PURCHASE AND SALE AGREEMENT
WHITING PETROLEUM CORPORATION, as Seller
and
DELTA PETROLEUM CORPORATION, as Buyer
Dated as of June 1, 2000
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") is made
and entered into as of this 1st day of June, 2000, by and between
WHITING PETROLEUM CORPORATION, a Delaware corporation, whose
address is 1700 Broadway, Suite 2300, Denver, Colorado 80290,
("Seller") and DELTA PETROLEUM CORPORATION, a Colorado
corporation, whose address is 3310 QWest Tower, 555 Seventeenth
Street, Denver, Colorado 80202 ("Buyer"). Capitalized terms used
in this Agreement shall have the meanings set forth in Appendix A
attached hereto.
RECITALS
A. Seller acquired certain undivided interests in the oil and
gas units described in Schedule I attached hereto (collectively,
the "Units") pursuant to the following instruments (collectively,
the "Assignments"):
(i) Assignment, Bill of Sale and Conveyance, effective as of
February 1, 2000, by Duncan Oil Partners to Seller;
(ii) Assignment, Bill of Sale and Conveyance, effective as of
February 1, 2000, by Raymond T. Duncan Oil Properties, Ltd. to
Seller; and
(iii) Assignment, Bill of Sale and Conveyance, effective as
of February 1, 2000, by KO-OP XVI RTD to Seller.
B. Seller desires to sell to Buyer and Buyer desires to
purchase from Seller a fifty percent (50%) undivided interest in
the interests in the Units that Seller acquired pursuant to the
Assignments and in the other rights and assets relating thereto.
C. Schedule I sets forth the working and net revenue interests
in the Units Seller desires to sell to Buyer and Buyer desires to
purchase from Seller upon the terms and conditions set forth in
this Agreement.
D. There are specifically excluded from this Agreement any
other interests in the Units held by Seller on the date hereof
that were not acquired pursuant to the Assignments.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, Seller
and Buyer hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale. Buyer hereby agrees to
purchase from Seller, and Seller hereby agrees to sell, transfer,
assign and convey to Buyer, a fifty percent (50%) undivided
working interest (the "Assigned Interest") in the following
properties, rights and assets (the "Interests"):
(a) the undivided interests of Seller in the
Units as specifically described on Exhibit A attached hereto and
made a part hereof;
(b) the undivided interests in the leasehold
estates created by the leases, licenses, permits and other
agreements described in Exhibit A (the "Leases"), insofar as the
Leases cover and relate to the land described in Exhibit A (the
"Land"), and only insofar as such interests were acquired by
Seller pursuant to the Assignments;
(c) Identical undivided interests in the
fixtures, personal property and equipment located on the Land or
used in the operation thereof including, without limitation, the
wells, well equipment, casing, tanks, boilers, buildings, tubing,
pumping units, motors, pipelines, gathering lines, power lines,
and all other machinery, equipment, ancillary facilities and
improvements used in the operation thereof (all of the foregoing
are collectively referred to herein as "Related Assets");
(d) Seller's rights and obligations arising after
the Effective Time (including, without limitation, any calls or
other preferential rights to purchase production) under any
contracts, permits, licenses, servitudes, easements, rights-of-
way, orders, gas purchase and sales agreements, crude oil
purchase and sales agreements, surface leases, farmin agreements,
farmout agreements, bottom hole agreements, acreage contribution
agreements, operating agreements, unit agreements, processing
agreements, options, and leases of equipment or facilities which
are appurtenant to or used in connection with the ownership or
operation of the Land and the Related Assets, insofar and only
insofar as the same are to be assigned pursuant to this
Agreement, or with the production, treatment, sale or disposal of
water, hydrocarbons or associated substances from the Land and
the Related Assets, insofar and only insofar as the same are to
be assigned pursuant to this Agreement; and
(e) Copies of all files, records or data owned by
or in the possession or control of Seller or any affiliate of
Seller and directly relating to or associated with the Land or
the Related Assets, insofar and only insofar as the same are to
be assigned pursuant to this Agreement, including, but not
limited to all land, lease, well, division and transfer orders,
prospect and title files and records, geological, pressure data,
decline curves and other related matters, but insofar and only
insofar as the same are directly related to the Land and only to
the extent the transfer thereof is not prohibited by existing
contractual obligations with third parties.
1.2 Effective Time. The effective time and date of
the transfer of the Interests shall be as of 7:00 A.M., local
time at the location of the affected real property, February 1,
2000 (the "Effective Time").
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the
Interests shall be (i) 90,000 shares of Buyer's restricted common
stock, and (ii) Eleven Million One Hundred Eighty Thousand
Dollars ($11,180,000.00), herein called the "Purchase Price,"
payable pursuant to Sections 2.2 and 2.3 below and subject to
adjustment pursuant to Section 2.4 below.
2.2 Common Stock. Following the execution of this
Agreement, Buyer shall issue and deliver to Seller 90,000 shares
of its restricted common stock (the "Common Stock") which shall
be subject to the registration rights set forth in Section 10.16.
2.3 Promissory Note.
(a) Following the execution of this Agreement, Buyer shall
execute and deliver to Seller a non-interest bearing promissory
note, in the form attached hereto as Exhibit B (the "Promissory
Note"), in the principal amount of Eleven Million One Hundred
Eighty Thousand Dollars ($11,180,000.00), payable in two
installments of Seven Million Four Hundred Ninety Thousand
Dollars ($7,490,000) on July 10, 2000 (the "First Installment
Payment") and Three Million Six Hundred Ninety Thousand Dollars
($3,690,000), as adjusted hereunder, on September 29, 2000 (the
"Second Installment Payment"). The Promissory Note will be Non-
Recourse to Buyer.
(b) For purposes of this Agreement, "Non-Recourse"
shall mean that neither Seller nor its successors or assigns nor
any holder or holders of the indebtedness represented by the
Promissory Note will have any claim, remedy or right to proceed
(at law or in equity) against Buyer for the payment of any
deficiency or any other sum or performance of any right or
obligation of any nature whatsoever under this Agreement from any
source other than the Assigned Interest and the Common Stock, for
the payment of such indebtedness or the satisfaction of any such
liability or for the satisfaction of any obligation by the Buyer
to the Seller whether sounding in contract, tort or otherwise.
Nothing contained herein will limit or impair the rights of the
holder of the Promissory Note to accelerate the maturity of the
debt during the continuance of an event of default or to bring
suit and obtain a judgment on the debt, provided, however the
satisfaction of such judgment is limited solely to the Assigned
Interest and Common Stock.
The following procedures shall apply with respect
to the Promissory Note:
(1) If Buyer fails to make the First Installment
Payment, this Agreement shall terminate without further
obligation by either Party to the other Party; provided, however,
that Seller shall retain the Common Stock delivered pursuant to
Section 2.2 and shall have the registration rights provided in
Section 10.16 hereof unless Buyer's failure to make the First
Installment Payment is due to:
(i) a condemnation loss in excess of twenty
percent (20%) of the unadjusted Purchase Price as provided in Section 5.5;
(ii) the exercise of a preferential right by a third party as
provided in Section 5.6; or
(iii) Seller's parent company failing to grant its timely
approval of this transaction in accordance with Section 9.1(c)(v).
In any such event (i), (ii) or (iii), the Promissory Note
and the Common Stock (if delivered to Seller) shall be forthwith
returned to Buyer.
(2) If Buyer makes the First Installment Payment, but fails
to make the Second Installment Payment, Seller shall retain the
First Installment Payment and the Common stock and shall convey
to Buyer at Closing sixty-seven percent (67%) of the Assigned
Interests pursuant to Section 7.3 hereof.
(3) If Buyer makes the First Installment Payment
and the Second Installment Payment, as adjusted hereunder, Seller
shall convey to Buyer at Closing one hundred percent (100%) of
the Assigned Interest in the Interests.
2.4 Adjustments to Purchase Price.
(a) The Second Installment Payment of the
Purchase Price shall be adjusted upward by the Assigned
Interest's share of the following:
(1) The value of all merchantable, allowable
oil or condensate in storage above the pipeline connection at the
Effective Time that is credited to the Interests, such value to
be the weighted average price received by Seller during the month
of February in each field less taxes deducted by the purchaser;
(2) The amount of all expenditures
(including without limitation royalties, overriding royalties,
rentals and other charges and ordinary operating expenses and
COPAS overhead charges billed under applicable operating
agreements), if any, that are, in accordance with generally
accepted accounting principles, attributable to Seller's
ownership in the Interests for times after the Effective Time and
are paid by Seller in connection with the operation of the
Interests; and
(3) Any other amount agreed upon by Seller
and Buyer.
(b) The Second Installment Payment of the
Purchase Price shall be adjusted downward by the Assigned
Interest's share of the following:
(1) The amount of the proceeds, if any,
received by Seller attributable to the Interests and that are, in
accordance with generally accepted accounting principles,
attributable to production occurring during the period of time
after the Effective Time;
(2) An amount equal to all unpaid expenses,
burdens and obligations (including without limitation royalties,
overriding royalties, rentals and other charges) which, in
accordance with generally accepted accounting principles, accrue
or are attributable to the Interests prior to the Effective Time;
(3) An amount equal to the value of uncured
Title Defects, as determined pursuant to Section 5.4(c) below;
(4) The amount equal to the value of any
Interest affected by a requirement for consent to assign
described on Schedule 3.1(i), where the required consent to
assign has not been obtained by Closing; and
(5) Any other amount agreed upon by Seller
and Buyer.
(c) Subject to Section 8.1(b), all ad valorem,
property and similar taxes based upon or measured by the value of
the Interests shall be prorated between Seller and Buyer as of
the Effective Time, such proration to be based upon calculations
using the 2000 valuation of the Interests and the tax levy
applicable for 2000, but if the tax levy for 2000 is not
available on or before Closing, based upon the tax levy for the
1999 tax year, and such proration shall be an adjustment to the
Purchase Price at the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. Seller
represents and warrants to Buyer that:
(a) Seller is a corporation duly organized and
validly existing under the laws of the State of Delaware and is
duly qualified to carry on its business in North Dakota.
(b) Subject to Seller obtaining approval of the
board of directors of Seller's parent company, Alliant Energy
Resources, Inc., to consummate the transactions described herein,
the execution, delivery and performance of this Agreement and the
transactions described herein have been duly and validly
authorized by all requisite corporate action on Seller's part and
this Agreement constitutes a legal, valid and binding obligation
of Seller.
(c) The consummation of the transactions
described herein will not violate any provision of Seller's
Articles of Incorporation or Bylaws or result in the breach of
any term or provision of, or constitute a default, or result in
the acceleration of any obligation under, any material contract,
loan agreement, indenture, note, deed of trust, mortgage,
security agreement or any other material agreement or instrument
of any kind to which Seller is a party or is subject.
(d) Except as set forth in Schedule 3.1(d), to
Seller's knowledge, there is no suit, action, claim,
investigation, arbitration, administrative proceeding or inquiry
by any person or entity or by any administrative agency or
governmental body pending, or threatened against Seller which has
or may materially and adversely affect its ability to consummate
the transactions contemplated hereby.
(e) To Seller's knowledge, Seller is not in
default under any material agreement or material obligation
affecting the Interests to which Seller is a party or by which
Seller or the Interests may be bound.
(f) Except as set forth on Schedule 3.1(f), to
Seller's knowledge, Seller has not entered into any contract or
other agreement to deliver oil or gas produced from the Interests
at some future time, including any contract for the sale of oil
or gas, any contract containing a "take or pay" or similar
provision or any contract providing for a production payment.
(g) To Seller's knowledge, Seller has paid all ad
valorem, property, production, severance, excise and similar
taxes and assessments based or measured by the ownership of
property or the production of hydrocarbons or the receipt of
proceeds therefrom on the Interests which have become due and
payable prior to the date hereof.
(h) To Seller's knowledge, no proposals are
currently outstanding under any operating agreement, and no
commitments exist to make expenditures that would obligate Seller
or Buyer to make expenditures after the Effective Time, other
than routine expenses incurred in the normal operation of the
properties described in Schedule I (the "Properties") and other
than as set forth on Schedule 3.1(h) hereof. Buyer acknowledges
that normal operation of the Properties includes the drilling and
completing or plugging and abandonment of wells on the
Properties.
(i) To Seller's knowledge, Schedule 3.1(i) sets
forth all preferential rights to purchase and requirements for
consents to assign affecting the Interests, other than
governmental consents customarily obtained after conveyance.
(j) Seller has not incurred any obligation or
liability, contingent or otherwise for broker's or finders' fees
in connection with this Agreement in respect of which Buyer may
have any responsibility.
(k) Seller is not a non-resident alien, foreign
corporation, foreign partnership, foreign trust or foreign estate
alien, as those terms are defined in the Internal Revenue Code of
1986, as amended (the "Code"), and the rules and regulations of
the Internal Revenue Service thereunder.
(l) Seller has not intentionally furnished Buyer
with untrue information relating to the Interests, including,
without limitation, information regarding production history and
characteristics, operating and net revenue interests and prices
currently being received for production; provided, however,
Seller has not investigated the accuracy of the facts included in
such information prior to providing it to Buyer.
(m) Seller has not caused nor allowed any
mortgage, lien, or other encumbrance to be placed upon or against
the Interests that will not be released at or prior to Closing,
other than (i) liens for taxes and assessments which are not yet
delinquent or (ii) rights under operating agreements or similar
contracts to assert liens against the Interests (but not
including rights which have actually been asserted).
(n) To Seller's knowledge, as of the Effective
Time, Seller was not obligated to deliver from the Interests any
make-up or other volumes of oil, gas or other hydrocarbons on
account of any gas balancing or similar obligations without then
or thereafter being entitled to full payment therefor.
(o) To Seller's knowledge (i) all of the Leases
are in full force and effect, (ii) Seller is not in material
breach or default with respect to any of its material obligations
pursuant to any such Lease, and (iii) all payments due
thereunder by Seller have been timely paid and Seller has
received no notice of default thereunder.
(p) Except as set forth herein or in the
assignment to be executed at Closing, Seller expressly denies all
warranties of title with respect to the Interests, either
express, implied or statutory. All title review matters and
remedies are governed by Section 5.4 hereof. EXCEPT AS SET FORTH
HEREIN, BUYER EXPRESSLY ACKNOWLEDGES THAT THE RELATED ASSETS ARE
BEING SOLD AND PURCHASED ON AN "AS IS, WHERE IS" BASIS. BUYER
FURTHER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE AND
SHALL NOT BE DEEMED TO HAVE MADE, AND SELLER HEREBY EXPRESSLY
DISCLAIMS, ANY REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE,
EXPRESS OR IMPLIED, AS TO THE RELATED ASSETS OR ANY PART THEREOF,
AS TO THE CONDITION, FITNESS OR SUITABILITY FOR A PARTICULAR
PURPOSE OF THE OPERATION EQUIPMENT OR ANY PART THEREOF, AS TO THE
VALUE, MERCHANTABILITY, OPERATION, FITNESS, DESIGN, OR CONDITION
OF THE RELATED ASSETS OR ANY PART THEREOF, AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP OF THE RELATED ASSETS OR ANY PART
THEREOF, AS TO THE ABSENCE OF ANY LATENT OR OTHER DEFECTS OR ANY
PATENT INFRINGEMENT OR THE LIKE, AS TO THE ABSENCE OF OBLIGATIONS
BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER.
3.2 Representations and Warranties of Buyer. Buyer
represents and warrants to Seller that:
(a) Buyer is a corporation, duly organized,
validly existing, and in good standing under the laws of the
State of Colorado and is, or will be by the Closing, duly
qualified to carry on its business in North Dakota.
(b) The execution, delivery, and performance of
this Agreement and the transactions described herein will have
been duly and validly authorized by all requisite corporate
action on Buyer's part and this Agreement constitutes a legal,
valid and binding obligation of Buyer.
(c) The consummation of the transactions
described herein will not violate any provision of Buyer's
Articles of Incorporation or Bylaws or result in the breach of
any term or provision of, or constitute a default, or result in
the acceleration of any obligation under, any material contract,
loan agreement, indenture, note, deed of trust, mortgage,
security agreement or any other material agreement or instrument
of any kind to which it is a party or is subject.
(d) There is no suit, action, claim,
investigation, arbitration, administrative proceeding or inquiry
by any person or entity or by any administrative agency or
governmental body pending, or, to Buyer's knowledge, threatened
against Buyer which has or may materially and adversely affect
its ability to consummate the transactions contemplated hereby.
(e) Buyer has not incurred any obligation or
liability, contingent or otherwise, for broker's or finders' fees
in connection with this Agreement in respect of which Seller may
have any responsibility.
(f) Buyer is acquiring the Interests for its own
account and not with the intent to make a distribution thereof
within the meaning of Securities Act of 1933 and the rules and
regulations thereunder or distribution thereof in violation of
any other applicable securities laws.
(g) Buyer acknowledges that, notwithstanding
anything to the contrary contained in this Agreement, it (i) is a
sophisticated buyer with respect to the Interests, (ii) has
independently and without reliance upon Seller or any of its
employees, agents or representatives and based on such
information as it has deemed appropriate in its independent
judgment made its own analysis and decision to enter into this
Agreement and to consummate the transactions contemplated herein,
except that it has relied upon the representations, warranties,
covenants and other agreements of Seller contained in this
Agreement, and (iii) has not received and is not relying upon any
representation or warranty, express or implied, by operation of
law or otherwise, as to the accuracy or completeness of any
information regarding Seller, or the Interests furnished or made
available to Buyer or its representatives, except as expressly
set forth in this Agreement.
(h) In entering into this Agreement, Buyer has
relied solely upon Buyer's Environmental Investigation, if any,
or its independent judgment not to conduct such investigation,
with respect to possible Environmental Liabilities.
(i) Buyer and its representatives (i) have been
or will be, assuming Seller's cooperation, permitted such access
as they have requested or will request to the Interests,
(ii) have been or will be given a full and complete opportunity
to perform such due diligence investigation of the Interests as
they have requested or will request, and (iii) have had or will
have an opportunity to meet with representatives of Seller to
discuss the Interests.
3.3 Knowledge. As used herein, "to Seller's knowledge"
or "to Buyer's knowledge" shall mean Seller's or Buyer's, as
appropriate, actual knowledge without independent investigation.
ARTICLE IV
COVENANTS
4.1 Covenants of Seller. From the date hereof until
the earlier of the Closing or the date of termination, Seller
covenants and agrees with Buyer as follows:
(a) Seller shall carry on the business of Seller
with respect to the Interests in substantially the same manner as
Seller has heretofore and shall not introduce any new method of
management, operation or accounting with respect to the
Interests.
(b) Seller shall exercise all due diligence in
safeguarding and maintaining secure all non-public engineering,
geological and geophysical data, reports and maps, and all other
confidential data in the possession of Seller and relating to the
Interests.
(c) Subject to the terms and conditions of this
Agreement, Seller shall use its best efforts to take or cause to
be taken all such actions as may be necessary or advisable to
consummate and make effective the sale of the Interests and the
transactions contemplated by this Agreement and to assure that as
of the Closing it will not be under any material company, legal
or contractual restriction that would prohibit or delay the
timely consummation of such transactions.
(d) Seller shall use its best efforts to cause
all the representations and warranties of Seller contained in
this Agreement to be true and correct on and as of the Closing.
To the extent the conditions precedent to the obligations of
Buyer are within the control of Seller, Seller shall use its best
efforts to cause such conditions to be satisfied on or prior to
the Closing and, to the extent the conditions precedent to the
obligations of Buyer are not within the control of Seller, Seller
shall use commercially reasonable efforts to cause such
conditions to be satisfied on or prior to the Closing.
(e) Seller shall promptly notify Buyer (1) if any
representation or warranty of Seller contained in this Agreement
is discovered to be or becomes untrue, or (2) if Seller fails to
perform or comply with any covenant or agreement contained in
this Agreement or it is reasonably anticipated that Seller will
be unable to perform or comply with any covenant or agreement
contained in this Agreement.
4.2 Covenants of Buyer. Buyer covenants and agrees
with Seller as follows:
(a) Subject to the terms and conditions of this
Agreement, Buyer shall use its best efforts to take or cause to
be taken all such actions as may be necessary or advisable to
consummate and make effective the purchase of the Interests and
the transactions contemplated by this Agreement and to assure
that as of the Closing it will not be under any material
corporate, legal or contractual restriction that would prohibit
or delay the timely consummation of such transactions.
(b) Buyer shall use its best efforts to cause all
the representations and warranties of Buyer contained in this
Agreement to be true and correct on and as of the Closing. To
the extent the conditions precedent to the obligations of Seller
are within the control of Buyer, Buyer shall use its best efforts
to cause such conditions to be satisfied on or prior to the
Closing and, to the extent the conditions precedent to the
obligations of Seller are not within the control of Buyer, Buyer
shall use commercially reasonable efforts to cause such
conditions to be satisfied on or prior to the Closing Date.
(c) Buyer shall promptly notify Seller (1) if any
representation or warranty of Buyer contained in this Agreement
is discovered to be or becomes untrue, or (2) if Buyer fails to
perform or comply with any covenant or agreement contained in
this Agreement or it is reasonably anticipated that Buyer will be
unable to perform or comply with any covenant or agreement
contained in this Agreement.
(d) Buyer shall exercise all due diligence in
safeguarding and maintaining secure all non-public engineering,
geological and geophysical data, reports and maps, and all other
confidential data in the possession of Buyer and relating to the
Interests.
ARTICLE V
BUYER'S REVIEW OF INTERESTS
5.1 Seller's Files and Records. Seller has made and
will continue to make available for examination at Seller's
offices in Denver such land, title, contract, marketing,
production, geological, engineering, accounting, litigation,
environmental and other records (including historical operating
data for the previous two years) relating to the Interests which
Seller has in its possession. Seller shall permit Buyer's
authorized representatives to consult with Seller's employees
during business hours.
5.2 Buyer's Environmental Investigation.
(a) From the date hereof until June 30, 2000,
Buyer shall have the right, at Buyer's sole risk, expense and
liability, to make an environmental assessment of the Interests
and Related Assets ("Buyer's Environmental Investigation").
Subject to the consent and cooperation of third parties, Seller
shall cooperate with reasonable requests by Buyer and its agents
to conduct Buyer's Environmental Investigation. Except to the
extent otherwise required by law, Buyer shall exercise all due
diligence in safeguarding and maintaining as confidential all
data or information acquired during Buyer's Environmental
Investigation. Buyer shall provide Seller with a copy of any
report or reports of the results of Buyer's Environmental
Investigation and shall disclose to Seller the discovery of any
Environmental Liabilities. Buyer waives and releases, and agrees
to defend, indemnify and save and hold harmless Seller, its
directors, officers, employees and agents, against claims for
injury to or death of persons or damage to property arising in
any way from Buyer's Environmental Investigation.
(b) The term "Environmental Liabilities," as used
herein, shall mean any liabilities, claims, expenses, penalties,
fines or other obligations, including reasonable fees of
attorneys, consultants, engineers, accountants and other
advisers, for environmental conditions, situations,
circumstances, events or incidents on, at or concerning,
originating at or relating to the Interests prior to the
Effective Time arising directly or indirectly under Environmental
Laws (as they exist and are in effect as of the Effective Time)
from (i) the use, transportation, handling, storage, treatment,
disposal, emission, discharge, spill, leak, injection, escape,
dumping, release or threatened release in any work place or to
the air, land, surface waters, groundwaters or other medium -- on
or off site -- of any Hazardous Substances, or (ii) the related
investigation, study, correction, cleanup, removal, remediation,
or monitoring with respect thereto. Environmental Liabilities
may arise from, among other things, common law actions. The term
"Hazardous Substances," as used herein, shall mean any hazardous
substance, hazardous material, hazardous waste, toxic substance,
pollutant, contaminant, hazardous constituent, petroleum
(including without limitation crude oil or any fraction thereof),
or solid waste, or any variation thereof, as defined in (i) the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act of 1986 and otherwise, 42 U.S.C. 9601, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C.
6901, et seq., the Clean Air Act, 42 U.S.C. 7401, et seq., the
Toxic Substances Control Act, 15 U.S.C. 2601, et seq., the Safe
Drinking Water Act, 42 U.S.C. 300f, et seq., the Federal Water
Pollution Control Act, 33 U.S.C. 1251, et seq., and other
federal laws relating to protection of health, safety, human
welfare and environment; (ii) regulations relating to such
federal laws; or (iii) similar state and local laws, ordinances,
and regulations (collectively, "Environmental Laws").
5.3 Buyer's Inspection of Related Assets. From the
date hereof until June 30, 2000, Buyer shall have the right, at
Buyer's sole risk, expense and liability, to inspect the Related
Assets. Subject to the consent and cooperation of third parties,
Seller shall cooperate with reasonable requests by Buyer and its
agents to obtain access to the Interests for the purpose of such
inspection. Buyer waives and releases, and agrees to defend,
indemnify and save and hold harmless Seller, its directors,
officers, employees and agents, against claims for injury to or
death of persons or damage to property arising in any way from
such inspection.
5.4 Buyer's Title Review.
(a) (i) As used herein, "Title Defect" shall
mean any material encumbrance, encroachment, irregularity, defect
or objection to Seller's title to the Interests, other than
Permitted Encumbrances, that would cause Seller not to have
Defensible Title to an Interest. In evaluating whether an
encumbrance, encroachment, irregularity, defect in or objection
to title is material, due consideration shall be given to whether
such defect is of the type expected to be encountered in the area
involved and is customarily acceptable to prudent operators and
interest owners.
(ii) As used herein the term "Defensible
Title" shall mean, as to the Interests, such title that, subject
to and except for the Permitted Encumbrances: (1) entitles
Seller to receive not less than the "Net Revenue Interest" set
forth in Schedule I of all oil, gas and associated liquid and
gaseous hydrocarbons produced, saved and marketed from the
presently producing formations in the presently producing wells
located on the Interests; (2) obligates Seller to bear costs and
expenses relating to the maintenance, development and operation
of the presently producing wells located on the Interests in an
amount not greater than the "Working Interest" set forth in
Schedule I; and (3) is free /and clear of material encumbrances,
liens and defects.
(iii) As used herein, the term "Permitted
Encumbrances" shall mean:
(1) lessors' royalties, overriding
royalties, reversionary interests and similar burdens if the net
cumulative effect of such burdens does not operate to reduce the
Net Revenue Interest to less than the Net Revenue Interest set
forth in Schedule I;
(2) preferential rights to purchase and
required third party consents to assignments and similar
agreements with respect to which (i) waivers or consents are
obtained from the appropriate parties, (ii) the appropriate time
period for asserting such rights has expired without an exercise
of such rights, or (iii) with respect to consents, such consent
need not be obtained prior to an assignment, or failure to obtain
such consent will not have a material adverse effect on the value
of any specific Interest;
(3) liens for taxes or assessments not
yet due or not yet delinquent or, if delinquent, that are being
contested in good faith in the normal course of business;
(4) materialmen's, mechanics',
repairmen's, employees', contractors', operators' or other
similar liens or charges arising in the ordinary course of
business incidental to construction, maintenance or operation of
the Interests if (i) they have not been filed pursuant to law,
(ii) if filed, they have not yet become due and payable or
payment is being withheld as provided by law or (iii) their
validity is being contested in good faith by appropriate action;
(5) all other liens, charges,
encumbrances, contracts, agreements, instruments, obligations,
defects and irregularities affecting the Interests that are not
such as to interfere materially with the operation, value or use
of any of the Interests;
(6) all rights to consent by, required
notices to, filings with, or other actions by governmental or
tribal entities in connection with the sale or conveyance of oil
and gas leases or interests therein if the same are customarily
obtained subsequent to such sale or conveyance;
(7) rights of reassignment upon release
or abandonment of the Leases;
(8) easements, rights-of-way,
servitudes, permits, surface leases and other rights in respect
of surface operations, pipelines, grazing, logging, canals,
ditches, reservoirs or the like; conditions, covenants or other
restrictions; and easements for streets, alleys, highways,
pipelines, telephone lines, power lines, railways and other
easements and rights-of-way, on, over or in respect of any of the
Interests;
(9) the terms and conditions of all
Leases and all agreements, orders, instruments, documents and
other matters affecting the Interests (including, without
limitation, production sales contracts, division orders,
contracts for sale, purchase, exchange, refining, or processing
of hydrocarbons, unitization and pooling designations,
declarations, orders and agreements, operating agreements,
agreements of development, area of mutual interest agreements,
gas balancing or deferred production agreements, processing
agreements, plant agreements, pipeline, gathering and
transporting agreements, injection, repressuring and recycling
agreements, carbon dioxide purchase or sale agreements, salt
water or other disposal agreements, seismic or geophysical
permits or agreements which are customary in the oil, gas,
sulphur and other mineral exploration, development or extraction
business or in the business of processing of gas and gas
condensate production for the extraction of products therefrom,
provided that the foregoing do not operate to reduce the Net
Revenue Interest, nor increase the Working Interest, of Seller as
reflected in Schedule I (unless, in the case of an increased
Working Interest, Seller's Net Revenue Interest is
proportionately increased); and
(10) rights reserved to or vested in any
municipality or governmental, tribal, statutory or public
authority to control or regulate any of the Interests in any
manner, and all applicable laws, rules and orders of governmental
and tribal authority.
(b) Buyer may, no later than June 30, 2000,
notify Seller of any Title Defect with respect to any of the
Interests; provided, however, that Buyer shall not give such
notice unless the aggregate value of all Title Defects contained
in such notice, calculated in accordance with this Section 5.4,
equals or exceeds $50,000.00 (the "Minimum Amount"). Such notice
must set forth in reasonable detail each Lease or portion thereof
with respect to which a Title Defect is claimed, the nature of
each Title Defect and Buyer's calculation, in accordance with
this Section 5.4, of the value of each Title Defect. Seller
shall use commercially reasonable efforts to cure Title Defects
created by, through or under Seller. Seller may elect, but shall
have no obligation, to take actions to cure any other Title
Defect. In the event that the aggregate value of such Title
Defects is in excess of five percent (5%) of the unadjusted
Purchase Price, then either Buyer or Seller shall have the option
to terminate this Agreement by giving written notice of such
termination within five (5) business days after Seller's receipt
of Buyer's notice of Title Defects.
(c) Subject to Seller's right to cure set forth
above, if the aggregate value of Title Defects exceeds the
Minimum Amount, then Buyer, subject to the further provisions of
this paragraph, may (i) elect to accept any Defective Interests
and waive Title Defects with respect thereto, or (ii) reduce the
Purchase Price by an amount equal to the aggregate value of such
uncured Title Defects calculated as hereinafter set forth;
provided, that the Purchase Price shall not be reduced to the
extent Seller cures such Title Defects on or before the date of
Closing. Buyer's failure to deliver to Seller a notice of Title
Defects with respect to an Interest by 5:00 p.m., Denver,
Colorado time on June 30, 2000, shall be deemed a waiver of any
unclaimed Title Defects existing on such date and Buyer shall
have no recourse against Seller with respect to such unclaimed
Title Defects hereunder except those that arise by, through or
under Seller. In the event that any reduction in Purchase Price
is made as a result of uncured Title Defects, Seller may elect to
withdraw the affected Interests from this Agreement and the
Purchase Price shall be reduced by the full Allocated Value of
withdrawn Interest as agreed upon by the parties.
(d) The value of a Title Defect shall be
determined as follows:
(i) If the actual Net Revenue Interest of
Seller in an Interest (after accounting for the Title Defect) is
less than that set forth on Schedule I for such Interest, the
value of the Title Defect shall be an amount equal to the dollar
amount set forth on Schedule II for such Interest multiplied by a
fraction, the numerator of which is the difference between (x)
the Net Revenue Interest for such Interest set forth on Schedule
I, and (y) the actual Net Revenue Interest of Seller in such
Interest, and the denominator of which is (x) above.
(ii) If the Title Defect affecting an
Interest results from a lien, encumbrance or other matter
involving a liquidated amount of money, the adjustment for such
Interest shall be the cost of removing or curing such lien,
encumbrance or other matter; provided, however, if such cost
exceeds the Allocated Value of the affected Interest, Seller
shall have the option to retain the affected Interest, and the
Purchase Price shall be reduced by an amount equal to the
Allocated Value for such affected Interest.
(iii) If the Title Defect represents an
obligation or burden upon the affected Interest for which the
economic detriment to Seller is not liquidated but can be
estimated with reasonable certainty as agreed to by the parties,
the adjustment shall be the sum necessary to compensate Buyer at
the Closing for the adverse economic effect which the Title
Defect will have on the affected Interest; provided, however, if
such sum exceeds the Allocated Value of the affected Interest,
Seller shall have the option to retain such affected Interest and
the Purchase Price shall be reduced by an amount equal to the
Allocated Value for such affected Interest.
5.5 Casualty or Condemnation Loss. The risk of loss
due to fire or other casualty or due to condemnation shall be
with Seller at all times prior to the Effective Time and shall be
with Buyer thereafter. If, after the Effective Time and prior to
Closing, all or any material portion of the Interests shall be
damaged or destroyed by fire or other casualty or any material
portion of the Interests shall be taken in condemnation or under
the right of eminent domain or proceedings for such purposes
shall be pending or threatened, and if the value of the Interests
so damaged or destroyed or so taken (determined as set forth in
Section 5.4(d) {5.3(d)} above) (i) is 20% or less of the Purchase
Price, Buyer shall accept the Interests and shall be entitled to
the Assigned Interest's share of all proceeds of insurance or
from any condemnation with respect thereto, or (ii) exceeds 20%
of the Purchase Price, Buyer shall have the option to terminate
this Agreement by delivering written notice of termination to the
Seller. If Buyer gives such notice of termination, then this
Agreement shall terminate and shall be of no further force or
effect and the Promissory Note and the Common Stock (if delivered
to Seller) shall be returned to Buyer. If the Interests are
damaged, destroyed or condemned as set forth in clause (ii) above
and Buyer does not elect to terminate pursuant to clause (ii),
such Interests shall be conveyed to Buyer at the Closing, Seller
shall retain any insurance proceeds relating thereto and shall
repair such damage or destruction caused by fire or other
casualty, and Buyer shall be entitled to all proceeds from any
condemnation, as the case may be.
5.6 Preferential Purchase Rights and Consents. Buyer
understands that certain of the Interests are or may be subject
to preferential purchase rights, rights of first refusal,
lessors' approvals, consents for transfer or similar rights
(hereinafter called "preferential rights") and that this
Agreement shall be subject to the terms and conditions of any
such preferential rights. Seller shall notify promptly all
holders of preferential rights of Buyer's price as offered for
such Interests and shall promptly notify Buyer of the exercise of
any preferential rights and the lapse of any applicable period of
time within which such rights must be exercised. It is
specifically understood and agreed that, if a preferential right
is exercised, Buyer shall be obligated to purchase the remainder
of the Interests and the Purchase Price shall be reduced by an
amount equal to the price allocated by Buyer to the Interests as
to which preferential rights were exercised. However, should the
exercise of the preferential rights by a third party exceed one
percent (1%) of the Purchase Price, Buyer shall have the option
to terminate this Agreement by delivering written notice to
Seller. In such event, this Agreement shall be of no further
force and effect and the Promissory Note and the Common Stock (if
delivered to Seller) shall be returned to Buyer. With respect to
the consents set forth in Schedule 3.1(i), in the event such
consents are not obtained by Closing, the Assignment and Bill of
Sale delivered at Closing shall exclude the Interests subject to
such consent, and the Purchase Price shall be adjusted
accordingly.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to Obligation of Buyer. Buyer's
obligation to consummate the transactions contemplated hereby
shall be subject to the satisfaction or waiver on or prior to
Closing of each of the following conditions:
(a) Representations, Warranties and Covenants of
Seller. The (i) representations and warranties of Seller
contained in Article III of this Agreement shall be true and
correct in all material respects on and as of the date of this
Agreement and as of the Closing Date; and (ii) covenants and
agreements of Seller contained in this Agreement and any related
agreements to be performed on or before Closing in accordance
with this Agreement shall have been duly performed in all
material respects.
(b) Consents and Preferential Rights. All
material consents of all persons required to permit the transfer
of the Interests and the consummation of the transactions
contemplated hereby and which consents or approvals, if not
received, could have a material adverse effect, shall have been
obtained, and all preferential purchase rights to any portion of
the Interests shall have been waived, or the time period for
their exercise shall have expired without such exercise.
(c) Buyer's Due Diligence Review. Buyer's
Environmental Investigation shall not have revealed any material
Environmental Liability affecting the Interests, and Buyer's
inspection of the Related Assets shall have revealed that the
Related Assets are in reasonably satisfactory condition for the
operation of the Interests in the normal course of business.
6.2 Conditions of Seller's Obligation to Close.
Seller's obligation to consummate the transactions contemplated
hereby is subject to the satisfaction or waiver on or prior to
Closing of all of the following conditions:
(a) Representations, Warranties and Covenants of
Buyer. The (i) representations and warranties of Buyer contained
in Article III of this Agreement shall be true and correct in all
material respects on and as of the date of this Agreement and as
of the Closing Date, and (ii) covenants and agreements of Buyer
contained in this Agreement and any related agreements to be
performed on or before Closing in accordance with this Agreement
shall have been duly performed in all material respects.
(b) Board Approval. Seller's parent company,
Alliant Energy Resources, Inc., shall have received on or before
June 15, 2000, approval from its board of directors to authorize
Seller to consummate the transactions contemplated by this
Agreement.
6.3 Conditions to Obligations of Both Parties. The
obligations of Seller and Buyer to consummate the transactions
contemplated by this Agreement are subject, at the option of each
Party, to the satisfaction or waiver by both Parties of the
following conditions:
(a) No Injunction. On the Closing Date, there
shall exist no injunction, restraining order or decree of any
nature of any court or governmental agency or body of competent
jurisdiction that is in effect and which restrains or prohibits
the consummation of the transactions contemplated hereby.
(b) No Prohibition. No state or federal statute,
rule, regulation or action shall exist or shall have been adopted
or taken and no judicial or administrative decision shall have
been entered (whether on a preliminary or final basis), that
would prohibit, restrict or delay the consummation of the
transactions contemplated by this Agreement or make illegal the
payments due hereunder.
ARTICLE VII
CLOSING
7.1 Closing. Subject to the provisions and conditions
of this Agreement, the closing of the transactions contemplated
by this Agreement (the "Closing") will take place on September
29, 2000 (the "Closing Date").
7.2 Place of Closing. The Closing shall be held at
Seller's Denver offices, or at such other place as Seller and
Buyer may agree upon in writing.
7.3 Closing Obligations. At the Closing, the
following documents shall be delivered and the following events
shall occur, all of which shall be deemed to have occurred
simultaneously:
(a) Seller and Buyer shall execute a preliminary
settlement statement prepared by Seller and approved by Buyer
that sets forth the Purchase Price and all adjustments thereto,
based on the best information then available.
(b) Buyer shall deliver the remaining portion of the
Purchase Price (i.e., the Second Installment Payment), as
adjusted pursuant to the settlement statement described in
Section 7.3(a), to Seller by wire transfer of funds to a bank and
bank account designated by Seller in a written notice delivered
to Buyer not less than two (2) business days prior to Closing.
(c) Seller shall execute and deliver to Buyer the
Assignment, Bill of Sale and Conveyance set forth as Exhibit C
attached hereto, conveying to Buyer, subject to Sections 2.3(b)
and 2.3(c), the Assigned Interest in the Interests, excluding,
however, any Interests to which consents to assign described in
Schedule 3.1(i) have not been obtained.
(d) Seller shall execute and deliver to Buyer all
necessary Assignments of Record Title Interest and Transfer of
Operating Rights on approved United States Department of the
Interior-Bureau of Land Management forms and all appropriate
forms of assignment of State oil and gas leases conveying to
Buyer Seller's Percentage Interest in the Interests.
(e) Seller and Buyer shall execute, acknowledge
and deliver transfer orders or letters in lieu thereof directing
all purchasers of production to make payment to Buyer of proceeds
attributable to Seller's Percentage Interest in the production
from the Interests.
7.4 Further Assurances. After the Closing, each Party
at the request of the other Party and without any additional
consideration, shall execute and deliver or cause to be delivered
from time to time such further instruments of conveyance and
transfer and shall take such other action as the other parties
may require to convey the Seller's Percentage Interest in the
Interests to Buyer or to fully vest the privileges, rights, and
powers incident to the ownership thereof in Buyer.
ARTICLE VIII
POST-CLOSING OBLIGATIONS
8.1 Post-Closing Adjustments.
(a) As soon as practicable after the Closing,
Seller shall prepare and deliver to Buyer, in accordance with
this Agreement and generally accepted accounting principles, a
statement setting forth each adjustment or payment that was not
finally determined as of the Closing and showing the calculation
of such adjustments. The parties shall undertake to agree with
respect to the amounts due pursuant to such post-Closing
adjustment no later than 90 days after the Closing (the "Final
Settlement Date"). If the Purchase Price as finally adjusted
pursuant to this Section 8.1 is more than the amount paid by
Buyer at the Closing, Buyer shall pay to Seller in immediately
available funds the amount of such difference. If the Purchase
Price as so adjusted is less than the amount paid by Buyer at the
Closing, Seller shall pay to Buyer in immediately available funds
the amount of such difference. Payment by Buyer or Seller shall
be made within five days after the date agreement is reached with
respect to all amounts due pursuant to the post-Closing
adjustment.
(b) Notwithstanding Section 8.1(a), the proration
of ad valorem taxes, if any, made at the Closing pursuant to
Section 2.4(c) shall be final as between the Parties, and after
Closing, Buyer shall bear and pay all taxes applicable to the
Assigned Interest in the Interests for production occurring after
the Effective Time, and shall indemnify Seller from and against
all liability thereof.
(c) Any revenues received or costs and expenses
paid by Buyer after the Final Settlement Date which are
attributable to the Assigned Interest in the Interests prior to
the Effective Time shall be billed or reimbursed to Seller, as
appropriate. Any revenues received or costs and expenses paid by
Seller after the Final Settlement Date which are attributable to
Seller's Percentage Interest in the Interests after the Effective
Time, and not expressly reserved by Seller, shall be billed or
reimbursed to Buyer, as appropriate.
8.2 Files and Records. As soon as practicable, but no
later than 30 days after the date of the Closing, Seller shall
deliver to Buyer, at Buyer's sole cost and expense, those copies
of Seller's files and records relating to the Interests that are
requested by Buyer.
8.3 Sales Taxes and Recording Fees. Buyer shall pay
all sales taxes occasioned by the sale of the Interests, and all
documentary, filing and recording fees required in connection
with the filing and recording of the assignments delivered at the
Closing.
8.4 Assumption of Obligations.
(a) After the Closing, Buyer shall own the
Assigned Interest in the Interests and all rights relating
thereto accruing from and after the Effective Time and shall
assume and pay, perform, fulfill and discharge all duties,
obligations and liabilities accruing with respect to Seller's
Percentage Interest in the Interests from and after the Effective
Time.
(b) Buyer shall be liable and responsible for the
Assigned Interest's share of all Claims and Liabilities arising
out of or in any manner relating or pertaining to the existence,
ownership or operation of, or activities at, the Interests which
are attributable to operations or activities during any period of
time before or after the Effective Time. Buyer shall indemnify,
defend and hold Seller harmless from, against, and with respect
to the Assigned Interest's share of any such Claims and
Liabilities and any failure of Buyer to pay, perform, and
discharge the obligations assumed hereunder.
(c) As used in this Agreement, the term "Claims
and Liabilities" means, without limitation, any and all causes of
action, claims (including, without limitation, claims for
personal injury to or death of persons and damage to property or
the environment), costs (including, without limitation,
environmental response, removal, remediation and cleanup costs),
damages (including, without limitation, punitive damages),
demands, expenses (including, without limitation investigative
and expert witness expenses, reasonable attorneys' fees, court
costs, and the like), assessments, fines, judgments, lawsuits,
legal proceedings, liabilities, debts, liens, taxes, losses,
penalties, suits, and any other obligations of any kind, nature,
character or description, whether known or unknown, foreseen or
unforeseen, direct or indirect, absolute or contingent,
including, without limitation, Environmental Liabilities.
8.5 Abandonment of Producing Properties. Buyer shall,
at such time as any portion of the Land or any well thereon is
abandoned, assume its proportionate share of the obligations to
properly plug said well or wells, and upon completion of the
salvaging of the property and equipment, shall restore the
condition of the premises in accordance with the then current
standards required by the rules and laws of all federal, state
and local agencies having jurisdiction and the leases herein
assigned. Buyer further agrees to indemnify and hold Seller
harmless for the Assigned Interest's share of any claims arising
in favor of any person or entity by reason of any failure of
Buyer to fully comply with the undertakings herein expressed from
and after the Effective Time.
8.6 Indemnification.
(a) Indemnities of Buyer. Buyer shall, to the
fullest extent permitted by law, defend, indemnify and save and
hold Seller, and all of its affiliates, successors and assigns
and their respective members, directors, officers, employees,
agents, shareholders and representatives (collectively, the
"Seller Indemnified Parties") harmless from and against all
damages, expenses, liabilities, losses, expenses (including
attorneys' fees) and costs arising out of or resulting from any
inaccuracy in or breach of any representation or warranty made by
the Buyer. The Seller Indemnified Parties shall give to Buyer
prompt notice in writing of any claims to which this Section
applies and afford Buyer the reasonable opportunity to pay,
settle, or contest such claim at its expense.
(b) Indemnities of Seller. Seller shall, to the
fullest extent permitted by law, defend, indemnify and save and hold Buyer,
and all of its affiliates, successors and assigns and their respective
members, directors, officers, employees, agents, shareholders and
representatives (collectively, the "Buyer Indemnified Parties")
harmless from and against all damages, expenses, liabilities,
losses, expenses (including attorneys' fees) and costs arising
out of or resulting from any inaccuracy in or breach of any
representation or warranty made by the Seller. The Buyer
Indemnified Parties shall give to Seller prompt notice in writing
of any claims to which this Section applies and afford Seller the
reasonable opportunity to pay, settle, or contest such claim at
its expense.
8.7 Consents to Assign. If, on or before the Final
Settlement Date, Seller obtains any of the required consents to
assign set forth on Schedule 3.1(i) that were not obtained as of
Closing, then Seller shall execute and deliver to Buyer the
Assigned Interest in the Interests affected by such consents to
assign, by instrument in the form and substance of the
Assignment, effective as of the Effective Time, and,
contemporaneously therewith, Buyer shall pay Seller the amount
equal to the Allocated Value of such Interests which was
previously withheld at Closing. For the purposes of Buyer's
indemnities under this Agreement the Interests assigned pursuant
to this Section 8.7 shall not be deemed part of "Interests" until
delivery of such assignment to Buyer.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 Events of Termination. This Agreement may be
terminated as follows:
(a) By the mutual written consent of Buyer and
Seller:
(b) By Seller if (i) Buyer fails to pay Seller the First
Installment; (ii) Buyer shall fail to perform in any material
respect its covenants contained herein required to be performed
by it on or prior to each Closing; (iii) any of Buyer's
representations contained herein shall be incorrect in any
material respect on the Closing Date; (iv) the conditions to
Seller's obligations to Close have not been satisfied in all
material respects as of the Closing Date;
(c) By Buyer if (i) Seller shall fail to perform in any material
respect its covenants contained herein required to be performed
by it on or prior to the Closing; (ii) any of Buyer's
representations contained herein shall be incorrect in any
material respect on the Closing Date; (iv) the conditions to
Buyer's obligation to close have not been satisfied in all
material respects as of the Closing Date or (v) Buyer has not
received on or before June 15, 2000 written notice from Seller of
Alliant Energy Resources, Inc., Board of Directors' approval to
consummate the transactions contemplated by this Agreement;
(d) By Buyer or Seller if the aggregate of all Title Defect
amounts or preferential right adjustments exceeds 1% of the
Purchase Price; provided, however, that Seller shall not have the
right to terminate this Agreement in the event that Buyer elects,
in its sole discretion, not to adjust the Purchase Price and to
bear the cost of curing the Title Defects which otherwise would
result in adjustments to the Purchase Price that exceeds 1% of
the Purchase Price; or
(e) By Buyer if the Interests suffer casualty loss or
condemnation loss during the period between the Effective Time
and the Closing in the aggregate that exceed(s) 20% of the
Purchase Price.
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations and Warranties.
All representations and warranties of the parties or any
authorized representative thereof contained in this Agreement or
in any Exhibit hereto, or in any certificate, document or other
instrument delivered in connection herewith shall survive the
Closing and the Effective Time of this Agreement for a period of
180 days after the Effective Time and shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives for such period.
Notwithstanding the foregoing, the representations and warranties
contained in Sections 3.1(a), (b) and (c) and 3.2(a), (b) and (c)
and shall continue in full force and effect without limitation.
10.2 Entire Agreement. This Agreement, together with
the Appendix, Exhibits and Schedules hereto, constitute all of
the promises, covenants, agreements, conditions and undertakings
between the parties hereto with respect to the subject matter
hereof and supersede any and all prior and contemporaneous
agreements, understandings, inducements or conditions, either
expressed or implied, oral or written, including, but not limited
to, those contained in any letter of intent. All of the terms
and conditions of this Agreement and shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns.
10.3 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.
10.4 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.
10.5 Governing Law. This Agreement, other documents
delivered pursuant hereto or in conjunction herewith, and the
legal relations between the parties shall be governed and
construed in accordance with the laws of the State of Colorado.
The validity of the various conveyances affecting the title to
real property shall be governed by and construed in accordance
with the laws of the jurisdiction in which such property is
situated.
10.6 Notices. Any notice, communication, request,
instruction, or other document required or permitted hereunder
shall be given in writing by hand delivery, certified mail or
facsimile transmission, addressed as follows:
If to Seller:
Whiting Petroleum Corporation
Mile High Center
1700 Broadway, Suite 2300
Denver, CO 80290-2300
Attn: John R. Hazlett
Telephone: 303/837-4230
Facsimile: 303/837-4244
If to Buyer:
Delta Petroleum Corporation
555 - 17th Street, Suite 3310
Denver, CO 80202
Attn: Roger A. Parker, President
Telephone: 303/293-9133
Facsimile: 303/298-8251
Notices shall be effective (a) upon delivery in the case of hand
delivery; (b) three days after mailing by certified mail; and (c)
on the day of transmission in the case of facsimile transmission,
unless received after regular business hours in which event
notice is deemed received on the next business day, provided in
either event that a copy of the notice is also mailed by
certified mail to the Party to whom notice is being given on the
day the facsimile is transmitted. Either Party shall have the
right to change its address for notices hereunder by giving
written notice of such change to the other Party at the address
so written above.
10.7 Assignment. Buyer shall not have the right to
assign any portion of its rights hereunder to any person or
persons without the prior written consent of Seller, which
consent shall not be unreasonably withheld.
10.8 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, and each such counterpart
hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute for all purposes one
document. Any counterpart may be delivered by facsimile. Any
facsimile signature shall be replaced with an original signature
as promptly as practical.
10.9 Expenses. Except as otherwise provided herein,
each party shall be solely responsible for all expenses incurred
by it in connection with this transaction (including, without
limitation, fees and expenses of its own counsel and accountants)
and shall not be entitled to any reimbursement therefor from the
other Party hereto.
10.10 Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law or public policy, 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 transactions contemplated hereby is not affected
in any adverse manner to any parties. Upon such determination
that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the
extent possible.
10.11 Generality of Provisions. The specificity of
any representation, warranty, covenant, agreement or indemnity
included or provided in this Agreement, or in any Exhibit,
document, certificate or other instrument delivered pursuant
hereto, shall in no way limit the generality of any
representation, warranty, covenant, agreement or indemnity
included or provided in this Agreement, or in any Exhibit,
document, certificate or other instrument delivered pursuant
hereto.
10.12 References. References made in this
Agreement, including use of a pronoun, shall be deemed to include
where applicable, masculine, feminine, singular or plural,
individuals, partnerships or corporations. As used in this
Agreement, "person" shall mean any natural person, corporation,
partnership, trust, estate or other entity. As used in this
Agreement, "affiliate" of a person shall mean any partnership,
joint venture, corporation or other entity in which such person
has an interest equal to or greater than 50% or which controls,
is controlled by or is under common control with such person.
10.13 Announcements. Seller and Buyer shall consult
with each other with regard to all press releases and other
announcements concerning this Agreement or the transaction
contemplated hereby and, except as may be required by applicable
laws or the applicable rules and regulations of any governmental
agency or stock exchange, neither Buyer nor Seller shall issue
any such press release or make any other announcement without the
prior written consent of the other party. This provision shall
survive Closing and shall continue in full force and effect
without limitation.
10.14 1031 Exchange. Seller may desire to
structure this transaction so that this transaction may be
accomplished in a manner that will comply with the requirements
of a like-kind exchange ("Like-Kind Exchange") pursuant to
Section 1031 of the Code. Seller reserves the right, at or prior
to Closing, to assign its rights under this Agreement with
respect to a portion of the Purchase Price, and that portion of
the Interests associated therewith ("1031 Assets"), to a
Qualified Intermediary (as that term is defined in Section
1.1031(k)-1(g)(4)(iii) of the Treasury Regulations) to accomplish
part of this transaction in a manner that will comply, either in
whole or in part, with the requirements of a Like-Kind Exchange.
Pursuant to this Section and a 1031 Exchange Agreement to be
executed contemporaneously herewith, Seller may assign its rights
to the 1031 Assets under this Agreement to the Qualified
Intermediary. Buyer here (i) consents to Seller's assignment of
its rights in this Agreement with respect to the 1031 Assets, and
(ii) if such an assignment is made, agrees to pay a portion of
the Purchase Price into the qualified trust account at Closing as
set forth in the 1031 Exchange Agreement. The Parties
acknowledge and agree that a partial assignment of this Agreement
to a Qualified Intermediary shall not release either Party from
any of their respective liabilities and obligations to each other
or expand any such respective liabilities or obligations under
this Agreement, and that neither Party represents to the other
that any particular tax treatment will be given to either Party
as a result thereof. Buyer shall not be obligated to pay any
additional costs or include any additional obligations as a
result of the Like-Kind Exchange, and Seller shall indemnify and
hold Buyer harmless from and against all claims, losses and
liabilities, if any resulting from such a Like-Kind Exchange.
10.15 Confidentiality Agreement. Until Closing,
each Party, its affiliates and its and their directors,
officers, employees, agents, representatives, consultants,
investors and lenders, agree to keep the terms and conditions of
this Agreement, including, without limitation, the Purchase Price
and all economic terms, confidential, and not to disclose such
terms and conditions without the prior written consent of the
other party, which consent may be withheld at either party's sole
discretion. The foregoing restriction shall not apply to
disclosures and information which (a) are required to comply with
applicable statutes and regulations, including stock exchange
regulations; (b) are required to enforce this Agreement; (c) are
required to obtain preferential rights or consents required to be
obtained under this Agreement; (d) are required to obtain
financing related to the transactions contemplated hereby or the
Interests acquired by Buyer hereunder; or (e) enter the public
domain through a third party who does not thereby breach an
obligation of confidentiality.
10.16 Registration Rights. Seller recognizes that
the Common Stock is "restricted," is not freely tradeable and is
subject to the provisions of Rule 144 of the Securities and
Exchange Commission. However, Seller shall have the right to
require that Buyer, at Seller's cost, prepare and file a
registration statement under the Securities Act of 1933, as
amended, concerning any shares of Buyer's common stock held by
Seller, including the shares of Buyer's common stock held by
Seller on the date hereof and the shares of Common Stock
delivered pursuant to Section 2.2. Buyer will thereafter use
its reasonable efforts to cause such registration statement to
become and remain effective. Seller agrees to comply with the
provisions of the Securities Act with respect to the sale and
disposition of the Common Stock covered by such registration
statement.
IN WITNESS WHEREOF, Buyer and Seller have executed this
Agreement as of the date first above written.
SELLER:
WHITING PETROLEUM CORPORATION
By: s/John R. Hazlett
John R. Hazlett, Vice President
BUYER:
DELTA PETROLEUM CORPORATION
By: s/Roger A. Parker
Roger A. Parker, President
LIST OF APPENDIX, EXHIBITS AND SCHEDULES
APPENDIX
APPENDIX A: Glossary of Terms
EXHIBITS
EXHIBIT A: Description of the Leases and Lands
EXHIBIT B: Promissory Note
EXHIBIT C: Form of Assignment, Bill of Sale and Conveyance
SCHEDULES
SCHEDULE I: Working Interests and Net Revenue Interests
SCHEDULE II: Value of the Interests
SCHEDULE 3.1(d) Description of Litigation
SCHEDULE 3.1(f) Description of Contracts to Deliver Oil or Gas
SCHEDULE 3.1(h) Outstanding Proposals
SCHEDULE 3.1(i) Preferential Rights and Consents
APPENDIX A
Glossary of Terms
"Agreement" shall mean this Purchase and Sale Agreement.
"Buyer" shall mean Delta Petroleum Corporation.
"Buyer Indemnified Parties" shall have the meaning set forth
in Section 8.6(b).
"Buyer's Environmental Investigation" shall have the meaning
set forth in Section 5.2(a).
"Claims and Liabilities" shall have the meaning set forth in
Section 8.4(c).
"Closing" shall have the meaning set forth in Section 7.1.
"Closing Date" shall have the meaning set forth in Section 7.1.
"Code" shall have the meaning set forth in Section 3.1(k).
"Common Stock" shall have the meaning set forth in Section 2.2.
"Defensible Title" shall have the meaning set forth in
Section 5.4(a)(ii).
"Effective Time" shall mean 7:00 a.m. local time, February 1, 2000.
"Environmental Laws" shall have the meaning set forth in Section 5.2(b).
"Environmental Liabilities" shall have the meaning set forth
in Section 5.2(b).
"Final Settlement Date" shall have the meaning set forth in
Section 8.1(a).
"First Installment Payment" shall have the meaning set forth
in Section 2.3.
"Hazardous Substances" shall have the meaning set forth in
Section 5.2(b).
"Interests" shall have the meaning set forth in Section 1.1.
"Land" shall have the meaning set forth in Section 1.1(a).
"Like Kind Exchange" shall have the meaning set forth in Section 10.14.
"Leases" shall have the meaning set forth in Section 1.1(a).
"Minimum Amount" shall have the meaning set forth in Section 5.4(b).
"Net Revenue Interest" shall have the meaning set forth in
Section 5.4(a).
"Non-Recourse" shall have the meaning set forth in Section 2.3(b).
"Party" refers to Buyer or Seller individually and "Parties"
refers to them collectively.
"Permitted Encumbrances" shall have the meaning set forth in Section 5.4(a).
"Promissory Note" shall have the meaning set forht in Section 2.3.
"Properties" shall have the meaning set forth in Section 3.1(h).
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Related Assets" shall have the meaning set forth in Section 1.1(b).
"Second Installment Payment" shall have the meaning set
forth in Section 2.3.
"Seller" shall mean Whiting Petroleum Corporation.
"Seller Indemnified Parties" shall have the meaning set
forth in Section 8.6(a).
"Title Defect" shall have the meaning set forth in Section 5.4(a)(i).
"Working Interest" shall have the meaning set forth in Section 5.4(a).
EXHIBIT B
PROMISSORY NOTE
US $ 11,180,000
Denver, Colorado
May 31, 2000
For Ten Dollars ($10.00) and other good and valuable
consideration, the receipt of which is hereby acknowledged, DELTA
PETROLEUM CORPORATION, a Colorado corporation ("Delta") whose
address is 555 - 17th Street, Suite 3310, Denver, Colorado 80202,
hereby promises to pay WHITING PETROLEUM CORPORATION, a Delaware
corporation ("Whiting"), whose address is 1700 Broadway, Suite
2300, Denver, Colorado 80290-2301, the principal amount of Eleven
Million One Hundred Eighty Thousand Dollars ($11,180,000),
payable in two installments of Seven Million Four Hundred Ninety
Thousand Dollars ($7,490,000) on July 10, 2000 and Three Million
Six Hundred Ninety Thousand Dollars ($3,690,000) on September 29,
2000.
This Promissory Note shall bear no interest and shall be non-
recourse to Delta.
The parties' rights and obligations with respect to this
Promissory Note, including Whiting's rights if Delta fails to
make one or both of the installment payments referred to in the
first paragraph above, are set forth in that certain Purchase and
Sale Agreement, dated as of the date hereof, between the parties
(the "Agreement"). The terms and conditions of the Agreement are
incorporated herein by this reference and such terms and
conditions shall govern and control between the parties in the
case of a conflict with any of the provisions hereof.
This Promissory Note is made in and shall be governed by and
interpreted in accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties hereto have signed this
Promissory Note as of the date first above written.
DELTA PETROLEUM CORPORATION
By: s/Roger A. Parker
Roger A. Parker, President
WHITING PETROLEUM CORPORATION
By: s/John R. Hazlett
John R. Hazlett, Vice President
