SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
The Securities Exchange Act of 1934.
May 14, 1997
Date of Report
(Date of earliest event reported)
INTERLINE RESOURCES CORPORATION
(Exact name of Registrant as specified in its charter)
Utah 0-18995 87-0461653
State of Incorporation Commission File No. IRS Employer
Identification No.
160 West Canyon Crest Rd.
Alpine, UT 84004
(Address of principal executive offices)
(801) 756-3031
(Registrant's telephone number)
<PAGE>
Item 5. Other Events
On April 30, 1997, Interline Resources Corporation and Interline
Energy Services, Inc. (the "Companies") entered into an Asset Purchase
and Sale Agreement ("Agreement") with Questar Gas Management Company
("Questar") for the Companies to sell the Companies' Monument Butte
gathering system and the associated properties, including the
interests in oil wells in the area to Questar for $4 million.
The effective date of the transaction is May 1, 1997.
The properties transferred to Questar include the Monument Butte
Gas Gathering System, located in Duchesne and Uintah Counties, Utah.
The sale includes all contracts, easements, rights-of-way, agreements
and any tangible or intangible assets associated with the ownership of
the Monument Butte Gas Gathering System.
Included in the transaction are the oil gas and/or mineral leases
and/or fee mineral interests located in the area.
The Monument Butte natural gas system consists of about 28 miles
of main trunk line and about 40 miles of lateral lines connecting
about 146 wells, as well as five compressors. These lines collect
natural gas from the Monument Butte area in the Uintah Basin in
eastern Utah. During 1996, gas sales from this system were about 4,400
MMbtu per day. The sale also includes 12 producing oil wells that
Interline owns in the same area.
The Companies expect to reduce about $4 million in outstanding
debt with the proceeds. Of that total, $800,000 will be used to retire
debt secured by the assets that were sold.
The Companies anticipate the gain on the sale to be approximately
$2 million. This one-time gain will be reflected in the Companies'
second quarter ending June 30, 1997.
The associated properties contributed about 14 percent of total
revenues and about 60 percent of gross margin for the year ended Dec.
31, 1996. For the first quarter ended March 31, 1997, these properties
contributed approximately 12 percent of revenues and approximately 26
percent of gross margin.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: May 13, 1997
INTERLINE RESOURCES CORPORATION
By: /s/ Michael R. Williams
Michael R. Williams
President
Chief Executive Officer
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement") is
entered into effective as of the 1st day of May, 1997 between
Interline Resources Corporation, a Utah corporation, and
Interline Energy Services, Inc. a Wyoming corporation,
(collectively referred to as "Seller") and Questar Gas Management
Company, a Utah corporation, ("Buyer"), referred to hereinafter
as the "Parties."
In consideration of the mutual covenants and agreements set
forth herein, the receipt and sufficiency of which are herein
acknowledged by all parties, Buyer and Seller agree as follows:
Article 1 - Purchase and Sale
1.01 Purchase and Sale. As of the Effective Date (as defined
herein), and subject to the provisions hereof, Seller agrees
to sell and deliver to Buyer, and Buyer agrees to purchase
and accept from Seller, all of Seller's interest in and to
certain gas gathering assets and production properties
(individually referred to as "Asset," and collectively, the
"Assets") as defined in Section 1.02 below (hereinafter
"Interest" or, collectively, "Interests.")
1.02 Interests. All of the following shall be referred to as the
Seller's Interests:
(a) All of the Seller's right, title and interest in
the gas gathering facilities described in Exhibit A-1
(Monument Butte Gathering System), located in Duchesne
and Uintah Counties, Utah, including all pipes, valves,
fittings, metering equipment, processing equipment,
tankage, compressors, offices, plant sites, vehicles,
easements, rights-of-way, contracts, agreements and any
other tangible or intangible assets associated with the
ownership of the Monument Butte Gathering System.
(b) All of the Seller's right, title and interest in
and to the oil, gas and/or mineral leases and/or fee
mineral interests described in Exhibit A-2 (Production
Properties), located in Duchesne and Uintah Counties,
Utah, including all rights, titles and interests in and
to all materials, supplies, machinery, equipment,
improvements and other personal property and fixtures
(including, but not by way of limitation, all wells,
wellhead equipment, pumping units, flow lines, tanks,
buildings, injection facilities, saltwater disposal
facilities, compression facilities, gathering systems,
processing or other plants, and other equipment)
located on the properties described in Exhibit A-2, and
used in connection with the exploration, development,
operation or maintenance thereof.
(c) All of the Seller's rights, titles and interests
in and to all existing and effective unitization,
pooling and/or communitization agreements, declarations
and orders, and other agreements relating to the
properties described in subsection (b) above, to the
extent and only to the extent such rights, titles and
interests are attributable to the properties described
in subsection (b) above; and
(d) All of the Seller's rights, titles, and interests
in and to all presently existing and valid production
sales contracts, operating agreements, and other
agreements and contracts which relate to any of the
properties described in subsections (b) and (c) above.
1.03 Effective Date. The sale and purchase contemplated by this
Agreement shall be effective as of May 1, 1997 (the
"Effective Date").
Article II - Purchase Price
2.01 Purchase Price. In return for the sale of the Interests
described in Paragraph 1.02 above, and subject to the other
provisions hereof, Buyer shall pay to Seller the sum of Four
Million and No/100 Dollars ($4,000,000.00), by depositing
said sum, subject to adjustments under this Agreement, with
an Escrow Agent pursuant to the Escrow Agreement and
Instructions (copy attached hereto as Exhibit D) executed by
both Parties prior to or at Closing. The Purchase Price
shall be:
(a) increased by an amount equal to the sum of all
monies paid by Seller prior to Closing which are
attributable to the costs relating to operation of the
Assets from and after the Effective Date, and;
(b) decreased by an amount equal to the sum of (i)
revenues generated by the Assets and received by Seller
prior to Closing which are attributable to operation of
the Assets from and after the Effective Date, (ii) the
actual amount (or, if the actual amount is unavailable,
a reasonable estimate) of Seller's share of property
and ad valorem taxes not yet paid by Seller
attributable to periods of time prior to the Effective
Date, and (iii) the amount of reduction in the Purchase
Price for the Alleged Defect(s) elected by Seller or
Buyer under Paragraph 5.03.
2.02 Post-Closing Adjustment and Payments. The Purchase Price
shall be subject to further adjustment, and appropriate
payment shall be made by the Buyer or the Seller, after the
Closing, including the following:
(a) Seller shall pay Buyer an amount equal to Seller's
proportionate share of (i) additional expenditures paid
by Buyer subsequent to the Closing, to the extent such
expenses, invoices or statements pertain to work
performed, or materials and supplies purchased, for the
Assets prior to the Effective Date, plus (ii) any
adjustments to the estimated ad valorem and property
taxes used to calculate the Purchase Price paid by
Buyer at Closing, to the extent such taxes are
attributable to time periods prior to the Effective
Date, and to the extent the actual amount of such taxes
is higher than the parties' original estimate;
(b) Buyer shall pay Seller an amount equal to Seller's
proportionate share of (i) any additional payments or
receivables paid to Buyer subsequent to Closing, to the
extent such payments are attributable to periods prior
to the Effective Date, plus (ii) any adjustments to the
estimated ad valorem and property taxes used to
calculate the Purchase Price paid by Buyer at Closing,
to the extent such taxes are attributable to time
periods prior to the Effective Date, and to the extent
the actual amount of such taxes is lower than the
parties' original estimate;
All post-closing adjustments shall be calculated by the
party making the payments as soon as all necessary
information is available, but in no event more than ninety
(90) days after Closing (or such additional time upon which
the parties may mutually agree). The party making the
calculation shall send it along with all supporting
documentation and accounting explanation to the other party,
which shall then have thirty (30) days to agree or disagree
with the calculations. If the receiving party does not
agree with the calculations, it shall so notify the sending
party (which notice shall set forth the reasons and basis
for the disagreement in reasonable detail), after which the
parties shall meet as soon as practicable to resolve their
differences. Failure by the receiving party to notify the
sending party within the thirty (30) day period in a timely
manner shall be deemed to be an acceptance by the receiving
party of the sending party's calculations. Once a
calculation has been agreed to (or been deemed to be agreed
to), the appropriate payment shall be paid within seven (7)
days of the date on which the parties agree (or are deemed
to have agreed) on the calculation and amount of the
adjustment. In the event a party owes money to the other
party, the amounts may be netted against each other before
the final net payment is made, but only as to amounts that
are not in dispute. If the parties are unable to reach
agreement on the calculation or amount of any post-closing
adjustment, such unresolved issues shall be submitted either
to arbitration or to a nationally recognized independent
certified public accounting firm of which neither party is a
client, which shall be chosen by both parties. The cost
charged by such arbitration or accounting firm shall be
equally borne by the parties.
2.03 Sales Taxes. While the parties do not believe that any
sales taxes should be applicable to this transaction, Buyer
and Seller agree that, if it is determined that sales taxes
are applicable to this transaction, any such sales taxes
shall be borne entirely by the Buyer.
Article III - Representations and Warranties
3.01 Seller's Representations and Warranties. Seller represents
and warrants to Buyer that:
(a) Organization and Qualification. Seller is, and
through the Effective Date shall continue to be, a
corporation duly organized, validly existing and in
good standing under the laws of the States of Utah and
Wyoming, and that it has all requisite power and
authority to enter into this Agreement, to sell the
Interests on the terms described in this Agreement, and
to perform its other obligations under this Agreement.
(b) Due Authorization. Seller's respective execution,
delivery and performance of this Agreement, and the
transactions contemplated hereby, have been duly and
validly authorized by or are pursuant to all requisite
corporate action on the part of Seller.
(c) Due Execution. This Agreement has been duly
executed and delivered on behalf of Seller, and at the
Closing, all documents and instruments required
hereunder to be executed and delivered by Seller shall
have been duly executed and delivered.
(d) Approvals. Other than requirements (if any) that
there be obtained consents to assign (or waivers of
preferential rights to pursue) from third parties, and
except for approvals required to be obtained from
governmental entities who are lessors under leases
forming a part of the Production Properties which are
customarily obtained post-closing, and except for the
requirements of any maintenance of uniform interest
provisions contained in any operating agreements, to
Seller's knowledge, neither the execution and delivery
of this Agreement, nor the consummation of the
transactions contemplated hereby will violate, nor be
in conflict with:
(i) any provisions of Seller's articles of
incorporation, by-laws, or other governing
documents;
(ii) any agreement or instrument to which
Seller is a party or is bound; or
(iii) any judgment, decree, order,
statute, rule or regulation applicable to Seller.
(e) Valid, Binding and Enforceable. This Agreement
does, and such documents and instruments as will be
executed in accordance with this Agreement shall,
constitute legal, valid and binding obligations of
Seller, enforceable in accordance with their terms,
except where such enforceability is limited by
bankruptcy or insolvency laws, or by general principles
of equity to the extent such principles apply.
(f) Title. The Interests are free and clear of all
liens, burdens, encumbrances and defects in title.
The Interests entitle Seller to receive not less than
the undivided Interests set forth in Exhibit A-2 as
"Net Revenue Interests" (NRI) of all indicated
hydrocarbons produced, saved and marketed from or
attributable to the land and all wells located thereon
or attributable thereto through the plugging,
abandonment and salvage of such wells. Seller's
obligation to bear costs and expenses relating to the
development of and operations on the leases, land, and
wells thereon or attributable thereto is not, and,
through the plugging, abandonment and salvage of such
wells, shall not be, greater than the "Working
Interest" (WI) set forth in Exhibit A-2.
(g) Valid Leases. All leases are in full force and effect,
are valid and subsisting, cover the entire estates they
purport to cover, and contain no express provisions
that require the drilling of additional wells or other
material development operations in order to earn or to
continue to hold all or any portion of the Interests,
and Seller has never been advised directly or
indirectly by any lessor under lease or by any other
party of a default under any lease or of any
requirements or demands to drill additional wells on
any of the land.
(h) Royalties. All royalties, rentals and other
payments due under the leases have been properly and
timely paid, and all conditions necessary to keep the
leases in force have been fully performed.
(i) Material Contracts; Production Sale Contracts.
Seller is not in default under any contract or
agreement pertaining to the Interests and, except as
specifically indicated in Exhibit A-1, there are no
contracts or other agreements pertaining to the
Interests which require any further action on the part
of Seller or require Seller to perform any obligations
thereunder.
Except as agreed to by Buyer, no hydrocarbons produced
from the Interests are subject to a sales contract or
other agreement relating to the production, gathering,
transporting, processing, treating or marketing of
hydrocarbons, and no person has any call upon, option
to purchase or similar rights with respect to the
Interests or to the production therefrom.
(j) Gas Imbalances and Prepayment. Seller has not
received for the period prior to the Effective Date any
deficiency payments under gas contracts covering or
included within any of the Assets for which any party
has a right to take deficiency gas from the Assets for
the period after the Effective Date, and none of the
Assets are subject to any gas imbalances nor has Seller
received any payments for production of any kind from
the Assets, which imbalances or payments are subject to
recoupment or refund out of future production.
(k) No Broker's Fees. Seller has incurred no
liability, contingent or otherwise, for brokers' or
finders' fees relating to the transactions contemplated
by this Agreement for which the Buyer shall have any
responsibility whatsoever.
(l) No Litigation, Environmental Problems. To the
best of Seller's knowledge (after having made inquiry
with respect thereto):
(i) Except as indicated in Exhibit B, there
are no lawsuits, claims, governmental
investigations or inquiries, or other actions
pending or threatened against the Seller before
any court or governmental agency that might result
in impairment or loss of the Seller's title to any
portion of the Interests or that might have a
material adverse effect on the Interests after the
Effective Date or that might prevent or delay
closing;
(ii) as of the Effective Date there are no
unlawful environmental conditions existing at the
Assets; and
(iii) there are no claims existing that
the Assets have not been operated and maintained
in accordance with good and workmanlike industry
standards.
(m) No Delinquent Taxes. All ad valorem, property,
production, severance, excise and similar taxes and
assessments based on or measured by the ownership of
property or the production of hydrocarbons or the
receipt of proceeds therefrom upon the Interests that
have become due and payable have been properly and
timely paid. For purposes of this Agreement, taxes
based on or measured by production shall be deemed
attributable to the period in which the production
occurred, regardless of the fact that such taxes may
not be assessed or payable until some subsequent
period.
(n) No Bankruptcy. To the best of Seller's knowledge
(after having made inquiry with respect thereto), there
are no bankruptcy, insolvency or other proceedings for
the benefit of creditors pending, contemplated or
threatened by or against Seller.
(o) Disclaimers. Except as otherwise expressly set
forth in this agreement, seller makes no representation
or warranty of any kind, express or implied. Without
limiting the warranties, representations and indemnity
obligations of Seller set forth in this Agreement,
Seller expressly disclaims and negates any implied,
express, or statutory warranty of (i) merchantability,
(ii) fitness for a particular purpose, and/or (iii)
conformity to models or samples of materials, it being
understood and agreed that, subject to the
representations, warranties and indemnity obligations
of Seller expressly set forth in this Agreement, Buyer
shall accept all of the Assets in their "AS IS, WHERE
IS" condition, with all faults.
3.02 Buyer's Representations and Warranties. Buyer represents to
Seller:
(a) Organization and Qualification. Buyer is, and
through the Effective Date shall continue to be, a
corporation organized, validly existing, and in good
standing under the laws of the State of Utah, and that
it has all requisite power and authority to enter into
this Agreement, and to perform all of its obligations
under this Agreement;
(b) Due Authorization. The execution, delivery and
performance of this Agreement, and the transaction
contemplated hereby, have been duly and validly
authorized by all requisite action on the part of the
Buyer.
(c) Due Execution. This Agreement has been duly
executed and delivered on behalf of Buyer, and at the
Closing, all documents and instruments required
hereunder to be executed and delivered by Buyer shall
have been duly executed and delivered.
(d) Approvals. The consummation of the transactions
contemplated by this Agreement will not violate, nor be
in conflict with:
(i) any provisions of Buyer's articles of
incorporation, bylaws, or other governing
documents;
(ii) any agreement or instrument that Buyer
is a party or is bound; or
(iii) any judgment, decree, order,
statute, rule or regulation applicable to Buyer.
(e) Valid, Binding and Enforceable. This Agreement
does, and such documents and instruments as will be
executed in accordance with this Agreement shall,
constitute legal, valid and binding obligations of the
Buyer, enforceable in accordance with their terms,
except where such enforceability is limited by
bankruptcy or insolvency laws, or by general principles
of equity to the extent such principles apply.
(f) No Broker's Fees. Buyer has incurred no
liability, contingent or otherwise, for brokers' or
finders' fees relating to the transactions contemplated
by this Agreement for which the Seller shall have any
responsibility whatsoever.
Article IV - Covenants of Seller Pending Closing
4.01 Access by Buyer.
(a) Records. After the execution of this Agreement,
Seller shall continue to make available to Buyer, or
Buyer's authorized representatives, all information in
Seller's possession relating to the title to,
environmental condition and operation of the Assets,
and Buyer shall have the right to review and to request
copies of any and all information provided. Seller
shall have the copies requested made and invoice Buyer
for the expenses associated with copying same. Buyer
shall pay Seller any and all amounts due for such
copying within fifteen (15) days after receipt of the
invoice.
(b) Physical Inspection. After the execution of this
Agreement, Seller shall also continue to make a good
faith effort to obtain for Buyer, or Buyer's authorized
representatives, at all reasonable times before the
Closing and upon adequate notice to Seller, physical
access to the Assets for the purpose of inspecting the
same. Buyer agrees to comply fully with the rules,
regulations and instructions issued by Seller regarding
the actions of Buyer while upon, entering or leaving
the Assets.
4.02 Notification of Claims. The Seller shall promptly notify
Buyer of any claim, condition, suit, action or other
proceeding relating to the Interests that arises prior to
the Closing with respect to which the Seller receives actual
notice.
4.03 Preferential Rights and Consents. Seller will use
reasonable efforts, consistent with industry practices, in
transactions of this type, to (i) identify all preferential
rights to purchase and consents to assign held by third
parties which would be applicable to the transactions
contemplated hereby, and (ii) request from the parties so
identified (and in accordance with the documents creating
such rights), execution of waivers of the preferential
rights and obtain all necessary consents.
Article V - Due Diligence Reviews
5.01 Review by Buyer. Buyer may conduct, at its sole cost, such
title examination or investigation, and other examinations
and investigations, as it may in its sole discretion choose
to conduct with respect to Seller's Interests.
5.02 Notice of Defects. Buyer shall have notified Seller, within
five days prior to Closing, of its objections, if any, to:
(a) Seller's title in and to the Interests ("Alleged
Title Defect");
(b) the environmental condition of the Interests
("Alleged Environmental Defect"); or
(c) the operation of the Interests, including, but not
limited to:
(i) the existence of any default under,
noncompliance with or violation by Seller of any
statute, regulation, rule, or order, or decree of
any court or governmental agency relating to, or
regulating, the operation or use of the Interests,
excluding only matters within the scope of the
Alleged Title Defect(s) and Alleged Environmental
Defect(s);
(ii) the existence of financial
obligations not in the ordinary course of
business;
(iii) breaches, defaults, defects or lack
of assignability of any of the agreements,
contracts, easements or rights-of-way to be
assigned by Seller under this Agreement; or
(iv) any other defect(s) revealed by Buyer's
due diligence investigation ("Alleged Other
Defect").
Buyer's notice of Alleged Title Defect(s), Environmental
Defect(s), and Alleged Other Defect(s) (collectively,
"Alleged Defects") shall include a description of each
individual Alleged Defect being claimed and the value Buyer
in good faith attributes thereto.
5.03 Response to Asserted Defects. In the event that Buyer gives
notice of Alleged Defect(s), Seller shall have the option,
to:
(a) cure, prior to Closing, the Alleged Defect(s);
(b) attempt to cure the Alleged Defect for a period of
30 days after Closing. If such election is made, the
portion of the Purchase Price attributable to the value
the parties in good faith attribute to the Alleged
Defect shall be held in an interest earning escrow or
trust account by the Escrow Agent pursuant to the
Escrow Agreement until such time as (i) the Alleged
Defect is cured, or (ii) if uncured by the end of the
period, or at any such earlier time as elected by
Seller, the Purchase Price is adjusted according to
Paragraph 5.03(c) below. In the event that Seller
elects to cure defects after Closing, the entire
Purchase Price shall be held by the Escrow Agent until
Buyer, pursuant to the Escrow Instructions, deems that
all material defects have been cured.
(c) deduct the value the parties in good faith
attribute to the Alleged Defect(s) from the Purchase
Price;
(d) if the value of the Alleged Defect(s) exceeds
twenty percent (20%) of the Purchase Price, terminate
this Agreement by written notice to Buyer. In this
regard, the Parties also agree that Buyer shall have a
similar option, subject to Seller's ability to cure, to
also terminate this Agreement if the value of the
Alleged Defect exceeds twenty percent (20%).
Seller shall have notified Buyer in writing of its election
of option (a), (b) (c) or (d) above, with respect to the
Alleged Defect(s), if any, prior to Closing.
5.04 All objections constituting Alleged Defects not made by
Buyer to Seller within the time period provided in Paragraph
5.02 above shall be deemed to have been waived by Buyer, and
Buyer shall have no right to make a claim against Seller,
seek an adjustment to the Purchase Price or seek
indemnification from Seller with respect thereto.
Article VI - Conditions to Closing
6.01 Conditions Precedent to the Obligations of Buyer. The
obligations of Buyer are subject, at the option of Buyer, to
the satisfaction at or prior to Closing of the following
conditions:
(a) All of the representations and warranties given by
Seller under this Agreement shall be true and accurate
in all material respects at and as of the Closing;
(b) All of the covenants and conditions of this
Agreement to be complied with or performed on, or
before, the Closing hereof, shall have been duly
complied with or performed;
(c) Any ancillary documents and agreements required to
implement this Agreement, including an Escrow Agreement
and Instructions covering the disbursement of the
Purchase Price and the receipt of each Conveyance,
Assignment and Bill of Sale, all in form and substance
satisfactory to all parties, shall have been executed
and delivered;
(d) All approvals, consents and authorizations of
third parties (including governmental authorities,
where applicable), which are required by applicable
law, regulation or contract for the consummation of the
transaction contemplated hereby, shall have been
obtained, including without limitation, any consent
required from, or the waiver or expiration of any
preferential right to purchase; and
(e) No action or proceeding before a court or
governmental agency or body shall have been instituted
or threatened to restrain or prohibit the transaction
contemplated hereby.
(f) Seller shall produce title to a 1994 Chevrolet
Pick-up, and shall, prior to Closing submit evidence
that title will be conveyed to Buyer for a 1995
Extended Cab vehicle, title to which will be given to
Buyer within two weeks after Closing.
6.02 Conditions Precedent to Obligations of Seller. The
obligations of Seller are subject, at the option of Seller,
to the satisfaction at or prior to Closing of the following
conditions:
(a) All of the representations and warranties given by
Buyer under this Agreement shall be true and accurate
in all material respects at and as of the Closing;
(b) All of the covenants and conditions of this
Agreement to be complied with or performed on, or
before, the Closing hereof, shall have been duly
complied with or performed;
(c) Any ancillary documents and agreements required to
implement this Agreement, all in form and substance
satisfactory to all parties, including an Escrow
Agreement and Instructions covering the disbursement of
the Purchase Price and the receipt of eachConveyance,
Assignment and Bill of Sale, shall have been executed
and delivered;
(d) All approvals, consents and authorizations of
third parties (including governmental authorities,
where applicable), which are required by applicable
law, regulation or contract for the consummation of the
transaction contemplated hereby, shall have been
obtained, including without limitation, any consent
required from, or the waiver or expiration of any
preferential right to purchase; and
(e) No action or proceeding before a court or
governmental agency or body shall have been instituted
or threatened to restrain or prohibit the transaction
contemplated hereby.
6.03 The parties agree that, in order for any party to assert the
failure of a condition precedent to its obligations
hereunder, such party must give written notice to the other
party prior to the Closing or as soon as practicable after
such party becomes aware of the failure of a condition
precedent to its obligations.
Article VII - Closing
7.01 Date, Time, and Place of Closing. The closing of this
transaction (the "Closing") shall occur at such time, date
and place upon which the parties may mutually agree;
provided, however, that the Closing shall occur no later
than May 1, 1997.
7.02 Closing shall be conducted pursuant to the Escrow Agreement
and Instructions executed by both Parties prior to or at
Closing.
7.03 Closing Obligations. At the Closing the following events
shall occur, each being a condition precedent to the others
and each being deemed to have occurred simultaneously with
the others:
(a) Seller shall deliver to the Escrow Agent:
(i) one or more counterparts of this
Agreement, executed by Seller;
(ii) two original executed Conveyance,
Assignment, and Bill of Sales of the Monument
Butte Gathering System to Buyer and of the
Production Properties to Buyer's designee, Celsius
Energy Company, in the form attached hereto as
Exhibits "C-1" and "C-2";
(iii) copies of the applicable Board
Resolutions or other authorization or approval
from Seller's Boards of Directors in regards to
this sale;
(iv) to the extent applicable, such documents
as the parties agree are necessary to evidence the
other Asset owners' waiver or election not to
exercise their preferential right; and
(v) all documents, files, records and any
pertinent correspondence (except for monthly
accounting and operating records for each Asset)
in Seller's possession and control which relate to
the Interests or the Assets (with the further
understanding that Seller may retain copies of
such documents, files, records and correspondence
at its sole cost and expense).
(b) Buyer shall deliver to the Escrow Agent:
(i) one or more counterparts of this
Agreement, executed by Buyer;
(ii) copies of the applicable Board
Resolution or other authorization or approval from
Buyer's Board of Directors in regards to this
sale; and
(iii) the payment of the Purchase Price
(as adjusted pursuant to Paragraph 2.01) pursuant
to instructions given by Seller to the Escrow
Agent.
Article VIII - Miscellaneous
8.01 Expenses. Seller and Buyer shall each bear their own
expenses and costs (including without limitation, legal
expenses) in connection with the consummation of the
transaction contemplated by this Agreement, except for any
costs in connection with the escrow agent and escrow
closing, which costs shall be borne as provided for in the
Escrow Agreement and Instructions.
8.02 Entirety and Modification.
(a) This Agreement, and any agreements referenced
herein, contains the entire agreement between the
parties hereto with respect to the acquisition by Buyer
of Seller's Interests, and supersedes any and all prior
agreements, whether written or oral, between such
parties relating to such acquisition.
(b) No modification, alteration, amendment or
supplement to the Agreement shall be valid or effective
unless the same is in writing and signed by all of the
parties hereto.
8.03 Further Assurances. In case, at any time prior to or after
the Closing, any action is necessary to carry out the
purposes of this Agreement, each party shall take all such
reasonably necessary actions, including the execution and
delivery of such further instruments and documents, as may
be reasonably requested by any other party for such purpose
or otherwise to complete or perfect the transactions
contemplated hereby.
8.04 Filings and Consents. Each of the parties will use its
reasonable best efforts to effect, as promptly as
practicable, such filings or registrations with, or
notifications to, or to obtain such permits, authorizations,
consents and approvals of, all governmental authorities
which are required to be effected or obtained by such party
in connection with the transactions contemplated by this
Agreement, and reasonably necessary to consummate the
transactions contemplated hereby.
8.05 Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the internal laws,
but not the laws concerning conflict of laws, of the State
of Utah. The parties agree that any litigation relating
directly or indirectly to this Agreement must be brought
before and determined by a court of competent jurisdiction
within the State of Utah, except that if any party desires
to join any other party in a state other than the State of
Utah, such parties shall be entitled to do so
notwithstanding the foregoing clause.
8.06 Counterparts. This Agreement may be signed in multiple
counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same agreement.
8.07 Buyer's Indemnity. Except to the extent Seller shall
indemnify Buyer pursuant to Paragraph 8.08 below, Buyer
shall indemnify, defend and hold Seller, its directors,
officers, employees, affiliates, agents or representatives,
successors and assigns harmless from and against any and all
actions, claims, costs, damages or other expenses
(including, without limitation, reasonable attorney's fees)
arising directly or indirectly from ownership or operation
of the Assets and which accrued or relate to events
occurring on or subsequent to the Effective Date
(hereinafter called "Buyer Indemnified Claims"); including,
but not limited to: (a) any Buyer Indemnified Claims of any
person, entity or third party for personal injury (whether
physical or non-physical), death or property damage, (b) any
Buyer Indemnified Claims relating to or arising in
connection with any provisions of any agreement related to
the Assets, or (c) any Buyer Indemnified Claims arising from
or relating to any violation or alleged violation of laws or
regulations.
8.08 Seller's Indemnity. Seller shall indemnify, defend and hold
harmless the Buyer, its directors, officers, employees,
affiliates, agents or representatives, successors and
assigns from and against any and all Claims arising directly
or indirectly as the result of (i ) any claim by any person,
entity or third party which claims an interest in, or
ownership of, the Interest by, through or under the Seller,
or (ii) any breach by Seller of the representations and
warranties made by Seller in Paragraph 3.01 above.
Additionally, except to the extent Buyer shall indemnify
Seller pursuant to Paragraph 8.07 above, Seller shall
indemnify, defend and hold Buyer, its directors, officers,
employees, affiliates agents or representatives, successors
and assigns harmless from and against any and all actions,
claims, costs, damages or other expenses (including, without
limitation, reasonable attorney's fees) arising directly or
indirectly from ownership or operation of the Assets and
which accrued or relate to events occurring prior to the
Effective Date (hereinafter called "Seller Indemnified
Claims"); including, but not limited to: (i) any claims
listed on Exhibit "B" (ii) any Seller Indemnified Claims of
any person, entity or third party for personal injury
(whether physical or non-physical), death or property
damage, (iii) any Seller Indemnified Claims relating to or
arising in connection with any provisions of any agreement
related to the Assets or (iv) any Seller Indemnified Claims
arising from or relating to any violation or alleged
violation of laws or regulations, including laws and
regulations concerning hazardous materials or the protection
of the environment, including any and all costs of
compliance or remedial action necessary in connection
therewith.
8.09 Confidentiality. Each party agrees that the terms of this
Agreement shall be kept confidential by it and shall not be
disclosed to any third party, without first obtaining the
written consent of the parties, which consent shall not be
unreasonably withheld; provided, however, that this
Paragraph shall not prevent, nor be construed as preventing,
any party from (i) notifying the other owners of each Asset
that Buyer intends to purchase Seller's Interest, and
providing each such other Asset owner with a copy of this
Agreement, in order to satisfy the other owners'
preferential right to purchase Seller's Interest, (ii)
making any disclosure required by law, including litigation
discovery requests and subpoenas, or required by the rules
and regulations of the Securities and Exchange Commission or
the New York Stock Exchange, or (iii) from disclosing any
information which is already in the public domain, or which
is required to be disclosed in the normal course of its
business to its lenders, accountants, auditors, outside
attorneys, or other consultants or representatives, each of
which shall be notified of the confidential nature of the
information and shall agree to keep such information
confidential on behalf of the party giving the information.
Prior to making any disclosure required under clause (ii)
above, the disclosing party shall notify the other party of
its intent to make such disclosure and a reasonable
description of the nature and content of the disclosure.
8.10 Notices. Any notice, demand or communication required,
permitted, or desired to be given hereunder shall be deemed
effectively given when personally delivered, when mailed by
prepaid certified mail, return receipt requested, or by
overnight courier, or when transmitted by facsimile
transmission (with a hard copy sent by one of the
aforementioned methods), addressed as follows:
If to Seller, to: Interline Resources Corporation
Attn: Michael R. Williams
160 West Canyon Crest
Alpine, Utah 84004
Fax No. (801) 756-8843
If to Buyer, to: Questar Gas Management Company
Attn: John B. Carricaburu
79 South State Street
P.O. Box 11070
Salt Lake City, Utah 84147
Fax No. (801) 324-2570
8.11 Survival. The representations, warranties, covenants,
agreements and indemnitees of each Party, as contained in
this Agreement or in any exhibit, document, certificate or
other instrument, shall survive the Closing hereof (and the
execution and delivery of the Conveyance).
8.12 Joint Negotiation: Nature of the Parties. Each party
hereto acknowledges that
(a) it has knowledge and experience about the oil and
gas business, and other business and financial matters,
which enable it to evaluate the merits and risks of
this transaction;
(b) it is not, and has not been, in a significantly
disparate position with regard to this transaction;
(c) it has participated fully in the negotiation and
preparation of this Agreement, and that it has had full
opportunity to consult with its counsel; and
8.13 Non-Assignability. This Agreement shall be binding upon the
parties, their affiliates and their respective successors
and assigns. No assignment of the rights of the parties
under this Agreement may be made without the prior written
consent of the other party hereunder, which consent shall be
within the other party's sole discretion.
8.14 Severability. In the event any covenant, condition, or
provision contained herein is held to be invalid by a court
of competent jurisdiction, the invalidity of any such
covenant, condition, or provision shall in no way affect any
other covenant, condition or provision contained herein;
provided, however, that any such invalidity does not
materially prejudice either the Buyer or Seller in its
respective rights and obligations contained in the valid
covenants, conditions, and provisions of this Agreement.
8.15 Construction of Ambiguity. In the event of any ambiguity in
any of the terms or conditions of this Agreement, including
any exhibits, whether or not placed of record, such
ambiguity shall not be construed for or against any Party
hereto on the basis that such Party did or did not authorize
the same.
8.16 Remedies. Under no circumstances shall either party be
liable to the other for indirect, consequential, punitive or
exemplary damages for any breach of this Agreement.
Questar Gas Management Company
By:
______________________________
JOHN B. CARRICABURU
Vice President and
General Manager
Interline Resources Corporation
By:______________________________
MICHAEL R. WILLIAMS
President
Interline Energy Services, Inc.
By:_______________________________
MICHAEL R. WILLIAMS
President
<PAGE>
EXHIBIT A-1
to the
ASSET PURCHASE AND SALE AGREEMENT
by and among
INTERLINE RESOURCES CORPORATION
INTERLINE ENERGY SERVICES, INC.
and
QUESTAR GAS MANAGEMENT COMPANY
Effective May 1, 1997
Monument Butte Gathering System
A. All gathering pipelines and related facilities owned by
Interline Resources Corporation and/or Interline Energy
Services, Inc. located in Townships 8 South and 9 South, Ranges
15 East, 16 East, 17 East and 18 East, Duchesne and Uintah
Counties, Utah, including but not limited to:
1. Approximately thirty-six (36) miles of surface
steel pipe (2" to 8" OD) and thirty-nine (39) miles
of surface polyethylene pipe (2" to 8" OD) and
associated measurement, vehicles, supplies, and other
equipment.
2. Three (3) active and two (2) inactive compressor
sites and associated equipment and inventory
including but not limited to:
a. The Monument Butte Station: One (1)
400 Bhp Ingersoll Rand 8SVG8 with a three stage
compressor, one (1) 825 Bhp White Superior with
a three stage Chicago Pneumatic compressor, and
associated building, condensate tanks,
separators and knockout tanks, a 5 Mmcfd TEG
dehy and other associated equipment and
supplies.
b. The Boundary Station: Two compressors
as follows: (i) one 400 Bhp, Waukesha F18GL Lean
Burn engine with an Ariel JGJ2 Compressor rated
at 1.4 Mmcfd, and (ii) the lease with Compressor
Specialties, Inc., for one 400 Bhp, Waukesha
F18GL Lean Burn engine with an Ariel JGJ2
Compressor rate at 1.4 Mmcfd; a 200 Barrel tank,
separator, 3.5 Mmcfd TEG dehy and other
associated equipment and supplies.
c. The PV3 Station: One (1) 90 Bhp
Caterpillar compressor, one (1) 60 Bhp Hercules
compressor, and associated building, TEG dehy,
separator, 100 barrel tank and other associated
equipment and supplies.
d. The PV1 and PV2 Stations: Inactive
compressor stations including associated
equipment and supplies.
B. All right-of-way easements over and through the following
described lands:
1. BLM: Easement No. U-50843, U-65168, U-53909, U-
53924, U-52129,
U-63977
2. State of Utah:
a. Easements: 362; 334; 372; 27
b. Rights of Way: 2485; 2615; 2695; 2838; 3097; 3119
3. Private Landowner Right-of-Way Easements:
Date: Grantor:
a. 09/10/91 Carman Family Investments
b. 10/14/91 Ethan Lee & Louise Nelson
Brad Lee & JoAnn H. Nelson
c. 12/28/94 A.A. & M, L.C.
d. 10/05/95 A.A. & M, L.C.
e. 08/27/96 A.A. & M, L.C.
f. 10/22/96 Lee and Louise Nelson
Family Trust
g. 01/08/96 Lee and Louise Nelson
Family Trust
h. 11/20/96 Lee and Louise Nelson
Family Trust
i. 06/04/96 Lee and Louise Nelson
Family Trust
j. 10/06/95 L. Clark Roberts &
Barbara J. Roberts
k. 01/02/96 L. Clark Roberts &
Barbara J. Roberts
l. 03/01/96 L. Clark Roberts &
Barbara J. Roberts
m. 10/03/95 Inland Resources
n. 01/08/96 Inland Resources
o. 08/21/96 Inland Resources
p. 09/12/84 Carmen Family
Investment Co. (Surface
Agreement with Lomax
Exploration Company)
C. All easements granted by Massey Utah Gas Systems, L.C. to
Interline Resources Corporation pursuant to a Quit-claim
Deed dated December 1, 1993 and recorded December 13, 1993
with the Duchesne County Recorder in Book MR260 at page
204-13, Entry No. 297880, and with the Uintah County
Recorder.
D. All corresponding gas purchase, gathering, and sale
agreements including:
Type/Name Date Wells/Dedicated Area Expirat
ion
Date
a. Gas 10/24/88T8S, R17E 10/31/97
Purchase Sec. 16: All
Agreement - Sec. 17: All
Lomax (Inland) Sec. 18: Lots 1 and 2
Sec. 19: Lots 3-5, E/2,
NE/SW
Sec. 20: All
Sec. 21: W/2, SE/4
Sec. 30: Lots 6, 7, E/2NE
b. Gas 10/19/88T8S, R16E 10/31/97
Purchase Sec. 27: S 1/2 S 1/2
Agreement Sec. 34: N 1/2 and SE 1/4
Lomax Sec. 35: All
(Inland) Sec. 37: All
T8S, R17E
Sec. 32: All
T9S, R16E
Sec. 2: All
c. Gas Boundary Federal #8-21
Purchase SENE Sec. 21, T8S, R17E
Agreement with
Inland Sundance State #5-32
(Pending) SWNW Sec. 32, T8S, R18E
Parriot Draw Federal #8-23
SENW Sec. 23, T8S, R17E
d. Gas 5/22/95 #11-4G Well NWNW Sec. 4, 12/31/99
Gathering T9S, R16E
Agreement - #12-4G Well SWNW Sec. 4,
Dalen (Enserch) T9S, R16E
#21-4G Well NENW Sec. 4,
T9S, R16E
#31-4G Well NWNE Sec. 4,
T9S, R16E
#42-4G Well SENE Sec. 4,
T9S, R16E
#21-5G Well NENW Sec. 5,
T9S, R16E
#22-5G Well SENW Sec. 5,
T9S, R16E
#23-5G Well NESW Sec. 5,
T9S, R16E
#31-5G Well NENE Sec. 5,
T9S, R16E
#32-5G Well SWNE Sec. 5,
T9S, R16E
#41-5G Well NENE Sec. 5,
T9S, R16E
#12-8H Well SWNW Sec. 8,
T9S, R17E
#31-8H Well NWNE Sec. 8,
T9S, R17E
#41-8H Well NENE Sec. 8,
T9S, R17E
#42-8H Well SENE Sec. 8,
T9S, R17E
#11-9H Well NWNW Sec. 9,
T9S, R17E
#12-9H Well SWNW Sec. 9,
T9S, R17E
#22-9H Well SENW Sec. 9,
T9S R17E
#23-9H Well NESW Sec. 9,
T9S, R17E
#24-9H Well SESW Sec. 9,
T9S, R17E
#13-33B Well NWSW Sec. 33,
T8S, R16E
#14-33B Well SWSW Sec. 33,
T8S, R16E
#23-33B Well NESW Sec. 33,
T8S, R16E
#24-33B Well SESW Sec. 33,
T8S, R16E
#33-33B Well NWSE Sec. 33,
T8S, R16E
#34-33B Well SWSE Sec. 33,
T8S, R16E
#43-33B Well SESE Sec. 33,
T8S, R16E
#44-33B Well SESE Sec. 33,
T8S, R16E
#13-34B Well NWSW Sec. 34,
T8S, R16E
#14-34B Well SWSW Sec. 34,
T8S, R16E
#23-34B Well NESW Sec. 34,
T8S, R16E
#24-34D Well SESW Sec. 34,
T8S, R18E
#43-5G Well NESE Sec. 5,
T9S, R16E
#21-8H Well NENW Sec. 8,
T9S, R17E
#22-8H Well SENW Sec. 8,
T9S, R17E
#32-8H Well SWNE Sec. 8,
T9S, R17E
#13-9H Well NWSW Sec. 9,
T9S, R17E
#14-9H Well SWSW Sec. 9,
T9S, R17E
#21-9H Well NENW Sec. 9,
T9S, R17E
#33-9H Well NWSE Sec. 9,
T9S, R17E
e. Gas 09/28/96Sec. 15, T9S, R17E
Purchase
Agreement -
Enserch
f. Gas July, Federal #23-26 NWSW Sec. 26, 7/1993
Purchase 1992 T8S, R18E (like
Agreement - Federal #44-29 SESE Sec. 29, Evergre
Wildrose T8S, R18E en)
Federal #10-29 NWSE Sec. 29,
T8S, R18E
Federal #12-34 SWNW Sec. 34,
T8S, R18E
Federal #1-35 SWNW Sec. 35,
T8S, R18E
Federal #22-35 SENW Sec. 35,
T8S, R18E
Federal #3-35 SWNE Sec. 35,
T8S, R18E
g. Gas Federal #13-26 NWSE Sec. 26,
Purchase T8S, R18E
Agreement - Federal #24-26 SESW Sec. 26,
Wildrose T8S, R18E
(Pending) Federal #42-35 SENE Sec. 35,
T8S, R18E
Federal #43-35 NESE Sec. 29,
T8S, R18E
Federal #43-29 NESE Sec. 29,
T8S, R18E
h. Gas Terms Federal #33-34D NWSE Sec.
Purchase under 34, T8S, R18E
Agreement - agree- Federal #42-34D SENE
Wildrose ment Sec. 34, T8S, R18E
dated Federal #43-34D NESE
March Sec. 34, T8S, R18E
29, Federal #13-35D NWSW Sec.
1985 35, T8S, R18E
between
AMGAS
and
Wildrose
i. Gas 7/10/95 Federal #11-25 NWNW Sec. 25, 2/29/2000
Purchase T8S, R17E
Agreement - Federal #21-25 NENW Sec. 25,
Equitable T8S, R17E
(Balcron) Federal #12-25 SWNW Sec. 25,
T8S, R17E
Federal #22-25 SENW Sec. 25,
T8S, R17E
Federal #32-25 SWNE Sec. 25,
T8S, R17E
Federal #31-25 NWNE Sec. 25,
T8S, R17E
j. Gas 8/31/93 Monument Butte #1-3 NWSW 8/31/98
Purchase Sec. 3, T9S, R17E
Agreement -
Phoenix (Snyder) Monument Butte #2-3 SENW
Sec. 3, T9S, R17E
k. Gas Sec. 26, T8S, R18E
Purchase (Site to be agreed upon)
Agreement -
Snyder (Pending)
l. Gas 9/7/90 #36-11 NWNW Sec. 36, T8S, 9/6/95
Purchase R18E (Evergr
Contract - #36-12 SWNW Sec. 36, T8S, een)
Phoenix (Snyder) R18E
#36-13 NWSW Sec. 36, T8S,
R18E
#36-22 SENW Sec. 36, T8S,
R18E
m. Gas 4/6/89 10/31/97
Transportation
and Compression
Agreement -
Phoenix (Snyder)
n. Gas 4/16/89 10/31/97
Transportation
Agreement -
Phoenix (Snyder
to transport
Interline's gas)
11/01/96 10/31/97
o. Gas
Purchase
Agreement -
PanEnergy
<PAGE>
EXHIBIT A-2
to the
ASSET PURCHASE AND SALE AGREEMENT
by and among
INTERLINE RESOURCES CORPORATION,
INTERLINE ENERGY SERVICES, INC.
and
QUESTAR GAS MANAGEMENT COMPANY
Effective May 1, 1997
PRODUCTION PROPERTIES
Lease/ Lessor Lessee Wells/Unproduced WI% NRI%
Description Acreage
U-52757 USA Enserch Squaw's Crossing 100 87.5
T9S, R18E Exploration Federal #1-5
Sec. 5; S/2SE/4 SWSE
Uintah County, Utah All depths
80.00 acres
U-69744 USA Interline (66.5%) Wells Draw 66.5 49.875
(Formerly U-30096) Normandy Oil Federal #11-
5
T9S, R16E (33.5%) Lot 4 (NWNW)
Sec. 5; SW/4NW/4, Lot 4
Duchesne County, Utah
80.08 acres
U-40026 USA Enserch (75%) (1) County
Line 62.5 52.813
T8S R17E Citation 1994 Federal #1-
35
Sec. 35; SE/4NW/4, Investment Ltd. SENW
NW/4SE/4 Key Production
Duchesne County, Utah (2) County
Line 37.5 31.688
80.00 acres Federal #2-35
NWSE
U-49950 USA Equitable Wells Draw 68.4 53.01
8S, R16E Resources Federal #44-31
Sec.31; SE/4SE/4 SESE
Duchesne County, Utah Surface to
6,077 ft.
40.00 acres
ML-21836 State of Chevron U.S.A. (1) State
#33-32 100 79
T8S, R16E Utah NWSE
Sec. 32; All Surface to 5850 ft.
Duchesne County, Utah
640.00 acres (2) State #32-32 69.9 56.25
SWNE
Surface to 6200 ft.
(3) State #24-32 75.27 60.40
SESW
Surface to 6200 ft
(4) State #23-32 73.82 59.24
NESW
Surface to 6200 ft
(5) State #22-32 74.598 58.99
SENW
Surface to 6233 ft
(6) State #14-32 69.71 55.94
SWSW
Surface to 6008 ft
(7) State #13-32 80.9 64.92
NWSW
Surface to 6002 ft
(8) N/2NW/4, 9.5982
SW/4NW/4
Surface to 6233 ft.
<PAGE>
EXHIBIT B
to the
ASSET PURCHASE AND SALE AGREEMENT
by and among
INTERLINE RESOURCES CORPORATION,
INTERLINE ENERGY SERVICES, INC.,
and
QUESTAR GAS MANAGEMENT COMPANY
Effective May 1, 1997
Lawsuits, Claims And Other Actions
A. Genesis Petroleum, Inc. v. Interline Resources Corp.,
Civil No. 960907074 filed in the Third District Court for
the State of Utah for approximately $2,650,000.00
<PAGE>
EXHIBIT C-1
to the
ASSET PURCHASE AND SALE AGREEMENT
by and among
INTERLINE RESOURCES CORPORATION,
INTERLINE ENERGY SERVICES, INC.,
and
QUESTAR GAS MANAGEMENT COMPANY
Effective May 1, 1997
CONVEYANCE, ASSIGNMENT AND BILL OF SALE
(Monument Butte Gathering System)
THIS CONVEYANCE, ASSIGNMENT AND BILL OF SALE
("Conveyance") dated as of April 30th, 1997, and effective May
1st, 1997 (the "Effective Date") 7:00 a.m. local time between
Interline Resources Corporation, 160 West Canyon Crest, Alpine,
Utah 84004, Interline energy Services, Inc., 350 West "A"
Street, #204, Casper, Wyoming 82601 (collectively referred to
as "Grantor") and Questar Gas Management Company, 79 South
State, P. O. Box 11070, Salt Lake City, Utah 84147 ("Grantee").
WITNESSETH:
Grantor, in consideration of the mutual covenants,
agreements and obligations contained in that certain unrecorded
Asset Purchase and Sale Agreement effective May 1, 1997 (the
"Agreement") and the payment of the Purchase Price provided
therein, the receipt and sufficiency of which are hereby
acknowledged, does hereby grant, sell, convey, assign, and
deliver unto Grantee all of Grantor's interest in the follow
ing:
The gas gathering facilities described in Exhibit "A"
(Monument Butte Gathering System), located in Duchesne and
Uintah Counties, Utah, including all pipes, valves,
fittings, metering equipment, processing equipment,
tankage, compressors, vehicles, offices, plant sites,
easements, rights-of-way, contracts, agreements (including
all gas purchase, sale, and gathering agreements) and any
other tangible or intangible assets associated with the
ownership of the Assets described in Exhibit "A".
All of the foregoing facilities, leases, interests, rights,
contracts and properties described above are herein called the
"Assets." All capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Agreement.
This Conveyance is made and accepted subject to all the
provisions of the Agreement, which are by this reference
incorporated herein as though set forth at length and which
provisions shall survive the execution of this Conveyance.
Without limiting the generality of the preceding
paragraph, Grantor, with respect to its interest in the Assets,
hereby warrants and represents that: (a) it is conveying to the
Grantee such title to the Assets without having made any prior
sale, transfer, conveyance, assignment, mortgage or other
encumbrance to a third party; and (b) as to any and every
person, corporation, partnership, joint venture or other entity
whomsoever may claim any interest in Grantor's Interest by,
through or under Grantor ("Claiming Party"), but not otherwise,
Grantor agrees to indemnify the Grantee from any claims of
Claiming Party and to defend the Interest transferred hereby
unto Grantee against claims of a Claiming Party.
The provisions hereof shall be covenants running with the
land and shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and assigns.
Except as set forth in the Agreement, the Grantor hereby
disclaims, and the conveyance of Grantor's interest is hereby
made without, any and all warranties, express or implied, under
the uniform commercial code, including without limitation, the
warranties of merchantability or fitness for a particular
purpose.
In Witness Whereof, this Assignment has been signed as of
the date above written.
Interline Resources Corporation
By:______________________________
Michael R. Williams
President
Interline Energy Services, Inc.
By: _____________________________
Michael R. Williams
President
Questar Gas Management Company
By:______________________________
John B. Carricaburu
Vice President and General
Manager
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
Before me, the undersigned, a Notary Public in and for
said County and State on this _____ day of ______________,
1997, personally appeared Michael R. Williams, to me known to
be the identical person who subscribed the name of the maker
thereof to the foregoing instrument as President of Interline
Resources Corporation and Interline Energy Services, Inc., and
acknowledged to me that he executed the same as his free and
voluntary act and deed and as the free and voluntary act and
deed of such corporation, for the uses and purposes therein set
forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
________________________________
Notary Public
________________________
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
Before me, the undersigned, a Notary Public in and for
said County and State on this _____ day of ______________,
1997, personally appeared John B. Carricaburu, to me known to
be the identical person who subscribed the name of the maker
thereof to the foregoing instrument as its Vice President and
General Manager and acknowledged to me that he executed the
same as his free and voluntary act and deed and as the free and
voluntary act and deed of such corporation, for the uses and
purposes therein set forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
________________________________
Notary Public
__________________________
<PAGE>
EXHIBIT C-2
to the
ASSET PURCHASE AND SALE AGREEMENT
by and among
INTERLINE RESOURCES CORPORATION,
INTERLINE ENERGY SERVICES, INC.,
and
QUESTAR GAS MANAGEMENT COMPANY
Effective May 1, 1997
CONVEYANCE, ASSIGNMENT AND BILL OF SALE
(Production Properties)
THIS CONVEYANCE, ASSIGNMENT AND BILL OF SALE
("Conveyance") dated as of April 30th, 1997, and effective May
1st, 1997 (the "Effective Date") 7:00 a.m. local time between
Interline Resources Corporation, 160 West Canyon Crest, Alpine,
Utah 84004, Interline energy Services, Inc., 350 West "A"
Street, Casper, Wyoming, 82601 (collectively referred to as
"Grantor") and Celsius Energy Company, 1331 17th Street, Suite
800, Denver CO 80202 ("Grantee").
WITNESSETH:
Grantor, in consideration of the mutual covenants,
agreements and obligations contained in that certain unrecorded
Asset Purchase and Sale Agreement effective May 1, 1997 between
Grantor and Questar Gas Management Company (the "Agreement")
and the payment of the Purchase Price provided therein, the
receipt and sufficiency of which are hereby acknowledged, does
hereby grant, sell, convey, assign, and deliver unto Grantee
all of Grantor's right, title, and interest in the following:
(a) The estates, royalty and mineral interests,
operating rights, working interests, contractual interests
of rights, reversionary interests (including but not
limited to non-consent interests) and net revenue
interests in the lands, leases, licenses, permits and
other agreements affecting the leases described in Exhibit
"A" in all depths and formations ("Leases" and "Lands").
(b) The oil and gas wells identified in Exhibit "A"
and the lands and the leases located within the existing
producing or spacing unit or allocated to the producing
wells or spacing unit for such wells, including all
existing and effective unitization, pooling and/or
communitization agreements, declarations and orders, and
other agreements relating to the properties.
(c) The product sale contracts, leases, permits,
agreements, rights-of-way, easements, licenses, farmouts,
options, and appurtenances of any kind pertaining to the
assigned Land and Leases.
(d) The fixtures, personal property, facilities and
equipment used or held for use and charged to the wells
listed on Exhibit "A" for the production, treatment, sale
or disposal of leasehold substances or water produced
therefrom, including all rights, titles and interest in
and to all materials, supplies, machinery, equipment,
improvements and other personal property and fixtures
(including, but not by way of limitation, all wells,
wellhead equipment, pumping units, flow lines, tanks,
buildings, injection facilities, saltwater disposal
facilities, compression facilities, gathering systems,
processing or other plants, and other equipment).
All of the foregoing leases, interests, rights, contracts and
properties described above are herein called the "Assets." All
capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Agreement.
This Conveyance is made and accepted subject to all the
provisions of the Agreement, which are by this reference
incorporated herein as though set forth at length and which
provisions shall survive the execution of this Conveyance.
Without limiting the generality of the preceding
paragraph, Grantor, with respect to its interest in the Assets,
hereby warrants and represents that: (a) it is conveying to the
Grantee such title to the Assets without having made any prior
sale, transfer, conveyance, assignment, mortgage or other
encumbrance to a third party; and (b) as to any and every
person, corporation, partnership, joint venture or other entity
whomsoever may claim any interest in Grantor's Interest by,
through or under Grantor ("Claiming Party"), but not otherwise,
Grantor agrees to indemnify the Grantee from any claims of
Claiming Party and to defend the Interest transferred hereby
unto Grantee against claims of a Claiming Party.
The provisions hereof shall be covenants running with the
land and shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and assigns.
Except as set forth in the Agreement, the Grantor hereby
disclaims, and the conveyance of Grantor's interest is hereby
made without, any and all warranties, express or implied, under
the uniform commercial code, including without limitation, the
warranties of merchantability or fitness for a particular
purpose.
In Witness Whereof, this Assignment has been signed as of
the date above written.
Interline Resources Corporation
By:______________________________
Michael R. Williams
President
Interline Energy services, inc.
By:______________________________
Michael R. Williams
President
Celsius Energy Company
By:______________________________
M. L. Owen
V. P., Administrative Services
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for
said County and State on this 30th day of April, 1997,
personally appeared Michael R. Williams, to me known to be the
identical person who subscribed the name of the maker thereof
to the foregoing instrument as President of Interline Resources
Corporation and Interline Energy Services, Inc., and
acknowledged to me that he executed the same as his free and
voluntary act and deed and as the free and voluntary act and
deed of such corporation, for the uses and purposes therein set
forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
_________________________________
Notary Public
____________________
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for
said County and State on this 30th day of April, 1997,
personally appeared M. L. Owen, to me known to be the identical
person who subscribed the name of the maker thereof to the
foregoing instrument as its Vice President, Administrative
Services and acknowledged to me that he executed the same as
his free and voluntary act and deed and as the free and
voluntary act and deed of such corporation, for the uses and
purposes therein set forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
________________________________
Notary Public
__________________________
<PAGE>
CONVEYANCE, ASSIGNMENT AND BILL OF SALE
(Monument Butte Gathering System)
THIS CONVEYANCE, ASSIGNMENT AND BILL OF SALE
("Conveyance") dated as of April 30th, 1997, and effective May
1st, 1997 (the "Effective Date") 7:00 a.m. local time between
Interline Resources Corporation, 160 West Canyon Crest, Alpine,
Utah 84004, Interline energy Services, Inc., 350 West "A"
Street, #204, Casper, Wyoming 82601 (collectively referred to
as "Grantor") and Questar Gas Management Company, 79 South
State, P. O. Box 11070, Salt Lake City, Utah 84147 ("Grantee").
WITNESSETH:
Grantor, in consideration of the mutual covenants,
agreements and obligations contained in that certain unrecorded
Asset Purchase and Sale Agreement effective May 1, 1997 (the
"Agreement") and the payment of the Purchase Price provided
therein, the receipt and sufficiency of which are hereby
acknowledged, does hereby grant, sell, convey, assign, and
deliver unto Grantee all of Grantor's interest in the follow
ing:
The gas gathering facilities described in Exhibit "A"
(Monument Butte Gathering System), located in Duchesne and
Uintah Counties, Utah, including all pipes, valves,
fittings, metering equipment, processing equipment,
tankage, compressors, vehicles, offices, plant sites,
easements, rights-of-way, contracts, agreements (including
all gas purchase, sale, and gathering agreements) and any
other tangible or intangible assets associated with the
ownership of the Assets described in Exhibit "A".
All of the foregoing facilities, leases, interests, rights,
contracts and properties described above are herein called the
"Assets." All capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Agreement.
This Conveyance is made and accepted subject to all the
provisions of the Agreement, which are by this reference
incorporated herein as though set forth at length and which
provisions shall survive the execution of this Conveyance.
Without limiting the generality of the preceding
paragraph, Grantor, with respect to its interest in the Assets,
hereby warrants and represents that: (a) it is conveying to the
Grantee such title to the Assets without having made any prior
sale, transfer, conveyance, assignment, mortgage or other
encumbrance to a third party; and (b) as to any and every
person, corporation, partnership, joint venture or other entity
whomsoever may claim any interest in Grantor's Interest by,
through or under Grantor ("Claiming Party"), but not otherwise,
Grantor agrees to indemnify the Grantee from any claims of
Claiming Party and to defend the Interest transferred hereby
unto Grantee against claims of a Claiming Party.
The provisions hereof shall be covenants running with the
land and shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and assigns.
Except as set forth in the Agreement, the Grantor hereby
disclaims, and the conveyance of Grantor's interest is hereby
made without, any and all warranties, express or implied, under
the uniform commercial code, including without limitation, the
warranties of merchantability or fitness for a particular
purpose.
In Witness Whereof, this Assignment has been signed as of
the date above written.
Interline Resources Corporation
By:______________________________
Michael R. Williams
President
Interline Energy Services, Inc.
By: _____________________________
Michael R. Williams
President
Questar Gas Management Company
By:______________________________
John B. Carricaburu
Vice President and General
Manager
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
Before me, the undersigned, a Notary Public in and for
said County and State on this _____ day of ______________,
1997, personally appeared Michael R. Williams, to me known to
be the identical person who subscribed the name of the maker
thereof to the foregoing instrument as President of Interline
Resources Corporation and Interline Energy Services, Inc., and
acknowledged to me that he executed the same as his free and
voluntary act and deed and as the free and voluntary act and
deed of such corporation, for the uses and purposes therein set
forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
________________________________
Notary Public
________________________
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
Before me, the undersigned, a Notary Public in and for
said County and State on this _____ day of ______________,
1997, personally appeared John B. Carricaburu, to me known to
be the identical person who subscribed the name of the maker
thereof to the foregoing instrument as its Vice President and
General Manager and acknowledged to me that he executed the
same as his free and voluntary act and deed and as the free and
voluntary act and deed of such corporation, for the uses and
purposes therein set forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
________________________________
Notary Public
__________________________
<PAGE>
CONVEYANCE, ASSIGNMENT AND BILL OF SALE
(Production Properties)
THIS CONVEYANCE, ASSIGNMENT AND BILL OF SALE
("Conveyance") dated as of April 30th, 1997, and effective May
1st, 1997 (the "Effective Date") 7:00 a.m. local time between
Interline Resources Corporation, 160 West Canyon Crest, Alpine,
Utah 84004, Interline energy Services, Inc., 350 West "A"
Street, Casper, Wyoming, 82601 (collectively referred to as
"Grantor") and Celsius Energy Company, 1331 17th Street, Suite
800, Denver CO 80202 ("Grantee").
WITNESSETH:
Grantor, in consideration of the mutual covenants,
agreements and obligations contained in that certain unrecorded
Asset Purchase and Sale Agreement effective May 1, 1997 between
Grantor and Questar Gas Management Company (the "Agreement")
and the payment of the Purchase Price provided therein, the
receipt and sufficiency of which are hereby acknowledged, does
hereby grant, sell, convey, assign, and deliver unto Grantee
all of Grantor's right, title, and interest in the following:
(a) The estates, royalty and mineral interests,
operating rights, working interests, contractual interests
of rights, reversionary interests (including but not
limited to non-consent interests) and net revenue
interests in the lands, leases, licenses, permits and
other agreements affecting the leases described in Exhibit
"A" in all depths and formations ("Leases" and "Lands").
(b) The oil and gas wells identified in Exhibit "A"
and the lands and the leases located within the existing
producing or spacing unit or allocated to the producing
wells or spacing unit for such wells, including all
existing and effective unitization, pooling and/or
communitization agreements, declarations and orders, and
other agreements relating to the properties.
(c) The product sale contracts, leases, permits,
agreements, rights-of-way, easements, licenses, farmouts,
options, and appurtenances of any kind pertaining to the
assigned Land and Leases.
(d) The fixtures, personal property, facilities and
equipment used or held for use and charged to the wells
listed on Exhibit "A" for the production, treatment, sale
or disposal of leasehold substances or water produced
therefrom, including all rights, titles and interest in
and to all materials, supplies, machinery, equipment,
improvements and other personal property and fixtures
(including, but not by way of limitation, all wells,
wellhead equipment, pumping units, flow lines, tanks,
buildings, injection facilities, saltwater disposal
facilities, compression facilities, gathering systems,
processing or other plants, and other equipment).
All of the foregoing leases, interests, rights, contracts and
properties described above are herein called the "Assets." All
capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Agreement.
This Conveyance is made and accepted subject to all the
provisions of the Agreement, which are by this reference
incorporated herein as though set forth at length and which
provisions shall survive the execution of this Conveyance.
Without limiting the generality of the preceding
paragraph, Grantor, with respect to its interest in the Assets,
hereby warrants and represents that: (a) it is conveying to the
Grantee such title to the Assets without having made any prior
sale, transfer, conveyance, assignment, mortgage or other
encumbrance to a third party; and (b) as to any and every
person, corporation, partnership, joint venture or other entity
whomsoever may claim any interest in Grantor's Interest by,
through or under Grantor ("Claiming Party"), but not otherwise,
Grantor agrees to indemnify the Grantee from any claims of
Claiming Party and to defend the Interest transferred hereby
unto Grantee against claims of a Claiming Party.
The provisions hereof shall be covenants running with the
land and shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and assigns.
Except as set forth in the Agreement, the Grantor hereby
disclaims, and the conveyance of Grantor's interest is hereby
made without, any and all warranties, express or implied, under
the uniform commercial code, including without limitation, the
warranties of merchantability or fitness for a particular
purpose.
In Witness Whereof, this Assignment has been signed as of
the date above written.
Interline Resources Corporation
By:______________________________
Michael R. Williams
President
Interline Energy services, inc.
By:______________________________
Michael R. Williams
President
Celsius Energy Company
By:______________________________
M. L. Owen
V. P., Administrative Services
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for
said County and State on this 30th day of April, 1997,
personally appeared Michael R. Williams, to me known to be the
identical person who subscribed the name of the maker thereof
to the foregoing instrument as President of Interline Resources
Corporation and Interline Energy Services, Inc., and
acknowledged to me that he executed the same as his free and
voluntary act and deed and as the free and voluntary act and
deed of such corporation, for the uses and purposes therein set
forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
_________________________________
Notary Public
____________________
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned, a Notary Public in and for
said County and State on this 30th day of April, 1997,
personally appeared M. L. Owen, to me known to be the identical
person who subscribed the name of the maker thereof to the
foregoing instrument as its Vice President, Administrative
Services and acknowledged to me that he executed the same as
his free and voluntary act and deed and as the free and
voluntary act and deed of such corporation, for the uses and
purposes therein set forth.
Given under my hand and seal of office the day and year
last above written.
My commission expires:
________________________________
Notary Public
__________________________
