or body of water, including ground water, whether or not such
Claims are attributable to Seller's activities or the
activities of third persons, whether or not Seller or the
Seller's Agents were or are aware of such activities,
including, but not limited to, any and all Environmental
Liabilities. This indemnification and assumption of
responsibility shall also apply to liability for voluntary
environmental response actions undertaken pursuant to CERCLA
or any other federal, state or local law, regulation or order.
THE ASSUMPTION AND INDEMNIFICATION OF ALL ENVIRONMENTAL
LIABILITIES BY SELLER UNDER THIS SECTION 4.5(b) SHALL APPLY
REGARDLESS OF WHETHER SUCH LIABILITIES ARE KNOWN OR UNKNOWN,
DISCLOSED OR UNDISCLOSED AT CLOSING, AND REGARDLESS OF WHETHER
ATTRIBUTABLE (IN WHOLE OR IN PART) TO THE ACTIONS, SOLE, JOINT
OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, BREACH OF
CONTRACT, PRODUCTS LIABILITY, ENVIRONMENTAL LIABILITY,
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OR OTHER FAULT, LIABILITY OR RESPONSIBILITY OF ANY OTHER
PERSON, AND REGARDLESS OF WHETHER ASSERTED UNDER ANY THEORY OF
LIABILITY.
(c) For the purposes of this Section 4, the term "Environmental
Liabilities" shall mean, with respect to Purchaser, all
obligations, duties, losses, liabilities, claims, fines,
expenses, damages, costs (including attorney's fees and
expenses) or penalties created by, related to or arising out
of any Environmental Law, to the extent Accruing on or after
the Effective Date. With respect to Seller, "Environmental
Liabilities" shall mean all obligations, duties, losses,
liabilities, claims, fines, expenses, damages, costs
(including attorney's fees and expenses) or penalties created
by, related to or arising out of any Environmental Law, to the
extent Accruing before the Effective Date. For the purposes of
this Section 4, the term "Environmental Laws" means any
applicable laws, orders, rules, regulations, judgments or
decrees of any federal, state, parish or municipal governing
authority having jurisdiction over any Asset or Party which
relate to pollution, the protection or cleanup of the
environment, or the release or disposal of deleterious
substances into the environment, including but not limited to
ambient air, surface water, groundwater, land surface or
subsurface strata; including all such laws, orders, rules,
regulations, judgments or decrees as they may be amended,
varied or modified in the future.
4.6 LIMITATION OF ASSUMPTION AND INDEMNIFICATION: The assumption and
indemnity obligations of Seller under Section 4.5 shall: (i) survive
Closing for eighteen (18) months, provided that, if within such period,
written notice is given by Purchaser to Seller asserting a Claim, and
once such notice is given, within six (6) months thereafter (unless
such period is extended by mutual agreement of the Parties), Purchaser
accompanies such notice with the filing of an appropriate action or
proceeding and pursues enforcement of such Claim with respect to such
assumption or indemnity, then the right to pursue enforcement of such
Claim shall survive the expiration of such eighteen (18) month period,
otherwise such right shall be perempted; and (ii) only arise in the
event that Claims, or the action that must be taken by Purchaser to
remedy any such Claims, exceed, or are reasonably expected by Purchaser
to exceed, ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000), in the
aggregate; PROVIDED HOWEVER, THAT THE ABOVE DESCRIBED LIMITATIONS OF
THE ASSUMPTION AND INDEMNITY OBLIGATIONS OF SELLER SHALL NOT COVER OR
INCLUDE CLAIMS OR LIABILITIES DIRECTLY RELATING TO THOSE WASTE
MATERIALS, CONTAMINANTS OR HAZARDOUS SUBSTANCES WHICH HAVE BEEN
TRANSPORTED FOR DISPOSAL PRIOR TO THE EFFECTIVE DATE BY SELLER OFF OF
THE ASSETS TO PROPERTIES OWNED BY SELLER OR THIRD PERSONS (INSOFAR AS
SUCH WASTE MATERIALS, CONTAMINANTS OR HAZARDOUS SUBSTANCES ARE
REGULATED BY GOVERNMENTAL AGENCIES UNDER CURRENT, APPLICABLE
ENVIRONMENTAL LAWS).
4.7 EXCLUSIVE REMEDY: The indemnities provided in this Article IV and
elsewhere in this Agreement set forth the exclusive remedy of the
Parties with respect to the Claims, liabilities and obligations covered
thereby.
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V.
OPERATIONS BY SELLER, RISK OF LOSS AND OBLIGATIONS OF PURCHASER
5.1 OPERATIONS AFTER EFFECTIVE DATE: Operations conducted by Seller after
the Effective Date with respect to the Assets will be conducted on
behalf of Purchaser, and Purchaser will reimburse Seller for all costs,
expenses and liabilities, including applicable overhead, incurred for
the operation, protection and maintenance of the Assets during said
time period.
5.2 NOTICE OF CHANGE OF OWNERSHIP: Purchaser will take all necessary steps
to ensure that it is recognized as the owner of the Assets. If Seller
is the principal on any financial assurance (including a bond) relating
to the Assets, which financial assurance is required by any law, rule
or regulation, then Purchaser will secure replacement financial
assurance in the required amount and deliver it to the regulatory body
requiring such assurance, to the end that Seller's financial assurance
is released and discharged.
VI.
REPRESENTATIONS
6.1 PURCHASER'S REPRESENTATIONS: Purchaser represents and warrants to
Seller as of the Effective Date and Closing as follows:
(a) EXISTENCE: Purchaser is duly organized, validly existing and
in good standing under the corporation laws of the
jurisdiction of its organization and is duly qualified at
Closing to carry on business in the states where the Assets
are located or adjacent.
(b) AUTHORIZATION: Purchaser has the corporate power and authority
to enter into and perform this Agreement and the transactions
contemplated hereby. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby and
all documents and instruments evidencing such transactions
have been duly and validly authorized by all requisite
corporate action on the part of Purchaser. This Agreement has
been duly executed and delivered on behalf of Purchaser, and
at Closing all documents and instruments required hereunder to
be executed and delivered by Purchaser shall have been fully
executed and delivered.
(c) BROKERS: Purchaser has not incurred any obligation or
liability, contingent or otherwise, for brokers' or finders'
fees with respect to the matters provided for in this
Agreement which will be the responsibility of Seller; and any
such obligation or liability that may exist or arise shall be
the sole obligation of the creating Party.
(d) ENFORCEABILITY: This Agreement constitutes, and the documents
and instruments to be executed pursuant hereto will
constitute, the legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with
their respective terms, except
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<PAGE> 16
to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and by general equitable
principles.
(e) FURTHER DISTRIBUTION: Purchaser is acquiring the Assets for
its own account and not with the intent of making a public
distribution thereof within the meaning of the Securities Act
of 1933, as amended, and the rules and regulations promulgated
thereunder.
(f) FEDERAL LEASES: Purchaser is qualified to own federal leases
comprising part of the Assets or will be so qualified at
Closing, and, if Purchaser intends to operate the Assets,
Purchaser is qualified to operate such leases or will be so
qualified at Closing.
6.2 SELLER'S REPRESENTATIONS: Seller represents and warrants to Purchaser
as follows as of the Closing:
(a) EXISTENCE: Seller is duly organized, validly existing and in
good standing under the corporation laws of the jurisdiction
of its organization and is (i) duly qualified under the name
of Energy Partners of Delaware, Ltd. to carry on business in
the State of Louisiana; and (ii) duly qualified with the
United States Minerals Management Service and other
governmental authorities with jurisdiction over the Assets to
carry on its business in the Outer Continental Shelf, Gulf of
Mexico.
(b) AUTHORIZATION: Seller has the corporate power and authority to
enter into and perform this Agreement and the transactions
contemplated hereby. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby and
all documents and instruments evidencing such transactions
have been duly and validly authorized by all requisite
corporate action on the part of Seller. This Agreement has
been duly executed and delivered on behalf of Seller, and at
Closing all documents and instruments required hereunder to be
executed and delivered by Seller shall have been fully
executed and delivered.
(c) BROKERS: Seller has not incurred any obligation or liability,
contingent or otherwise, for brokers' or finders' fees with
respect to the matters provided for in this Agreement which
will be the responsibility of Purchaser; and any such
obligation or liability that may exist or arise shall be the
sole obligation of the creating Party.
(d) ENFORCEABILITY: This Agreement constitutes, and the documents
and instruments to be executed pursuant hereto will
constitute, the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their
respective terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and by
general equitable principles.
(e) NO VIOLATIONS: The execution, delivery and performance of this
Agreement by Seller, and the transactions contemplated hereby,
will not violate: (i) any material agreement or instrument to
which Seller is a party or by which Seller or the Assets is
bound; (ii) any
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judgment, order, ruling or decree applicable to Seller or the
Assets; (iii) to Seller's knowledge any law, rule or
regulation applicable to Seller or the Assets; or (iv) any of
the organizational documents of Seller.
(f) LITIGATION: Except as set forth in Exhibit "D":
(i) to Seller's knowledge, there is no suit, action,
investigation or other proceeding pending or
threatened against Seller or otherwise involving the
Assets (except for suits, actions, investigations or
proceedings relating to the oil and gas industry
generally to which Seller is not a named party), that
could reasonably be expected to materially and
adversely affect any of the Assets, including,
without limitation, Seller's title thereto, the value
thereof, operations thereon or the marketing of
production therefrom;
(ii) to Seller's knowledge, there is no suit, action,
investigation or other proceeding pending or
threatened against Seller that could reasonably be
expected to materially and adversely affect the
ability of Seller to perform its obligations under
this Agreement or that could reasonably be expected
to prevent, delay or hinder the consummation of the
transactions contemplated hereby; and
(iii) Seller has not received any notice that it has been
charged with any violation of, or threatened with a
charge of a violation of, any Legal Requirement (as
defined below), which violation might reasonably be
expected to materially and adversely affect any of
the Assets, and to the knowledge of Seller, no third
party has been charged with any violation of any
Legal Requirement which violation might reasonably be
expected to materially and adversely affect the
Assets.
As used in this Agreement, "Legal Requirement" shall mean any
law, statute, ordinance, decree, requirement, order, judgment,
rule or regulation of, including the terms of any license,
permit or authorization issued by, any federal, state, or
local authority.
(g) BASIC DOCUMENTS: To Seller's knowledge, and except as set
forth on Schedule 6.2(g), the documents and instruments
creating or giving rise to the Leasehold Property and all
agreements, contracts, easements, rights-of-way and other
surface use rights, and all governmental licenses, permits,
approvals and other authorizations necessary to own, maintain
and operate the Assets in compliance with applicable laws and
in the manner in which they have historically been owned,
maintained and operated by Seller (all such documents and
instruments being herein referred to as the "Basic
Documents"), are in full force and effect and no material
breach or default exists thereunder. To Seller's knowledge,
and except as set forth on Schedule 6.2(g), the Basic
Documents, if assumed by Purchaser at Closing, would not
subject Purchaser to any area of mutual interest,
non-competition or similar provision restricting Purchaser
from independently conducting operations in any geographic
area. Except as set forth in Schedule 6.2(g), neither Seller
nor, to Seller's knowledge, any other party to the Basic
Documents, has received written
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<PAGE> 18
notice that Seller or such other party is in breach or
default, or with the lapse of time or the giving of notice, or
both, would be in breach or default, with respect to any of
its obligations thereunder. To Seller's knowledge, and except
as set forth on Schedule 6.2(g), there are no amounts claimed
to be due to Seller in respect of the Assets that are being
held in suspense because of a dispute as to title to such
Assets or for any other reason, and Seller has no knowledge
of, and has not received any notice from any purchaser of
production, that it will not be paid its net revenue interest
for each unit or well specified on Exhibit "A" without
indemnity or guarantee other than those customarily found in
division orders and other similar agreements and documents.
(h) COMPLIANCE WITH LAWS: Except as set forth in Schedule 6.2(h),
to Seller's knowledge, all operations (including, without
limitation, the exploration and development of all leases, the
drilling, completion and production of all wells thereon, and
the marketing of all production therefrom) by Seller relating
to the Leasehold Property have been conducted in compliance
with, and all items of tangible personal property and fixtures
constituting part of the Assets conform with, all Legal
Requirements, including, but not limited to, Environmental
Laws, in each case, in all material respects.
(i) GOVERNMENTAL LICENSES: Except as set forth in Schedule 6.2(i),
to Seller's knowledge, Seller has obtained all material
governmental permits, licenses and other authorizations
required to own and operate the Assets, all such
authorizations are in full force and effect and no material
violations exist thereunder. To Seller's knowledge, no
proceeding is pending or threatened relating to the
challenging, revocation or limitation of any such license or
authorization.
(j) LEASE OBLIGATIONS: Except as set forth in Schedule 6.2(j),
Seller has not received any written notice that: (i) there are
unfulfilled drilling obligations affecting the Leasehold
Property, other than provisions requiring optional drilling as
a condition of maintaining or earning all or a portion of a
lease; and (ii) royalties, rentals and other payments due in
respect of the Leasehold Property have not been timely paid,
or that any other conditions necessary to keep such properties
and interests in full force and effect during their primary
term and thereafter, if commercial production has been
established thereon or on lands pooled therewith, have not
been fully performed.
(k) OBLIGATIONS RELATING TO OPERATIONS: With respect to operations
relating to the Assets, except as set forth on Schedule
6.2(k), to Seller's knowledge, there are no: (i) gas
production, processing, sales, transportation or other
imbalances as of the Effective Date between Seller and any
third party; (ii) material non-consent operations with respect
to any Leasehold Property which have resulted or will result
in a temporary or permanent increase or decrease in Seller's
interest in such Leasehold Property for the applicable unit or
well; and (iii) binding commitments with respect to the Assets
that will result in Purchaser incurring after the Closing Date
capital expenditures in excess of $100,000 with respect to any
one unit or well or $250,000 with respect to the Assets in the
aggregate.
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<PAGE> 19
(l) OPERATIONS SINCE THE EFFECTIVE DATE: Except as set forth in
Schedule 6.2(1), to Seller's knowledge, since the Effective
Date:
(i) Seller has caused the Assets to be developed,
maintained and operated in a good and prudent manner
and in substantially the same manner as the Assets
were developed, maintained and operated prior to the
Effective Date;
(ii) Seller has not sold, assigned, transferred, farmed
out, conveyed or otherwise disposed of any of the
Assets, except for the sale of hydrocarbons in the
ordinary course of business under contracts
terminable upon thirty (30) days notice or less;
(iii) Seller has not, to the extent related to (and
materially and adversely affecting) the Assets, made
any major change in its business or operations or
otherwise conducted its business and operations other
than in accordance with standard industry practices;
(iv) Seller has not permitted any leases or material
rights with respect to the Assets to expire or waived
any material rights with respect to the Assets;
(v) Seller has not entered into any agreement or made any
commitment (other than this Agreement) to take any of
the actions referred to in clauses (i) through (iv)
above or that would materially and adversely affect
the ownership or operation of, or production from,
the Assets after the Effective Date; and
(vi) there have been no fires, blow-outs, or other
casualties (above or below the surface of the
seabed), which materially and adversely affected any
of the Assets.
(m) MARKETING OF PRODUCTION; SUSPENDED FUNDS:
(i) Except as set forth in Schedule 6.2(m), to Seller's
knowledge:
(1) Seller has not received, as of the Effective
Date, any advance, "take-or-pay," or other
similar payments under production sales
contracts that entitle the purchasers to
"make-up" or otherwise receive deliveries of
hydrocarbons at any time after the Effective
Date without paying at such time the full
market price therefor, nor has Seller
received any payments with respect to, in
lieu of or in satisfaction for any
take-or-pay obligations of the purchasers of
Seller's hydrocarbons deliverable under any
contracts covering any of the Leasehold
Property on or after the Effective Date; and
(2) since the Effective Date, none of the
Leasehold Property are subject to any: (i)
dedication under production sales contracts
with terms in excess of 31 days; (ii)
production gathering agreements not
terminable without
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<PAGE> 20
cause on 30 days advance written notice; or
(iii) calls on, or preferential rights to
purchase, hydrocarbons produced therefrom.
(ii) Schedule 6.2(m) sets forth a list of all funds held
in suspense by Seller on the date hereof that are
attributable to the Leasehold Property; a description
of the source of such funds and the reason they are
being held in suspense; the agreement or agreements
under which such funds are being held; and the name
or names of the parties claiming such funds or to
whom such funds are owed.
(n) TAXES: Since the Effective Date, except as set forth in
Schedule 6.2(n), to Seller's knowledge, all material ad
valorem, property, production, severance, sales, use, and
similar taxes and assessments owed by Seller based on or
measured by the ownership of the Assets or the production of
hydrocarbons or the receipt of proceeds therefrom that have
become due and payable with respect to the Assets have been,
or will be, paid timely and all tax and information returns to
tax authorities required to be filed by Seller with respect to
the Assets have been, or will be, filed timely. Schedule
6.2(n) identifies all audits or examinations pending or
presently being conducted by any taxing jurisdiction or
regulatory authority against Seller regarding the Assets and a
summary of the likely outcomes of any such audit or
examination.
(o) PREFERENTIAL RIGHTS AND RESTRICTIONS ON ASSIGNMENT: Except as
set forth in Schedule 6.2(o), to Seller's knowledge none of
the Leasehold Property are subject to any preferential rights
to purchase or restrictions on assignment, including, but not
limited to, requirements for consents from third persons to
any assignment, but excluding any governmental consents to or
approvals of assignment that are typically obtained after
Closing.
(p) WELLS: To Seller's knowledge, and except as set forth on
Schedule 6.2(p), all of the wells in which Seller has an
interest by virtue of its ownership of the Leasehold Property
and which have been drilled and completed by Seller are within
the boundaries of such Leasehold Property or within the limits
otherwise permitted by contract, pooling or unit agreement,
and by law; and, except as set forth on Schedule 6.2(p), to
Seller's knowledge, no such well is subject to penalties on
allowables because of any over production or any other
violation of applicable Legal Requirements that would prevent
such well from being entitled to its full legal and regular
allowable from and after the Effective Date as prescribed by
any governmental authority.
(q) ENVIRONMENTAL MATTERS: Except as set forth in Schedule 6.2(q),
to Seller's knowledge:
(i) the Assets do not violate any order or requirement of
any governmental authority or any Environmental Laws,
nor are there any conditions existing on or resulting
from the operations of the Assets that may give rise
to any on-site or off-site remedial obligations under
any Environmental Laws, which would have a material
and adverse effect on the Assets;
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<PAGE> 21
(ii) without limitation of clause (i) above, the Assets
are not in violation of or subject to any existing,
pending or threatened action, suit, investigation,
inquiry or proceeding by or before any court or any
other governmental authority, which would have a
material and adverse effect on the Assets;
(iii) during the term of Seller's ownership of the Assets
(and prior thereto to the knowledge of Seller), all
material notices, permits, licenses or similar
authorizations, if any, required to be obtained or
filed in connection with the Assets, including,
without limitation, those relating to the past or
present treatment, storage, disposal or release of a
hazardous substance or solid waste into the
environment, have been duly obtained or filed, and
Seller is in material compliance with the terms and
conditions of all such notices, permits, licenses and
similar authorizations;
(iv) during the term of Seller's ownership of the Assets
(and prior thereto to the knowledge of Seller), and
since the date on which any relevant requirements of
the Resource Conservation and Recovery Act ("RCRA")
became effective and applicable to the Assets, all
hazardous substances or solid waste generated at or
as a result of the Assets have been transported,
treated and disposed of only by carriers maintaining
valid authorizations under RCRA and any other
Environmental Laws and only at treatment, storage and
disposal facilities maintaining valid authorizations
under RCRA and any other Environmental Law; and
(v) during the term of Seller's ownership of the Assets
(and prior thereto to the knowledge of Seller), no
hazardous substance or solid waste has been disposed
of or otherwise released (including without
limitation discharges or releases into pits) that
would have a material and adverse effect on the
Assets and there has been no threatened release of
any hazardous substances or solid waste on, to or as
a result of the Assets, which would have a material
and adverse effect on the Assets, except in
compliance with Environmental Laws, and there are no
storage tanks or other containers on or under any of
the Assets from which hazardous substances, petroleum
products or other contaminants may be released into
the surrounding environment that would have a
material and adverse effect on the Assets.
(r) INTERESTS EARNED: At Closing, all material conditions of
Seller set forth in the Union PSA and the Shell PSA have been
satisfied or waived by the other parties to the Union PSA and
the Shell PSA, respectively.
(s) ACCURACY: The exhibits and schedules prepared by Seller and
attached hereto are materially complete and correct.
6.3 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES:
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(a) Except as otherwise set forth in Sections 1.4 and 6.2; THE
ASSETS ARE SOLD "AS IS," "WHERE IS" AND "WITH ALL FAULTS AS TO
ALL MATTERS," AND SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY
REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW,
BY STATUTE, OR OTHERWISE RELATING TO: (i) THE CONDITION OF THE
ASSETS (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY, OF FITNESS FOR A PARTICULAR
PURPOSE OR OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS);
(ii) ANY INFRINGEMENT BY SELLER OF ANY PATENT OR PROPRIETARY
RIGHT OF ANY THIRD PERSON; (iii) ANY INFORMATION, DATA OR
OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO PURCHASER BY OR
ON BEHALF OF SELLER (INCLUDING WITHOUT LIMITATION, IN RESPECT
OF GEOLOGICAL AND ENGINEERING DATA, THE EXISTENCE OR EXTENT OF
OIL, GAS OR OTHER MINERAL RESERVES, THE RECOVERABILITY OF OR
THE COST OF RECOVERING ANY SUCH RESERVES, THE VALUE OF SUCH
RESERVES, ANY PRODUCT PRICING ASSUMPTIONS AND THE ABILITY TO
SELL OIL OR GAS PRODUCTION AFTER CLOSING); (iv) THE
ENVIRONMENTAL CONDITION AND OTHER CONDITION OF THE ASSETS AND
ANY POTENTIAL LIABILITY ARISING FROM OR RELATED TO THE ASSETS;
(v) THE FAILURE OF ANY COMPUTER, ELECTRONICS, SOFTWARE OR
COMPONENTS TO BE FREE OF ANY DEFECTS OR ERRORS, INCLUDING, BUT
NOT LIMITED TO, ANY DEFICIENCIES RELATING TO THE INABILITY TO
PROPERLY FUNCTION BEYOND DECEMBER 31, 1999; AND (vi) THE
WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE AGAINST
HIDDEN OR LATENT REDHIBITORY VICES.
(b) PURCHASER: (i) WAIVES ALL RIGHTS IN REDHIBITION PURSUANT TO
LOUISIANA CIVIL CODE ARTICLES 2520, ET SEQ.; (ii) ACKNOWLEDGES
THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND
INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND
(iii) ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO THE
ATTENTION OF PURCHASER, HAS BEEN EXPLAINED IN DETAIL AND THAT
PURCHASER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS
WAIVER OF WARRANTY OF FITNESS AND WARRANTY AGAINST REDHIBITORY
VICES AND DEFECTS FOR THE ASSETS.
(c) ALL INSTRUMENTS OF CONVEYANCE TO BE DELIVERED BY SELLER AT
CLOSING SHALL EXPRESSLY SET FORTH THE DISCLAIMERS OF
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION 6.3.
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VII.
CONDITIONS OF CLOSING
The obligations of either Party to consummate the transactions provided for
herein are subject to the satisfaction or waiver by the other Party of the
following conditions:
7.1 REPRESENTATIONS: The representations of Purchaser and Seller contained
in Article VI hereof shall be true and correct in all material respects
on the date of Closing as though made on and as of that date.
7.2 PERFORMANCE: Both Purchaser and Seller shall have performed in all
material respects the obligations, covenants and agreements hereunder
to be performed by them at or prior to Closing.
7.3 PENDING MATTERS: No suit, action or other proceeding by a third person
or a governmental authority shall be pending or threatened which seeks
substantial damages from Purchaser or Seller in connection with the
Assets, or seeks to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by this Agreement.
7.4 HART-SCOTT-RODINO ACT: If either Party is of the opinion that the
transaction described in this instrument falls within the purview of
the Hart-Scott-Rodino Act ("HSR Act"), Purchaser shall prepare and
submit in a timely manner, any necessary filings for Purchaser in
connection with the transactions contemplated by this Agreement under
the HSR Act and the rules and regulations thereunder. Purchaser shall
request expedited treatment of such filing by the Federal Trade
Commission, shall promptly make any appropriate or necessary subsequent
or supplemental filings, and shall furnish to Seller copies of all
filings made under the HSR Act at the same time they are filed with the
government.
7.5 GOVERNMENTAL BONDS: Purchaser shall have delivered to Seller either:
(i) copies of any bonds covering the Assets required under any laws,
rules or regulations of any federal, state or local governmental agency
having jurisdiction over the Assets issued by corporate sureties
satisfactory to Seller or a commitment by a surety company,
satisfactory to Seller, to issue such bonds upon Closing; and (ii)
copies of all other necessary or appropriate consents, permits,
insurance, approvals, authorizations and similar items required of
Purchaser to purchase, receive, own and operate the Assets as of the
Closing and to otherwise transact business in the applicable
jurisdiction(s).
7.6 CONSENTS AND WAIVERS: All necessary consents, permissions and approvals
by third parties in connection with the sale and transfer of the Assets
shall have been received prior to Closing ("Necessary Approvals"),
except those governmental consents customarily generated and received
in the ordinary course of business at a post-Closing date.
7.7 SATISFACTION WITH DUE DILIGENCE: Purchaser shall be satisfied in its
sole discretion with the results of its due diligence investigation of
the Assets, including, but not limited to: (i) the operational and
environmental condition of the Assets; and (ii) title to the Assets.
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VIII.
CLOSING
8.1 CLOSING ITEMS: At Closing, as defined in Section 1.2 hereof, the
following shall occur:
(a) Seller shall execute, acknowledge and deliver Assignments of
Record Title Interest (whether one or more, "Record Title
Assignment") and an Assignment, Bill of Sale and Conveyance
("General Assignment") in the forms attached hereto as Exhibit
"H" and Exhibit "H-1," respectively, covering all of the
Assets to be sold pursuant hereto;
(b) Purchaser shall deliver to Seller either by wire transfer of
cash as specified by Seller the remaining balance of the total
Purchase Price as adjusted hereunder;
(c) Purchaser shall provide Seller with executed designation of
operator forms designating Seller as the operator, as required
by the Minerals Management Service to effect a change of
operator for the properties being sold at Closing, and
promptly thereafter, file said forms with the Minerals
Management Service;
(d) Purchaser and Seller shall execute an Operating Agreement
which names Seller as the operator in the form attached hereto
as Exhibit "I";
(e) Seller shall provide Purchaser with executed non-foreign
affidavits, and shall execute, acknowledge and deliver such
other instruments and documents and take such other actions as
may be necessary to carry out its obligations under this
Agreement;
(f) Seller shall (subject to the terms of applicable operating
agreements and other provisions hereof) deliver to Purchaser
possession of the Assets, effective as of the Effective Date;
(g) Upon Purchaser's request, Seller shall, at or as promptly as
reasonably possible after Closing, provide Purchaser, at
Purchaser's expense, with copies of the Records;
(h) Seller shall deliver letters in lieu of transfer orders
directing all purchasers of production to pay Purchaser the
proceeds of production produced from the Assets from and after
the Effective Date, to the extent that such purchasers of
production have not already paid the same to Seller;
(i) Seller shall deliver to Purchaser: (i) partial releases of all
liens and encumbrances securing Secured Items insofar as such
liens and encumbrances affect the Assets; and (ii) all other
releases or subordinations that may be necessary in the sole
discretion of Purchaser with respect to other agreements that
affect the Assets;
(j) Seller shall deliver to Purchaser a copy of the resolutions of
Seller's board of directors approving the sale of the Assets,
certified by Seller as being true and correct as of Closing;
(k) Seller shall deliver to Purchaser the Necessary Approvals
obtained before Closing;
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(l) Seller shall deliver to Purchaser a certificate signed by the
chief executive officer of Seller which states that: (i) as of
Closing, none of the Assets have been destroyed by fire,
blowout, or other casualty, and none of the Assets have been
taken by, or threatened with being taken, in condemnation or
under the right of eminent domain; (ii) no adverse material
change in the Assets has occurred since the Effective Date;
and (iii) with respect to Seller, the conditions set forth in
Sections 7.1, 7.2, and 7.3 have been fulfilled;
(m) Seller shall execute, acknowledge and deliver the Pipeline
Purchase Option Agreement providing Purchaser with the option
to acquire rights in all pipeline systems and associated
rights-of-way in the form attached hereto as Exhibit "H-2",
over which production from the Assets is transported; and
(n) Purchaser and Seller shall execute Right of First Refusal
Agreement in the form attached hereto as Exhibit "N".
Immediately after Closing, Purchaser shall notify all pertinent
operators, non-operators, oil or gas purchasers, governmental agencies
and royalty owners that it has purchased the Assets.
IX.
CONTINUING OBLIGATIONS
9.1 FINAL ACCOUNTING: Within one hundred (120) days after the Closing,
Seller shall prepare, in accordance with this Agreement and with
generally accepted accounting principles consistently applied, and
deliver to Purchaser a statement setting forth each adjustment to the
Purchase Price required pursuant to Section 2.2 and showing the
calculation of each such adjustment. From and after Closing and until
the Adjusted Purchase Price is finally determined pursuant to this
Section 9.1, Seller shall make available to Purchaser at any reasonable
time such accounting records and other information as may be reasonably
necessary for Purchaser to verify the accuracy of the adjustments set
forth on such statement. Purchaser will give representatives of Seller
reasonable access to its premises and to its books and records for
purposes of determining the final Adjusted Purchase Price, and if
requested by Seller, will use reasonable efforts to cause the
appropriate personnel of Purchaser to assist Seller and its
representatives, during normal business hours and without unreasonably
interfering with the conduct by such personnel of their duties, in
determining the final Adjusted Purchase Price. Within sixty (60) days
after receipt of such statement from Seller, Purchaser shall deliver to
Seller a written report containing all changes with explanations
therefor that Purchaser proposes be made to such statement. The parties
shall then undertake to agree on the items in dispute and the final
Adjusted Purchase Price no later than sixty (60) days after the receipt
by Seller of Purchaser's statement of proposed changes. At any time
after the end of such sixty (60) day period, any adjustments remaining
in dispute or not finally determined and agreed upon may, at the
request of either Seller or Purchaser, be submitted for determination
by a mutually acceptable accounting firm not employed by either Party
within a three-year period prior to selection of the firm. Such firm
shall make such determination within sixty (60) days following such
submission and such determination shall be final and binding upon
Seller and Purchaser, with
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the fees and expenses of such firm to be shared equally by Seller and
Purchaser. Following the final determination of the Adjusted Purchase
Price pursuant to this Section 9.1 (which final determination, however
determined, shall be final and binding on Seller and Purchaser), Seller
or Purchaser, as the case may be, shall promptly make the payment
required pursuant to Section 2.3.
9.2 RECEIPTS AND CREDITS: Except as otherwise provided in this Agreement:
(a) All monies, proceeds, receipts, credits and income
attributable to the Assets for all periods of time on and
after the Effective Date shall be the sole property and
entitlement of Purchaser, and to the extent received by
Seller, Seller shall fully disclose, account for and transmit
same to Purchaser promptly;
(b) All monies, proceeds, receipts and income attributable to the
Assets for all periods of time prior to the Effective Date
shall be the sole property and entitlement of Seller and, to
the extent received by Purchaser, Purchaser shall fully
disclose, account for and transmit same to Seller promptly;
(c) All costs, expenses, disbursements, obligations and
liabilities attributable to the Assets for periods of time
prior to the Effective Date, regardless of when due or payable
shall be the sole obligation of Seller and Seller shall
promptly pay, or if paid by Purchaser, promptly reimburse
Purchaser for and hold Purchaser harmless from and against
same; and
(d) All costs, expenses, disbursements, obligations and
liabilities attributable to the Assets for periods of time on
and after the Effective Date, regardless of when due or
payable, shall be the sole obligation of Purchaser, and
Purchaser shall promptly pay, or if paid by Seller, promptly
reimburse Seller for and hold Seller harmless from and against
same.
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9.3 INDEMNITIES:
(a) Purchaser agrees to indemnify, defend and hold harmless Seller
and Seller Agents from and against any and all Claims arising:
(i) from the breach of this Agreement by Purchaser; (ii) from
the Assumed Liabilities; or (iii) on or after the Effective
Date, in any way connected with, attributable to, or resulting
from Purchaser's ownership or operation of, or activities on,
the Assets, including, but not limited to, Claims for damage
to property or injury or death to persons, Claims for breach
of duties and obligations arising under or by virtue of any
lease, contract, agreement, permit, applicable statute or
rule. Purchaser's obligations to indemnify, defend and hold
harmless, as set forth above, shall also specifically extend
to all such claims, REGARDLESS OF WHETHER ATTRIBUTABLE, IN
WHOLE OR IN PART TO, CLAIMS WHICH ARE KNOWN OR UNKNOWN, CLAIMS
ARISING FROM THE SOLE, JOINT, CONCURRENT NEGLIGENCE, STRICT
LIABILITY, BREACH OF CONTRACT, PRODUCTS LIABILITY, OR OTHER
FAULT OR RESPONSIBILITY OF SELLER, SELLER'S AGENTS OR ANY
OTHER PERSON, AND REGARDLESS WHETHER OR NOT SUCH CLAIMS AROSE
PRIOR TO THE EFFECTIVE DATE OR RELATE TO CONDITIONS THAT
EXISTED PRIOR TO THE EFFECTIVE DATE.
(b) Except as otherwise set forth herein and except for the
Assumed Liabilities, Seller agrees to indemnify, defend and
hold harmless, Purchaser and Purchaser's Agents from and
against any and all Claims arising: (i) from the breach of
this Agreement by Seller; (ii) arising from or related to
Excluded Assets; (iii) arising from or related to Retained
Matters; (iv) before the Effective Date, in any way connected
with, attributable to, or resulting from the ownership or
operation of, or activities on the Assets, including, but not
limited to, Claims for damage to property or injury or death
to persons, Claims for breach of duties and obligations
arising under or by virtue of any lease, contract, agreement,
permit, applicable statute or rule; and (v) any obligations or
liabilities retained by Seller. Seller's obligations to
indemnify, defend and hold harmless, as set forth above, shall
also specifically extend to all such claims, REGARDLESS OF
WHETHER ATTRIBUTABLE, IN WHOLE OR IN PART TO, CLAIMS WHICH ARE
KNOWN OR UNKNOWN, CLAIMS ARISING FROM THE SOLE, JOINT,
CONCURRENT NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT,
PRODUCTS LIABILITY OR OTHER FAULT OR RESPONSIBILITY OF
PURCHASER, PURCHASER'S AGENTS OR ANY OTHER PERSON.
(c) Any claim for indemnity under any provision of this Agreement,
including Sections 4.5 and 9.3, shall be made by written
notice from the Party seeking indemnification (the
"Indemnified Party") to the Party required to provide same
(the "Indemnifying Party"), together with a written
description of any third person claim against the Indemnified
Party, stating the nature and basis of such claim and, if
ascertainable, the amount thereof. The Indemnifying Party
shall have a period of thirty (30) days after receipt of such
notice within
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which to respond thereto or, in the case of a third person
claim which requires a shorter time for response, then within
such shorter period as specified by the Indemnified Party in
such notice (the "Notice Period"). If the Indemnifying Party
denies liability or fails to respond to the notice within the
Notice Period, the Indemnified Party may defend or compromise
the claim as it deems appropriate without prejudice to any of
the Indemnified Party's rights hereunder, with no further
obligation to inform the Indemnifying Party of the status of
the claim and no right of the Indemnifying Party to approve or
disapprove any action, taken in connection therewith by the
Indemnified Party. If the Indemnifying Party accepts
liability, it shall so notify the Indemnified Party within the
Notice Period and elect either: (i) to undertake the defense
or compromise of such third person claim with counsel selected
by the Indemnifying Party and reasonably approved by the
Indemnified Party; or (ii) to instruct the Indemnified Party
to defend or compromise such claim. If the Indemnifying Party
undertakes the defense or compromise of such third person
claim, the Indemnified Party shall be entitled, at its own
expense, to participate in such defense. No compromise or
settlement of any third person claim shall be made without
reasonable notice to the Indemnified Party and, unless such
compromise or settlement includes a general release of the
Indemnified Party in respect of the matter with no admission
of liability on the part of the Indemnified Party and no
constraints on the future conduct of its business, without the
prior written approval of the Indemnified Party.
9.4 FURTHER ASSURANCES: After Closing, Seller and Purchaser agree to take
such further actions and to execute, acknowledge and deliver all such
further documents that are necessary or useful in carrying out the
purposes of this Agreement or of any document delivered pursuant
hereto.
9.5 RECORDING: Purchaser shall immediately file for all requisite approvals
of the appropriate federal governmental agencies to the Assignment. The
Assignment shall be filed in the appropriate governmental offices in
compliance with the applicable rules of such governmental agencies.
Purchaser shall supply Seller with a true and accurate photocopy of
each recorded and filed Assignment and General Assignment within a
reasonable period of time after their recording and filing.
9.6 CONFIDENTIALITY AND PUBLICITY: In the event Closing does not occur for
any reason except as required by law and with prior notice to Seller,
Purchaser and its officers, directors, employees, agents and
representatives will hold in strict confidence all data and information
obtained from Seller in connection with the Assets, whether before or
after execution of this Agreement, except any data or information
which:
(a) at the time of the disclosure to Purchaser by Seller is in the
public domain;
(b) after disclosure to Purchaser by Seller becomes part of the
public domain by publication or otherwise, except by breach of
this provision by Purchaser;
(c) Purchaser can establish by competent proof was rightfully in
its possession at the time of disclosure to Purchaser by
Seller;
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(d) Purchaser rightfully received from third parties free of any
obligations of confidence; or
(e) is developed independently by Purchaser, provided the person
or persons alleged to have independently developed the
information shall not have any access to data or information
obtained from Seller in connection with the transactions
contemplated by this Agreement.
If this Agreement is terminated for any reason, Purchaser shall return
to Seller all copies of confidential information, as requested by
Seller, in the possession of Purchaser obtained from Seller or pursuant
to any provision of this Agreement, which information is at the time of
termination required to be held in confidence pursuant to this Section.
The obligations of Purchaser under this Section 9.6 shall be in
addition to, and not in lieu of, Purchaser's obligations under
confidentiality agreements previously executed by the Parties that
relate to the Assets ("Prior Confidentiality Agreements").
Notwithstanding anything to the contrary contained in the Prior
Confidentiality Agreements, the Parties acknowledge and agree that: (i)
the terms and provisions of the Prior Confidentiality Agreements shall
not be superseded by the provisions of this Agreement; and (ii) the
Prior Confidentiality Agreements shall terminate at Closing or upon
termination of this Agreement pursuant to Article XI.
9.7 THIRD-PERSON CONSENTS: Certain of the transfers contemplated by this
Agreement are subject to various forms of consents required of third
persons, which are identified on Exhibit "J" ("Consents"). The Parties
shall cooperate and shall promptly take such action as may be required
to obtain all necessary Consents prior to Closing. The Parties agree
that to the extent any Assets, contract or permit that would otherwise
be assigned under this Agreement is not capable of being assigned,
transferred, subleased or sublicensed without any such Consent, or
waiver by any other party thereto or any other person, or if such
assignment, transfer, sublease or sublicense or attempted assignment,
transfer, sublease or sublicense would constitute a breach thereof, or
a violation of any law, this Agreement shall not constitute an
assignment, transfer, sublease or sublicense, or an attempted
assignment, transfer, sublease or sublicense of any such contract or
permit. With respect to each Asset, contract that, but for the reasons
set forth in the first sentence of this Section, would be assigned,
Seller agrees to provide Purchaser with the benefits (including the
right to terminate any such contract or permit in accordance with the
terms thereof) of such Asset, contract or permit, to the extent related
to transactions or periods that occur at or after Closing, and to the
extent it is possible to do so; and, if and to the extent such benefits
are provided to Purchaser, Purchaser agrees to observe and perform such
contract or permit. Seller shall continue to use its reasonable efforts
to obtain an assignment to Purchaser of each Asset, contract or permit
that, but for the reasons set forth in the first sentence of this
Section, would be assigned; provided, however, that Seller shall not be
required to pay any consideration or suffer any financial disadvantage
to obtain such assignment.
9.8 PLUGGING AND ABANDONMENT: Purchaser recognizes that pursuant to Article
7.7 of the Union PSA, Seller agreed under certain circumstances to
provide to Union a bond. In the event Closing occurs and Seller is
obligated to provide this bond to Union Oil Company of California,
Purchaser agrees to pay for and bear an undivided fifty percent (50%)
of such cost and obligation.
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X.
TAXES
10.1 APPORTIONMENT OF AD VALOREM AND PROPERTY TAXES: All ad valorem taxes,
real property taxes, personal property taxes and similar obligations
with respect to the Assets for the tax period in which the Effective
Date occurs shall be apportioned as of the Effective Date between
Seller and Purchaser. That portion of such apportioned tax liability
which is attributable to Seller shall be taken into account as an
adjustment to the Purchase Price pursuant to Section 2.2. Purchaser
shall file or cause to be filed all required reports and returns
incident to such taxes and shall pay or cause to be paid to the taxing
authorities all such taxes relating to the tax period in which the
Effective Date occurs. Seller will use its reasonable efforts to
provide Purchaser with all necessary information.
10.2 SALES TAXES; FILING FEES: The transactions contemplated by this
Agreement are an occasional sale and should be deemed exempt from any
state and local sales and use taxes, and the Parties hereto will use
reasonable efforts to report and have this transfer treated as exempt
from such taxes. The Purchase Price and the Adjusted Purchase Price
provided for herein are net of any sales taxes or other transfer taxes
in connection with the sale of the Assets. Purchaser shall be liable
for any sales tax or other transfer tax, as well as any applicable
conveyance, transfer and recording fees and real estate transfer stamps
or taxes imposed on the transfer of the Assets pursuant to this
Agreement. If Seller is required by applicable state law to report and
pay these taxes and fees, Purchaser shall, upon presentment of an
invoice by Seller, promptly deliver a check to Seller in full payment
of the invoice.
10.3 OTHER TAXES: All production, severance, excise and other similar such
taxes or fees (other than income, franchise and general corporate
taxes) relating to production of oil, gas and condensate by Seller
attributable to the Assets prior to the Effective Date shall be paid by
Seller, and all such taxes relating to such production on and after the
Effective Date shall be paid by Purchaser. Purchaser and Seller shall
supply each other with copies of the filed reports and proof of payment
promptly after filing and paying them.
XI.
TERMINATION
11.1 RIGHT OF TERMINATION: This Agreement, the transactions contemplated
hereby, and any obligations under any letters of intent between the
Parties may be terminated at any time prior to Closing by either Party.
Any termination pursuant to this Section 11.1 must be by written notice
by the Party electing to terminate, and shall be effective when
delivered to the other Party.
11.2 EFFECT OF TERMINATION: In the event of termination pursuant to Section
11.1, neither Party shall have any further obligations to the other
hereunder or under any letter of intent between the Parties, or
otherwise, except for the Prior Confidentiality Agreements.
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XII.
MISCELLANEOUS
12.1 GOVERNING LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA. ALL ASSIGNMENTS AND
INSTRUMENTS EXECUTED IN ACCORDANCE WITH THIS AGREEMENT SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
WHERE THE ASSETS CONVEYED THEREBY ARE LOCATED.
12.2 ENTIRE AGREEMENT: This Agreement and all documents and instruments
executed and delivered pursuant to this Agreement, together with any
confidentiality agreements relating to the Assets previously executed
by Purchaser, constitute the entire agreement between the parties and
supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the Parties. No supplement,
amendment, alteration, modification or waiver of this Agreement shall
be binding unless executed in writing by the Parties.
12.3 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.
12.4 CAPTIONS: The captions in this Agreement are for convenience only and
shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
12.5 ASSIGNMENT: Except as provided in Section 2.4, prior to Closing,
neither Party shall assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other
Party, and any assignment made without such consent shall be void.
Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the Parties and their respective
permitted successors and assigns.
12.6 NOTICES: Any notice provided or permitted to be given under this
Agreement shall be in writing, and may be served by personal delivery
or by depositing same in the United States mail, addressed to the Party
to be notified, postage prepaid, and registered or certified with a
return receipt requested. Notices deposited in the mail in the manner
hereinabove described shall be deemed to have been given and received
upon the date of delivery as shown on the return receipt. Notice served
in any other manner shall be deemed to have been given and received
only if and when actually received by the addressee. For purposes of
notice, until receipt of written notice changing same, the addresses of
the Parties shall be as follows:
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SELLER'S MAILING ADDRESS:
Energy Partners, Ltd.
201 St. Charles Avenue
Suite 3400
New Orleans, Louisiana 70170
Attention: Vice President - Land
PURCHASER'S MAILING ADDRESS:
Vastar Resources, Inc.
15375 Memorial Drive
Houston, Texas 77079
Attention: Shawn E. Conner
12.7 WAIVER OF COMPLIANCE WITH BULK TRANSFER LAWS: Purchaser waives
compliance with any applicable bulk transfer law relating to the
transactions contemplated by this Agreement, and agrees to assume all
risk and liability in connection with the failure to so comply.
12.8 UTPCPL WAIVER: TO THE EXTENT APPLICABLE TO THE ASSETS OR ANY PORTION
THEREOF, PURCHASER HEREBY WAIVES THE PROVISIONS OF THE LOUISIANA UNFAIR
TRADE PRACTICES AND CONSUMER PROTECTION LAW (LA. R.S. 51:1402, ET
SEQ.). PURCHASER WARRANTS AND REPRESENTS THAT IT: (i) IS EXPERIENCED
AND KNOWLEDGEABLE WITH RESPECT TO THE OIL AND GAS INDUSTRY GENERALLY
AND WITH TRANSACTIONS OF THIS TYPE SPECIFICALLY; (ii) POSSESSES AMPLE
KNOWLEDGE, EXPERIENCE AND EXPERTISE TO EVALUATE INDEPENDENTLY THE
MERITS AND RISKS OF THE TRANSACTIONS HEREIN CONTEMPLATED; AND (iii) IS
NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION. Nothing in this
Section shall be interpreted as a waiver of the express representations
and warranties in this Agreement.
12.9 WAIVER OF CONSUMER RIGHTS: PURCHASER HEREBY WAIVES ITS RIGHTS UNDER THE
DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET
SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL
RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN
SELECTION, PURCHASER VOLUNTARILY CONSENTS TO THIS WAIVER. IN ADDITION,
TO THE EXTENT APPLICABLE TO THE ASSETS OR ANY PORTION THEREOF,
PURCHASER HEREBY WAIVES THE PROVISIONS OF THE TEXAS CONSUMER
PROTECTION LAWS REGARDING FALSE, MISLEADING AND DECEPTIVE BUSINESS
PRACTICES, UNCONSCIONABLE ACTIONS AND BREACHES OF WARRANTY; PROVIDED,
HOWEVER, THAT NOTHING HEREIN CONTAINED SHALL BE DEEMED A WAIVER BY
PURCHASER WHERE SUCH WAIVER IS PROHIBITED BY LAW. IN ORDER TO EVIDENCE
ITS ABILITY TO GRANT SUCH WAIVER, PURCHASER HEREBY REPRESENTS AND
WARRANTS TO SELLER THAT PURCHASER: (i) IS IN THE BUSINESS OF SEEKING OR
ACQUIRING, BY PURCHASE OR LEASE, GOODS, OR SERVICES FOR COMMERCIAL OR
BUSINESS USE; (ii) HAS ASSETS OF FIVE MILLION DOLLARS OR MORE ACCORDING
TO ITS MOST RECENT FINANCIAL STATEMENT PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; (iii) HAS
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KNOWLEDGE AND EXPERIENCE IN FINANCIAL MATTERS THAT ENABLE IT TO
EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED HEREBY;
AND (iv) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION.
Nothing in this Section shall be interpreted as a waiver of the express
representations and warranties in this Agreement.
12.10 WAIVER OF JURY TRIAL: SELLER AND PURCHASER DO HEREBY IRREVOCABLY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING BASED UPON, ARISING
OUT OF, OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
12.11 LIMITATION OF LIABILITY: SELLER AND PURCHASER DO HEREBY COVENANT AND
AGREE THAT: (i) THE RECOVERY BY EITHER PARTY HERETO OF ANY DAMAGES
SUFFERED OR INCURRED BY IT AS A RESULT OF ANY BREACH BY THE OTHER PARTY
OF ANY OF ITS COVENANTS, AGREEMENTS, REPRESENTATIONS, GUARANTIES,
WARRANTIES, DISCLAIMERS, WAIVERS OR CONTINUING OBLIGATIONS UNDER THIS
AGREEMENT SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR INCURRED
BY THE NON-BREACHING PARTY AS A RESULT OF SUCH BREACH; AND (ii) IN NO
EVENT SHALL SUCH RECOVERY INCLUDE ANY INDIRECT, CONSEQUENTIAL,
EXEMPLARY, STATUTORY OR PUNITIVE DAMAGES.
12.12 NO ADMISSIONS: Purchaser and Seller agree that neither this Agreement,
nor any part hereof, nor any performance under this Agreement, nor any
payment of any amount pursuant to any provision of this Agreement shall
constitute or be construed as a finding, evidence of, or an admission
or acknowledgment of any liability, fault, past or present wrongdoing
or violation of any law, rule, regulation or policy, by either Seller
or Purchaser or by their respective officers, directors, employees or
agents.
12.13 ANNOUNCEMENTS: Subject to any applicable requirement under the Unocal
PSA, Seller and Purchaser agree that the press announcement(s)
identified on Exhibit "K" attached hereto will be made within twenty
(20) days following Closing. Seller and Purchaser, including their
respective affiliates, agree that from the date of this Agreement and
continuing for twelve (12) months after the Closing if reserve volumes
are estimated in a news release in conjunction with a Purchase Price
disclosure the release must state that the reserve estimates are the
disclosing Party's reserve estimates; provided, that either Party may
make all disclosures which are required or prudent under applicable
laws, including, but not limited to, rules, regulations and guidelines
of the Securities and Exchange Commission and applicable stock
exchanges.
12.14 BOOKS AND RECORDS: Seller shall, at or as promptly as reasonably
possible after Closing, provide and make available to the Purchaser, at
Purchaser's cost and expense, subject to the attorney-client privilege,
photocopies of the Records. Notwithstanding any other provision herein
contained, Purchaser shall retain all original documents comprising the
Records, if any, delivered by Seller
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hereunder which pertain to the Assets (any documents delivered by
Seller hereunder may be maintained on electronic, magnetic, optical, or
any other form of storage media) for as long as Purchaser so desires
and make the same available after the Closing for inspection and
copying by Seller during normal business hours, upon reasonable request
and upon reasonable notice; provided, however, that during the first
six (6) years after Closing, such originals shall not be disposed of or
destroyed by Purchaser without first advising Seller in writing and
giving Seller reasonable opportunity to inspect, photocopy or obtain
possession of such originals.
12.15 THIRD PARTY BENEFICIARIES: Except as expressly provided herein, neither
this Agreement nor any performance hereunder by the Parties is intended
to create, nor shall this Agreement or any such performance be
construed to create, any rights, claims, causes of action or remedies
in any third person under doctrines concerning third-party or intended
beneficiaries.
12.16 EXPENSES: Except as otherwise provided herein, each Party shall be
solely responsible for all expenses incurred by it in connection with
the transactions contemplated by this Agreement, including, without
limitation, fees and expenses of its own legal counsel, accountants,
consultants or other advisers.
12.17 CONVEYANCE COSTS: Purchaser shall be solely responsible for filing and
recording documents related to the transfer of the Assets and for all
costs and fees associated therewith. Purchaser shall file and record
all such documents as promptly as practicable after the Closing Date
and shall promptly furnish Seller with evidence of all required filings
and recording data.
12.18 SECURITIES LAWS: The solicitation of offers and the sale of the Assets
by Seller have not been registered under any federal or state
securities laws. Purchaser represents that at no time has it been
presented with or solicited by or through any public promotion or any
form of advertising in connection with this transaction. Purchaser
represents that it intends to acquire the Assets for its own benefit
and account and that it is not acquiring the Assets with a view to or
with the intent of distributing fractional, undivided interests that
would be subject to regulation by federal or state securities laws, and
that if it sells, transfers or otherwise disposes of the Assets or
fractional, undivided interests, it will do so in compliance with
applicable federal and state securities laws.
12.19 DUE DILIGENCE: Purchaser represents that it has performed, or will
perform prior to Closing, sufficient review and due diligence with
respect to the Assets, which includes reviewing well data, title and
other files, and performing necessary evaluations, assessments and
other tasks involved in evaluating the Assets, to satisfy its
requirements completely and to enable it to make an informed decision
whether to acquire the Assets under the terms of this Agreement.
12.20 SEVERABILITY: If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any applicable
rule or law, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transaction contemplated hereby is
not affected in a materially adverse manner with respect to either
Party.
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12.21 SURVIVAL: Except as otherwise specifically provided in this Agreement,
all covenants, agreements, representations, guaranties, indemnities,
warranties, disclaimers, waivers and continuing obligations, including,
without limitation, the obligations described in Article IX, shall
survive the execution of the Agreement, Closing, and the delivery and
recording of any acts of sale, assignments or bills of sale, including,
without limitation, the Record Title Assignment and the General
Assignment, which convey title to the Assets from Seller to Purchaser.
12.22 LISTING OF EXHIBITS AND SCHEDULES: The Exhibits and Schedules listed
below are attached to this Agreement and by this reference are fully
incorporated herein:
Exhibit "A" - Assets
Exhibit "B" - Easements
Exhibit "C" - Assets Not Sold
Exhibit "D" - Retained Matters and Litigation
Exhibit "E" - Contracts
Exhibit "F" - Back-in, Reversion
Exhibit "G" - Union PSA and Shell PSA
Exhibit "H" - Record Title Assignment
Exhibit "H-1" - General Assignment
Exhibit "H-2" - Pipeline Purchase Option Agreement
Exhibit "I" - Operating Agreement
Exhibit "J" - Consents
Exhibit "K" - Press Announcements
Exhibit "N" - Right of First Refusal Agreement
Exhibit "O" - Joint Development Area
Exhibit 2.4(a) - Like Kind Exchange Assignment
Schedule 6.2(g) - Matters Concerning Basic Documents
Schedule 6.2(h) - Compliance with Laws
Schedule 6.2(i) - Governmental Licenses
Schedule 6.2(j) - Lease Obligations
Schedule 6.2(k) - Obligations Relating to Operations
Schedule 6.2(l) - Operations Since the Effective Date
Schedule 6.2(m) - Marketing of Production; Suspended Funds
Schedule 6.2(n) - Taxes
Schedule 6.2(o) - Preferential Rights and Restrictions on Assignment
Schedule 6.2(p) - Wells
Schedule 6.2(q) - Environmental Matters
12.23 COUNTERPARTS: This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
12.24 RECORDATION: The General Assignment (the form of which is attached
hereto as Exhibit "H-1" is intended to convey all of the Assets being
conveyed pursuant to this Agreement. Certain of the Leasehold Property
or other specific property comprising a portion of the Assets that are
leased
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from or require the approval of any transfer by any governmental entity
conveyed by the General Assignment may also be described in separate
assignments made by Seller to Purchaser on officially approved forms,
or forms acceptable to such entity, in sufficient multiple originals to
satisfy applicable statutory and regulatory requirements. THE INTERESTS
CONVEYED BY SUCH SEPARATE ASSIGNMENTS ARE THE SAME, AND NOT IN ADDITION
TO, THE INTERESTS CONVEYED IN THE GENERAL ASSIGNMENT. Further, such
assignments shall be deemed to contain the special limited warranty of
Seller and all of the exceptions, reservations, rights to enforce
covenants and warranties (if any) against Seller's predecessors-
in-title, rights, titles, power and privileges set forth herein as
fully and only to the extent as though they were set forth in each such
separate assignment. For recording purposes, property descriptions
attached to various counterparts of the General Assignment may contain
a description of the Assets relating only to the jurisdiction in which
the counterpart is to be filed for registry or recordation. For all
purposes, each counterpart shall be deemed to be an original and all
such counterparts shall together constitute but one and the same
instrument and juridical act.
12.25 AREA OF MUTUAL INTEREST: Seller and Purchaser agree that in the event
that either party directly or indirectly acquires, on or before
December 31, 2002, an interest in any leasehold rights, royalty,
overriding royalty, farmin, farmout, farmout option, exploration
agreement or any other similar agreement covering all or any portion of
lands situated within the boundaries of South Timbalier Area Blocks 25,
27 (SE/4 and S/2 SW/4 only) 40, 41, or 42, Offshore Louisiana, Outer
Continental Shelf, Gulf of Mexico (the "Properties"), such acquiring
party (the "Acquiring Party") shall provide written notice thereof to
the other party (the "Notified Party") within thirty (30) days after
such acquisition. Said written notice shall include copies of all
instruments of acquisition and all documentation evidencing and
supporting the actual costs relating thereto. The Notified Party shall
have thirty (30) days following receipt of such written notice to elect
by written notice to the Acquiring Party to acquire an undivided fifty
percent (50.00%) of the Acquiring Party's interest in any or all of
such interests acquired by the Acquiring Party. In the event that the
Notified Party elects to acquire any such interest(s), the Acquiring
Party shall assign such interest(s) to the Notified Party, on a form
mutually acceptable to the Notified Party and the Acquiring Party,
within thirty (30) days following receipt of written notice of Notified
Party's election to acquire such interests. Said assignment shall be
made free and clear of any burdens other than those placed on the
interests being assigned by the original granting party of such
interest. Within fifteen (15) days after the Notified Party's receipt
of such assignment, the Notified Party shall reimburse the Acquiring
Party for fifty percent (50.00%) of all actual and documented costs
directly incurred by the Acquiring Party (excluding, without
limitation, the Acquiring Party's overhead, internal or administrative
costs) with respect to such acquisition and shall assume an undivided
fifty percent (50.00%) of the Acquiring Party's obligations, if any,
attributable to such acquired interest. In the event the Acquiring
Party's acquires an interest in the Properties as described above and
the Notified Party elects to acquire an undivided fifty (50%) interest
in such lease(s), and such interests are not already subject to an
operating agreement, then the Notified Party and the Acquiring Party
shall enter into a mutually acceptable Operating Agreement in a form
substantially similar to that attached as Exhibit "I" hereto.
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12.26 CALLS ON PRODUCTION:
Seller has made certain representations and warranties in Section 6.2(m) of this
Agreement with respect to calls on production. Notwithstanding such
representations and warranties, and without limiting any rights of Purchaser
hereunder, Seller and Purchaser agree that in the event that a call on
production ("Call") is exercised with respect to Purchaser's proportionate share
of production after May 1, 2000, and the price basis for the exercise of such
call ("Call Price") is less than the "Market Price," Seller shall, on a
month-to-month basis within thirty (30) days after the date that payment is made
to Purchaser pursuant to the exercise of such Call, remit to Purchaser by wire
transfer to an account designated by Purchaser, an amount equal to the
difference between the Call Price and the Market Price with respect to the
volume of production for which the Call is exercised. For purposes of this
section, the "Market Price" shall be the greater of the price to be received
under the Call under the production sales contract then existing between
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Purchaser and any third party purchaser or Seller and any third party
purchaser for any production from the Assets.
12.27 PIPELINE ACCESS: Seller agrees to cause its appropriate subsidiaries
(including, without limitation, EPL Pipeline, LLC) to grant, to
Purchaser, its successors and assigns, from and after April 20, 2000,
the right to ship its proportionate share of crude oil production
attributable to the Assets on the Bay Marchand six-inch (6") pipeline
extending from South Timbalier Block 26 "A" platform to Chevron's Bayou
Fourchon, Louisiana Terminal in Section 24, Township 23 South, Range 22
East (the "Pipeline"). Such right to ship shall be on an open-access
non-discriminatory basis at the Pipeline's published tariff rate, as
same may be amended from time to time. Such right shall terminate only
in the event, and at such time, that Purchaser exercises its option to
purchase an interest in the Pipeline pursuant to the Pipeline Purchase
Option Agreement described in Section 8.1(n).
PURCHASER ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT IN ITS ENTIRETY, AND THAT
IT UNDERSTANDS ALL THE PROVISIONS SET FORTH HEREIN, INCLUDING, BUT NOT LIMITED
TO, THOSE PROVISIONS WHEREIN PURCHASER AGREES TO INDEMNIFY SELLER IN CERTAIN
CIRCUMSTANCES EVEN THOUGH THE LOSSES, COSTS, EXPENSES AND DAMAGES MAY HAVE BEEN
CAUSED BY THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE OF THE SELLER, ITS
EMPLOYEES OR ANY THIRD PERSON AND EVEN THOUGH THE SELLER MAY BE RESPONSIBLE FOR
SUCH LOSSES, COSTS, EXPENSES AND DAMAGES UNDER ANY THEORY OF LAW, INCLUDING, BUT
NOT LIMITED TO, STRICT LIABILITY.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first set forth above.
SELLER:
ENERGY PARTNERS, LTD.
By:
------------------------------------
Printed Name:
--------------------------
Title:
---------------------------------
PURCHASER:
VASTAR RESOURCES, INC.
By:
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Shawn E. Conner
Attorney-in-Fact
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