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PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
NAMI RESOURCES COMPANY, LLC
AND
MILLER PETROLEUM, INC.
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), dated the 31st
day of August, 2000, is by and between NAMI RESOURCES COMPANY, LLC ("Nami"), a
Kentucky limited liability company, with an address of 1222 1/2 North Main
Street, London, Kentucky 40741, and MILLER PETROLEUM, INC., ("Miller"), a
Tennessee corporation, with an address of 3651 Baker Highway, P.O. Box 130,
Huntsville, Tennessee 37756.
WHEREAS, Miller desires to sell to Nami and Nami desires to
purchase from Miller on the terms set forth in this Agreement those certain
oil and gas properties set forth hereinafter;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the benefits to be derived by each party hereunder, and intending to
be legally bound, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Definitions. All capitalized terms and the definitions set
forth in this Agreement, not defined in the body of this Agreement, are set
forth in EXHIBIT "A", attached hereto and incorporated herein by reference.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.01 Assets To Be Sold. Subject to the terms and conditions of this
Agreement, Miller shall sell, transfer and assign to Nami, and Nami shall
purchase from Miller, effective July 1, 2000 (the "Effective Date"), certain
specified interests in and to the assets described below (the "Assets"). The
Assets shall consist of all of:
(a) the leases described on EXHIBIT "B" (including but not
limited to the "interests" set forth in EXHIBIT "C"), as
well as any and all working interest, royalty interests,
operating rights, overriding royalties, net profits
interests and all other types of interests held by Miller in
the "Lease(s)". (The various interests in the Lease(s)
shall be collectively referred to as the "Leasehold
Interests");
(b) Those interests attributable to the Leasehold Interests,
including but not limited to, wells (those wells are
identified in EXHIBIT "D"), well-head equipment, well bores,
pipe, gathering lines, compressors (identified in EXHIBIT
"E"), materials, inventory, facilities, supplies, equipment,
pipelines, meters, and any and all other personal, real,
movable and immovable property, fixtures or equipment which
are located on or presently used in connection with, or
relating to, the wells, the production, treatment or
transportation of oil and gas from the Lease(s), and any
replacements, additions, attachments or accessories now or
hereafter attached, added or affixed (collectively the
"Equipment").
(c) The gas, oil, oil products, casing-head gas, methane, coal
bed methane gas, drip gasoline, natural gasoline and any and
all other liquid and gaseous hydrocarbons of whatsoever
nature or kind (hereinafter referred to collectively as "Gas
and Oil") produced from or attributable to the Leasehold
Interest(s) on or after the Effective Date; and
(d) To the extent the same are assignable or transferable by
Miller and to the extent and only to the extent that the
same relate and are necessary or relevant to the ownership
or operation of the Leasehold Interest(s), the interest in
and to all orders, contracts, agreements (including without
limitation all easements and rights of way, operating
agreements, bidding agreements, transportation agreements,
unit agreements, participation agreements, gathering
agreements and processing agreements), instruments,
licenses, authorizations, well record files, reserve
reports, seismic information and reports, maps, surveys,
bonds, title opinion, permits, audits, claims, liens, suits,
settlements and demands, and other rights, privileges,
benefits and powers conferred upon Miller, including but not
limited to those described on EXHIBIT "F" (the "Contracts").
(e) to the extent attributable to the Assets, the following
records in the possession of Seller: (i) lease and land
records, including title opinions, (ii) geological and
geophysical records, (iii) operations, production and
engineering records, (iv) accounting records, and
(v) facility and well records (collectively, the "Records").
(f) It is agreed and understood between the parties that there
is reserved unto Miller, and excepted out of this
conveyance, twenty (20) drilling locations on the subject
lease, at sites approved by Nami (which approval shall not
be unreasonably withheld); provided however that all of
these twenty (20) locations must be drilled by Miller within
two (2) years of closing or said locations shall revert to
Nami. Nami shall have reasonable access to any drilling and
completion performed by Miller (to avoid problems with
Nami's own drilling and operations). Nami shall have the
right of first refusal on all of these locations before
Miller can sell same to any third party.
2.02 Purchase Price. The purchase price for the Assets to be paid by
Nami to Miller at Closing, as herein defined, shall be as follows:
(a) Nami shall pay TWO MILLION DOLLARS ($2,000,000.00) to Miller
at the time of the Closing, as herein defined, by wire
transfer.
2.03 Effective Date. The conveyance of the Assets as contemplated in
this Agreement shall be deemed for all respects, except that all
Representations and Warranties of Miller shall be applicable at the time of
the Closing, to be effective on July 1, 2000. The parties agree that within
sixty days after Closing that a full accounting of all gas shall be completed.
2.04 Allocation of Purchase Price. EXHIBIT "G" contains the allocation
of the value of the Assets as mutually agreed by the Parties (the "Allocated
Value"). Seller and Purchaser agree not to assert, in connection with any tax
return, tax audit or similar proceedings, any allocation of the consideration
that differs from any such agreed-upon in writing allocation. Seller and
Purchaser shall each prepare an IRS Form 8594 in accordance with such
Allocated Value.
ARTICLE III
CLOSING AND DELIVERIES
3.01 Closing. The Closing of the purchase and sale of the Assets
(the "Closing"), shall be held on August 28, 2000 (the "Closing Date"), or on
such other date as shall be mutually agreed upon by Nami and Miller, or unless
extended by Nami for purposes of accomplishing any cures necessary to
consummate this Agreement. The Closing shall be held at the law offices of
Howard Mann in Corbin, Kentucky, or at such other location as the parties
hereto may mutually agree upon.
3.02 Deliveries by Miller to Nami. At the Closing, Miller shall
deliver to Nami:
(a) Bill of sale, assignment and/or other instruments of
transfer referred to in this Agreement, in form
substantially identical to that attached hereto as EXHIBIT
"H", to affect the transfer of the Assets to Nami.
(b) The opinion of Miller's Counsel referred to in Section 3.04
hereof.
(c) The executed counterparts of all consents, if any, from
third parties necessary to consummate the transactions
contemplated herein.
(d) All opinions, letters or documents of counsel previously
prepared for Miller regarding the Assets, including but not
limited to the title opinions, legal opinions on litigation
(threatened or pending) and all opinions of counsel
addressed to Miller.
(e) A certificate from the Secretary of State of the State of
Tennessee and any other jurisdiction in which Miller
transacts business, as to the good standing of Miller in its
respective state of incorporation and any other jurisdiction
in which it transacts business, certified within thirty (30)
days of Closing Date.
(f) A copy of the board resolutions, certified by the Secretary
of Miller, authorizing Miller to enter into the transactions
contemplated by this Agreement to which it is a party.
(g) All other previously undelivered items required to be
delivered by Miller to Nami at or prior to the Closing.
(h) The Disclosure Schedules contemplated by this Agreement.
(i) All documents identified in the Closing Agreement.
(j) Complete copies of all lease documents, deeds, easements,
surface leases or agreements, or any other property document
which affects or involves the properties identified herein.
(k) All title information concerning the properties, including
but not limited to, bills of sale, original leases or
assignments, title opinions, reports or abstracts.
(l) Copies of any and all oil and gas reserve reports and
studies, including but not limited to, core logs, laboratory
testing data, and any other geological or engineering
reports concerning properties listed herein.
(m) A statement previously identified and attached hereto as
EXHIBIT "C", showing all royalties, overriding royalties,
working interests and revenue interests required under each
lease or agreement and a statement showing all minimum or
advance royalties or rentals paid under each lease or rental
and the extent to which such have been recouped.
(n) Releases of all liens, claims and encumbrances against the
Assets, in form and substance acceptable to Nami.
(o) Lessor's ratification (in form and substance acceptable to
Nami) of the base leases assigned to Nami under this
Agreement.
3.03 Deliveries by Nami to Miller.
(a) At the Closing, Nami shall deliver to Miller:
(i) The wire transfer provided for in Section
2.02(a);
(ii) Certificates from the Secretary of State of
Kentucky as to the good standing of Nami,
certified as of a date within thirty (30) days
of Closing;
(vii) All other previously undelivered items required
to be delivered by Nami to Miller at, or prior
to, such date.
3.04 Opinion of Miller's Counsel. Nami shall receive from Miller's
Counsel an opinion in form and substance reasonably satisfactory
to and addressed to Nami and dated the Closing Date, stating:
(i) Miller is duly organized, validly existing and in good
standing under the laws of the State of Tennessee;
(ii) Miller has the corporate power to conduct its business and
to execute and deliver this Agreement and to perform its
obligations under this Agreement;
(iii)Miller has authorized the execution, delivery and
performance of this Agreement by all necessary
corporate action;
(iv) Miller has executed and delivered this Agreement;
(v) All corporate, or other proceedings and all notices required
by law or by the Articles of Incorporation, Bylaws, or other
applicable governing documentation of Miller and the
provisions of this Agreement to be taken or given to Miller
in connection with the transactions contemplated by this
Agreement have been so taken or gave;
(vi) To Miller's Counsel's knowledge after limited investigation,
Miller is not in default under any law or regulation, or
under any order of any court or Federal, state, municipal or
other governmental department, commission, board, bureau,
agency or instrumentality wherever located, or under any
contract or agreement, which would effect the assets or the
operation of the business contemplated to be operated after
the Closing;
(vii)The instruments of transfer and assignment delivered
by Miller to Nami hereunder have been duly authorized,
executed and delivered and are valid and sufficient to
convey to Nami all of Miller's right, title an
interest in and to all of the Assets, subject to the
obtaining of necessary licenses, permits and consents
and approvals of third parties;
(viii) The execution and delivery of this Agreement,
performance by Miller of its obligations under this
Agreement and the exercise by Miller of the rights
created by this Agreement do not (a) violate Miller's
Articles of Incorporation or bylaws; (b) constitute an
illegal or ultra vires act of Miller or to Miller's
Counsel's knowledge after due investigation,
constitute a breach of or a default under, or
invalidate or give any party a right to cancel or
terminate any lease, agreement, instrument, license,
permit or other similar authorization that is being
transferred to or assumed by Nami pursuant to this
Agreement;
(ix) To Miller's Counsel's knowledge, after due investigation,
all consents, approvals and authorizations required to be
obtained by Miller in connection with the Agreement and the
transactions contemplated hereby, have been obtained;
(x) This Agreement is a valid and binding obligation of Miller
enforceable against Miller under the laws of the
Commonwealth of Kentucky, State of Tennessee and the federal
law of the United States;
(xi) To Miller's Counsel's knowledge, after due investigation,
Miller's Counsel has no knowledge of any pending or
threatened actions, claims, investigations, or other
proceedings against Miller except as disclosed to Nami; and
(xii) To Miller's Counsel's knowledge, after due
investigation, no notices of violation of any laws,
ordinances, rules, requirements or regulations
(including, without limitation, those relating to
zoning, occupational health and safety, and building
and fire codes) of any Federal, state, city or county
governmental body or agency having jurisdiction over
the Real Property or improvements constructed thereon
have been issued or received by Miller or entered
against Miller regarding the Real Property or
improvements constructed thereon.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MILLER
Miller hereby represents and warrants to Nami as of the date hereof
that:
4.01 Existence of Miller. Miller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Tennessee
and has the power and authority to own its property, to carry on its business
as now conducted and to enter into and carry out the terms of this Agreement.
4.02 Power of Miller. Miller has the corporate power to enter into and
perform this Agreement and the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by Miller, and the
transactions contemplated hereby, will not violate (i) any provision of the
certificate of incorporation or bylaws of Miller, (ii) any material agreement
or instrument to which Miller is a party or by which Miller is bound which
pertains to the Assets, Lease(s) or Leasehold Interest(s), (iii) any
judgment, order, ruling, or decree applicable to Miller as a party in
interest, or (iv) any law, rule or regulation applicable to Miller.
4.03 Authorization of Miller. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all requisite corporate action on the part of Miller.
This Agreement has been duly executed and delivered on behalf of Miller, and
at the Closing all documents and instruments required to be executed and
delivered by Miller pursuant to this Agreement shall have been duly executed
and delivered. This Agreement does, and such documents and instruments shall,
constitute legal, valid and binding obligations of Miller enforceable in
accordance with their terms, subject, however, to the affect of bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to time in
affect relating to the rights and remedies of creditors, as well as to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4.04 Litigation-Agreement. No litigation, claims, administrative
proceedings or other proceedings or governmental investigations are pending,
or to the best of Miller's actual knowledge threatened, which would prevent or
delay the execution, delivery or performance of this Agreement by Miller.
4.05 Litigation - Assets. There are no court, administrative,
regulatory or similar proceedings (whether civil, administrative, quasi-
criminal or criminal); arbitration or other dispute resolution or settlement
procedure; investigation or inquiry by any government, administrative,
regulatory or similar body or any third person or entity; or any similar
matter or proceeding (collectively "Proceedings") (a) against the Assets,
Lease(s) or Leasehold Interests, or (b) against Miller and relating in any way
to the Assets, Lease(s) or Leasehold Interests, which would have a material
adverse affect on the Assets, Lease(s) or Leasehold Interests (whether in
progress or threatened); as it pertains to the Assets, Lease(s) or Leasehold
Interests, no event has occurred which might give rise to any Proceedings,
there is no judgment, decree, injunction, rule, award or order of any court,
government department, board, commission, agency, arbitrator or similar body
outstanding against Miller and no complaint, grievance, claim, work order or
investigation has been filed, made or commenced against Miller.
4.06 No Violations. Neither the execution or delivery of this
Agreement, nor the consummation of the transactions contemplated hereby or
thereby:
(a) To the best of Miller' Knowledge, requires any filing or
registration with, or permission, authorization, consent or
approval of, any governmental or regulatory authority on the
part of Miller;
(b) To the best of Miller' Knowledge, violates or will violate
any order, writ, injunction, judgment, decree or award, or
any law, rule, regulations, or ordinance, or any court or
governmental or regulatory authority to which Miller or any
of the Assets are subject; and
(c) To the best of Miller' Knowledge, violates or conflicts
with, or will violate or conflict with, any provision of the
Articles of Incorporation or By-Laws, as amended, of Miller;
or
(d) To the best of Miller' Knowledge, violates or breaches, or
constitutes a default, (or an event which, with notice or
lapse of time or both, would constitute a default) under,
any material provision of any mortgages, deed of trust,
lien, note, lease, license, agreement, security agreement,
or other instrument, arrangement, commitment, obligation,
understanding or restriction of any kind to which Miller is
a party or by which any of its Assets may be bound.
4.07 Consents and Preferential Purchase Rights. There are no consents,
agreements or waivers of preferential rights necessary to the valid assignment
of the Assets to Nami at Closing and there are no preferential purchase
rights or calls on production with respect to the production from the
Leasehold Interest except as outlined below in Paragraph 4.14(iv).
4.08 Environmental Matters. To the best of Miller's knowledge,
information and belief after reasonable inquiry, there exists no Environmental
Defect with respect to the Assets. As used herein, "Environmental Defect"
means a condition or circumstance that exists in connection with the Leasehold
Interest or the Assets that is not in material compliance with any law,
regulation, order or judgment of or agreement with any federal, state or local
agency or court relating to the environment or that under such law,
regulation, order, judgment or agreement requires the owner or operator of
such leases or assets to undertake any cleanup, remediation or other expense
of such "Environmental Defect". To the best of Miller's knowledge, Miller
has not received notice of any material violation of applicable environmental
laws, rules, regulations, ordinances and orders relating thereto, including
laws relating to actual or threatened emissions, discharges or releases of
pollutants, contaminants or hazardous or toxic materials or waste into air,
water or land, or otherwise relating to the generation, manufacture,
processing, transportation or distribution of pollutants, contaminants or
hazardous toxic substances or wastes, the noncompliance with which would have
a material adverse affect on the ownership or operation of the Assets.
4.09 Compliance with Laws. To the best of Miller's Knowledge, the
Assets have been operated in compliance with all laws, ordinances, regulations
and orders applicable to the Assets and the operations undertaken in
connection therewith. Furthermore, no notice from any governmental body has
been served upon Miller for the Assets claiming any material violation of any
law or any other code, rule or regulation, which would have material adverse
affect on the Assets. To the best of Miller's knowledge, none of the Assets,
nor the ownership, leasing, occupancy, or the operation thereof, is in
material violation of any such law, ordinance, code, rule or regulation, which
would have a material adverse affect on the Assets.
4.10 Assets in Satisfactory Condition. To the best of Miller's
Knowledge, all the physical Assets (fixtures, equipment and personalty)
necessary for the operation of the Lease as currently constructed are, as of
closing date, in satisfactory operating condition for their intended use;
provided however, that said physical assets are sold "as is, where is," have
been inspected and found satisfactory by Nami, and are not warranted as to
fitness or continued operation, but only as to title.
4.11 Insurance. All the Assets conveyed hereunder are covered by
insurance with responsible insurers against such risks and in such amounts as
are reasonable for prudent owners of comparable assets. Miller will provide,
prior to Closing a copy of all the insurance policies pertaining to the
Assets, held by the Miller, including the name of the insurer, the risks
insured against, the amount of coverage, the policy numbers and the
expiration dates. Miller is not in default with respect to any of the
provisions contained in any such policies of insurance or has failed to give
any notice or pay any premium or present any claim under any such insurance
policy.
4.12 Permits. Miller holds all permits, licenses, bonds, approvals
and franchises (collectively, "Permits") which it requires, or is required to
have, to operate, own or lease the Assets conveyed hereunder. All such
Permits are in full force and affect; Miller is in material compliance with
all the terms and conditions relating to such permits; and there are no
proceedings in progress, pending or threatened which may result in revocation,
cancellation, suspension or any adverse modification of any of such Permits.
Neither the terms and conditions relating to such Permits nor the legislation
or regulations pursuant to which the same were issued require that any consent
or approval of, or filing with or notice to, any governmental agency or
regulatory body or other Person be made to assure the continued holding by
Nami of such permits after completion of the transaction contemplated by this
Agreement.
4.13 Material Facts Disclosed. Miller has disclosed in writing to Nami
facts within their Knowledge relating to the Assets, Lease(s) and Leasehold
Interests, which could reasonably be expected to be material to an intending
purchaser of the Assets, Lease(s) or Leasehold Interests, or that would have a
Material Adverse Affect on the Assets, Lease(s) or Leasehold Interests, or on
Nami's acquisition and ownership thereof.
4.14 Lease(s). Miller owns the Lease(s) free and clear of liens, claims
and encumbrances placed against the Assets by Miller or incurred by Miller,
and Miller has duly performed all of the obligations under the Lease(s) that
are now or will prior to the Closing Date be required to be performed by
Miller, except as is expressly set out in paragraph 4.14(iv) below. Miller
has not received any notice of default under the Lease(s) nor is any such
notice pending. The Lease(s) are valid and enforceable in accordance with
their terms; further, that:
(i) Miller has not received any notice of, and there
exists no event of default under the Lease(s) or
event which constitutes or would constitute
(with notice or lapse of time or both) a default
in any material respect thereunder; and
(ii) all working interest owners under such Lease(s)
have consented (where such consent is necessary
pursuant to the Lease or other agreements) to
the consummation of the transactions
contemplated by this Agreement without requiring
modification in the rights or obligations of
Miller under the Lease(s).
(iii) With respect to the Assets, and limited to the
time period during which Miller has owned the
Assets, to the best of Miller's Knowledge, all
rentals and royalties (including minimum
royalties, shut-in or otherwise) required to be
paid to perpetuate the Lease(s) to the date of
this Agreement have been timely and properly
paid to the proper parties and in the proper
amounts. To the best of Miller's Knowledge, (i)
the Lease(s), and all material agreements,
orders and other instruments creating the Assets
or out of which the Assets arise are legal,
valid, binding, subsisting, in good standing and
in full force and affect, and (ii) the Lease(s)
are in full force and effect.
(iv) Miller has a drilling commitment under the
S.M.E.P.A. lease which is not current; Miller
has a drilling commitment under the ENPRO lease
which is not current; There is a production
payment to Cabot Oil and Gas which is assumed
herein.
4.15 Rights of Way. Miller owns all the rights of way currently
utilized by Miller for the transportation of Oil and Gas from the Assets (the
"Rights of Way"), free and clear of liens, claims and encumbrances, and Miller
has duly performed all of the obligations under the Rights of Way that are now
or will prior to the Closing Date be required to be performed by Miller.
Miller has not received any notice of default under the Rights of Way nor is
any such notice pending. The Rights of Way are valid and enforceable in
accordance with their terms; further, that:
(i) Miller has not received any notice of, and there
exists no event of default under the Rights of
Way or event which constitutes or would
constitute (with notice or lapse of time or
both) a default in any material respect
thereunder; and
(ii) all grantors of the Rights of Way have consented
(where such consent is necessary pursuant to the
Rights of Way or other agreements) to the
consummation of the transactions contemplated by
this Agreement without requiring modification in
the rights or obligations of Miller under the
Rights of Way.
(iii) With respect to the Assets, and limited to the
time period during which Miller has owned the
Assets, to the best of Miller's Knowledge, all
payments required to be paid to perpetuate the
Rights of Way to the date of this Agreement have
been timely and properly paid to the proper
parties and in the proper amounts. To the best
of Miller's Knowledge, (i) all Rights of Way are
legal valid, binding, subsisting, in good
standing and in full force and affect, and (ii)
the Rights of Way are in full force and affect.
4.16 Disclosure. No representation or warranty by or on behalf of
Miller contained in this Agreement, in any Schedule hereto, in any agreement
entered into pursuant hereto or in connection herewith, in any certificate
delivered at Closing, or in any other certificate which states that it is
delivered pursuant to or in connection with this Agreement (certificates
referred to in this sentence are sometimes referred to herein individually as
an "Agreement Certificate" and collectively as the "Agreement Certificates"),
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact required to make the statements herein or
therein contained not misleading. Miller is not aware of any event or
condition which could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), of the Assets. Neither the
furnishing of opinions or reports pursuant to this Agreement nor any
information disclosed by any investigation or examination by Nami, nor the
Closing of the transactions contemplated hereby, shall in any way reduce any
rights Nami may have under any representation, warranties or covenants
contained in this Agreement.
4.17 Title Warranty. Miller shall warrant title to the Assets, Lease(s)
and Leasehold Interests against the demands and claims of all persons
asserting an adverse claim to the Assets, Lease(s) and Leasehold Interests
that arise by, through, or under Miller. Miller also shall convey title to
the Asset, Lease(s) and Leasehold Interest to Nami with full substitution and
subrogation in and to all covenants and warranties of Miller's predecessors-
in-title, such that Nami shall be the beneficiary and recipient thereof.
4.18 Contractual Agreements. To the best of Miller's Knowledge EXHIBIT
"I" sets forth all operating agreements, farm-out or farm-in agreements,
pooling or unitization orders and agreements, oil or gas sales contracts,
processing contracts, drilling or service contracts, partnership or joint
venture agreements and any other material contracts or agreements affecting
any of the Assets, Lease(s) or Leasehold Interests (ii) no present or future
production from any of the Assets, Lease(s) or Leasehold Interests is
dedicated under or subject to any contract, commitment, agreement, lien or
arrangement of any kind, [except as noted in Paragraph 4.14 (iv) above
(Cabot)] (iii) no person or entity has any call upon, option to purchase or
similar rights with respect to the Assets, Lease(s) or Leasehold Interests
(iv) Miller is not obligated, by virtue of a prepayment arrangement, a "take
or pay" arrangement, a production payment or any other arrangement, to deliver
hydrocarbons produced from the Assets at some future time without then or
thereafter receiving payment therefor, [except as noted in Paragraph 4.14 (iv)
above (Cabot)] and (v) Miller is not in default of its material obligations
under any agreements, except as described in Section 4.14(iv), above.
4.19 Material Adverse Effects. To the best of Miller's Knowledge, there
is no new or recent development, occurrence, event or condition which has
materially and adversely affected or may materially and adversely effect the
Assets, Lease(s) or Leasehold Interests and Miller has not done anything with
respect to the Assets, Lease(s) or Leasehold Interests which is not in the
ordinary course of Miller's business, and which would have a material adverse
affect on the Assets, Lease(s) or Leasehold Interests.
4.20 Payment of Funds. To the best of Miller's Knowledge, Miller has
duly and timely paid all taxes, governmental charges, duties, penalties,
interests and fines due and payable by it and affecting the Assets and its
operation on or before the date of this Agreement where the failure to make
such payment would have a material adverse affect on the Assets.
4.21 Gas Imbalance. Miller represents and warrants that no gas
imbalances exist for the Assets, Lease(s) or Leasehold Interests.
4.22 Wells Subject to Plugging and Abandonment. Miller represents
and warrants that at the time of Closing, it has not received any notification
from any governmental agency that any wells located on the Leases are to be
plugged and abandoned, except for the following:
None.
4.23 No Undisclosed Liabilities. Miller has not incurred any
liabilities or obligations (express, implied, absolute, accrued, contingent or
otherwise) on behalf of the Assets which were not fully disclosed to Nami
prior to the date hereof. At the time of the Closing, all of the Assets shall
be free and clear of all liens, liabilities, obligations, encumbrances, claims
(contingent, existing, pending, undisclosed, or threatened) or charges, of
whatsoever nature or kind.
4.24 Ownership of Acquired Assets. Miller is the owner legally and
beneficially of the Assets, Lease(s) or Leasehold Interests and there are no
outstanding options, calls, puts, rights, revisions, contracts, commitments,
agreements, understandings, mortgages, liens, encumbrances or other
arrangements relating to the Assets, Lease(s) and Leasehold Interests.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF NAMI
Nami represents as of the date hereof that:
5.01 Existence of Nami. Nami is a limited liability company duly
organized and validly existing and in good standing under the laws of the
State of Kentucky and has the power and authority to own property and to carry
on its business as now conducted and to enter into and to carry out the terms
of this Agreement.
5.02 Power of Nami. Nami has the power to enter into and perform this
Agreement and the transactions contemplated hereby. The execution, delivery
and performance of this Agreement by Nami, and the transactions contemplated
hereby, will not violate (i) any provision of the articles of organization or
operating agreement of Nami, (ii) any material agreement or instrument to
which Nami is a party or by which Nami is bound, (iii) any judgment, order,
ruling, or decree applicable to Nami as a party in interest, or (iv) any law,
rule or regulation applicable to Nami;
5.03 Authorization of Nami. The execution, delivery and performance of
this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all requisite company action on the part of Nami. This
Agreement has been duly executed and delivered on behalf of Nami, and at the
Closing all documents and instruments required to be executed and delivered by
Nami shall have been duly executed and delivered. This Agreement does, and
such documents and instruments shall, constitute legal, valid and binding
obligations of Nami enforceable in accordance with their terms, subject,
however, to the affect of bankruptcy, insolvency, reorganization, moratorium
and similar laws from time to time in affect relating to the rights and
remedies of creditors, as well as to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law);
5.04 Litigation. No litigation, claims, administrative proceedings
or other proceedings or governmental investigations are pending, or to the
best of Nami's actual knowledge threatened, which would prevent or delay the
execution, delivery or performance of this Agreement by Nami;
ARTICLE VI
COVENANTS AND AGREEMENTS OF SELLER
6.01 Transactions Effecting Organization and Good Standing. Between
the date hereof and the Closing Date, except as disclosed in writing to Nami,
Miller will not amend or otherwise change its Articles of Incorporation or
Bylaws and Miller will take all necessary actions to keep in full force and
affect its legal existence as of the date hereof.
6.02 Conduct of Business Before the Closing.
(i) Diligence and Conduct. Between the date hereof and the
Closing Date, Miller will conduct its business diligently
and in the ordinary course in such manner and at such times
so that, among other things, the Offices (a) maintain
satisfactory relationships with its vendors in accordance
with their custom and practice, (b) use their best efforts
to preserve intact their business organizations.
(ii) Properties and Assets. Between the date hereof and the
Closing Date, Miller will not, except in the ordinary course
of its business, without notifying Nami and obtaining Nami's
consent, (a) sell, assign, lease or otherwise transfer or
dispose of any of the Assets, except as is outlined on
EXHIBIT "J"; (b) mortgage, pledge or subject any of the
Assets to a lien, charge or encumbrance of any kind.
(iii) Contracts. Between the date hereof and the Closing Date,
(a) Miller will not, without Nami' approval, amend or
terminate any contracts (including, without limitation, any
contract or agreement with any governmental agency), or
enter into or become a party to any contract or agreement
related to or affecting the Assets or the operation thereof;
(b) Miller will not enter into any contracts which directly
or indirectly transfer any of the Assets to any officer,
director, principal or employee of Miller or third party.
(iv) Insurance. From the date hereof through and including the
Closing Date, Miller will continue in full force and affect
all of its existing insurance coverage which in any way
provides insurance coverage for the Assets or the operation
thereof.
(v) Material Increase of Liabilities. Between the date hereof
and the Closing Date, Miller will not enter into any
contract, agreement or course of action which may reasonably
be expected to materially increase the aggregate amount of
its liabilities and which in any way, adversely affects the
Assets, Lease(s) or Leasehold Interests or the operations
thereof.
(vi) Books, Records, Accounting and Asset Inspection. Between
the date hereof and the Closing Date, (a) Miller will not
make any alteration in the manner of keeping its books,
accounts or records, or in the accounting practices therein
reflected, and (b) Miller will grant to Nami and its
representatives (attorneys, auditors, agents and bankers)
full and complete access to, and the right to inspect the
Assets and evaluate the prospects of the Assets, and upon
prior notice to Miller, full access to all agents, employees
and accountants of Miller; provided, however, that any such
investigation shall be conducted in such manner as not to
interfere unreasonably with the operation of the Offices.
Miller will make available to Nami and its representatives
all books, agreements, papers and records reasonably
requested by Nami and its representatives relating to the
Assets and ownership and operation of the Assets. Upon
request by Nami, Miller shall provide Nami with such other
financial statements, reports or analyses as may be in the
possession of Miller, or affiliates of Miller, and as they
relate to the Assets' business, operations or affairs,
including both regular internal reports and special reports,
including, but not limited to, reports of consultants. Nami
agrees to keep all information received from the Miller
pursuant to this Section confidential and will not disclose
the same except to its agents or representatives or where
required in the ordinary course of business.
(vii) Other Transactions Not in the Ordinary Course of Business.
Between the date hereof and the Closing Date, without the
prior written consent of Nami, Miller will not enter into
any material transaction, whether or not restricted by a
specific paragraph of this Article VI, which directly
relates to, or affects, any of the Assets, Lease(s) or
Leasehold Interests, including the operations thereof, which
is not in the ordinary course of business.
6.03 Preservation of the Assets. From the date hereof until the
Closing Date, Miller will maintain the Assets, Lease(s) and Leasehold
Interests in no worse condition, repair and working order as such exist on the
date hereof, subject to ordinary wear, tear and consumption in the ordinary
course of the business.
6.04 Breaches of Representations and Warranties. Miller shall notify
Nami of the discovery by Miller that any representation or warranty of Miller
contained in this Agreement is or becomes untrue or will be untrue on the
Closing Date. Such disclosure shall be made in writing and within the earlier
of 48 hours after discovery or the Closing.
6.05 No-Shop Clause. From and after the date of the execution of this
Agreement through the Closing Date, Miller shall not (i) offer for sale the
Assets, Lease(s) or Leasehold Interests (or any material portion thereof) or
any ownership interest of any entity owning any of the Assets, Lease(s) or
Leasehold Interests, (ii) solicit offers to buy all or any material portion of
the Assets, Lease(s) or Leasehold Interests or any ownership interest of any
entity owning any of the Assets, Lease(s) or Leasehold Interests, (iii) hold
discussions with any party (other than Nami) looking toward such an offer or
solicitation or looking toward a merger or consolidation of any entity owning
any of the Assets, Lease(s) or Leasehold Interests, or (iv) enter into any
agreement with any party (other than Nami) with respect to the sale or other
disposition of the Assets, Lease(s) or Leasehold Interests (or any material
portion thereof) or any ownership interest in any entity owning any of the
Assets, Lease(s) or Leasehold Interests or with respect to any merger,
consolidation, or similar transaction involving any entity owning any of the
Assets, Lease(s) and Leasehold Interests. Notwithstanding anything herein to
the contrary, this "no-shop" covenant shall terminate with the Agreement if
the Agreement is terminated due to a factor outside the control of Miller.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
The obligation of Miller on the one hand and Nami on the other to
complete the transaction contemplated by this Agreement is subject to the
satisfaction of, or compliance with, at or prior to the Time of Closing, each
of the following conditions, unless waived in writing by the parties:
7.01 Accuracy of Representations and Compliance with Covenants. The
representations and warranties of the parties made in or pursuant to this
Agreement shall be true and correct at the Closing with the same force and
affect as if made at and as of the Time of Closing; the covenants contained in
this Agreement to be performed by the parties at or prior to the Time of
Closing shall have been performed; the parties shall not be in breach of any
agreement on their part contained in this Agreement; and shall have received
certificates confirming the foregoing, signed by the parties by whom such
representation is made.
7.02 Closing Documents and Proceedings. All documents relating to the
authorization and completion of the transaction contemplated by this Agreement
and all actions and proceedings to be taken at or prior to the Time of Closing
in connection with the performance by Miller and Nami of their respective
obligations under this Agreement shall be satisfactory to the respective
parties' Counsel and the parties shall have received copies of all such
documents and evidence that all such actions and proceedings have been taken
as they may reasonably request, in form and substance satisfactory to such
parties and their Counsel.
7.03 No Substantial Damage. No substantial damage by fire or other
hazard to the Assets, which in the opinion of Nami is material, shall have
occurred prior to the Time of Closing.
7.04 No Action to Restrain. No action or proceeding shall be pending
or threatened by any person to restrain or prohibit Nami from acquiring the
Assets contemplated herein.
7.05 Consents and Approvals. In the event that any consents and
approvals are required to be obtained by Miller, the same shall have been
delivered to Nami, in each case in form and substance satisfactory to Nami and
Nami's counsel.
7.06 Delivery of Documents. Miller shall have delivered all instruments
of conveyance referenced herein, in form acceptable to Nami.
7.07 Due Diligence. Nami shall complete any due diligence Nami deems
appropriate and prudent. If Nami, in its sole discretion, determines that it
should not consummate the transactions contemplated in this Agreement because
of any information discovered in its due diligence, then Nami may terminate
and abandon this Agreement by giving written notice to Miller prior to the
Closing. If any of the other conditions contained in this Article VII shall
not be fulfilled or performed at or prior to the Time of Closing to the
satisfaction of Nami (acting reasonably), Nami may, by notice to Miller,
terminate this Agreement and the obligations hereunder. Any condition
contained in this Article may be waived in whole or in part by Nami without
prejudice to any claims it may have for breach of covenants, representations
or warranties by Miller.
ARTICLE VIII
INDEMNIFICATION AND REMEDIES
8.01 Miller Indemnification. Miller agrees to indemnify, defend and
hold harmless Nami, its affiliates, successors and assigns, owners, officers,
directors, employees and agents against any and all claims, losses, expenses,
costs, obligations and liabilities of any kind, including reasonable
attorney's fees ("Indemnity Amounts") which they may incur to the extent
arising out of or resulting from any inaccuracy in or breach of any of the
representations, warranties, covenants or any other provision of this
Agreement by Miller.
Miller further agrees to indemnify, defend and hold harmless Nami, its
partners, officers, directors, shareholders, employees, agents and
representatives, and the officers, directors, shareholders, employees, agents
and representatives, and the officers, directors, shareholders, employees,
agents and representatives of its partners (the "Nami Group"), from and
against any and all claims, liabilities, losses, environmental liabilities,
fines and penalties, costs and expenses (including, without limitation, court
costs and reasonable attorneys' fees) arising from:
(1) events that have transpired or conditions that have
come into existence prior to the Effective Date that
are attributable to the ownership or operation of the
Assets; and
(2) property damage or injury or death of persons
occurring prior to the Effective Date and arising out
of the ownership or operation of the Assets regardless
of whether claims related to said damage, injury or
death are asserted on, before or after the Effective
Date.
8.02 Nami Indemnification. Nami agrees to indemnify, defend and hold
harmless Miller, its affiliates, successors and assigns, officers, directors,
employees and agents against any and all claims, losses, expenses, costs,
obligations and liabilities of any kind, including reasonable attorney's fees
("Indemnity Amounts") which they may incur to the extent arising out of or
resulting from any inaccuracy in or breach of any of the representations,
warranties, covenants or any other provision of this Agreement by Nami.
Limited to the extent of the Leasehold Interest to be acquired pursuant
to this Agreement Nami hereby assumes all of the following described
obligations, and Nami agrees to indemnify, defend and hold harmless Miller,
its officers, directors, shareholders, employees, agent and representatives
(the "Miller Group"), regardless of whether the Miller Group was wholly or
partially negligent or otherwise at fault, from and against any and all
claims, liabilities, losses, environmental liabilities, fines and penalties,
costs and expenses (including, without limitation, court costs and reasonable
attorneys' fees) arising from:
(1) events that transpire or conditions that come into
existence on or after the Effective Date that are
attributable to the ownership or operation of the
Assets on or after the Effective Date;
(2) the proper plugging and abandonment of all wells now
or hereafter located on the Leasehold Interest;
(3) all liability for property damage or injury to or
death of persons occurring on or after the Effective
Date and arising out of the ownership or operation of
the Assets.
8.03 General Provisions. In the case of any claim for indemnification
brought under this Agreement:
(a) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify the party
from whom identification is sought (the "Indemnifying
Party") of any third-party claim or claims asserted against
the Indemnified Party ("Third Party Claim") which could give
rise to a right of indemnification under this Agreement and
(ii) transmit to the Indemnifying Party a written notice
("Claim Notice") describing in reasonable detail the nature
of the Third Party Claim, a copy of all papers served with
respect to such claim (if any), an estimate of the amount of
damages attributable to the Third Party Claim and the basis
of the Indemnified Party's request for indemnification under
this Agreement. Within thirty (30) days after receipt of any
Claim Notice (the "Election Period"), the Indemnifying Party
shall notify the Indemnified Party (i) whether the
Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article VIII with respect to
such Third Party Claim and (ii) whether the Indemnifying
Party desires, at the sole cost and expense of the
Indemnifying Party, to defend the Indemnified Party against
such Third Party Claim.
(b) If the Indemnifying Party notifies the Indemnified Party
within the Election Period that the Indemnifying Party does
not dispute its potential liability to the Indemnified Party
under this Article VIII and that the Indemnifying Party
elects to assume the defense of the Third Party Claim, then
the Indemnifying Party shall have the right to defend, as
its sole cost and expense, such Third Party Claim by all
appropriate proceedings, which proceedings shall be
prosecuted diligently by the Indemnifying Party to a final
conclusion or settled at the discretion of the Indemnifying
Party in accordance with this Section 8.03. The
Indemnifying Party shall have full control of such defense
and proceedings, including any compromise or settlement
thereof. The Indemnified Party is hereby authorized, at the
sole cost and expense of the Indemnifying Party (but only if
the Indemnified Party is actually entitled to
indemnification hereunder or if the Indemnifying Party
assumes the defense with respect to the Third Party Claim),
to file, during the Election Period, any motion, answer or
other pleadings which the Indemnified Party shall deem
necessary or appropriate to protect its interest or those of
the Indemnifying Party and not prejudicial to the
Indemnifying Party (it being understood and agreed that if
an Indemnified Party takes any such action which is
prejudicial and conclusively causes a final adjudication
which is adverse to the Indemnifying Party, the Indemnifying
Party shall be relieved of its obligations hereunder with
respect to such Third Party Claim). If requested by the
Indemnifying Party, the Indemnified Party agrees, at the
sole cost and expense of the Indemnifying Party, to
cooperate with the Indemnifying Party and its counsel in
contesting any Third Party Claim which the Indemnifying
Party elects to contest, including, without limitation, the
making of any related counterclaim against the person or
entity asserting the Third Party Claim or any cross-
complaint against any person. The Indemnified Party may
participate in, but not control, any defense or settlement
of any Third Party Claim controlled by the Indemnifying
Party pursuant to this Section 8.03 and shall bear its own
costs and expenses with respect to such participation.
(c) If the Indemnifying Party fails to notify the Indemnified
Party within the Election Period that the Indemnifying Party
elects to defend the Indemnified Party or if the
Indemnifying Party elects to defend the Indemnified Party
but fails to diligently and promptly prosecute or settle the
Third Party Claim, then the Indemnified Party shall have the
right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate
proceedings, which proceedings shall be promptly and
vigorously prosecuted by the Indemnified Party to a final
conclusion or settled. The Indemnified Party shall have
full control of such defense and proceedings, provided,
however, that the Indemnified Party may not enter into,
without the Indemnifying Party's consent, which shall not be
unreasonably withheld, any compromise or settlement of such
Third Party Claim. Notwithstanding the foregoing, if the
Indemnifying Party has delivered a written notice to the
Indemnified Party to the affect that the Indemnifying Party
disputes its potential liability to the Indemnified Party
under this Article VIII and if such dispute is resolved in
favor of the Indemnifying Party by final, nonappealable
order of a court of competent jurisdiction, the Indemnifying
Party shall not be required to bear the costs and expenses
of the Indemnified Party's defense pursuant to this Section
or of the Indemnifying Party's participation therein at the
Indemnifying Party in full for all costs and expenses of
such litigation. The Indemnifying Party may participate in,
but not control any defense or settlement controlled by the
Indemnified Party pursuant to this Section, and the
Indemnifying Party shall bear its own costs and expenses
with respect to such participation.
(d) In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder which does not
involve a Third Party Claim, the Indemnified Party shall
transmit to the Indemnifying Party a written notice (the
"Indemnity Notice") describing in reasonable detail the
nature of the claim, an estimate of the amount of damages
attributable to such claim and the basis of the Indemnified
Party's request for indemnification under this Agreement.
If the Indemnifying Party does not notify the Indemnified
Party within sixty (60) days from its receipt of the
Indemnity Notice that the Indemnifying Party disputes such
claim, the claim specified by the Indemnified Party in the
Indemnity Notice shall be deemed a liability of the
Indemnifying Party hereunder. If the Indemnifying Party has
timely disputed such claim, as provided above, such dispute
shall be resolved by litigation in an appropriate court of
competent jurisdiction.
ARTICLE IX
TERMINATION
9.01 Methods of Termination. The transactions contemplated by this
Agreement may be terminated at any time, but not later than Closing:
(a) By mutual consent of Miller and Nami; or
(b) By Nami on the Closing Date, if any of the conditions
provided for in Article IV or VII to have been performed by
Miller has not been met or waived in writing by Nami; or
(c) By Miller on the Closing Date, if any of the conditions
provided for in Article V or VII to have been performed by
Nami has not been met or waived in writing by Miller.
ARTICLE X
POST-CLOSING
10.01 Receipts and Credits. All monies, proceeds, receipts, credits
and income attributable to the Assets, Lease(s) and Leasehold Interests, for
all periods of time subsequent to the Effective Date shall be the sole
property and entitlement of Nami, and, to the extent received by Miller,
Miller shall fully disclose, account for and transmit same to Nami promptly
together with copies of all remittance advises, purchase statements, meter
charts and interpretations and support for disbursements of royalty,
overriding royalty interests, working interests and taxes to the extent not
previously provided.
All monies, proceeds, receipts and income attributable to the Assets,
Lease(s) or Leasehold Interests, for all periods of time prior to the
Effective Date shall be the sole property and entitlement of Miller and, to
the extent received by Nami, Nami shall fully disclose, account for and
promptly transmit same to Miller, together with copies of all remittance
advises, purchase statements, meter charts and interpretations and support for
disbursements of royalty, overriding royalty interests, working interests and
taxes not otherwise provided.
All costs, expenses, disbursements, obligations and liabilities, with
respect to the Assets, Lease(s) and Leasehold Interests attributable to
periods of time prior to the Effective Date, regardless of when due or
payable, shall be the sole obligation of Miller, and Miller shall promptly
pay, or if paid by Nami, promptly reimburse Nami for and defend and hold Nami
harmless from and against same. Except as otherwise set forth in Article XI,
all costs, expenses, disbursements, obligations, and liabilities with respect
to the Assets, Lease(s) or Leasehold Interests attributable to periods of time
subsequent to the Effective Date, regardless of when due or payable, shall be
the sole obligation of Nami, and Nami shall promptly pay, or if correctly paid
by Miller, promptly reimburse Miller for and defend and hold Miller harmless
from and against same.
Miller shall be entitled to a credit for and reimbursement in an amount
equal to any amount received by Nami after closing for any delivery or
performance by Miller prior to the Effective Date. All accounts receivable
relating to the Assets, Lease(s) and Leasehold Interests and attributable to
the period of time after the Effective Date shall be assigned to Nami. All
accounts receivable relating to the Assets, Lease(s) and Leasehold Interests
and attributable to the period of time before the Effective Date shall be
retained by Miller.
10.02 Access. After the Closing and for a transitional period of six
months thereafter, upon the reasonable request of Nami, Miller shall, and
shall cause its officers and employees to, cooperate with and assist Nami to
ensure an orderly transition of the ownership of the Assets to Nami and to
answer inquires and supply information, whether written or oral, relating to
the Assets (including legal, accounting, environmental, government affairs
and other information). All out-of-pocket expenses incurred in connection
herewith shall be borne by Nami. Miller shall also join in any notifications
to third parties, where necessary, to document the transfer of ownership of
the Assets.
ARTICLE XI
TAXES
11.01 Apportionment of Ad Valorem and Property Taxes. All ad
valorem taxes, real property taxes, personal property taxes, and similar
obligations attributable to the Assets ("Property Taxes") with respect to the
tax period in which the Effective Date occurs shall be apportioned as of the
Effective Date between Miller and Nami. The owner of record on the assessment
date shall file or cause to be filed all required reports and returns incident
to the Property Taxes and shall pay or cause to be paid to the taxing
authorities all Property Taxes relating to the tax period on which the
Effective Date occurs but shall be entitled to reimbursement from the other
party for its proportional share.
11.02 Sales Taxes. Any sales, use or other tax on the transfer of
the Assets from Miller to Nami shall be shared equally by the parties.
11.03 Other Taxes. All such taxes, including severance taxes, which
have accrued prior to the Effective Date have been or will be properly paid or
withheld by Miller and all statements, returns, and documents pertinent
thereto have been or will be properly filed by Miller. Nami shall be
responsible for paying or withholding or cause to be paid or withheld all such
taxes which have accrued after the Effective Date and for filing all
statements, returns, and documents incident thereto.
ARTICLE XII.
MISCELLANEOUS
12.01 Entire Agreement and Amendments. This Agreement constitutes the
entire agreement between Miller and Nami with respect to the transactions
contemplated herein, and supersedes all prior oral or written agreements,
commitments, understandings, or information otherwise furnished by Miller and
Nami with respect to such matters and may not be altered or amended, nor may
any rights hereunder be waived, except by an instrument in writing executed by
the party to be charged with such amendment or waiver.
12.02 Assignment. Neither Miller nor Nami may assign its rights or
delegate its duties or obligations under the terms of this Agreement without
the prior written consent of the other party, which consent shall not be
unreasonably withheld.
12.03 Headings. The headings of the Articles and Sections of this
Agreement are for guidance and convenience of reference only and shall not
limit or otherwise effect any of the terms or provisions hereof.
12.04 Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Kentucky.
12.05 Parties in Interest. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and, except as otherwise
prohibited, their respective successors and assigns, and nothing contained in
this Agreement, express or implied, is intended to confer upon any other
person or entity any benefits, rights or remedies.
12.06 Further Assurances and Further Documents. After execution,Miller
and Nami shall execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered such other instruments and further documents and
take such other action as may be reasonable necessary or advisable to carry
out their obligations under this Agreement and under any document, certificate
or other instrument delivered pursuant hereto.
12.07 Relationship. It is not the purpose or intention of Miller or
Nami to create any partnership, joint venture, mining partnership, or any
association or any other relationship between them, express or implied,
whether legal or quasi-legal, whereby one party is held liable for the acts or
omissions of the other party, and neither this Agreement nor the operations
hereunder shall be construed or considered as creating any such relationship.
12.08 Publicity. Nami agrees to consult Miller prior to the issuance of
any public announcements; however Miller acknowledges that Nami has certain
regulatory and statutory responsibilities to disburse information to the
public.
12.09 Notices. All notices and consents to be given hereunder shall be
in writing and shall be deemed to have been duly given if delivered
personally, sent by facsimile transmission, registered or certified mail,
postage prepaid and return receipt requested, addressed as follows:
If to Miller: Miller Petroleum, Inc.
Attention: Deloy Miller
3651 Baker Highway
P.O. Box 130
Huntsville, TN 37756
If to Nami: Nami Resources Company, LLC
Attention: Mike Nami
1222 1/2 North Main Street
London, KY 40741
The addresses so indicated may be changed by similar written notice.
Notices shall be deemed effective as of the date of their receipt.
12.11 Confidentiality. Nami acknowledges that all information furnished
or disclosed pursuant hereto must remain confidential until Closing. Prior to
the Closing, Nami may disclose such information:
(d) to its employees or consultants or to any related
corporation or the employees or consultants thereof
taking the customary precautions to ensure that they
keep such records, data, studies, opinions and other
information confidential;
(e) as may in the opinion of an attorney or Counsel for
Nami or for any related corporation be required by law
or for the reasonable protection of Nami or related
corporation or their respective directors or other
officers;
(f) to any government or governmental authority or any
financier or prospective financier of Nami.
12.12 Severability. If any term or other provisions of this Agreement
is invalid, illegal or incapable of being enforced under any rule or law, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect.
12.13 No Third Party Beneficiary. This Agreement is not intended to
create, nor shall it be construed as to create, any rights in any third party
under doctrines concerning third party beneficiaries or stipulations pour
autrui.
12.14 Payment of Expenses and Fees. Nami and Miller shall bear their
respective costs and expenses, including but not limited to, attorneys' fees
incurred in connection with the transactions contemplated in this Agreement;
provided, however, Nami shall pay all recording fees or transfer taxes in
connection with the recording of any instrument of transfer of the Leasehold
Interest from Miller to Nami hereunder.
12.15 Arbitration. Upon the demand of Nami or Miller (collectively, the
"parties"), whether made before the institution of any judicial proceeding or
not more than 60 days after service of a complaint, third party complaint,
cross-claim or counterclaim or any answer thereto or any amendment to any of
the above, any Dispute (as defined below) shall be resolved by binding
arbitration in accordance with the terms of this Section 12.15. A "Dispute"
shall include any action, dispute, claim, or controversy of any kind, whether
founded in contract, tort, statutory or common law, equity, or otherwise, now
existing or hereafter occurring between the parties arising out of, pertaining
to or in connection with this Agreement or any related agreements, documents,
or instruments (the "Documents"). The parties understand that by this Section
12.15, they have decided that the Dispute may be submitted to arbitration
rather than being decided through litigation in court, however the parties do
not waive their respective rights to appeal any decision on due process
grounds, failure to adhere to the procedures set forth herein, or otherwise.
Governing Rules. Arbitrations conducted pursuant to this Section
12.15, including selection of arbitrators, shall be administered by the
American Arbitration Association ("Administrator") pursuant to the Commercial
Arbitration rules of the Administrator. Arbitrations conducted pursuant to
the terms hereof shall be governed by the provisions of the Federal
Arbitration Act (Title 9 of the United States Code), and to the extent the
foregoing are inapplicable, unenforceable or invalid, the laws of the
Commonwealth of Kentucky. Judgment upon any award rendered hereunder may be
entered in any court having jurisdiction. Any party who fails to submit to
binding arbitration following a lawful demand by the opposing party shall bear
all costs and expenses, including reasonable attorney's fees, incurred by the
opposing party in compelling arbitration of any Dispute.
Arbitrator Powers and Qualifications; Awards. Arbitrators shall
resolve all Disputes in accordance with the applicable substantive law
including the award of attorneys' fees and expenses if permitted by law or the
agreement of the parties. All statutes of limitation applicable to any
Dispute shall apply to any proceeding brought in accordance with this Section
12.15. Any arbitrator selected to act as the only arbitrator in a Dispute
shall be required to be a practicing attorney with not less than 10 years
practice in commercial law in the Commonwealth of Kentucky. With respect to a
Dispute in which the claims or amounts in controversy do not exceed $100,000,
a single arbitrator shall be chosen and shall resolve the Dispute. In such
case the arbitrator shall have authority to render an award up to but not to
exceed $100,000 including all damages of any kind whatsoever, costs, fees and
expenses. Submission to a single arbitrator shall be a waiver of all parties'
claims to recover more than $100,000. Disputes involving claims or amounts in
controversy exceeding $100,000 shall be decided by a majority vote of a panel
of three arbitrators ("Arbitration Panel"). An Arbitration Panel shall be
composed of one arbitrator who would be qualified to sit as a single
arbitrator in a Dispute decided by one arbitrator, and two arbitrators who
have at least ten years experience in the oil and gas business. Arbitrator(s)
may, in the exercise of their discretion, at the written request of a party,
(i) consolidate in a single proceeding any multiple party claims that are
substantially identical, and (ii) administer multiple arbitration claims as
class actions in accordance with Rule 23 of the Federal Rules of Civil
Procedure. The arbitrator(s) shall be empowered to resolve any dispute
regarding the terms of this Agreement or the arbitrability of any Dispute or
any claim that all or any part (including this provision) is voidable but
shall have no power to change or alter the terms of this Section 12.15. The
award of the arbitrator(s) shall be in writing and shall specify the factual
and legal basis for the award.
Miscellaneous. To the maximum extent practicable, the
Administrator, the Arbitrator(s) and the parties shall take any action
necessary to require that an arbitration proceeding hereunder be concluded
within 180 days of the filing of the Dispute with the Administrator. The
Arbitrator(s) shall be empowered to impose sanctions for any party's failure
to proceed with the times established herein. Arbitration proceedings
hereunder shall be conducted in Kentucky at a location determined by the
Administrator. In any such proceeding the doctrines of res judicata and
collateral estoppel shall apply and a party shall state as a counterclaim any
claim which arises out of the transaction or occurrence or is in any way
related to the Documents which does not require the presence of a third party
which could not be joined as a party in the proceeding. The provisions of
this Section 12.15 shall survive any termination, amendment, or expiration of
the Documents unless the parties otherwise expressly agree in writing. Each
party agrees to keep all Disputes and arbitration proceedings strictly
confidential, except for disclosures of information required in the ordinary
course of business of the parties or as required by applicable law or
regulation.
12.16 Access to Employees. Miller and Nami each shall use its
reasonable efforts to afford the other with access to its employees, as
follows: (i) in the case of Miller, employees of Miller, as Nami may
reasonably request for Nami's proper business purposes regarding the Assets,
but not as to matters proprietary to either Nami or Miller, who remain
employees of Miller following the date of Closing and who are familiar with
the operations of the Assets, and (ii) in the case of Nami, employees of Nami,
as Miller may reasonably request for Miller's proper business purposes,
including without limitation, the defense of legal proceedings. Such access
may include interviews (provided however, no such interview shall be conducted
without attendance of such employee's counsel) or attendance at depositions or
legal proceedings (provided however, no such attendance will be made without
attendance of such employee's counsel); provided, however, that in any event
all out-of-pocket expenses (including wages and salaries) reasonably incurred
by any party in connection with this Section 12.16 shall be paid or promptly
reimbursed by the party requesting such services.
12.17 Limited No-Compete. From date of closing, and for a period of
three years thereafter, neither Miller nor any of its agents, servants or
employees, shall contact, solicit, induce or otherwise attempt to lease or
contract with, the landowners or Lessors who are parties to the Lease(s), or
in any way interfere with Nami's operations of the Assets, Lease(s) or
Leasehold Interests. This provision does not apply to any Asset, Lease or
Leasehold Interest not transferred by Miller under this Agreement.
12.18 Survival of Representations. The parties shall have a period of
two (2) years from the date of Closing of this transaction in which to pursue
legal action for any alleged breach of the covenants, representations and
warranties contained in this Agreement and in all certifications and documents
delivered pursuant to or contemplated by this Agreement.
12.19 No Finder's Fees. Each of the parties represent and warrants to
the other parties that such party has not taken, and agrees that it will not
take, any action that would cause any other party to become liable to any
claim or demand for a brokerage commission, finder's fee or other similar
payment.
[SIGNATURE PAGE ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have executed this Agreement on this
31st day of August, 2000.
MILLER PETROLEUM, INC.
By: /s/Deloy Miller
Its: CEO
NAMI RESOURCES COMPANY, LLC
By: /s/Nami
Its: Managing Member
EXHIBITS
<PAGE>
Exhibit A Definitions
Definitions
All terms in need of explanation found in the Purchase and Sale
Agreement from Miller Petroleum, Inc. to Nami Resources, LLC, have been
provided relevant definitions for the Purchase and Sale Agreement and have
been fully explained within the text of the Purchase and Sale Agreement;
therefore, no further definitions are necessary in this Exhibit A.
<PAGE>
Exhibit B Leases
1. That certain Oil & Gas Lease dated April 4,1 994, by and between
South Mississippi Electric Power Association unto AKS Energy Corporation of
record in Lease Book 40, Page 221, in the Bell County Clerk's Office, in Lease
Book 87, Page 91 in the Knox County Clerk's Office, in Lease Book 37, Page 9
in the Harlan County Clerk's Office, in Lease Book 49, Page 523 in the Leslie
County Clerk's Office, in Lease Book 80, Page 70 in the Clay County Clerk's
Office. The last conveyance being an Assignment and Bill of Sale dated
December 16, 1997, by and between AKS Energy Corporation unto Miller
Petroleum, Inc. of record in Lease Book 41, Page 276 in the Bell County
Clerk's Office, in Lease Book 92, Page 016 in the Knox County Clerk's Office,
In Lease Book 38, Page 431 in the Harlan County Clerk's Office, in Lease Book
52, Page 452 in the Leslie County Clerk's Office, in Lease Book 83, Page 492
in the Clay County Clerk's Office.
2 That Oil and Gas Lease dated May 31, 1994, by and between Enpro,
Inc., unto AKS Energy Corporation, of record in Lease Book 40, Page 228 in the
Bell County Clerk's Office, in Lease Book 87, Page 240 in the Knox County
Clerk's office. The last conveyance being an Assignment and bill of Sale
dated December 16, 1997, by and between AKS Energy Corporation unto Miller
Petroleum, Inc., of record in Lease Book 41, Page 276 in the Bell County
Clerk's Office, in Lease Book 92, Page 016 in the Knox County Clerk's Office.
3 That Assignment of Oil and Gas Leases dated May 31, 1994, by and
between Enpro, Inc., unto AKS Energy Corporation, of record in Lease Book 40,
Page 242 in the Bell County Clerk's Office, in Lease Book 87, Page 240 in the
Knox County Clerk's Office. The last conveyance being an Assignment and Bill
of Sale dated December 16, 1997, by and Between AKS Energy Corporation of
record in Lease Book 41, Page 276 in the Bell County Clerk's Office, in Lease
Book 92, Page 016 in the Knox County Clerk's Office.
4. That Assignment of Oil and Gas Lease dated March 19, 1997, by and
between Rio Grande Resources, Inc. unto AKS Energy Corporation, of record in
Lease Book 41, Page 141 in the Bell County Clerk's Office. The last
conveyance being an Assignment and Bill of Sale dated December 16, 1997, by
and between AKS Energy Corporation unto Miller Petroleum, Inc., of record in
Lease Book 41, Page 276 in the Bell County Clerk's Office.
<PAGE>
Exhibit C Interest in Leases
MILLER PETROLEUM, INC.
KENTUCKY LEASES
WELL OWNERSHIP
Net Revenue
Lease Name Well No. County Permit No. Interest Total
South Miss. Elec. Power Assn. 1 Leslie 86005
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 2 Leslie 86004
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 2A Leslie 88096
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 3 Leslie 86079
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 6 Clay 86141
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 7 Clay 86143
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 10 Bell 88502
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 13 Leslie 86623
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 21 Leslie 88520
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 22 Clay 88462
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 24 Leslie 87675
Miller Petroleum, Inc. 0.445313
Southern Gas Co. 0.429687 *
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 24A Leslie 88071
Miller Petroleum, Inc. 0.445313
Southern Gas Co. 0.429687 *
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 25 Leslie 88153
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Cabot 2Leslie44430
Miller Petroleum, Inc. 0.717500
James E. Black 0.017500
Johnny C. Boyles 0.043750
Dale J. Walters 0.008750
L. Lee Lohman 0.008750
Frank A. Pierce 0.035000
Ken Davidson 0.008750
George J. Slavik 0.008750
M. A. "Bud" Bauer 0.008750
Ray E. Crawford 0.008750
Ken Kreuter 0.008750
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Cabot 4Leslie44431 **
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Cabot 6Leslie45094 **
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Cabot 8Leslie45270 **
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Cabot 11Bell 46654 **
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Riley 14Leslie55516
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Riley 15Leslie58995
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. Riley 17Leslie60777
Miller Petroleum, Inc. 0.875000
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 26 Clay 89518
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 28 Clay 89569
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 29 Bell 89599
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 30 Bell 89587
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. 31 Clay 89586
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. CBM 32Clay 90010
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. CBM 33Clay 90011
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. CBM 34Clay 90012
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
South Miss. Elec. Power Assn. CBM 35Bell 90080
Miller Petroleum, Inc. 0.787500
Nancy Gettelfinger 0.043750
Herman Gettelfinger 0.021875
Andrew Gettelfinger 0.021875
South Miss. Elec. Power Assn. 0.125000
1.000000
Asher Land & Mineral, Ltd. 1 Bell 86953
Miller Petroleum, Inc. 0.585687
Enpro, Inc. 0.244313
Enpro, Inc. (ORRI) 0.045000
Asher Land & Mineral, Ltd. 0.125000
1.000000
Asher Land & Mineral, Ltd. 2 Bell 86954
Miller Petroleum, Inc. 0.585687
Enpro, Inc. 0.244313
Enpro, Inc. (ORRI) 0.045000
Asher Land & Mineral, Ltd. 0.125000
1.000000
Asher Land & Mineral, Ltd. 4 Bell 86956
Miller Petroleum, Inc. 0.585687
Enpro, Inc. 0.244313
Enpro, Inc. (ORRI) 0.045000
Asher Land & Mineral, Ltd. 0.125000
1.000000
Asher Land & Mineral, Ltd. 11 Bell 87422
Miller Petroleum, Inc. 0.585687
Enpro, Inc. 0.244313
Enpro, Inc. (ORRI) 0.045000
Asher Land & Mineral, Ltd. 0.125000
1.000000
Asher Land & Mineral, Ltd. 12 Bell 87564
Miller Petroleum, Inc. 0.420313
Southern Gas Co. 0.409687 *
Enpro, Inc. (ORRI) 0.045000
Asher Land & Mineral, Ltd. 0.125000
1.000000
Asher Land & Mineral, Ltd. 14A Bell 87599
Miller Petroleum, Inc. 0.585687
Enpro, Inc. 0.244313
Enpro, Inc. (ORRI) 0.045000
Asher Land & Mineral, Ltd. 0.125000
1.000000
Asher Land & Mineral, Ltd. 2 Bell 1500-EF
Miller Petroleum, Inc. 0.830000
Enpro, Inc. (ORRI) 0.045000
Asher Land & Mineral, Ltd. 0.125000
1.000000
Carnes Heirs (Enpro 1) 3 Knox 88317
Miller Petroleum, Inc. 0.875000
Enpro, Inc. 0.125000
1.000000
Enpro, Inc. 2 Knox 87981
Miller Petroleum, Inc. 0.441562
Southern Gas Co. 0.425938
Enpro, Inc. 0.132500
1.000000
Lewis, W. E. Heirs 1 Bell 88570
Miller Petroleum, Inc. 0.825000
Rio Grande Resources 0.050000
W.E. Lewis Heirs 0.125000
1.000000
** On the Cabot wells, there is a 40% net revenue production payment owed
until the sum of $106,138.20 is paid.
South Mississippi Electric Power Association has a 15% royalty on oil in its
lease.
<PAGE>
Exhibit D Wells
EXHIBIT "D"
WELLS
Net Revenue
Lease Name Well No. County Permit No. Interest
South Miss. Elec. Power Assn. 1 Leslie 86005 0.875000
South Miss. Elec. Power Assn. 2 Leslie 86004 0.875000
South Miss. Elec. Power Assn. 2A Leslie 88096 0.875000
South Miss. Elec. Power Assn. 3 Leslie 86079 0.875000
South Miss. Elec. Power Assn. 6 Clay 86141 0.875000
South Miss. Elec. Power Assn. 7 Clay 86143 0.875000
South Miss. Elec. Power Assn. 10 Bell 88502 0.875000
South Miss. Elec. Power Assn. 13 Leslie 86623 0.875000
South Miss. Elec. Power Assn. 21 Leslie 88520 0.875000
South Miss. Elec. Power Assn. 22 Clay 88462 0.875000
South Miss. Elec. Power Assn. 24 Leslie 87675 0.445313
South Miss. Elec. Power Assn. 24A Leslie 88071 0.445313
South Miss. Elec. Power Assn. 25 Leslie 88153 0.875000
South Miss. Elec. Power Assn. Cabot 2 Leslie 44430 0.717500
South Miss. Elec. Power Assn. Cabot 4 Leslie 44431 0.875000
South Miss. Elec. Power Assn. Cabot 6 Leslie 45094 0.875000
South Miss. Elec. Power Assn. Cabot 8 Leslie 45270 0.875000
South Miss. Elec. Power Assn. Cabot 11 Bell 46654 0.875000
South Miss. Elec. Power Assn. Riley 14 Leslie 55516 0.875000
South Miss. Elec. Power Assn. Riley 15 Leslie 58995 0.875000
South Miss. Elec. Power Assn. Riley 17 Leslie 60777 0.875000
South Miss. Elec. Power Assn. 26 Clay 89518 0.787500
South Miss. Elec. Power Assn. 28 Clay 89569 0.787500
South Miss. Elec. Power Assn. 29 Bell 89599 0.787500
South Miss. Elec. Power Assn. 30 Bell 89587 0.787500
South Miss. Elec. Power Assn. 31 Clay 89586 0.787500
South Miss. Elec. Power Assn. CBM 32 Clay 90010 0.787500
South Miss. Elec. Power Assn. CBM 33 Clay 90011 0.787500
South Miss. Elec. Power Assn. CBM 34 Clay 90012 0.787500
South Miss. Elec. Power Assn. CBM 35 Bell 90080 0.787500
Asher Land & Mineral, Ltd. 1 Bell 86953 0.585687
Asher Land & Mineral, Ltd. 2 Bell 86954 0.585687
Asher Land & Mineral, Ltd. 4 Bell 86956 0.585687
Asher Land & Mineral, Ltd. 11 Bell 87422 0.585687
Asher Land & Mineral, Ltd. 12 Bell 87564 0.420313
Asher Land & Mineral, Ltd. 14A Bell 87599 0.585687
Carnes Heirs 3 Knox 88317 0.875000
Enpro, Inc. 2 Knox 87981 0.449063
Lewis, W. E. Heirs 1 Bell 88570 0.825000
<PAGE>
Exhibit E Compressors
SMEPA has a 1978 Integral Engine Compressor- natural gas, Ajac, Model DPC-280,
S/N 79254, 13 1/4 X 16 stroke, 2200 cu. in., 2 cylinder, 250-400 RPM, w (2)
Ace air cooled exchangers, Model J4B, S/N 81873-2 & 3, 1981, with regulators,
skid mounted, continuous operations 24/365 with dehy.
Asher has a 1985 Integral Engine Compressor- natural gas, Ajax, Model DPC-180,
L2 S/N 82344, 2800 cu. in., 1 cylinder, 15 X 8 stroke, coller, regulators,
skid mounted, continuous operations 24/365 with dehy.
<PAGE>
Exhibit F Assigned Contracts
TO THAT PURCHASE AND SALE AGREEMENT DATED AUGUST 31, 2000
BETWEEN MILLER PETROLEUM, INC. AND
NAMI RESOURCES COMPANY, LLC
CONTRACTS
1. That Oil & Gas Agreement and Joint Operating Agreement dated May 12,
1994, by and between Enpro, Inc. and AKS Energy Corporation.
2. That Oil & Gas Lease between AKS and SMEPA referenced in Exhibit A.
3. That Letter Agreement of May, 1995 between AKS, Asher Land and Mineral
Ltd. and Crockett Colleries, Inc.
4. That Purchase and Sale Agreement of December 16, 1997 by and between AKS
Energy Corporation and Miller Petroleum, Inc.
5. All easements, rights of way, access agreements, or assignments thereof,
affecting the subject properties.
6. All gas sales agreements, transportation agreements, production
agreements, operating agreements or assignments thereof pertaining to
the subject properties.
7. All licenses, permits, bonds or assignments thereof pertaining to the
subject leases, wells and facilities.
8. All documents of public record or which are contained in the files of
Miller Petroleum, Inc. pertaining to the subject property.
<PAGE>
Exhibit G Allocation of Purchase Price
NOT DISCLOSED
<PAGE>
Exhibit H Form of Assignment
ASSIGNMENT AND BILL OF SALE
COMMONWEALTH OF KENTUCKY
COUNTIES OF BELL, LESLIE, KNOX, HARLAN AND CLAY
THIS ASSIGNMENT AND BILL OF SALE, (hereinafter referred to as
"Assignment"), dated this _______ day of __________________, executed by and
between MILLER PETROLEUM, INC., a Tennessee Corporation, with an office at
3675 Baker Highway, P.O. Box 130, Huntsville, Tennessee 37756 (hereinafter
referred to as "Assignor"), and NAMI RESOURCES COMPANY, LLC, a Kentucky
Limited Liability Company, with an office at 1222 1/2 North Main Street, London,
Kentucky 40741 (hereinafter referred to as "Assignee"), is effective for the
purposes of this transfer as of 12:01 a.m. Eastern time, on July 1, 2000 ( the
"Effective Time" hereunder).
ARTICLE I
Conveyance and Transfer of Oil & Gas Properties
Assignor, intending to be bound hereby, for and in consideration of the
sum of TEN and NO/00 DOLLARS ($10.00) and other good and valuable
considerations to it in hand paid by Assignee, the receipt and sufficiency of
which are hereby acknowledged and confessed by Assignor, has GRANTED,
BARGAINED, SOLD, ASSIGNED, TRANSFERRED, CONVEYED, and DELIVERED, and by these
presents does hereby grant, bargain, sell, assign, transfer, convey and
deliver, unto Assignee, and the successors and assigns of Assignee, all of
Assignor's right, title and interest in, to, and under (i) those certain oil
and/or gas leases (the "Leases") described on EXHIBIT "A" attached hereto and
by this reference made a part hereof, (ii) the oil and gas wells and interests
(the "Wells") described on EXHIBIT "B", attached hereto and by this reference
made a part hereof, together with all rights, titles and interests incident
thereto, and (iii) all surface and underground equipment and other personalty
and fixtures in or on the Leases, to the extent that Assignor owns, possesses
and has the right to transfer same ("Facilities") including but not limited to
those described on EXHIBIT "C", attached hereto and by this reference made a
part hereof. The Wells, the Leases, and the Facilities, subject to the
Permitted Encumbrances (hereinafter defined) are herein collectively referred
to as the "Subject Properties". There is included in this Assignment such
surface rights and rights of ingress and egress on, under, over and across the
Leases as were granted to Assignor by the Leases, as amended.
TO HAVE AND TO HOLD, the Subject Properties unto Assignee, and the successors
and assigns of Assignee, forever subject to and in accordance with the
provisions of this Agreement.
This Agreement is made with special warranty of title.
ARTICLE II
Disclaimers
THE PARTIES AGREE THAT TO THE EXTENT REQUIRED TO BE OPERATIVE, THE
DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED IN THIS SECTION ARE "CONSPICUOUS"
DISCLAIMERS FOR THE PURPOSES OF EVERY APPLICABLE LAW, RULE OR ORDER. THIS
ASSIGNMENT IS MADE AND ACCEPTED UPON THE UNDERSTANDING AND AGREEMENT THAT ALL
PERSONAL PROPERTY , MACHINERY, FIXTURES, EQUIPMENT AND MATERIALS CONVEYED
HEREBY ARE SOLD AND ASSIGNED AND ACCEPTED BY ASSIGNEE, IN THEIR "WHERE IS",
AND "AS IS" CONDITION WITHOUT ANY WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED OR
STATUTORY, OF MARKETABILITY, QUALITY, CONDITION, MERCHANTABILITY AND/OR
FITNESS FOR A PARTICULAR PURPOSE OR USE, ALL OF WHICH ARE EXPRESSLY
DISCLAIMED, BUT RETAINS ALL WARRANTIES OF GOOD TITLE TO THE PROPERTY. FOR THE
BENEFIT OF ASSIGNOR, ASSIGNEE STIPULATES FOR ALL PURPOSES THAT TO THE FULL
EXTENT PERMITTED BY LAW, ASSIGNEE WAIVES AND RELEASES TO ASSIGNORS, ANY CLAIM
UNDER THE MERCHANT OR CONSUMER PROTECTION ACTS WHICH APPLY OR MIGHT APPLY TO
THIS TRANSACTION.
ARTICLE III
Permitted Encumbrances
The Subject Properties are granted, bargained, sold, assigned,
transferred, conveyed, and delivered by Assignor and accepted by Assignee
subject to the following, to the extent such encumbrances are valid and
enforceable and not included as Subject Properties (the "Permitted
Encumbrances" under this Assignment): (a) all royalty interests, overriding
royalty interests, and other burdens on or payable out of the production oil
and gas that are presently existing and outstanding, whether or not of record
in the official deed records of Bell, Knox, Harlan, Clay and Leslie Counties,
Kentucky; (b) all division orders, unitization and pooling designations,
declarations, orders and agreements, contracts for the sale, purchase,
exchange, refining, gathering or processing of oil, or of gas or of other
mineral production from the Leases and Wells; (c) any lien, security
interests, or mortgages, that arise to secure payment of amounts not yet
delinquent, which are of a type and nature customary in the oil and gas
industry, and which have been disclosed to Assignee, but Assignor shall
acquire release of the Leases or Wells any such lien, security interest, or
mortgage in order to make this Assignment or promptly pay or discharge same;
(d) liens, security payment of taxes or assignments that are, in either case,
not yet delinquent or, if delinquent, are being contested in good faith in the
normal course of business, and Assignor agrees to pay or discharge same in a
timely manner; and (e) rights reserved to or vested in the state, municipality
or other governmental, statutory or public authority to control or regulate
any of the Subject Properties and all applicable laws, rules and order of the
state, municipality or other governmental authority.
ARTICLE IV
Other Agreements
This assignment is further subject to an unrecorded Asset Purchase
Agreement, dated 31st of August, 2000 between Assignor and Assignee.
ARTICLE V
General
This Assignment may be executed in any number of counterparts, each of
which shall be of equal dignity and all of which shall constitute but one and
the same instrument. In order to facilitate recordation, signature pages from
each original counterpart may be removed therefrom, and attached to a single
instrument and recorded, which recorded instrument shall be effective for all
purposes hereunder and under the recording statutes,.
This Assignment shall bind and inure to the benefit of Assignor and
Assignee and their respective affiliates, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
executed as of the date of their respective acknowledgments set forth below,
to be effective, however, for all purposes as of the Effective Time.
ASSIGNOR:
MILLER PETROLEUM, INC.
/s/Deloy Miller
BY: DELOY MILLER
ITS: PRESIDENT
ASSIGNEE:
NAMI RESOURCES COMPANY, LLC
/s/Mike Nami
BY: MIKE NAMI
ITS: SOLE MEMBER/MANAGER
STATE OF TENNESSEE )
)
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this 31ST day
of August, 2000, by Deloy Miller, President of Miller
Petroleum, Inc., a Tennessee corporation, on behalf of the corporation.
/s/Teresa A. Potter
Notary Public, State at Large
My Commission Expires: March 24, 2002
STATE OF KENTUCKY )
)
COUNTY OF WHITLEY )
The foregoing instrument was acknowledged before me this 6th day of
September, 2000, by Mike Nami, of Nami Resources Company, LLC,
a Kentucky limited liability company, on behalf of the company.
/s/Tami L. Rogers
Notary Public, State at Large
My Commission Expires: 12/11/03
THIS INSTRUMENT PREPARED BY:
/s/Howard O. Mann
HOWARD O. MANN
LAW OFFICES OF HOWARD O. MANN, P.S.C.
104 NORTH KENTUCKY STREET
P.O. DRAWER 1344
CORBIN, KENTUCKY 40702
TELEPHONE: (606) 528-0616
<PAGE>
Exhibit "A"
Leases
See Exhibit B above
<PAGE>
Exhibit "B"
Wells
See Exhibit D above
<PAGE>
Exhibit I Contractual Agreements
NONE
<PAGE>
Exhibit J Acknowledged Assignments
NONE
<PAGE>
