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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 26, 1999
BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST
(Exact name of registrant as specified in its charter)
Delaware 1-12058 76-6088828
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Trust Division
NationsBank, N.A.
901 Main Street, Suite 1700
Dallas, Texas 75202
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: (214) 508-2364
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Item 2. DISPOSITION OF ASSETS.
On March 26, 1999, NationsBank, N.A. (the "Trustee") announced that it,
as trustee and on behalf of Burlington Resources Coal Seam Gas Royalty Trust, a
Delaware business trust (the "Trust"), and San Juan Partners, L.L.C., a Texas
limited liability company ("San Juan"), entered into an Agreement of Purchase
and Sale (the "Purchase Agreement") pursuant to which San Juan purchased all of
the assets of the Trust estate on such date for an all-cash purchase price of
$73 million. The Trustee also announced that it has established April 12, 1999
as the record date for a special distribution to unitholders of the Trust of the
proceeds of the sale, net of certain fees, expenses, liabilities and obligations
of the Trust, including a reserve for such items anticipated to be incurred in
the future. The Purchase Agreement and the Trust's March 26, 1999 press release
related to the foregoing are filed as Exhibit 10.1 and Exhibit 99.1,
respectively, to this report on Form 8-K and are incorporated herein by
reference.
By press release dated March 25, 1999, the Trustee previously announced
that it had accepted San Juan's offer to purchase the assets of the Trust estate
and that the parties intended to consummate the transaction as soon as possible.
That press release is filed as Exhibit 99.2 to this report on Form 8-K and
incorporated herein by reference.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro forma financial information.
Following the sale of the Trust assets to San Juan and the distribution
of the net proceeds therefrom to unitholders, the Trust will have no assets
other than a cash reserve retained by the Trustee to cover fees, expenses,
liabilities and obligations of the Trust in the final administration, windup and
dissolution of the Trust. The Trust will have no income other than any interest
accrued on such cash reserve. After the Trustee has determined that all fees,
expenses, liabilities and obligations anticipated to be incurred by the Trust
have been paid, the remaining balance, if any, of the cash reserve will be
distributed to unitholders.
Based on the foregoing, pro forma information for the Trust giving
effect to the sale of the Trust assets is immaterial and therefore not included
in this report.
(c) Exhibits.
10.1 Agreement of Purchase and Sale dated March 26, 1999, between the Trust
and San Juan
99.1 Press Release dated March 26, 1999
99.2 Press Release dated March 25, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BURLINGTON RESOURCES COAL SEAM GAS
ROYALTY TRUST
By: NationsBank, N.A., Trustee
Date: April 9, 1999 By: /s/ Ron E. Hooper
--------------------------
Ron E. Hooper
Vice President and
Trust Administrator
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Item
Number Exhibit
- ------ -------
<S> <C>
10.1 Agreement of Purchase and Sale dated March 26, 1999,
between Burlington Resources Coal Seam Gas Royalty Trust and
San Juan Partners, L.L.C.
99.1 Press Release dated March 26, 1999
99.2 Press Release dated March 25, 1999
</TABLE>
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Exhibit 10.1
AGREEMENT OF SALE AND PURCHASE
This Agreement dated March 26, 1999, by and between BURLINGTON
RESOURCES COAL SEAM GAS ROYALTY TRUST, A DELAWARE BUSINESS TRUST, (herein called
"SELLER") and San Juan Partners, LLC (herein called "BUYER");
W I T N E S S E T H:
1. PROPERTY TO BE SOLD AND PURCHASED. Seller agrees to sell and Buyer
agrees to purchase, for the consideration hereinafter set forth, and subject to
the terms and provisions herein contained, all right, title and interest of
Seller in and to that certain net profits overriding royalty interest (herein
called the "NPI")that was conveyed to Seller in that certain Net Profits
Interest Conveyance (the "NPI CONVEYANCE") from Meridian Oil Production Inc.
dated May 1, 1993 recorded as shown on EXHIBIT 1 hereto.
2. PURCHASE PRICE. The purchase price for the NPI shall be Seventy
Three Million Dollars ($73,000,000) (such amount, unadjusted by any adjustments
provided for in this Agreement or agreed to by the parties, being herein called
the "BASE PURCHASE PRICE"). Such Base Purchase Price may be adjusted as provided
in Section 7 hereof (the Base Purchase Price, as so adjusted, and as the same
may otherwise be adjusted by mutual agreement of the parties, being herein
called the "PURCHASE PRICE"). The Purchase Price shall be paid in cash at the
Closing as hereinafter provided.
3. REPRESENTATIONS OF SELLER.
(a) REPRESENTATIONS. Seller represents to Buyer that:
(i) ORGANIZATION AND QUALIFICATION, DUE AUTHORIZATION. Seller
is a Delaware Business Trust duly organized and legally existing
under the laws of the State of Delaware. Seller has full power to
enter into and perform its obligations under this Agreement and has
taken all proper action to authorize entering into this Agreement
and performance of its obligations hereunder.
(ii) VALID, BINDING AND ENFORCEABLE. This Agreement constitutes
(and the Conveyance provided for herein to be delivered at Closing
will, when executed and delivered, constitute) the legal, valid and
binding obligation of Seller, enforceable in accordance with its
terms, except as limited by bankruptcy or other laws applicable
generally to creditor's rights and as limited by general equitable
principles.
(b) DISCLAIMERS. THE EXPRESS REPRESENTATIONS AND WARRANTIES OF
SELLER CONTAINED IN THIS SECTION 3 ABOVE ARE EXCLUSIVE AND ARE IN LIEU
OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, AND SELLER AND THE TRUSTEE EXPRESSLY DISCLAIMS
ANY AND ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES. WITHOUT
LIMITATION OF THE FOREGOING, THE NPI SHALL BE CONVEYED PURSUANT HERETO
WITHOUT ANY WARRANTY OR
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REPRESENTATION, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE,
RELATING TO TITLE TO THE NPI, RELATING TO THE CONDITION, QUANTITY,
QUALITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO THE MODELS OR
SAMPLES OF MATERIALS OR MERCHANTABILITY OR FITNESS FOR ANY PURPOSE,
AND, EXCEPT AS PROVIDED OTHERWISE IN THE FIRST SENTENCE OF THIS
PARAGRAPH, WITHOUT ANY OTHER EXPRESS, IMPLIED, STATUTORY OR OTHER
WARRANTY OR REPRESENTATION WHATSOEVER. BUYER SHALL HAVE INSPECTED, OR
WAIVED (AND UPON CLOSING SHALL BE DEEMED TO HAVE WAIVED) ITS RIGHT TO
INSPECT, THE PROPERTIES OUT OF WHICH THE NPI WAS CREATED (THE "BURDENED
INTERESTS") FOR ALL PURPOSES AND SATISFIED ITSELF AS TO THEIR PHYSICAL
AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, INCLUDING BUT
NOT LIMITED TO CONDITIONS SPECIFICALLY RELATED TO THE PRESENCE, RELEASE
OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES, ASBESTOS AND OTHER
MAN MADE FIBERS, OR NATURALLY OCCURRING RADIOACTIVE MATERIALS ("NORM").
BUYER IS RELYING SOLELY UPON ITS OWN INSPECTION OF SUCH PROPERTIES, AND
BUYER SHALL ACCEPT THE CONDITION OF SUCH PROPERTIES, AND THE NPI, "AS
IS" AND "WHERE IS." ALSO WITHOUT LIMITATION OF THE FOREGOING, SELLER
AND THE TRUSTEE MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA,
REPORTS, RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE
OR HEREAFTER FURNISHED OR MADE AVAILABLE TO BUYER IN CONNECTION WITH
THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, RELATIVE TO PRICING
ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY)
ATTRIBUTABLE TO THE NPI OR THE BURDENED INTERESTS OR THE ABILITY OR
POTENTIAL OF THE SAME TO PRODUCE HYDROCARBONS OR THEIR ENVIRONMENTAL
CONDITION OR ANY OTHER MATTERS CONTAINED IN ANY MATERIALS FURNISHED OR
MADE AVAILABLE TO BUYER BY SELLER OR BY SELLER'S AGENTS OR
REPRESENTATIVES. ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS,
INFORMATION AND OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED BY SELLER
OR OTHERWISE MADE AVAILABLE OR DISCLOSED TO BUYER ARE PROVIDED BUYER AS
A CONVENIENCE AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR
AGAINST SELLER OR THE TRUSTEE AND ANY RELIANCE ON OR USE OF THE SAME
SHALL BE AT BUYER'S SOLE RISK TO THE MAXIMUM EXTENT PERMITTED BY LAW.
(c) NO LITIGATION. There are no pending suits, actions, or other
proceedings in which Seller is a party (or, to Seller's knowledge,
which have been threatened to be instituted against Seller) which
affect the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
4. REPRESENTATIONS OF BUYER. Buyer represents to Seller that:
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(a) ORGANIZATION AND QUALIFICATION, DUE AUTHORIZATION. Buyer is a
limited liability company/etc. duly organized and legally existing and
in good standing under the laws of the State of Texas, and is qualified
to do business and in good standing in each of the states in which
Burdened Interests are located where the laws of such state would
require a limited liability company owning the NPI to so qualify. Buyer
is also qualified with all applicable governmental agencies having
jurisdiction over the NPI, to the extent such qualification is
necessary or appropriate or will be necessary or appropriate upon
consummation of the transactions contemplated hereby. Buyer has full
power to enter into and perform its obligations under this Agreement
and has taken all proper action to authorize entering into this
Agreement and performance of its obligations hereunder.
(b) VALID, BINDING AND ENFORCEABLE. This Agreement constitutes (and
the Conveyance provided for herein to be delivered at Closing will,
when executed and delivered, constitute) the legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms, except
as limited by bankruptcy or other laws applicable generally to
creditor's rights and as limited by general equitable principles.
(c) NO LITIGATION. There are no pending suits, actions, or other
proceedings in which Buyer is a party (or, to Buyer's knowledge, which
have been threatened to be instituted against Buyer) which affect the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(d) KNOWLEDGEABLE BUYER, NO DISTRIBUTION. Buyer is a knowledgeable
purchaser, owner and operator of oil and gas properties, has the
ability to evaluate (and in fact has evaluated) the NPI for purchase,
and is acquiring the NPI for its own account and not with the intent to
make a distribution in violation of the Securities Act of 1933 as
amended (and the rules and regulations pertaining thereto) or in
violation of any other applicable securities laws, rules or
regulations.
5. CERTAIN COVENANTS OF SELLER PENDING CLOSING. Between the date of
this Agreement and the Closing Date:
(a) ACCESS BY BUYER.
(i) RECORDS. Seller will give Buyer, or Buyer's authorized
representatives, at Seller's office and at all reasonable times
before the Closing Date, access to Seller's records pertaining to
the ownership of the NPI for the purpose of conducting due
diligence reviews contemplated by Section 6 below. Buyer may make
copies of such records, at its expense, but shall, if Seller so
requests, return all copies so made if the Closing does not occur;
all costs of copying such items shall be borne by Buyer. Seller
shall not be obligated to provide Buyer with access to any records
or data which Seller considers to be proprietary or confidential to
it or which Seller cannot provide to Buyer without, in its opinion,
breaching, or risking a breach of, agreements with other parties,
or waiving, or risking waiving, legal privilege. BUYER RECOGNIZES
AND AGREES THAT ALL MATERIALS MADE AVAILABLE TO IT IN CONNECTION
WITH THE TRANSACTION CONTEMPLATED HEREBY, WHETHER MADE AVAILABLE
PURSUANT TO THIS SECTION OR
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OTHERWISE, ARE MADE AVAILABLE TO IT AS AN ACCOMMODATION, AND
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND AS TO THE ACCURACY
AND COMPLETENESS OF SUCH MATERIALS. NO WARRANTY OF ANY KIND IS MADE
BY SELLER AS TO THE INFORMATION SUPPLIED TO BUYER (INCLUDING THE
COMPLETENESS THEREOF) OR WITH RESPECT TO PROPERTIES TO WHICH THE
INFORMATION RELATES, AND BUYER EXPRESSLY AGREES THAT ANY
CONCLUSIONS DRAWN THEREFROM SHALL BE THE RESULT OF ITS OWN
INDEPENDENT REVIEW AND JUDGMENT.
(ii) EXCULPATION AND INDEMNIFICATION. If Buyer exercises
rights of access under this Section or otherwise, or conducts
examinations or inspections under this Section or otherwise, then
(a) such access, examination and inspection shall be at Buyer's
sole risk, cost and expense and Buyer waives and releases all
claims against Seller (and its Trustees and its and their
affiliates and the respective directors, officers, employees,
attorneys, contractors and agents of such parties) arising in any
way therefrom or in any way connected therewith or arising in
connection with the conduct of its directors, officers, employees,
attorneys, contractors and agents in connection therewith and (b)
Buyer shall indemnify, defend and hold harmless Seller (and its
Trustees and its and their affiliates and the respective officers,
directors, employees, attorneys, contractors and agents of such
parties) from any and all claims, actions, causes of action
liabilities, damages, losses, costs or expenses (including, without
limitation, court costs and attorneys fees), or liens or
encumbrances for labor or materials, arising out of or in any way
connected with the actions and matters described in this paragraph
6(a). THE FOREGOING RELEASE AND INDEMNIFICATION SHALL APPLY WHETHER
OR NOT SUCH CLAIMS, ACTIONS, CAUSES OF ACTION, LIABILITIES,
DAMAGES, LOSSES, COSTS OR EXPENSES ARISE OUT OF (i) NEGLIGENCE
(INCLUDING SOLE NEGLIGENCE, SINGLE NEGLIGENCE, CONCURRENT
NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, BUT EXPRESSLY NOT
INCLUDING GROSS NEGLIGENCE) OF ANY INDEMNIFIED PARTY, OR (ii)
STRICT LIABILITY.
(b) INTERIM ADMINISTRATION. Seller and the Trustee will continue its
administration of the NPI in the ordinary course of its business, and will not
sell or otherwise dispose of any portion of the NPI. Without expanding any
obligations which Seller or the Trustee may have to Buyer, it is expressly
agreed that Seller's and the Trustee's standard of care with respect to the
administration of the NPI shall not be greater than that which it might have as
the operator to a non-operator under the AAPL 610 (1989 Revision) form Operating
Agreement, IT BEING RECOGNIZED THAT UNDER SUCH FORM THE OPERATOR IS NOT
RESPONSIBLE FOR ITS OWN NEGLIGENCE, AND HAS NO RESPONSIBILITY OTHER THAN FOR
GROSS NEGLIGENCE OR WILFUL MISCONDUCT.
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6. DUE DILIGENCE REVIEWS.
(a) 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 the NPI in order to determine whether Defects (as below
defined) exist. Should, as a result of such examinations and
investigations, or otherwise, one or more matters come to Buyer's
attention which would constitute a Defect (as below defined), and
should there be one or more of such Defects which Buyer is unwilling to
waive and close the transaction contemplated hereby notwithstanding the
fact that such Defects exist, Buyer shall notify Seller in writing of
such Defects as soon as the same are identified by Buyer, but in no
event later than ten (10) days after this Agreement is executed by both
parties (such Defects of which Buyer so provides notice are herein
called "ASSERTED DEFECTS"). Such notification shall include, for each
Asserted Defect, (i) a description of the Asserted Defect and all
supporting documentation reasonably necessary to fully describe the
basis for the Defect, and (ii) the amount by which Buyer would propose
to adjust the Purchase Price and complete detail supporting such
proposed adjustment. All Defects with respect to which Buyer fails to
so give Seller notice will be deemed waived for all purposes. All
access to Sellers records and the Properties in connection with such
due diligence shall be subject and pursuant to Section 6(a) including,
without limitation, the exculpation and indemnification provisions
contained therein.
(b) Nature of Defects. The term "DEFECT" as used in this Section
shall mean the following:
(i) TITLE TO NPI. Seller's ownership of the NPI is subject to
a lien other than (A) a lien for taxes which are not yet delinquent
or (B) a mechanic's or materialmen's lien (or other similar lien),
or a lien under an operating agreement or similar agreement, to the
extent the same relates to expenses incurred which are not yet
delinquent.
(ii) NRI OR WI VARIANCES. Title to the NPI is such that (A) the
Net Revenue Interest Percentage of Coal Bed Methane utilized in
computing Gross Proceeds, as provided for in the NPI Conveyance, is
less than .15713% of the Coal Bed Methane produced from the wells
and (B) the decimal share of the cost of operation of such wells
which represents Costs as provided for in the NPI Conveyance is
greater a decimal share of .18620 without at least a proportionate
increase in the Net Revenue Interest Percentage of the Coal Bed
Method produced from the wells.
(iii) IMPERFECTIONS IN TITLE. The NPI is subject to an
imperfection in title which, if asserted, would cause a Defect, as
defined in subparagraph (i) or (ii) above, to exist, and such
imperfection in title is not such as would normally be waived by
persons engaged in the oil and gas business when purchasing
producing properties.
(iv) LITIGATION. Except for the litigation listed on the
Disclosure Exhibit (herein called the "Disclosure Exhibit")
attached hereto as Exhibit 6(b)(iv), there are no pending suits,
actions, or other proceedings in which Seller is a party which
affect the NPI in a material respect (including, without
limitation, any actions challenging or pertaining to
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Seller's title to the NPI), or affecting the execution and delivery
of this Agreement or the consummation of the transactions
contemplated hereby.
(c) SELLER'S RESPONSE. In the event that Buyer notifies Seller of
Asserted Defects:
(i) CURE. Seller may (but shall have no obligation to) attempt
to cure, prior to Closing, one or more Asserted Defects.
(ii) POSTPONE CLOSING. Whether or not Seller has then begun
to, or ever begins to, cure one or more Asserted Defects (and
whether or not Seller has elected option (iii) below with respect
to one or more Asserted Defects), Seller may postpone the Closing
by designating a new Closing Date not later than March 31, 1999.
Notwithstanding any such election to postpone Closing, Seller shall
still have no obligation to cure Asserted Defects.
(iii) ADJUSTMENT. Notwithstanding any other election made
under this Section (without limitation, it being expressly
recognized that Seller may attempt to cure Asserted Defects while
acting under this election), Seller may elect to have one or more
Asserted Defects handled under Section 7 below.
(d) Any capital terms not otherwise defined in this Section 6 shall
have the meaning indicated in the NPI Conveyance.
7. CERTAIN PRICE ADJUSTMENTS.
(a) PROCEDURES. In the event that, as a part of the due diligence
reviews provided for in Section 6 above, Asserted Defects are presented
to Seller and Seller is unable (or unwilling) to cure such Asserted
Defects prior to Closing, then:
(i) AGREE UPON ADJUSTMENT. Buyer and Seller shall attempt to
agree upon an appropriate downward adjustment of the Purchase Price
to account for such matters.
(ii) DISPUTE RESOLUTION. With respect to each Asserted Defect
as to which Buyer and Seller are unable to agree upon an
appropriate adjustment, the Asserted Defect shall be referred for
dispute resolution conducted in the manner provided for in Exhibit
7(a)(ii) hereto (it is understood and agreed that the matters
covered in such referral shall include whether the matters asserted
as Asserted Defects are in fact "Defects" as defined herein and
what quantums of interest is affected by Asserted Defect, as well
as the appropriate Purchase Price Adjustment). If such a referral
occurs, Closing will be postponed by 15 days to allow such dispute
resolution process to be concluded.
(b) LIMITATIONS ON ADJUSTMENTS. If the aggregate net Purchase Price
reduction which would result from the above provided for procedure, as
applied to all Asserted Defects for which an adjustment is to be made,
does not exceed three percent (3%) of the Base Purchase Price, then no
adjustment of the Purchase Price shall occur. If the aggregate net
Purchase Price reduction which would result from the above provided for
procedure, as applied to all Asserted Defects for
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which an adjustment is to be made, exceeds three percent (3%) of the
Base Purchase Price, the Purchase Price shall be adjusted by the
amount by which such aggregate net reduction exceeds three percent
(3%) of the Base Purchase Price.
(c) NO ADJUSTMENTS. NOTWITHSTANDING ANYTHING TO THE CONTRARY,
BUYER HAS CONDUCTED SUCH TITLE EXAMINATION AND INVESTIGATION AS IT
CHOSE TO CONDUCT WITH RESPECT TO THE NPI, AND HAS NOT DISCOVERED ANY
DEFECTS AND HEREBY WAIVES ANY DEFECTS. BUYER HAS ELECTED TO SIGN
THIS AGREEMENT AND HAVE CLOSING ON THE SAME DAY. THEREFORE,
NOTWITHSTANDING ANYTHING TO THE CONTRARY, NO ADJUSTMENTS SHALL BE
MADE TO THE PURCHASE PRICE IN CONNECTION WITH ANY DEFECTS (ACTUAL,
ASSERTED, OR OTHERWISE), OR ANY OTHER IMPERFECTION IN TITLE.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER. The obligations
of Buyer under this Agreement are subject to each of the following conditions
being met:
(a) REPRESENTATIONS TRUE AND CORRECT. Each and every
representation of Seller under this Agreement shall be true and
accurate in all material respects as of the date when made and shall
be deemed to have been made again at and as of the time of Closing
and shall at and as of such time of Closing be true and accurate in
all material respects except as to changes specifically contemplated
by this Agreement or consented to by Buyer.
(b) COMPLIANCE WITH COVENANTS AND AGREEMENTS. Seller shall have
performed and complied in all material respects with (or compliance
therewith shall have been waived by Buyer) each and every covenant
and agreement required by this Agreement to be performed or complied
with by Seller prior to or at the Closing.
(c) LITIGATION. No suit, action or other proceedings shall, on
the date of Closing, be pending or threatened before any court or
governmental agency seeking to restrain, prohibit, or obtain
material damages or other material relief in connection with the
consummation of the transactions contemplated by this Agreement.
(d) PRICE ADJUSTMENT LIMITATIONS. The aggregate net downward
adjustment (if any) of the Purchase Price which results from the
procedures set forth in Section 7 does not exceed fifteen percent
(15%) of the Base Purchase Price.
If any such condition on the obligations of Buyer under this Agreement is not
met as of the Closing Date, or in the event the Closing does not occur on or
before March 26, 1999, and (in either case) Buyer is not in material breach of
its obligations hereunder in the absence of Seller being in material breach of
its obligations hereunder, this Agreement may, at the option of Buyer, be
terminated. In the event such a termination by Buyer occurs the parties shall
have no further obligations to one another hereunder (other than the obligations
under Sections 5(a)(ii) and 13 hereof all of which will survive such
termination). With respect to any condition set forth above (other than
condition (c) or (d), which is not met (and which is asserted by Buyer as a
failure of one of its conditions of Closing), and for which the reasons why such
condition is not met relate to some portion of, but less than all of, the NPI,
Seller may require that such failure of such condition to be met be treated as
an uncured Asserted Defect and handled in accordance with the process set
forth in Section 7 above, and, if Seller so requires such handling, such
condition will be considered met for the purposes of this Section.
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9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. The obligations
of Seller under this Agreement are subject to the each of the following
conditions being met:
(a) REPRESENTATIONS TRUE AND CORRECT. Each and every representation
of Buyer under this Agreement shall be true and accurate in all
material respects as of the date when made and shall be deemed to have
been made again at and as of the time of Closing and shall at and as of
such time of Closing be true and accurate in all material respects
except as to changes specifically contemplated by this Agreement or
consented to by Seller.
(b) COMPLIANCE WITH COVENANTS AND AGREEMENTS. Buyer shall have
performed and complied in all material respects with (or compliance
therewith shall have been waived by Seller) each and every covenant and
agreement required by this Agreement to be performed or complied with
by Buyer prior to or at the Closing.
(c) LITIGATION. No suit, action or other proceedings shall, on the
date of Closing, be pending or threatened before any court or
governmental agency seeking to restrain, prohibit, or obtain material
damages or other material relief in connection with the consummation of
the transactions contemplated by this Agreement.
(d) PRICE ADJUSTMENT LIMITATIONS. The aggregate net downward
adjustment (if any) to the Base Purchase Price which results from the
procedures set forth in Section 7 does not exceed fifteen percent (15%)
of the Base Purchase Price.
If any such condition on the obligations of Seller under this Agreement is not
met as of the Closing Date, or in the event the Closing does not occur on or
before March 26, 1999, and (in either case) Seller is not in material breach of
its obligations hereunder in the absence of Buyer being in material breach of
its obligations hereunder, this Agreement may, at the option of Seller, be
terminated, in which case the parties shall have no further obligations to one
another hereunder (other than the obligations under Sections 5(a)(ii) and 13
hereof, all of which will survive such termination).
10. CLOSING. The closing (herein called the "CLOSING") of the
transaction contemplated hereby shall take place in the offices of Thompson &
Knight, P.C., at 1700 Pacific Avenue, Suite 3300, Dallas, Texas, on March 25,
1999, at 10:00 a.m. local time, or at such other date and time (i) as the Buyer
and Seller may mutually agree upon or (ii) to which Seller may postpone the
Closing pursuant to Section 7 hereof or (iii) to which the Closing is postponed
pursuant to Section 7(a)(ii) (such date and time, as changed pursuant to clauses
(i), (ii) and (iii), being herein called the "CLOSING DATE"). At the Closing:
(a) DELIVERY OF CONVEYANCE. Seller shall execute, acknowledge and
deliver to Buyer a conveyance of the NPI (the "CONVEYANCE"), in the
form attached hereto as Exhibit 10(a), with such modifications as may
be mutually agreed to by Buyer and Seller, effective for all purposes
as of 7 o'clock a.m., Mountain Time on the Closing Date (herein called
the "EFFECTIVE DATE"). Subject to Section 9.03(g) of the Trust
Agreement of Burlington Resources Coal Seam Royalty Trust dated May 1,
1993 ("the Trust"), Buyer shall also be entitled to receive all
proceeds of production attributable to the Remaining Royalty Interest
as the term is defined in the Trust which are payable after December
28, 1998, to the purchaser of the NPI pursuant to Section 9.03(f) of
the Trust.
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(b) PAYMENT TO SELLER. Buyer shall deliver to the Seller, by wire
transfer of immediately available funds to an account designated by
Seller in a bank located in the United States, an amount equal to the
Purchase Price.
Seller will deliver to Buyer, at Buyer's expense, and within 60 days after
Closing, copies of all of Seller's title files, production records, well files
and other similar files and records (but not including accounting records) which
directly relate to the NPI, other than those which Seller considers to be
proprietary or confidential to it or which Seller cannot provide to Buyer
without, in its opinion, breaching, or risking a breach of, agreements with
other parties, or waiving, or risking waiving, legal privilege. Seller may, at
its election, deliver originals of any or all such files, rather than delivery
copies, and, in such event, Seller may make, at Buyer's expense, and retain
copies of any or all such original files. Buyer shall preserve all files
(original or copies) so delivered by Seller of a period of seven years following
Closing and will allow Seller access (including, without limitation, the right
to make copies at Seller's expense) to such files at all reasonable times.
11. NO ACCOUNTING ADJUSTMENTS. After the Effective Date, no adjustments
shall be made between Buyer and Seller as to amounts to be paid under the NPI.
12. ASSUMPTION AND INDEMNIFICATION. Buyer shall, on the Closing Date,
agree (and, upon the delivery to Buyer of the Conveyance, shall be deemed to
have agreed) (a) to assume, and to timely pay and perform, all duties,
obligations and liabilities relating to the NPI regardless of whether the same
accrued or otherwise arising on or after the Effective Date and (b) to indemnify
and hold Seller (and its Trustees and its and their affiliates, and the
respective directors, officers, employees, attorneys, contractors and agents of
such parties) harmless from and against any and all claims, actions, causes of
action, liabilities, damages, losses, costs or expenses (including, without
limitation, court costs and attorneys' fees) of any kind or character arising
out of or otherwise relating to the NPI or the Burdened Interests regardless of
whether the same accrued or otherwise arose before or after the Effective Date.
THE FOREGOING ASSUMPTIONS AND INDEMNIFICATIONS SHALL APPLY WHETHER OR NOT SUCH
DUTIES, OBLIGATIONS OR LIABILITIES, OR SUCH CLAIMS, ACTIONS, CAUSES OF ACTION,
LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISE OUT OF (i) NEGLIGENCE
(INCLUDING SOLE NEGLIGENCE, SINGLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE OR
PASSIVE NEGLIGENCE, AND EXPRESSLY INCLUDING GROSS NEGLIGENCE) OF ANY INDEMNIFIED
PARTY, OR (ii) STRICT LIABILITY.
13. NO COMMISSIONS OWED. Seller agrees to indemnify and hold Buyer (and
its affiliates, and the respective officers, directors, employees, attorneys,
contractors and agents of such parties) harmless from and against any and all
claims, actions, causes of action, liabilities, damages, losses, costs or
expenses (including, without limitation, court costs and attorneys fees) of any
kind or character arising out of or resulting from any agreement, arrangement or
understanding alleged to have been made by, or on behalf of, Seller with any
broker or finder in connection with this Agreement or the transaction
contemplated hereby. Buyer agrees to indemnify and hold Seller (and its Trustees
and its and their affiliates and the respective officers, directors, employees,
attorneys, contractors and agents of such parties) harmless from and against any
and all claims, actions, causes of action, liabilities, damages, losses, costs
or expenses (including, without limitation, court costs and attorneys fees) of
any kind or character arising out of or resulting from any agreement,
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<PAGE> 10
arrangement or understanding alleged to have been made by, or on behalf of,
Buyer with any broker or finder in connection with this Agreement or the
transaction contemplated hereby.
14. NOTICES. All notices and other communications required under this
Agreement shall (unless otherwise specifically provided herein) be in writing
and be delivered personally, by recognized commercial courier or delivery
service which provides a receipt, by telecopier (with receipt acknowledged), or
by registered or certified mail (postage prepaid), at the following addresses:
If to Buyer: with a copy to:
San Juan Partners, LLC Dominion Resources, Inc.
c/o Dominion San Juan, Inc. 120 Tredegar Street
901E Byrd Street Richmond, VA 23220
Richmond, VA 23219 Attn: Mark Webb
Attn: G E Lake, Jr. Fax: 804-812-2202
Fax: 804-775-5823
If to Seller: with a copy to:
Ron Hooper Ken Webb
NationsBank, N.A. Thompson & Knight
901 Main Street, 17th Floor 1700 Pacific Avenue, Suite 3300
Dallas, Texas 75202 Dallas, Texas 75201
and shall be considered delivered on the date of receipt. Either Buyer or Seller
may specify as its proper address any other post office address within the
continental limits of the United States by giving notice to the other party, in
the manner provided in this Section, at least ten (10) days prior to the
effective date of such change of address.
15. SURVIVAL OF PROVISIONS. All representations made herein by Buyer
and Seller shall be continuing and shall be true and correct on and as of the
date of Closing with the same force and effect as if made at that time, and
Buyer's representations shall survive the Closing and the delivery of the
Conveyance. The obligations of the parties under Sections 12 through 16 shall
(subject to any limitations expressly set forth therein) also survive the
Closing and the delivery of the Conveyance.
16. MISCELLANEOUS MATTERS.
(a) FURTHER ASSURANCES. For a period of ninety (90) days after the
Closing, Seller shall execute and deliver, and shall otherwise cause to
be executed and delivered, from time to time, such further instruments,
notices, division orders, transfer orders and other documents, and do
such other and further acts and things, as may be reasonably necessary
to more fully and effectively grant, convey and assign the NPI to
Buyer.
(b) GAS IMBALANCES, MAKEUP OBLIGATIONS. Without limitation on any
other provision of this Agreement, it is expressly understood and
agreed that, upon the occurrence of Closing, Buyer shall succeed to and
assume the position of Seller with respect to all gas imbalances and
make-up obligations related to the NPI (regardless of whether such
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imbalances or make-up obligations arise at the wellhead, pipeline,
gathering system or other level, and regardless of whether the same
arise under contract or otherwise). As a result of such succession,
Buyer shall (i) be entitled to receive any and all benefits which
Seller would have been entitled to receive by virtue of such position
and (ii) be obligated to suffer any detriments which Seller would have
been obligated to suffer by virtue of such position.
(c) DECEPTIVE TRADE PRACTICES WAIVER. TO THE EXTENT APPLICABLE TO
THE TRANSACTION CONTEMPLATED HEREBY OR ANY PORTION THEREOF, BUYER
WAIVES BUYER'S RIGHTS UNDER THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE
PRACTICES - CONSUMER PROTECTION ACT, SECTIONS 17.41 ET. SEQ. OF THE
TEXAS BUSINESS AND COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL
RIGHTS AND PROTECTIONS, AND ANY COMPARABLE ACT IN ANY OTHER STATE IN
WHICH THE PROPERTIES ARE LOCATED. BUYER STATES THAT, AFTER CONSULTATION
WITH AN ATTORNEY OF BUYER'S SELECTION, BUYER VOLUNTARILY CONSENTS TO
THIS WAIVER.
(d) PARTIES BEAR OWN EXPENSES/NO SPECIAL DAMAGES. EACH PARTY SHALL
BEAR AND PAY ALL EXPENSES (INCLUDING, WITHOUT LIMITATION, LEGAL FEES)
INCURRED BY IT IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT. EXCEPT FOR THE INDEMNITIES PROVIDED HEREIN, NEITHER PARTY
SHALL HAVE ANY OBLIGATIONS WITH RESPECT TO THIS AGREEMENT, OR OTHERWISE
IN CONNECTION HEREWITH, FOR ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES.
(e) CAPACITY OF TRUSTEES. The trustees of Seller are signing this
agreement in their capacity as such trustees, and only in such
capacity; all obligations and liabilities hereunder or related hereto
are obligations and liabilities of Seller and not obligations or
liabilities of such trustees.
(f) NO SALES TAXES. No sales, transfer or similar tax will be
collected at Closing from Buyer in connection with this transaction.
If, however, this transaction is later deemed to be subject to sales,
transfer or similar tax, for any reason, Buyer agrees to be solely
responsible, and shall indemnify and hold Seller (and its affiliates,
and its and their directors, officers, employees, attorneys,
contractors and agents) harmless, for any and all sales, transfer or
other similar taxes (including related penalty, interest or legal
costs) due by virtue of this transaction on the property transferred
pursuant hereto and the Buyer shall remit such taxes at that time.
Seller and Buyer agree to cooperate with each other in demonstrating
that the requirements for exemptions from such taxes have been met.
(g) ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto with respect to subject matter
hereof and supersedes all prior agreements, understandings,
negotiations, and discussions among the parties with respect to such
subject matter; provided that any Confidentiality Agreement executed
by Buyer and Seller, or any representative of Seller, in connection
with the transaction contemplated hereby remains in full force and
effect and is not superseded or modified by this Agreement.
(h) AMENDMENTS, WAIVERS. This Agreement may be amended, modified,
supplemented, restated or discharged (and provisions hereof may be
waived) only by an instrument in writing signed by the party against
whom enforcement of the amendment, modification, supplement,
restatement or discharge (or waiver) is sought.
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(i) CHOICE OF LAW. Without regard to principles of conflicts of law,
this Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas applicable to contracts made
and to be performed entirely within such state and the laws of the
United States of America, except that, to the extent that the law of a
state in which a portion of the Properties is located (or which is
otherwise applicable to a portion of the Properties) necessary governs,
the law of such state shall apply as to that portion of the property
located in (or otherwise subject to the laws of) such state.
(j) HEADINGS, TIME OF ESSENCE, ETC. The descriptive headings
contained in this Agreement are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement. Within this Agreement words of any gender shall be held and
construed to cover any other gender, and words in the singular shall be
held and construed to cover the plural, unless the context otherwise
requires. Time is of the essence in this Agreement.
(k) NO ASSIGNMENT. Neither party shall have the right to assign its
rights under this Agreement, without the prior written consent of the
other party first having been obtained.
(l) SUCCESSORS AND ASSIGNS. Subject to the limitation on assignment
contained in subsection (k) above, the Agreement shall be binding on
and inure to the benefit of the parties hereto and their respective
successors and assigns.
(m) NO PRESS RELEASES. Except as may be required under applicable
law, prior to Closing neither party shall make any public announcement
with respect to the transaction contemplated hereby without the consent
of the other party.
(n) COUNTERPART EXECUTION. This Agreement may be executed in
counterparts, all of which are identical and all of which constitute
one and the same instrument. It shall not be necessary for Buyer and
Seller to sign the same counterpart.
IN WITNESS WHEREOF, this Agreement is executed by the parties hereto on
the date set forth above.
BURLINGTON RESOURCES COAL SEAM GAS
ROYALTY TRUST
By: NationsBank, N.A., Trustee
By: /s/ Ronnie E. Hooper
------------------------------------
Name: Ronnie E. Hooper
Title: Vice President of NationsBank,
N.A. and Trust Administrator
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SAN JUAN PARTNERS, LLC
By: /s/ G. E.Lake
------------------------------------
Name: G.E. Lake, Jr.
Title: Senior Vice President
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<PAGE> 1
Exhibit 99.1
BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST
ANNOUNCES SALE OF TRUST PROPERTIES; ESTABLISHMENT
OF RECORD DATE FOR SPECIAL DISTRIBUTION
FOR IMMEDIATE RELEASE
Dallas, Texas, March 26, 1999 -- NationsBank, N.A. (the "Trustee"), as
trustee of Burlington Resources Coal Seam Gas Royalty Trust, a Delaware business
trust (the "Trust"), announced today that the Trustee, on behalf of the Trust,
and San Juan Partners, L.L.C., a Texas limited liability company ("San Juan"),
entered into an Agreement of Purchase and Sale pursuant to which San Juan has
purchased today all of the assets of the Trust estate, consisting principally of
the Trust's net profits interest in certain coal bed methane gas producing
properties located in the San Juan Basin of New Mexico (the "Royalty Interests")
for an all-cash purchase price of $73 million. Pursuant to the Trust Agreement
governing the Trust (the "Trust Agreement"), the sale of the assets of the Trust
estate is effective as of December 28, 1998, the date the unitholders of the
Trust approved a unitholder proposal to terminate the Trust and certain related
matters (the "Termination Date"). Accordingly, under the Trust Agreement, San
Juan, as purchaser of the assets of the Trust estate, is entitled to all
proceeds of production attributable to the Royalty Interests since the
Termination Date.
Pursuant to the Trust Agreement, the Trustee has established April 12,
1999 as the "Special Distribution Record Date" to determine those unitholders
entitled to receive a special distribution payment of the net proceeds of the
sale. On or before the fifteenth day following the Special Distribution Record
Date, the Trustee will distribute to unitholders of record as of the close of
business on the Special Distribution Record Date a special distribution payment
in the amount of $8.167045 per Trust unit. This amount represents the proceeds
from the sale of the assets of the Trust estate to San Juan net of the funds
necessary to pay fees, expenses, liabilities and other obligations of the Trust,
including fees and expenses of the Trustee and its accountants and legal counsel
and the fee of Albrecht & Associates, Inc. ("Albrecht"), a Houston, Texas based
company specializing in divestment of oil and gas properties that was engaged by
the Trustee to assist in the sale of the assets of the Trust estate. The special
distribution amount also is net of funds the Trustee has estimated to be
necessary to hold in reserve to pay any other such fees, expenses, liabilities
or obligations of the Trust as may be incurred in connection with the final
administration, winding up and dissolution of the Trust. The Trustee anticipates
that a small final distribution will be made at a later date to unitholders as
of the Special Distribution Record Date of the balance, if any, of the amount of
any such funds held in reserve that are not actually used.
The Trustee will instruct the Trust's transfer agent to stop transfer
of the Trust's units immediately following the Special Distribution Record Date.
The Trustee anticipates that the New York Stock Exchange will initiate
procedures for the delisting of the units at such time or shortly thereafter. In
addition, the Trustee will request that unitholders surrender their unit
certificates upon or prior to their receipt of the special distribution payment.
The sale to San Juan followed several weeks of active marketing of the
Trust assets by Albrecht. Prior to the closing of the sale, Albrecht delivered
to the Trustee a letter setting forth Albrecht's opinion that the transaction is
fair to the Trust and its unitholders from a financial point of view.
<PAGE> 2
Burlington Resources Coal Seam Gas Royalty Trust is a Delaware business
trust formed to own a net profits interest related to an interest in the
Fruitland coal formation underlying the Northeast Blanco Unit in the San Juan
Basin of New Mexico formerly owned by Burlington Resources Oil & Gas Company.
Burlington Resources Oil & Gas Company conveyed its retained interest in the
properties to San Juan effective as of July 1, 1998. The Trust's units of
beneficial interest are traded on the New York Stock Exchange under the symbol
"BRU."
For additional information, contact:
Burlington Resources Coal Seam Gas Royalty Trust
NationsBank, N.A., as Trustee
Ron E. Hooper, Vice President and Trust Administrator
214-508-2400 or fax 214-508-2431
2
<PAGE> 1
Exhibit 99.2
BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST
ANNOUNCES AGREEMENT TO SELL
TRUST PROPERTIES
FOR IMMEDIATE RELEASE
Dallas, Texas, March 25, 1999 -- NationsBank, N.A. (the "Trustee"), as
trustee of Burlington Resources Coal Seam Gas Royalty Trust (the "Trust"),
announced today that the Trustee has accepted on behalf of the Trust an offer by
San Juan Partners, L.L.C. ("San Juan") to purchase all of the assets of the
Trust estate for an all-cash purchase price of $73 million. San Juan is an
affiliate of Dominion Resources, Inc. and a major unitholder of the Trust. The
are 8,800,000 Units outstanding, 5,867,968 of which are owned by San Juan. The
sale of the assets of the Trust estate to San Juan as described above remains
contingent upon final negotiation of transaction documents and entry by the
parties into a definitive purchase and sale agreement. The transaction is also
contingent upon the Trustee's receipt of a fairness opinion from its advisor,
Albrecht & Associates, Inc., a Houston, Texas based company specializing in
divestment of oil and gas properties ("Albrecht").
The parties intend to consummate the transaction as soon as possible.
Under the Trust Agreement, the close of business on the fifteenth day following
receipt by the Trust of the proceeds from the sale will be established as the
record date (the "Special Distribution Record Date") for a special distribution
to unitholders of the net proceeds from the sale. On or before the fifteenth day
following the Special Distribution Record Date, the Trustee will distribute pro
rata to unitholders of record on such date a special distribution of the
proceeds from the sale of the assets of the Trust estate net of the funds
necessary to pay any fees, expenses, liabilities and other obligations of the
Trust, including fees and expenses of the Trustee and its accountants and legal
counsel and Albrecht's fee in connection with the sale, and such funds as the
Trustee may deem necessary to hold in reserve to pay any other such fees,
expenses, liabilities or obligations of the Trust as may be incurred in
connection with the final administration, winding up and dissolution of the
Trust. The Trustee anticipates that a small final distribution will be made at a
later date to unitholders as of the Special Distribution Record Date of the
balance, if any, of the amount of any such funds held in reserve that are not
actually used.
The sale of the assets of the Trust estate is required under the terms
of the Trust Agreement as a result of the December 28, 1998 vote of unitholders
approving a unitholder proposal that included the termination of the Trust and
certain related matters. Under the Trust Agreement, all proceeds from production
attributable to the Trust's royalty interests since December 28, 1998 are being
held for the benefit of the purchaser of the assets of the Trust estate and will
be delivered to San Juan upon consummation of the transaction. Under the Trust
Agreement, the Trustee was required to engage an advisor to assist in the sale
of the Trust assets and the Trustee engaged and has been assisted in such
capacity by Albrecht. The acceptance of San Juan's offer follows several weeks
of active marketing of the Trust assets to potential buyers by Albrecht.
Burlington Resources Coal Seam Gas Royalty Trust is a Delaware business
trust formed to own a net profits interest related to an interest in the
Fruitland coal formation underlying the Northeast Blanco Unit in the San Juan
Basin of New Mexico formerly owned by Burlington
<PAGE> 2
Resources Oil & Gas Company. Burlington Resources Oil & Gas Company conveyed its
retained interest in the properties to San Juan effective as of July 1, 1998.
The Trust's units of beneficial interest are traded on the New York Stock
Exchange under the symbol "BRU." The Trustee will instruct the Trust's transfer
agent to stop transfer of the Trust's units immediately following the Special
Distribution Record Date. The Trustee anticipates that the New York Stock
Exchange will initiate procedures for the delisting of the units at such time or
shortly thereafter.
For additional information, contact:
Burlington Resources Coal Seam Gas Royalty Trust
NationsBank, N.A., as Trustee
Ron E. Hooper, Vice President and Trust Administrator
214-508-2400 or fax 214-508-2431
2
