Administration of the Assets. (a) From and after the date of execution of this Agreement and until the Closing with respect to a Property, and subject to the constraints of applicable operating and other agreements, each Seller shall operate, manage, and administer the Properties in which it owns an interest in a good and workmanlike manner consistent with its past practices, and shall carry on its business with respect to the Assets in substantially the same manner as before execution of this Agreement. Prior to Closing with respect to a Property, each Seller shall use reasonable efforts to preserve in full force and effect all material Leases, operating agreements, easements, rights-of-way, permits, licenses, and agreements which relate to the Properties in which such Seller owns an interest, and shall perform all material obligations of such Seller in or under all such agreements relating to the Properties. Each Seller shall, except for emergency action taken in the face of serious risk to life, property, or the environment, (1) submit to Buyer all requests for capital expenditures, including AFE’s, for Buyer’s prior written approval but only up to an aggregate of Fifteen Million Dollars ($15,000,000) in capital expenditures being approved by Buyer between the date of this Agreement and Closing (herein called the “Capital Cap”) and shall comply with Buyer’s timely and reasonable written instructions regarding such expenditures; (2) submit to Buyer, for prior written approval, all proposed contracts and agreements relating to the Properties which involve individual commitments of more than TWENTY-FIVE THOUSAND dollars ($25,000); (3) consult with, inform, and advise Buyer regarding all material matters concerning the operation, management, and administration of the Properties; (4) obtain Buyer’s written approval prior to voting under any operating, unit, joint venture, partnership or similar agreement; (5) not approve or elect to go non-consent as to any proposed well without Buyer’s prior written approval but only as to proposals (when aggregated with the capital expenditures described in subsection (1) above and prior proposals requested by Buyer pursuant to this subsection) which would not exceed the Capital Cap; (6) not elect to go non-consent as to any Initial ▇▇▇▇▇ as defined in the JEA (notwithstanding subsection (5) above); (7) not plug or abandon or agree to plug and abandon any Well without Buyer’s prior written approval and (8) not propose any drilling or other operations requiring elections to participate pursuant to the applicable operating agreements except as may be necessary to maintain any portion of the Properties. On any matter requiring Buyer’s approval under this Section 6.4, Buyer shall respond within five (5) days to Seller’s request for approval, and failure of Buyer to respond to Seller’s request for approval within such time shall release Seller from the obligation to obtain Buyer’s approval before proceeding on such matter and the election Seller makes in proceeding thereon shall comply with this Section 6.4 unless taken in bad faith. With respect to emergency actions taken by any Seller in the face of serious risk to life, property, or the environment, without prior approval of Buyer pursuant to the provisions above, such Seller will advise Buyer of its actions as promptly as reasonably possible and consult with Buyer as to any further related actions.
Appears in 1 contract
Sources: Agreement of Sale and Purchase (Ultra Petroleum Corp)
Administration of the Assets. (a) From and after the date of execution of this Agreement and until the Closing with respect to a Property, and subject to the constraints of applicable operating and other agreements, each Seller shall operate, manage, and administer the Properties in which it owns an interest in a good and workmanlike manner consistent with its past practices, and shall carry on its business with respect to the Assets in substantially the same manner as before execution of this Agreement. Prior to Closing with respect to a Property, each Seller shall use reasonable efforts to preserve in full force and effect all material Leases, operating agreements, easements, rights-of-way, permits, licenses, and agreements which relate to the Properties in which such Seller owns an interest, and shall perform all material obligations of such Seller in or under all such agreements relating to the Properties. Each Seller shall, except for emergency action taken in the face of serious risk to life, property, or the environment, (1) submit to Buyer all requests for capital expenditures, including AFE’s, for Buyer’s prior written approval but only up to an aggregate of Fifteen Million Dollars ($15,000,000) in capital expenditures being approved by Buyer between Between the date of this Agreement and the Closing Date, Seller will conduct all ownership of and business relating to the Properties in the manner in which they are now being conducted (herein called including the “Capital Cap”) maintaining existing insurance covering the Properties, maintaining the books, accounts and records relating to the Properties, and not materially modifying or terminating a material agreement where to do so would result in a MAE), and will notify Buyer promptly of any significant occurrence or change affecting the Properties. Between the date of this Agreement and the Closing Date, Seller shall perform and comply in all material respects with Buyer’s timely all covenants and reasonable written instructions regarding such expenditures; (2) submit to Buyer, for prior written approval, all proposed contracts and conditions contained in agreements relating to the Properties which involve individual commitments of more than TWENTY-FIVE THOUSAND dollars ($25,000); (3) consult withand comply in all material respects with all applicable laws, informrules, regulations, and advise Buyer regarding all material matters concerning orders that apply to the operation, management, Properties. The parties hereby recognize that the current ownership and administration operation of the Properties; Properties includes Seller electing to participate or not participate (4i.e. nonconsent status) obtain Buyer’s written approval prior to voting under any operating, unit, joint venture, partnership or similar agreement; (5) not approve or elect to go non-consent as to any proposed well without Buyer’s prior written approval but only as to proposals (when aggregated with the capital expenditures described in subsection (1) above and prior proposals requested by Buyer pursuant to this subsection) which would not exceed the Capital Cap; (6) not elect to go non-consent as to any Initial ▇▇▇▇▇ as defined in drilled pursuant to the JEA (notwithstanding subsection operating agreements or joint exploration agreement relating to the Properties and that Seller may continue to make consistent elections for the Properties, provided, however, Seller will provide Buyer notice of such election five (5) above); days prior to such election and shall consult with Buyer regarding such election. Prior to Closing, Seller shall (7a) not plug or abandon or agree to plug and abandon any Well without Buyer’s prior written approval and (8) not propose any drilling or other operations requiring elections to participate pursuant to the applicable operating agreements except as may be necessary to maintain any portion of the PropertiesProperties or to extend a Lease, or (b) not surrender, abandon, assign, ▇▇▇▇▇ ▇ ▇▇▇▇ or otherwise encumber any material Property other than in the ordinary course of business; provided however, that nothing contained herein shall require Seller to expend any funds to extend or perpetuate a Lease. On any matter requiring Buyer’s approval under this Section 6.4Seller shall reasonably cooperate with Buyer in the notification of all applicable governmental authorities of the transactions contemplated hereby and reasonably cooperate with Buyer in obtaining the issuance or transfer by each such authority of such permits, Buyer shall respond within five (5) days to Seller’s request licenses and authorizations as may be necessary for approval, and failure of Buyer to respond to Seller’s request for approval within such time shall release own and operate the Properties following Closing. To the extent Seller from is not the obligation to obtain Buyer’s approval before proceeding on such matter and operator of any of the election Properties, the obligations of Seller makes in proceeding thereon shall comply with this Section 6.4 unless taken in bad faith. With respect to emergency actions taken by any Seller in the face of serious risk to life, property, concerning operations or the environment, without prior approval of Buyer activities which normally or pursuant to existing contracts are carried out or performed by the provisions aboveoperator, shall be construed to require only that Seller use reasonable efforts (without being obligated to incur any expense or institute any cause of action) to cause the operator of such Seller will advise Buyer Properties to take such actions or render such performance as would a reasonable prudent operator and within the constraints of its actions as promptly as reasonably possible the applicable operating agreements and consult with Buyer as to any further related actionsother applicable agreements.
Appears in 1 contract
Sources: Agreement of Sale and Purchase (Halcon Resources Corp)