PURCHASE AND SALE AGREEMENT
By and Between
▇▇▇▇▇ Petroleum Company and
▇▇▇▇▇▇▇▇▇ Oil Company, a California general partnership, and
▇▇▇▇▇ Resource Development Company, a California corporation;
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as Trustee of Trust "B" Under
the Will of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Deceased;
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V;
▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇ ▇. ▇▇▇▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇;
Vernier Resources Corporation, a Texas corporation;
▇▇▇▇▇ ▇. ▇▇▇▇▇▇; General Western, Inc., a New Mexico corporation;
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustees of the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust, Dated June 22, 1982;
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇;
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family
Trust, Dated April 9, 1996; and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
as partners of ▇▇▇▇▇▇▇▇▇ Oil Company, and individually
Dated November 8, 1996
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 "Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 "Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 "Closing". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 "Default". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 "Encumbrance". . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 "Environmental Laws" . . . . . . . . . . . . . . . . . . . . . 2
1.11 "Escrow" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 "Financial Statements" . . . . . . . . . . . . . . . . . . . . 3
1.13 "Governmental Entity". . . . . . . . . . . . . . . . . . . . . 3
1.14 "Indemnifying Party" . . . . . . . . . . . . . . . . . . . . . 3
1.15 "Indemnitee" . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.16 "IRS". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.17 "Material" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.18 "Mineral Interest" . . . . . . . . . . . . . . . . . . . . . . 4
1.19 "Permitted Encumbrances" . . . . . . . . . . . . . . . . . . . 4
1.20 "Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.21 "Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . 4
1.22 "Requisite Regulatory Approvals" . . . . . . . . . . . . . . . 4
1.23 "TEC Purchase Agreement" . . . . . . . . . . . . . . . . . . . 4
1.24 "TOC Purchase Agreement" . . . . . . . . . . . . . . . . . . . 4
1.25 "Warrant". . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II THE PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . . 4
2.1 Transfer to ▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Purchase by ▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Payment of the Purchase Price. . . . . . . . . . . . . . . . . 5
2.4 Operating Adjustment.. . . . . . . . . . . . . . . . . . . . . 5
2.5 Assets to be Conveyed to ▇▇▇▇▇.. . . . . . . . . . . . . . . . 6
2.6 Allocation of Purchase Price . . . . . . . . . . . . . . . . . 7
2.7 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.8 Proration of Credits and Payment Obligations . . . . . . . . . 7
2.9 Real Estate and Other Taxes. . . . . . . . . . . . . . . . . . 8
2.10 Documentation of Sale and Transfer of Ownership. . . . . . . . 8
2.11 Approval of Title and Condition of the Real Property . . . . . 8
2.12 Closing Procedure. . . . . . . . . . . . . . . . . . . . . . . 8
2.13 Post Closing Access to Documents . . . . . . . . . . . . . . . 9
2.14 Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
▇▇▇▇▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Partnership Organization . . . . . . . . . . . . . . . . . . 10
3.2 Effect of Agreement; Consents. . . . . . . . . . . . . . . . 10
3.3 Financial Statements . . . . . . . . . . . . . . . . . . . . 11
3.4 Taxes and Tax Returns. . . . . . . . . . . . . . . . . . . . 11
3.5 Absence of Adverse Change. . . . . . . . . . . . . . . . . . 11
3.6 No Misleading Statements . . . . . . . . . . . . . . . . . . 11
3.7 No Significant Transactions. . . . . . . . . . . . . . . . . 12
3.8 Properties, Title and Related Matters. . . . . . . . . . . . 12
3.9 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 13
3.10 Records. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11 No Undisclosed Material Liabilities. . . . . . . . . . . . . 13
3.12 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.14 Execution and Delivery . . . . . . . . . . . . . . . . . . . 14
3.15 Environmental Matters. . . . . . . . . . . . . . . . . . . . 14
3.16 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.17 Investigation. . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF ▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1 Corporate Organization . . . . . . . . . . . . . . . . . . . 17
4.2 Due Authorization, Execution and Delivery; Effect of
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.5 Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.6 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V COVENANTS OF ▇▇▇▇▇▇▇▇▇. . . . . . . . . . . . . . . . . . . 19
5.1 Access to ▇▇▇▇▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . 19
5.2 Governmental Approvals; Consents . . . . . . . . . . . . . . 19
5.3 Litigation and Claims. . . . . . . . . . . . . . . . . . . . 19
5.4 Notice of Changes. . . . . . . . . . . . . . . . . . . . . . 20
5.5 Conduct of Business Operations . . . . . . . . . . . . . . . 20
5.6 Maintain Assets and Operations . . . . . . . . . . . . . . . 21
5.7 Exclusive Dealing. . . . . . . . . . . . . . . . . . . . . . 21
5.8 Termination Fee. . . . . . . . . . . . . . . . . . . . . . . 22
5.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.10 Approval of Transaction. . . . . . . . . . . . . . . . . . . 22
ARTICLE VI COVENANTS OF ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . 22
6.1 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 Governmental Approvals . . . . . . . . . . . . . . . . . . . 22
6.3 Disclosure Responsibilities. . . . . . . . . . . . . . . . . 22
6.4 Authorization of Warrant . . . . . . . . . . . . . . . . . . 23
6.5 Cooperation in Exchange. . . . . . . . . . . . . . . . . . . 23
ARTICLE VII CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇ . . . . . . . . . . . . . 23
7.1 Accuracy of Representations and Warranties . . . . . . . . . 23
7.2 Performance of Covenants and Agreements. . . . . . . . . . . 23
7.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.4 Governmental Approvals . . . . . . . . . . . . . . . . . . . 23
7.5 Approval of Counsel. . . . . . . . . . . . . . . . . . . . . 23
7.6 Partners' Certificate. . . . . . . . . . . . . . . . . . . . 24
7.7 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 24
7.8 Closing of TEC and TOC Purchase Agreements . . . . . . . . . 24
7.9 Condition of Real Property . . . . . . . . . . . . . . . . . 24
7.10 Termination of Operating Agreement . . . . . . . . . . . . . 26
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇▇▇▇. . . . . . . . . . 26
8.1 Accuracy of Representations and Warranties . . . . . . . . . 26
8.2 Performance of Covenants and Agreements. . . . . . . . . . . 26
8.3 Resolutions. . . . . . . . . . . . . . . . . . . . . . . . . 26
8.4 Approval of Counsel. . . . . . . . . . . . . . . . . . . . . 26
8.5 Governmental Approvals . . . . . . . . . . . . . . . . . . . 26
8.6 Officers' Certificate. . . . . . . . . . . . . . . . . . . . 27
8.7 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 27
8.8 Closing of TEC and TOC Purchase Agreements . . . . . . . . . 27
ARTICLE IX TERMINATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . 27
9.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . 27
9.2 Effect on Obligations. . . . . . . . . . . . . . . . . . . . 27
ARTICLE X INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 28
10.1 Indemnification by ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . 28
10.2 Indemnification by ▇▇▇▇▇▇▇▇▇.. . . . . . . . . . . . . . . . 28
10.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Notice and Opportunity to Defend . . . . . . . . . . . . . . 28
10.5 General. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XI MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . 30
11.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.4 Taking of Necessary Action . . . . . . . . . . . . . . . . . 30
11.5 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.6 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . 31
11.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 31
11.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.9 Construction and References. . . . . . . . . . . . . . . . . 31
11.10 Modification and Waiver. . . . . . . . . . . . . . . . . . . 31
11.11 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.12 Public Announcements . . . . . . . . . . . . . . . . . . . . 33
11.13 Governing Law; Interpretation. . . . . . . . . . . . . . . . 33
11.14 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 33
LIST OF EXHIBITS
Exhibit Number
Warrant Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Grant Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
▇▇▇▇ of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Assignment of Leases, Rights of Way, Easements
and Contracts (Unrecorded Documents). . . . . . . . . . . . . . . . 4
Assignment of Leases, Rights of Way, Easements
and Contracts (Recorded Documents). . . . . . . . . . . . . . . . . 5
Assignment of Oil and Gas Leases . . . . . . . . . . . . . . . . . . . . 6
Promissory Note 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Promissory Note 2. . . . . . . . . . . . . . . . . . . . . . . . . . 8A-8F
Description of Real Property . . . . . . . . . . . . . . . . . . . . . . 9
Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . 10
Certificate of Satisfaction. . . . . . . . . . . . . . . . . . . . . . . 11
Escrow Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Certificate of Compliance of ▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . 13
Opinion of Counsel to ▇▇▇▇▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . 14
Certificate of Compliance of ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . 15
Opinion of Counsel to ▇▇▇▇▇. . . . . . . . . . . . . . . . . . . . . . . 16
1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is
dated, for the convenience of the parties hereto, November 8, 1996, by and
between ▇▇▇▇▇ Petroleum Company, a Delaware corporation ("▇▇▇▇▇"), and
▇▇▇▇▇▇▇▇▇ Oil Company, a California general partnership ("▇▇▇▇▇▇▇▇▇ Oil"),
and ▇▇▇▇▇ Resource Development Company, a California corporation; ▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇., as Trustee of Trust "B" Under the Will of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Deceased; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V; ▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇ ▇.
▇▇▇▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇▇▇▇ Resources Corporation, a Texas
corporation; ▇▇▇▇▇ ▇. ▇▇▇▇▇▇; General Western, Inc., a New Mexico corporation;
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustees of the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Family Trust, dated June 22, 1982; ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust, dated April
9, 1996; and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, all acting as partners of ▇▇▇▇▇▇▇▇▇ Oil and
individually, jointly and severally ("Partners"), with ▇▇▇▇▇▇▇▇▇ Oil and the
Partners collectively referred to herein as "▇▇▇▇▇▇▇▇▇."
RECITALS:
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ have all determined that it is in their
respective best interests for ▇▇▇▇▇ to purchase substantially all of the assets
owned by ▇▇▇▇▇▇▇▇▇ Oil or the Partners and utilized in or related to the oil
and gas operations of ▇▇▇▇▇▇▇▇▇ Oil, upon the terms and subject to the
conditions set forth herein;
B. In furtherance thereof, it is proposed that ▇▇▇▇▇ shall
purchase from ▇▇▇▇▇▇▇▇▇ for the Purchase Price set forth in Section 2.3 hereof
substantially all of the assets of ▇▇▇▇▇▇▇▇▇ Oil and substantially all assets
of the Partners that are utilized in the operations of ▇▇▇▇▇▇▇▇▇ Oil in fee,
and with clear title, free of debt, subject to the reservation by the Partners
of a royalty interest of four percent (4%) of all gas, oil and other
hydrocarbon substances produced from all zones lying below 4,500 feet below the
surface of the ▇▇▇▇▇▇▇▇▇ property (excluding the ▇▇▇▇▇▇ Lease as defined
herein) purchased under the terms of this Agreement; and
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ have entered into an Agreement in
Principle and Exclusive Dealing Agreement dated August 15, 1996 ("AIP"),
and wish to set forth the representations, warranties, agreements and
conditions under which the purchase and sale will occur in this Definitive
Agreement, as defined in Section 6 of the AIP, which upon execution will
supersede the AIP.
NOW, THEREFORE, in consideration of the premises,
representations, warranties and agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement shall have the
meanings given to them in this Article I, unless defined elsewhere in this
Agreement.
1.1 "Affiliate" shall mean with respect to any Person, an
individual or entity that, directly or indirectly, controls, is controlled by or
is under common control with such Person.
1.2 "Agreement" shall have the meaning such term is given in
the introductory paragraph hereof.
1.3 "Assets" shall mean substantially all the tangible and
intangible, real, personal and mixed assets and properties of ▇▇▇▇▇▇▇▇▇
Oil and substantially all the individual assets of the Partners utilized in the
oil and gas operations of ▇▇▇▇▇▇▇▇▇ Oil, including but not limited to the oil
and gas leases, easements, rights of way, inventory, supplies and equipment of
▇▇▇▇▇▇▇▇▇ Oil and the oil and gas interests, ▇▇▇▇▇, pipelines, surface
equipment and real property owned individually by the Partners, excluding
only cash, receivables and specific items of personal property, as described
in Section 2.5 hereof. Assets shall also include the Partners' interests as
Premises Lessors under the Cogeneration Premises Lease (as defined in
Section 2.5 hereof).
1.4 "Business Day" shall mean any day other than Saturday,
Sunday or other days on which federally chartered commercial banks in
California are authorized by law to close.
1.5 "Closing" shall have the meaning such term is given in Section
2.7 hereof.
1.6 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.7 "Default" shall mean, as to any party to this Agreement,
(a) a default by such party in the performance of any of its material
obligationshereunder and the continuation of such default for a period of five
(5) Business Days after written notice is delivered by the non-defaulting party
to the defaulting party that a default has occurred or (b) the breach of any
representation or warranty hereunder.
1.8 "Effective Date" shall have the meaning such term is given in
paragraph 2.4a hereof.
1.9 "Encumbrance" shall mean any security interest, mortgage,
pledge, claim, lien, charge, option, defect, encumbrance, or other right
or interest of any nature.
1.10 "Environmental Laws" shall be broadly construed to mean any
and all federal, state or local laws, statutes, ordinances, rules, regulations,
orders, or determinations of
any Governmental Entity pertaining to the environment heretofore or currently
in effect in any and all jurisdictions in which ▇▇▇▇▇▇▇▇▇ is conducting or at
any time has conducted business, or where any of the Assets are located, or
where any hazardous substances generated by or disposed of by ▇▇▇▇▇▇▇▇▇
are located. "Environmental Laws" shall include, but shall not be limited to,
the federal Clean Air Act, as amended; the federal Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980 ("CERCLA"),
as amended; the federal Water Pollution Control Act, as amended; the federal
Resource Conservation and Recovery Act of 1976, as amended ("RCRA"); the
ederal Safe Drinking Water Act, as amended; the federal Toxic Substances
Control Act, as amended; the federal Superfund Amendments and
Reauthorization Act of 1986, as amended; the federal Clean Water Act, as
amended; or any state laws or regulations similar or analogous to or in
implementation of these provisions; the California State Business Plan Law,
California Health and Safety Code Section 25500 et seq.; the Hazardous
Substance Account Act, Health and Safety Code Section 25300 et seq.; the
Hazardous Waste Control Law, Health and Safety Code Section 25100 et seq.;
Chapter 6.7 of Division 20 of the Health and Safety Code, Section 25280
et seq.; the Safe Drinking Water and Toxic Enforcement Act of 1986
("Proposition 65"); Health and Safety Code Section 25249.5 et seq.; Division
26 of the Health and Safety Code, Section 39000 et seq.; the ▇▇▇▇▇▇-Cologne
Act, Water Code Section 13000 et seq.; and any other successor or amendments
thereto, or implementing regulations thereof; and all other laws, statutes,
ordinances, rules, regulations, orders and determinations of any Governmental
Entity relating to (a) the control of any potential pollutant or protection of
the air, water or land; (b) solid, gaseous or liquid waste generation,
handling, treatment, storage, disposal or transportation; and (c) exposure to
hazardous, toxic or other substances alleged to be harmful. The terms
"hazardous substance," "release" and "threatened release" have the meanings
specified in CERCLA, and the terms "solid waste" and "disposal" (or "disposed")
have the meanings specified in RCRA; provided, however, that, to the extent
the laws of the state in which any Assets are or were located currently or
subsequently provide for a meaning for "hazardous substance," "release," "solid
waste" or "disposal" which is broader than that specified in either CERCLA or
RCRA, such broader meaning shall apply.
1.11 "Escrow" shall mean the escrow to be established by ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ with First American Title Insurance Company pursuant to Section 2.14
hereof.
1.12 "Financial Statements" shall have the meaning such term is
given in Section 3.3 hereof.
1.13 "Governmental Entity" shall mean the United States of America,
any state, county, city, municipality and any subdivision thereof, any court,
administrative or regulatory agency, commission, department or body or other
governmental authority or instrumentality or any entity or Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.14 "Indemnifying Party" shall have the meaning such term is
given in paragraph 10.4a hereof.
4
1.15 "Indemnitee" shall have the meaning such term is given in
paragraph 10.4a hereof.
1.16 "IRS" shall mean the Internal Revenue Service.
1.17 "Material" means any condition, change or effect that,
individually or when taken together with all other such conditions,
changes or effects that existed or occurred prior to the date of determination
of the existence or occurrence of the material condition, change or effect, is
or is reasonably likely to be materially adverse to the business, assets
(including intangible assets), financial condition or results of operations
of ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇ respectively, in each case taken as a whole.
1.18 "Mineral Interest" shall mean the right to extract oil, gas
and other hydrocarbons, unrestricted as to depth and with unlimited surface
access for such purpose.
1.19 "Permitted Encumbrances" shall mean encumbrances which ▇▇▇▇▇
accepts, in writing, including, but not limited to, encumbrances revealed on
the preliminary title report approved by ▇▇▇▇▇ as provided in this Agreement.
1.20 "Person" shall mean any individual, corporation, association,
partnership, joint venture, trust, estate, unincorporated organization or
Governmental Entity.
1.21 "Purchase Price" shall have the meaning such term is given in
Section 2.2 hereof.
1.22 "Requisite Regulatory Approvals" shall have the meaning such
term is given in paragraph 5.2a hereof.
1.23 "TEC Purchase Agreement" shall have the meaning such term is
given in paragraph 2.12c hereof.
1.24 "TOC Purchase Agreement" shall have the meaning such term is
given in paragraph 2.12c hereof.
1.25 "Warrant" shall have the meaning such term is given in the
form of Exhibit 1 attached hereto and made a part hereof.
ARTICLE II
THE PURCHASE AND SALE
2.1 Transfer to ▇▇▇▇▇. In accordance with the provisions of this
Agreement, ▇▇▇▇▇▇▇▇▇ shall transfer and convey the Assets to ▇▇▇▇▇ pursuant to
a Grant Deed, ▇▇▇▇ of Sale, Assignment of Leases, Rights of Way, Easements and
Contracts (Unrecorded Documents),
5
Assignment of Leases, Rights of Way, Easements and Contracts (Recorded
Documents), and Assignment of Oil and Gas Leases in the forms of Exhibits 2, 3,
4, 5 and 6 attached hereto and made a part hereof, respectively (collectively,
the "Instruments of Transfer"), to be delivered at the Closing , in accordance
with the provisions relating to the Closing, and ▇▇▇▇▇ will acquire such Assets
from ▇▇▇▇▇▇▇▇▇.
2.2 Purchase by ▇▇▇▇▇. ▇▇▇▇▇, in reliance upon the covenants,
representations, warranties and indemnities of ▇▇▇▇▇▇▇▇▇ contained herein,
hereby agrees to purchase the Assets from ▇▇▇▇▇▇▇▇▇ at the purchase price (the
"Purchase Price") stated in Section 2.3 hereof.
2.3 Payment of the Purchase Price. As payment for the transfer
and conveyance of the Assets by ▇▇▇▇▇▇▇▇▇ to Berry, Berry shall deliver to
Escrow for the benefit of ▇▇▇▇▇▇▇▇▇ or its nominees at the Closing, in
accordance with the provisions related to the Closing, a purchase price of
Eighteen Million, Eighty-Seven Thousand, Four Hundred Thirteen Dollars and
Fifty-Three Cents ($18,087,413.53) which shall be payable in the form of two
(2) wire transfers with immediately available funds in the amounts of Two
Million, Two Hundred Eighty-Five Thousand Dollars ($2,285,000) and Seven
Million, Six Hundred Two Thousand, Four Hundred Thirteen Dollars and
Fifty-Three Cents ($7,602,413.53) to an account specified by the Escrow Agent
(as herein defined) prior to the Closing and a wire transfer in the amount of
One Million Three Hundred Thousand Dollars ($1,300,000) to an account for the
benefit of Sunset Investment Company, LLC, a California limited liability
company ("Sunset") established pursuant to that certain Security Agreement,
dated as of November 8, 1996, by and among Sunset, Solar Turbines, Inc., a
Delaware corporation, et al. ("Monarch") and ▇▇▇▇▇ (the "Sunset Security
Agreement"); and seven (7) promissory notes, one (1) note in the amount of
Three Million, Seven Hundred Thousand Dollars ($3,700,000) ("Note 1")
and six (6) notes aggregating Three Million, Two Hundred Thousand Dollars
($3,200,000) (collectively, "Note 2") in substantially the same form as in
Exhibits 7, 8A, 8B, 8C, 8D, 8E and 8F respectively, attached hereto and made a
part hereof. At Closing, Note 2 shall be delivered to ▇▇▇▇▇▇▇▇▇ or its
assignee. Note 1 shall be delivered to the Secured Party (as that term is
defined in the Sunset Security Agreement) pursuant to the terms of the Sunset
Security Agreement. The Purchase Price shall be subject to the post-closing
operating adjustment as provided in Section 2.4 hereof ("Operating
Adjustment"). The Operating Adjustment shall not be handled through Escrow.
Allocation of the Purchase Price among ▇▇▇▇▇▇▇▇▇ Oil and the Partners shall be
the responsibility of ▇▇▇▇▇▇▇▇▇ Oil and the Partners after payment of the
Purchase Price, subject to Section 2.6 hereof, and any adjustment pursuant to
Section 2.4, and ▇▇▇▇▇ shall be and is hereby held harmless by ▇▇▇▇▇▇▇▇▇ Oil
and the Partners from any claims or loss arising from disputes among ▇▇▇▇▇▇▇▇▇
Oil and any of the Partners regarding the allocation of such Purchase Price
among themselves. In addition, ▇▇▇▇▇▇▇▇▇ Oil shall receive, at the Closing,
a Warrant to acquire one hundred thousand (100,000) shares of Common Stock of
▇▇▇▇▇.
2.4 Operating Adjustment.
a. October 1, 1996, at 12:01 a.m. shall be considered the
"Effective Date" of this Agreement, and the oil and gas operations included in
the Assets shall be deemed to be for the account of ▇▇▇▇▇ from and after that
date. The Operating Adjustment will occur
6
after the Closing in an amount equal to the difference between (i) the value of
oil and gas produced by ▇▇▇▇▇▇▇▇▇ Oil after the Effective Date and (ii) the
normal cost of producing oil and gas after the Effective Date, as determined by
▇▇▇▇▇▇▇▇▇'▇ customary accounting method adjusted to reflect only necessary
operating revenues and expenses which would have been credited to or incurred
by ▇▇▇▇▇ had this transaction closed on the Effective Date. The oil tanks
shall be gauged at 12:01 a.m. on the Effective Date. The value of oil and gas
produced by ▇▇▇▇▇▇▇▇▇ after the Effective Date shall be the net sales after
royalties adjusted for the change in inventory between the Effective Date and
the Closing. If the value of the oil and gas produced after the Effective Date
is greater than said cost, then ▇▇▇▇▇▇▇▇▇ shall pay ▇▇▇▇▇ an Operating
Adjustment equal to the amount of the difference. If the value of the oil and
gas produced after the Effective Date is less than said cost, then ▇▇▇▇▇ shall
pay ▇▇▇▇▇▇▇▇▇ an Operating Adjustment equal to the amount of the difference.
b. In the event ▇▇▇▇▇▇▇▇▇ does not provide ▇▇▇▇▇ with its
calculation of the Operating Adjustment (the "Calculation") prior to the
Closing, ▇▇▇▇▇▇▇▇▇ shall provide ▇▇▇▇▇ with the Calculation within sixty (60)
days after the Closing. ▇▇▇▇▇ shall have immediate access at reasonable times
to such books, records and invoices as it deems necessary to verify the
Calculation. If ▇▇▇▇▇ does not object to the Calculation within ten (10) days
after receipt thereof by ▇▇▇▇▇, it shall be deemed to be final and binding upon
the parties hereto. If ▇▇▇▇▇ objects to the Calculation within such ten (10)
days by specifying the items to which it objects, then the parties will attempt
to mutually resolve any differences. If the differences cannot be resolved
within twenty (20) days after ▇▇▇▇▇'▇ objection to the Calculation, then all
amounts agreed to shall be paid as provided below and the difference shall be
resolved by arbitration under the Commercial Arbitration Rules of the American
Arbitration Association. The costs of arbitration shall be shared equally by
the parties. This Section 2.4 is the only Section or part of this Agreement
which is subject to arbitration jurisdiction.
c. Within three (3) days of the final determination of the
Calculation, the party required to make the Operating Adjustment payment
shall pay, via wire if requested, the Operating Adjustment payment agreed upon
to the other party.
d. For managing ▇▇▇▇▇▇▇▇▇ Oil subsequent to September 30,
1996, ▇▇▇▇▇▇▇▇▇ shall only be entitled to be credited for management fees at
the rate of One Hundred Fifty Dollars ($150) per day and shall not be entitled
to reimbursement of overhead costs including, but not limited to, legal
expenses, accounting costs, loan fees and interest, contributions, dues and
assessments, 401K retirement costs, severance payments, payments of accrued
vacation pay, payments in lieu of compensatory time off or excessive travel or
entertainment costs or expenses. Distributions to Partners subsequent to
September 30, 1996, shall not be included in the costs.
2.5 Assets to be Conveyed to ▇▇▇▇▇. The Assets to be conveyed
to ▇▇▇▇▇ by ▇▇▇▇▇▇▇▇▇ are the following assets owned and/or operated by
▇▇▇▇▇▇▇▇▇ Oil: (a) all of the fee real property, oil and gas leases (including
all of ▇▇▇▇▇▇▇▇▇'▇ interest in that certain oil and gas lease known as the
▇▇▇▇▇▇ Lease (the "▇▇▇▇▇▇ Lease")), and interests, easements and rights of way
included in the operations of ▇▇▇▇▇▇▇▇▇ Oil, including one hundred percent
(100%) of the
7
Mineral Interests in such property, all as more particularly described in
Exhibit 9 attached hereto and made a part hereof ("Real Property"); (b) all of
the buildings, structures, tanks and pipelines on or under the property owned
and/or operated by ▇▇▇▇▇▇▇▇▇ Oil, as are described in the Disclosure Letter
from ▇▇▇▇▇▇▇▇▇ delivered to ▇▇▇▇▇ at or prior to execution hereof, which shall
refer to the Sections of this Agreement (the "▇▇▇▇▇▇▇▇▇ Disclosure Letter");
(c) all equipment and supplies related to or utilized in operating the oil
properties and facilities owned and/or operated by ▇▇▇▇▇▇▇▇▇ as described in
the ▇▇▇▇▇▇▇▇▇ Disclosure Letter, excluding only that portion of the "yellow
iron," rolling stock, pulling rigs, drilling rig and miscellaneous office
equipment and furnishings described in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter.
▇▇▇▇▇▇▇▇▇ shall convey the Assets to ▇▇▇▇▇ free and clear of all liens and
Encumbrances (other than Permitted Encumbrances). Any asset of ▇▇▇▇▇▇▇▇▇ Oil
not described in Exhibit 9 or the ▇▇▇▇▇▇▇▇▇ Disclosure Letter shall be conveyed
to ▇▇▇▇▇ subject to ▇▇▇▇▇'▇ right, in its sole discretion, to refuse to accept
such asset by written notice to ▇▇▇▇▇▇▇▇▇ Oil within thirty (30) days after
▇▇▇▇▇ has received written notice from ▇▇▇▇▇▇▇▇▇ Oil that the asset is included
in the Assets. Subject to paragraph 3.16a hereof, ▇▇▇▇▇▇▇▇▇ Oil employees will
not be employed by ▇▇▇▇▇. In addition, the Partners shall convey to ▇▇▇▇▇ all
their right, title and interest as Premises Lessor under that certain
Cogeneration Premises Lease, dated as of August 15, 1994, between the Partners
and Security Pacific Leasing Corporation, a Delaware corporation (the
"Cogeneration Premises Lease"), free and clear of all Encumbrances, excluding
Permitted Encumbrances. ▇▇▇▇▇▇▇▇▇ shall convey to ▇▇▇▇▇ all of its right,
title and interest as Lessee under the ▇▇▇▇▇▇ Lease free and clear of all
Encumbrances, except Permitted Encumbrances.
2.6 Allocation of Purchase Price. The parties agree to allocate
the Purchase Price in accordance with the terms of Code Section 1060 and the
Treasury Regulations promulgated thereunder, and to report this transaction for
federal and state tax purposes in accordance with the agreed-upon allocation
in the form of Exhibit 10 attached hereto and made a part hereof.
2.7 Closing. Subject to the provisions of Articles VII and VIII,
the closing (the "Closing") shall take place at 10 a.m., Pacific Standard Time,
at the offices of ▇▇▇▇▇ Petroleum Company, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, at such date prior to December 1, 1996, as to which ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ may mutually agree. By written notice to the other party, either
▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇ shall have the right to extend the Closing an additional
forty-five (45) days in the event that either party is not in a position to
close by December 1, 1996.
2.8 Proration of Credits and Payment Obligations. All credits and
payment obligations associated with the Assets, including but not limited to
royalties, lease rentals and other forms of contractual payment shall be
prorated between ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ as of the Effective Date. ▇▇▇▇▇▇▇▇▇ shall
be responsible and shall pay for all such items due, incurred or attributable
to the period prior to the Effective Date and ▇▇▇▇▇ shall be responsible and
shall pay for all such items due, incurred or attributable to the period after
such date. However, ▇▇▇▇▇ shall not be responsible for any severance payments,
vacation payments or payments in lieu of compensatory time off made to
▇▇▇▇▇▇▇▇▇ Oil employees after the Effective Date.
8
2.9 Real Estate and Other Taxes. All real estate, occupation, ad
valorem, personal property and severance taxes and charges on any of the Assets
shall be prorated as of the Effective Date. ▇▇▇▇▇▇▇▇▇ shall pay all such items
for all periods prior to such date, however, ▇▇▇▇▇ shall be entitled to all
refunds and rebates with regard to such periods. In the event ▇▇▇▇▇ pays
additional taxes or charges which are assessed upon or levied against any of
the Assets after the Closing with respect to any period prior to the Effective
Date, ▇▇▇▇▇▇▇▇▇ shall promptly reimburse ▇▇▇▇▇ the amount thereof upon
presentation of a receipt therefor. If ▇▇▇▇▇▇▇▇▇ elects to challenge the
validity of such ▇▇▇▇ or any portion thereof, ▇▇▇▇▇ shall extend reasonable
cooperation to ▇▇▇▇▇▇▇▇▇ in such efforts, at no expense to ▇▇▇▇▇.
2.10 Documentation of Sale and Transfer of Ownership. Except as
otherwise provided herein, the Assets to be conveyed by ▇▇▇▇▇▇▇▇▇ to ▇▇▇▇▇
shall be conveyed pursuant to the Instruments of Transfer in such form or forms
customary and necessary to properly transfer the Assets according to the
requirements of any applicable federal, state or local agency.
▇. ▇▇▇▇▇▇▇▇▇ shall deliver the Assets to ▇▇▇▇▇ at the
Closing subject to the reservations, limitations, conditions and restrictions
contained in this Agreement and the Instruments of Transfer.
▇. ▇▇▇▇▇▇▇▇▇ shall make available at ▇▇▇▇▇▇▇▇▇'▇ offices or
such other place as deemed appropriate by ▇▇▇▇▇ until the Closing, during
normal business hours, for examination by ▇▇▇▇▇, such title information and
abstracts as may then be available in ▇▇▇▇▇▇▇▇▇'▇ files.
2.11 Approval of Title and Condition of the Real Property.
▇▇▇▇▇▇▇▇▇ has provided a preliminary title report to ▇▇▇▇▇ regarding the Real
Property. ▇▇▇▇▇ shall accept or reject title and condition of the Real
Property as provided in Section 7.9 hereof.
2.12 Closing Procedure. At the Closing, through Escrow, the
transactions listed below shall occur, all subject to and conditioned upon the
execution and delivery of a Certificate of Satisfaction described in paragraph
2.12e hereof.
▇. ▇▇▇▇▇▇▇▇▇ shall deliver to ▇▇▇▇▇ originals (unless
otherwise noted) of each of the following documents:
(1) Executed Instruments of Transfer.
(2) All leases, contracts, agreements, indentures and
other instruments described in or attached to the ▇▇▇▇▇▇▇▇▇ Disclosure Letter.
(3) Executed Certificate of Compliance of ▇▇▇▇▇▇▇▇▇ Oil.
(4) Executed Opinion of Counsel to ▇▇▇▇▇▇▇▇▇.
9
(5) A CLTA Policy of Title Insurance on the Real
Property described in Exhibit 9 if ▇▇▇▇▇ elects not to obtain an ALTA Policy.
(6) ▇▇▇▇▇▇▇▇▇ Disclosure Letter.
▇. ▇▇▇▇▇ shall deliver to ▇▇▇▇▇▇▇▇▇ originals (unless
otherwise noted) of each of the following documents:
(1) Executed Certificate of Compliance of ▇▇▇▇▇.
(2) Executed Opinion of Counsel to ▇▇▇▇▇.
(3) ▇▇▇▇▇ Disclosure Letter.
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Oil will execute and mutually
deliver two (2) originals of a statement that the Purchase and Sale Agreement
between ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Oil Company, Inc., a California corporation, dated
November 8, 1996 ("TOC Purchase Agreement") and the Purchase and Sale Agreement
between ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Electric Company, Inc., a California corporation,
dated November 8, 1996 ("TEC Purchase Agreement") are in condition to close.
▇. ▇▇▇▇▇ will deliver to ▇▇▇▇▇▇▇▇▇ the Purchase Price and
the Warrant as provided in Section 2.3 hereof.
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Oil will execute and mutually deliver
two (2) originals of the Certificate of Satisfaction in the form of Exhibit 11
attached hereto and made a part hereof. By signing this Agreement, each of the
Partners hereby authorizes ▇▇▇▇▇▇▇▇▇ Oil to execute the Certificate of
Satisfaction.
2.13 Post Closing Access to Documents. ▇▇▇▇▇▇▇▇▇ is currently
involved in litigation with ▇▇▇▇▇ Performance Chemicals, Inc. (the "▇▇▇▇▇
Litigation") involving the alleged use of ineffective, diluted or blended
chemicals in the treatment of oil and water on the ▇▇▇▇▇▇▇▇▇ property. ▇▇▇▇▇
shall afford to ▇▇▇▇▇▇▇▇▇ and to the employees, agents and authorized
representatives of ▇▇▇▇▇▇▇▇▇ such reasonable access to the files, agreements,
documents and books and records of ▇▇▇▇▇▇▇▇▇ for periods prior to the Closing
as may be requested by ▇▇▇▇▇▇▇▇▇ in order that ▇▇▇▇▇▇▇▇▇ may have full
opportunity to obtain information reasonably necessary in connection with the
▇▇▇▇▇ Litigation. ▇▇▇▇▇▇▇▇▇ hereby releases ▇▇▇▇▇ from all liability arising
out of the entry by ▇▇▇▇▇▇▇▇▇ or its employees, agents or authorized
representatives onto the business premises of ▇▇▇▇▇ for purposes of obtaining
such information. ▇▇▇▇▇▇▇▇▇ hereby agrees to indemnify, defend and hold
harmless ▇▇▇▇▇ against all liability, demands, claims, costs, losses, damages,
recoveries, settlements and expenses incurred by ▇▇▇▇▇ arising from or related
to the conduct by ▇▇▇▇▇▇▇▇▇ or its employees, agents and authorized
representatives in connection with obtaining such information.
10
▇▇▇▇▇▇▇▇▇ will cooperate with ▇▇▇▇▇ and its agent on any
post-closing audit or financial review that is required of ▇▇▇▇▇ due to this
transaction.
2.14 Escrow. First American Title Insurance Company, a California
corporation, whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, is hereby appointed to act as escrow agent
("Escrow Agent") to conduct the purchase and sale of the Assets. ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ shall execute written instructions to the Escrow Agent, substantially
in the form of Exhibit 12 attached hereto and made a part hereof, to provide
for the payment of liabilities secured by the Assets and the release of
Encumbrances, other than Permitted Encumbrances, against the Assets. ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ further agree that ▇▇▇▇▇▇▇▇▇ shall be responsible for and pay for all
Escrow fees and charges.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇▇▇
Except as set forth in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter, ▇▇▇▇▇▇▇▇▇
hereby represents and warrants to and covenants with ▇▇▇▇▇ as follows:
3.1 Partnership Organization. ▇▇▇▇▇▇▇▇▇ Oil is a general
partnership duly organized, validly existing and in good standing under the
laws of the State of California and has full power and authority to conduct
its business as currently conducted and to own, operate and lease the Assets
it now owns, operates or holds under lease. ▇▇▇▇▇▇▇▇▇ Oil has previously
delivered to ▇▇▇▇▇ true and correct copies of the Agreement of Partnership, any
amendments thereto, the Fictitious Business Name Statement, and the Statement
of Partnership, all as in effect on the date hereof.
3.2 Effect of Agreement; Consents.
a. The execution, delivery and performance of this Agreement
by ▇▇▇▇▇▇▇▇▇ and the consummation by ▇▇▇▇▇▇▇▇▇ of the transactions contemplated
hereby (i) do not require the consent, approval, clearance, waiver, order or
authorization of any Person; (ii) do not violate any provision of the Agreement
of Partnership of ▇▇▇▇▇▇▇▇▇ Oil; (iii) do not conflict with or violate any
permit, concession, grant, franchise, statute, law, rule or regulation of any
Governmental Entity or any order, judgment, award or decree of any court or
other Governmental Entity to which ▇▇▇▇▇▇▇▇▇ is subject or any of the Assets
are bound; and (iv) do not conflict with, or result in any breach of, or
default or loss of any right under (or an event or circumstance that, with
notice or the lapse of time, or both, would result in a default), of any
agreement to which ▇▇▇▇▇▇▇▇▇ is a party or to which any of the Assets are
subject, in each case, which failure, violation, conflict or breach would, in
the aggregate, materially hinder or impair the consummation of the transactions
contemplated by this Agreement. By signing this Agreement, each of the
Partners hereby consents to the sale of the Assets by ▇▇▇▇▇▇▇▇▇ Oil to ▇▇▇▇▇.
11
b. The execution, delivery and performance of this Agreement
by ▇▇▇▇▇▇▇▇▇ will not result in the loss of any governmental license, franchise
or permit possessed by ▇▇▇▇▇▇▇▇▇ related to the Assets or give a right of
acceleration or termination to any party to any agreement or other instrument
to which ▇▇▇▇▇▇▇▇▇ is a party and by which the Assets are bound, or result
in the loss of any right or benefit under such agreement or instrument.
3.3 Financial Statements. ▇▇▇▇▇▇▇▇▇ has heretofore furnished to
▇▇▇▇▇ true and correct copies of the balance sheets of ▇▇▇▇▇▇▇▇▇ Oil as of
December 31, 1994, December 31, 1995, and September 30, 1996, and the related
statements of revenues and expenses for the periods then ended (collectively,
the "Financial Statements"). The Financial Statements have been prepared in
accordance with the books and records of ▇▇▇▇▇▇▇▇▇ Oil and in conformity with
generally accepted accounting principles applied, except as otherwise noted
therein, on a basis consistent with prior periods, and fairly present, in all
material respects, the financial position and results of operations of
▇▇▇▇▇▇▇▇▇ Oil as at and for the periods specified therein. As of September 30,
1996, ▇▇▇▇▇▇▇▇▇ Oil did not have any liability of any kind or manner, either
direct, accrued, absolute or otherwise, which was required to be disclosed by
generally accepted accounting principles and which was not reflected or
disclosed in the Financial Statements and there have been no changes in
▇▇▇▇▇▇▇▇▇ Oil's method of accounting for tax purposes or other purposes except
as disclosed in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter.
3.4 Taxes and Tax Returns. ▇▇▇▇▇▇▇▇▇ Oil has filed all federal,
state, local and foreign income and other tax returns required to be filed by
it, and each such return is complete and accurate in all material respects. The
taxes shown due on such returns have been paid and there are no taxes,
interest, penalties, assessments or deficiencies (any of the foregoing being
referred to herein as a "Tax") claimed to be due in respect of such tax returns
or claimed in writing to be due by any taxing authority. The tax returns of
▇▇▇▇▇▇▇▇▇ Oil have not been audited by the IRS, nor has ▇▇▇▇▇▇▇▇▇ Oil received
notice of any examination being conducted by the IRS or any other taxing
authority for any fiscal year. All other taxes, including property taxes,
imposed by the United States and by any state, municipality, subdivision or
instrumentality of the United States, or other taxing authority, which are due
and payable by ▇▇▇▇▇▇▇▇▇ Oil have been paid in full or will be paid or provided
for up to the Closing date.
3.5 Absence of Adverse Change. Since December 31, 1995, there has
not been (a) any Material adverse change in the condition of the Assets to be
acquired by ▇▇▇▇▇; (b) any damage, destruction or loss adversely affecting the
Assets; (c) any incurrence by ▇▇▇▇▇▇▇▇▇ Oil or by Partners of or entry into any
liability, mortgage, lien or transaction affecting the Assets; (d) any
guarantee of or grant of a security interest to secure a third Person's
obligations by ▇▇▇▇▇▇▇▇▇; (e) except as provided in the ▇▇▇▇▇▇▇▇▇ Disclosure
Letter, any commitment by ▇▇▇▇▇▇▇▇▇ Oil relating to the Assets; or (f) any
agreement, in writing or otherwise, or any partnership action with respect to
the foregoing. No event or condition has occurred or exists and ▇▇▇▇▇▇▇▇▇ is
not aware of any event or condition that has occurred or exists and that could
result in a Material adverse change in the Assets since December 31, 1995.
3.6 No Misleading Statements. This Agreement, the exhibits hereto
and the information referred to herein, when taken as a whole, do not include
any untrue statement of
12
a material fact and do not omit any material fact necessary to make the
statements contained herein or therein not misleading.
3.7 No Significant Transactions. Except for the execution of this
Agreement, since December 31, 1995, ▇▇▇▇▇▇▇▇▇ Oil has not engaged in any
Material transactions and will not engage in any Material transactions prior to
the Closing.
3.8 Properties, Title and Related Matters.
▇. ▇▇▇▇▇▇▇▇▇ has good title to all of the personal property
included in the Assets free and clear of all Encumbrances, except for Permitted
Encumbrances.
b. Other than as set forth on Exhibit 9, there is no real
property owned by ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇ has title to all of the Real Property
(except the ▇▇▇▇▇▇ Lease), in fee simple absolute, including one hundred
percent (100%) of the Mineral Interests therein, free and clear of all
Encumbrances. ▇▇▇▇▇▇▇▇▇ holds its interest as Lessee under the ▇▇▇▇▇▇ Lease
free and clear of all Encumbrances (other than Permitted Encumbrances). No
parcel of Real Property is subject to any governmental decree or is being
condemned, expropriated or otherwise taken by any public authority, with or
without payment of compensation therefor, and no such condemnation,
expropriation or taking has been proposed. The ▇▇▇▇▇▇▇▇▇ Disclosure Letter
contains a description of all buildings, structures, improvements, tanks and
pipes or other fixtures located on or under the fee Real Property. Each
Partner will transfer all of its right, title and interest, whether held
directly or indirectly, in and to the ▇▇▇▇▇▇ Lease to ▇▇▇▇▇.
c. Other than as set forth in Exhibits 4, 5 and 9, ▇▇▇▇▇▇▇▇▇
has no easements or rights of way and no real property is leased by ▇▇▇▇▇▇▇▇▇.
▇▇▇▇▇▇▇▇▇ has good title to all the leasehold estates pursuant to which the
real property described in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter is leased, free and
clear of all Encumbrances, except for Permitted Encumbrances. ▇▇▇▇▇▇▇▇▇ has
not breached any provision of and is not in default (and no event or
circumstance exists that with notice or the lapse of time, or both, would
constitute a default) under the terms of any lease, easement, right of way or
other agreement pursuant to which the Real Property is leased or held and all
of such leases, easements, rights of way or other agreements are in full force
and effect. There are no pending or threatened disputes with respect to any
lease, easement, right of way or other agreement pursuant to which the Real
Property is leased or held and the lessor or grantor thereunder has not
breached any provision of and is not in default (and no event or circumstance
exists that with notice or the lapse of time, or both, would constitute a
default) under the terms of any such lease, easement, right of way or other
agreement. The ▇▇▇▇▇▇▇▇▇ Disclosure Letter contains a description of all
structures, improvements, tanks and pipes or other fixtures located on or under
any leases, easements or rights of way described in Exhibits 4, 5 and 9.
d. Since the physical inspection by ▇▇▇▇▇ on September 5,
1996, the maintenance and operation of buildings, machinery, ▇▇▇▇▇, pipelines
and equipment of ▇▇▇▇▇▇▇▇▇ Oil have been consistent with the past maintenance
and operation of such Assets, ordinary wear and tear excepted, and, except as
described in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter, all machinery,
13
▇▇▇▇▇, pipelines and equipment are operative in all Material respects. ▇▇▇▇▇
shall acquire such Assets AS IS and WHERE IS. ▇▇▇▇▇▇▇▇▇ makes no
representations or warranties as to the suitability of any Asset for any
particular use.
▇. ▇▇▇▇▇▇▇▇▇ is not in Material violation of and, except as
disclosed in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter, ▇▇▇▇▇▇▇▇▇ has not received any
written notice of any violation of any zoning regulation, ordinance, law, rule,
order, regulation or requirement relating to the Assets or operation of its
leased or owned properties which remains uncured or which has not been
dismissed where failure to comply therewith would have a Material adverse
effect on ▇▇▇▇▇▇▇▇▇ Oil or the Assets.
f. Attached to the ▇▇▇▇▇▇▇▇▇ Disclosure Letter is a correct
and complete list and copies of all policies of fire, liability and other forms
of insurance held by ▇▇▇▇▇▇▇▇▇ presently in force with respect to the Assets.
Such policies are in full force and effect and assignable and ▇▇▇▇▇▇▇▇▇ is not
in default under any of them.
3.9 Legal Proceedings. Except as disclosed in the ▇▇▇▇▇▇▇▇▇
Disclosure Letter, there is no legal, judicial, administrative or governmental
arbitration or other action or proceeding or governmental investigation pending
or threatened against ▇▇▇▇▇▇▇▇▇ Oil or the Assets, or affecting any of the
Assets, which if adversely determined would have a Material adverse effect on
the Assets. ▇▇▇▇▇▇▇▇▇ is not in violation of or default under any laws,
ordinances, regulations, judgments, injunctions, orders or decrees (including,
without limitation, any immigration laws or regulations) of any court or other
Governmental Entity applicable to its business, which violations or defaults
would have a Material adverse effect on the Assets. There are no Material
judgments, orders, injunctions or decrees of any Governmental Entity regarding
any agreement in which ▇▇▇▇▇▇▇▇▇ is a named party or any of the Assets are
identified and subject. Except for the ▇▇▇▇▇ Litigation, there is no pending
litigation in or to which ▇▇▇▇▇▇▇▇▇ is a named party or any of the Assets of
▇▇▇▇▇▇▇▇▇ are identified and subject.
3.10 Records. ▇▇▇▇▇▇▇▇▇ Oil has records that accurately reflect
its transactions in all material respects.
3.11 No Undisclosed Material Liabilities. There are no Material
liabilities of ▇▇▇▇▇▇▇▇▇, whether or not accrued and whether or not contingent
or absolute, or any existing condition, situation or set of circumstances that
it expects, or could expect, to result in such liability, other than
liabilities disclosed in the Financial Statements, except liens vested by deeds
of trust as set forth in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter. All such liens shall
be removed prior to the Closing.
3.12 Contracts.
a. All contracts, agreements, indentures and other
instruments to which ▇▇▇▇▇▇▇▇▇ is a party are attached to the ▇▇▇▇▇▇▇▇▇
Disclosure Letter. Except for the agreements attached to the ▇▇▇▇▇▇▇▇▇
Disclosure Letter, ▇▇▇▇▇▇▇▇▇ is not a party to or bound by (i) any agreement,
contract or commitment limiting the freedom of ▇▇▇▇▇▇▇▇▇ or any Affiliate
14
of ▇▇▇▇▇▇▇▇▇ to engage in any line of business, to own, operate, sell,
transfer, pledge or otherwise dispose of or encumber any Asset or to compete
with any Person in any geographical area; (ii) any agreement, contract or
commitment relating to the Assets; or (iii) any agreement, contract or
commitment that will have a Material adverse effect on the Assets.
b. Except as disclosed in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter,
▇▇▇▇▇▇▇▇▇ Oil and the Partners with respect to the Assets have not breached any
provision of or are not in default (and no event or circumstance exists that
with notice or the lapse of time, or both, would constitute a default) under
the terms of any agreement (including the Cogeneration Premises Lease) attached
to the ▇▇▇▇▇▇▇▇▇ Disclosure Letter. All contracts, agreements, indentures and
other instruments attached to the ▇▇▇▇▇▇▇▇▇ Disclosure Letter are in full force
and effect. There are no pending or threatened disputes with respect to the
contracts, agreements, indentures or instruments attached to the ▇▇▇▇▇▇▇▇▇
Disclosure Letter.
3.13 Brokerage. No investment banker, broker or finder has acted
directly or indirectly for ▇▇▇▇▇▇▇▇▇ in connection with this Agreement or the
transactions contemplated hereby. No investment banker, broker, finder or
other Person is entitled to any brokerage or finder's fee or similar commission
in respect thereof based in any way on agreements, arrangements or
understandings made by or on behalf of ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇ agrees to
indemnify, defend and hold ▇▇▇▇▇ harmless from and against any and all claims,
liabilities or obligations with respect to all fees, commissions or expenses
asserted by any Person on the basis of any act, statement, agreement or
commitment alleged to have been made by ▇▇▇▇▇▇▇▇▇ with respect to any such fee,
expense or commission.
3.14 Execution and Delivery. ▇▇▇▇▇▇▇▇▇ Oil has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by ▇▇▇▇▇▇▇▇▇ Oil and
the performance of its obligations hereunder have been duly authorized by all
Partners. This Agreement has been duly executed and delivered by ▇▇▇▇▇▇▇▇▇ and
constitutes a legal, valid and binding obligation of ▇▇▇▇▇▇▇▇▇, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by or subject to (a) any bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally and
(b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3.15 Environmental Matters.
a. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, ▇▇▇▇▇▇▇▇▇ has at
all times operated in compliance with all applicable limitations, restrictions,
conditions, standards, prohibitions, requirements and obligations of
Environmental Laws and related orders of any court or other Governmental
Entity.
b. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, ▇▇▇▇▇▇▇▇▇ is not
in violation of or subject to (i) any existing, pending or threatened action,
suit, investigation, inquiry or proceeding by or before any court or other
Governmental Entity or (ii) any remedial obligations, in each case under any
applicable Environmental Law relating to the Assets or operations
15
conducted thereon by any Person at any time during which such Assets were
owned, leased, used or operated by or for the benefit of ▇▇▇▇▇▇▇▇▇, or by any
Person prior to such time to the extent ▇▇▇▇▇▇▇▇▇ has knowledge of such
matters.
c. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, all notices,
permits, licenses or similar authorizations, if any, required to be obtained or
filed by ▇▇▇▇▇▇▇▇▇ under all applicable Environmental Laws in connection with
its past or present operation or use of any and all Assets or the conduct of
its business, including but not limited to past or present treatment, storage,
disposal or release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed.
d. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, all hazardous
substances and solid wastes generated at any and all of the Assets or by any
Person in connection with the ownership, lease, use or operation of the Assets
have, at any time during which such Assets were owned, leased, used or operated
by or for the benefit of ▇▇▇▇▇▇▇▇▇ or any Affiliate thereof, been transported,
stored, treated and disposed of by carriers or treatment, storage and disposal
facilities authorized or maintaining valid permits under all applicable
Environmental Laws.
e. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, all hazardous
substances and solid wastes generated at any and all of the Assets or by any
prior owner or operator of the Assets were transported, stored, treated and
disposed of by carriers or treatment, storage and disposal facilities
authorized or maintaining valid permits under all applicable Environmental
Laws.
f. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, no Person has, at
any time during which the Assets were owned, leased, used or operated by or for
the benefit of ▇▇▇▇▇▇▇▇▇, disposed of or released any hazardous substance or
solid waste on or under the Assets, except in compliance with all applicable
Environmental Laws.
g. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, no Person has
disposed of or released any hazardous substance or solid waste on, under or
around the Assets, except in compliance with all applicable Environmental Laws.
h. To the best of ▇▇▇▇▇▇▇▇▇'▇ knowledge, no facts or
circumstances exist which could reasonably be expected to result in any
liability to any Person with respect to the current or past business and
operations of ▇▇▇▇▇▇▇▇▇ or the Assets in connection with any release,
transportation or disposal of any hazardous substance or solid waste or action
taken or omitted that was not in full compliance with or was in violation of
any applicable Environmental Law.
3.16 Employees.
a. The ▇▇▇▇▇▇▇▇▇ Disclosure Letter lists all employees,
their addresses, job titles, job descriptions and number of years employed by
▇▇▇▇▇▇▇▇▇ Oil. ▇▇▇▇▇ shall be
16
provided the opportunity to interview, and if desired, may offer employment to
any of ▇▇▇▇▇▇▇▇▇'▇ employees as selected in ▇▇▇▇▇'▇ sole discretion.
b. Employees of ▇▇▇▇▇▇▇▇▇ Oil shall not assert claims
against ▇▇▇▇▇ based on employment by ▇▇▇▇▇▇▇▇▇ Oil for severance, retirement
benefits, health benefits, deferred compensation, violations of any federal,
state or local laws or statutes, wages or other benefits or compensation.
Employees of ▇▇▇▇▇▇▇▇▇ Oil not employed by ▇▇▇▇▇ shall not assert any claim
against ▇▇▇▇▇ for discriminatory hiring practices based on state or federal
laws or statutes, union contracts or for benefits based upon the Employee
Retirement Income Security Act of 1974, as Amended ("ERISA").
c. The ▇▇▇▇▇▇▇▇▇ Disclosure Letter sets forth a list of all
plans and other arrangements involving direct or indirect compensation or
benefits to Partners, consultants or providing employee benefits to employees of
▇▇▇▇▇▇▇▇▇ Oil, including, without limitation, all "employee benefit plans" as
defined in Section 3(3) of ERISA, and all bonus, incentive, deferred
compensation, supplemental retirement, severance and other similar fringe or
employee benefit plans, and all employment or executive compensation agreements
(collectively, the "Benefit Plans"). True and complete copies of the Benefit
Plans have been made available to ▇▇▇▇▇. To the extent applicable, the Benefit
Plans comply, in all material respects, with the requirements of ERISA and the
Code, and any Benefit Plan intended to be qualified under Section 401(a) of the
Code has been determined by the IRS to be so qualified. No Benefit Plan is
covered by Title IV of ERISA or Section 4112 of the Code. No Benefit Plan has
incurred any liability or penalty under Section 4975 of the Code or Section
502(i) of ERISA. Each Benefit Plan has been maintained and administered in all
material respects in compliance with its terms and with ERISA and the Code to
the extent applicable thereto. There are no pending or anticipated claims
against or otherwise involving any of the Benefit Plans and no suit, action or
other litigation (excluding claims for benefits incurred in the ordinary course
of Benefit Plan activities) has been brought against or with respect to any
such Benefit Plan, except for any of the foregoing which would not have a
Material adverse effect. Neither ▇▇▇▇▇▇▇▇▇ Oil nor any entity under "common
control" within the meaning of ERISA Section 4001 with ▇▇▇▇▇▇▇▇▇ Oil or its
Affiliates has contributed to, or been required to contribute to, any
"multiemployer plan" (as defined in Sections 3(37) and 4001(a)(3) of ERISA).
Except as may be required by law, ▇▇▇▇▇▇▇▇▇ Oil does not maintain or contribute
to any plan or arrangement which provides or has any liability to provide life
insurance, medical or other employee welfare benefits to any employee or former
employee upon his retirement or termination of employment, and ▇▇▇▇▇▇▇▇▇ has
never represented, promised or contracted (whether in oral or written form) to
any employee or former employee that such benefits would be provided.
d. Except as disclosed in the ▇▇▇▇▇▇▇▇▇ Disclosure Letter,
▇▇▇▇▇▇▇▇▇ Oil is not currently nor has it ever been a party to any employee
pension or welfare plan to which ERISA applies or to which ▇▇▇▇▇▇▇▇▇ Oil was
required to make contributions for the benefit of its employees.
e. Neither ▇▇▇▇▇▇▇▇▇ Oil nor any of its Affiliates is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding
17
with a labor union or labor union organization. There is no unfair labor
practice or labor arbitration proceeding pending or threatened against
▇▇▇▇▇▇▇▇▇ Oil or any of its Affiliates relating to their business which,
if determined adversely to ▇▇▇▇▇▇▇▇▇ Oil or the Affiliate would have a
Material adverse effect. There are no organizational efforts with respect to
the formation of a collective bargaining unit presently being made or
threatened involving employees of ▇▇▇▇▇▇▇▇▇ Oil or any of its Affiliates.
3.17 Investigation. ▇▇▇▇▇▇▇▇▇ and its agents, counsel and
accountants have had reasonable access to representatives of ▇▇▇▇▇ to make such
investigations as they desired with respect to the business, operations and
affairs of ▇▇▇▇▇ in connection with the transactions contemplated hereby. In
determining whether to consummate the transactions contemplated hereby,
▇▇▇▇▇▇▇▇▇ is relying solely on the terms, covenants, representations,
warranties and indemnities herein and on their own investigations into and
analysis of the business, operations and condition (financial or otherwise) of
▇▇▇▇▇ and have not relied on ▇▇▇▇▇, or its officers or directors, with respect
to the interpretation of data relating to the valuation of ▇▇▇▇▇▇▇▇▇, the
income tax ramifications of this purchase and sale, and/or the ability of ▇▇▇▇▇
to operate the Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇
Except as set forth in the Disclosure Letter from ▇▇▇▇▇ delivered
to ▇▇▇▇▇▇▇▇▇ at or prior to the execution hereof, which shall refer to the
relevant Sections of this Agreement (the "▇▇▇▇▇ Disclosure Letter"), ▇▇▇▇▇
hereby represents and warrants to and covenants with ▇▇▇▇▇▇▇▇▇ as follows:
4.1 Corporate Organization. ▇▇▇▇▇ is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as it is now being conducted, and to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby.
4.2 Due Authorization, Execution and Delivery; Effect of
Agreement. The execution, delivery and performance by ▇▇▇▇▇ of this Agreement
and the consummation by ▇▇▇▇▇ of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of ▇▇▇▇▇. This
Agreement has been duly and validly executed and delivered by ▇▇▇▇▇ and
constitutes the legal, valid and binding obligation of ▇▇▇▇▇, enforceable
against it in accordance with its terms, except to the extent that such
enforceability (a) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally; and
(b) is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
execution, delivery and performance by ▇▇▇▇▇ of this Agreement and the
consummation by ▇▇▇▇▇ of the transactions contemplated hereby (i) do not
require the consent, approval, clearance, waiver, order or
18
authorization of any Person, except as otherwise disclosed in the ▇▇▇▇▇
Disclosure Letter; (ii) do not violate any provision of the Certificate of
Incorporation or Bylaws of ▇▇▇▇▇; (iii) do not conflict with or violate any
permit, concession, grant, franchise, statute, law, rule or regulation of any
Governmental Entity or any order, judgment, award or decree of any court or
other Governmental Entity to which ▇▇▇▇▇ is subject; and (iv) do not conflict
with, or result in any breach of, or default or loss of any right under (or
an event or circumstance that, with notice or the lapse of time, or both, would
result in a default), or the creation of an Encumbrance pursuant to, or cause
or permit the acceleration prior to maturity of any amounts owing under, any
indenture, mortgage, deed of trust, lease, or other agreement to which ▇▇▇▇▇
is a party, in each case, which failure, violation, conflict or breach would,
in the aggregate, materially hinder or impair the consummation of the
transactions contemplated by this Agreement. The issuance of the Warrants in
accordance with this Agreement has been duly authorized by all necessary
corporate action on the part of ▇▇▇▇▇.
4.3 Consents. Except as otherwise disclosed in the ▇▇▇▇▇
Disclosure Letter, no consent, approval or authorization of, or exemption by,
or filing with, any Governmental Entity or any Person is required in
connection with the execution, delivery or performance by ▇▇▇▇▇ of this
Agreement or the taking of any other action contemplated hereby.
4.4 Litigation. There is no legal, judicial, administrative or
governmental arbitration or other action or proceeding or governmental
investigation pending against ▇▇▇▇▇, or threatened against ▇▇▇▇▇, which seeks
to enjoin or obtain damages in respect of the consummation of the transactions
contemplated hereby.
4.5 Brokerage. No investment banker, broker, finder or other
Person is entitled to any brokerage or finder's fee or similar commission in
respect of this Agreement or the transactions contemplated hereby based in any
way on agreements, arrangements or understandings made by or on behalf of
▇▇▇▇▇. ▇▇▇▇▇ agrees to indemnify and hold ▇▇▇▇▇▇▇▇▇ Oil and the Partners
harmless from and against any and all claims, liabilities or obligations with
respect to all fees, commissions or expenses asserted by any Person on the
basis of any act, statement, agreement or commitment alleged to have been made
by ▇▇▇▇▇ with respect to any such fee, commission or expense.
4.6 Approvals. No approval of the stockholders of ▇▇▇▇▇ is
necessary or required under Delaware General Corporation Law, as currently in
effect, or ▇▇▇▇▇'▇ Certificate of Incorporation or Bylaws for the consummation
of the transactions contemplated by this Agreement.
19
ARTICLE V
COVENANTS OF ▇▇▇▇▇▇▇▇▇
From and after the date of this Agreement until the Closing, except
as expressly authorized by this Agreement or expressly consented to in writing
by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ covenants and agrees with ▇▇▇▇▇ as follows:
5.1 Access to ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇ shall afford to ▇▇▇▇▇ and to
the employees, agents, lenders, investors and authorized representatives of
▇▇▇▇▇ and to their respective counsel and accountants such reasonable access to
the Assets, officers, offices, equipment, files, agreements, documents, and
books and records of ▇▇▇▇▇▇▇▇▇ (including, without limitation, engineering data
and information, computer programs, tapes and other records), and the
opportunity to make notes, abstracts and copies therefrom, as may be requested
by ▇▇▇▇▇ in order that ▇▇▇▇▇ may have full opportunity to make such reasonable
investigations as it shall desire with respect to the business, operations,
Assets and affairs of ▇▇▇▇▇▇▇▇▇ in connection with the transactions
contemplated hereby and ▇▇▇▇▇▇▇▇▇ shall furnish ▇▇▇▇▇ with such additional
financial and operating data and other information as to the business,
operations and Assets of ▇▇▇▇▇▇▇▇▇ as ▇▇▇▇▇ shall, from time to time,
reasonably request for such purpose. ▇▇▇▇▇ hereby releases ▇▇▇▇▇▇▇▇▇ from all
liability arising out of the entry by ▇▇▇▇▇ or its employees, agents, lenders,
investors or authorized representatives onto the business premises of ▇▇▇▇▇▇▇▇▇
for purposes of conducting the investigation contemplated by this Section 5.1.
▇▇▇▇▇ hereby agrees to indemnify, defend and hold harmless ▇▇▇▇▇▇▇▇▇ against
all liability, demands, claims, costs, losses, damages, recoveries, settlements
and expenses incurred by ▇▇▇▇▇▇▇▇▇ arising from or related to the conduct by
▇▇▇▇▇ or its employees, agents, lenders, investors or authorized
representatives of the investigation.
5.2 Governmental Approvals; Consents.
▇. ▇▇▇▇▇▇▇▇▇ shall use its best efforts, and shall cooperate
with ▇▇▇▇▇, to obtain all permits, approvals and consents, and to make all
filings, necessary or required to be obtained or made, and to begin and cause
all waiting periods required to lapse, for ▇▇▇▇▇ to have full use and
enjoyment of the Assets subsequent to the purchase and sale and for the
consummation by ▇▇▇▇▇▇▇▇▇ of the transactions contemplated by this Agreement
under any applicable federal law or the applicable laws of any state having
jurisdiction over the transactions contemplated hereby (all such permits,
approvals, filings and consents and the lapse of all such waiting periods being
referred to as the "Requisite Regulatory Approvals").
▇. ▇▇▇▇▇▇▇▇▇ shall use its best efforts to obtain all
consents, approvals, clearances, waivers, orders or authorizations of any
Person necessary to be obtained by ▇▇▇▇▇▇▇▇▇ for ▇▇▇▇▇ to have full use and
enjoyment of the Assets subsequent to the purchase and sale and for the
consummation of the transactions by ▇▇▇▇▇▇▇▇▇ contemplated by this Agreement.
5.3 Litigation and Claims. ▇▇▇▇▇▇▇▇▇ shall promptly inform ▇▇▇▇▇
in writing of any litigation, or of any claim or controversy or contingent
liability of which ▇▇▇▇▇▇▇▇▇
20
becomes aware that might reasonably be expected to become the subject of
litigation, against ▇▇▇▇▇▇▇▇▇ Oil or affecting any of the Assets.
5.4 Notice of Changes. ▇▇▇▇▇▇▇▇▇ shall promptly inform ▇▇▇▇▇ in
writing if ▇▇▇▇▇▇▇▇▇ becomes aware of any change that shall have occurred or
that shall have been threatened (or any development that shall have occurred
or that shall have been threatened involving a prospective change) in the
financial condition, results of operations, business of the Assets or of
▇▇▇▇▇▇▇▇▇ Oil that is or with the exercise of reasonable business judgment
would be expected to have an adverse effect on the Assets. ▇▇▇▇▇▇▇▇▇ shall
promptly inform ▇▇▇▇▇ in writing if any representation or warranty made by
▇▇▇▇▇▇▇▇▇ in this Agreement shall cease to be accurate or upon the occurrence
of any breach of any covenant or other agreement required by this Agreement to
be performed or complied with by ▇▇▇▇▇▇▇▇▇.
5.5 Conduct of Business Operations. ▇▇▇▇▇▇▇▇▇ shall not, without
the prior written consent of ▇▇▇▇▇:
a. Materially increase the annual level of compensation of
any employee, nor increase at all the annual level of compensation of any
employee whose compensation from ▇▇▇▇▇▇▇▇▇ Oil during the last preceding fiscal
year exceeded Fifty Thousand Dollars ($50,000), and shall not grant any unusual
or extraordinary bonuses, benefits or other forms of direct or indirect
compensation to any employee, officer, partner or consultant except in keeping
with past practices by formulas or otherwise. Nothing in this paragraph 5.5a
shall prohibit the payment by ▇▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ payments, accrued and
unpaid vacation pay, or payments in lieu of compensatory time-off to its
employees;
b. From the Effective Date to the Closing, fail to use its
best efforts to prevent the daily production averaged over any calendar week
during the period from declining below one thousand three hundred (1,300)
barrels per day.
c. Other than in the ordinary course of business, sell,
lease or otherwise dispose of any Assets or any interests therein, or enter
into, or consent to the entering into of, any agreement granting to any third
Person a right to purchase, lease or otherwise acquire any Assets or interests
therein, except as otherwise provided for in this Agreement;
d. Enter into any agreement or incur any obligation, the
terms of which would be violated by the consummation of the transactions
contemplated by this Agreement;
e. Organize, invest in or acquire an equity interest in any
corporation, partnership, joint venture, association or other entity or
organization;
f. Create, incur, assume, guarantee or otherwise become
liable or obligated with respect to any indebtedness for monies borrowed or make
any loan or advance to any Person (other than trade receivables in the ordinary
course of business);
21
g. (i) Enter into any new line of business with respect to
the Assets; (ii) change its investment, liability management and other material
policies in any respect; (iii) incur or commit to any capital expenditures or
financing; (iv) acquire or agree to acquire by merging or consolidating with,
or acquire or agree to acquire by purchasing all or substantially all of the
assets of, or in any manner, any Person; (v) otherwise acquire or agree to
acquire any assets for a total consideration in the aggregate in excess of Ten
Thousand Dollars ($10,000); or (vi) waive any right under or cancel any
contract, debt or claim listed in any exhibits hereto or the ▇▇▇▇▇▇▇▇▇
Disclosure Letter, which waiver or cancellation would have an adverse effect on
the Assets;
h. Enter into any contract, commitment or arrangement (or
amend, modify, supplement or otherwise alter the terms of any existing
contract, agreement or instrument attached to the ▇▇▇▇▇▇▇▇▇ Disclosure Letter)
with any Person;
i. Maintain its books of account other than in the usual,
regular and ordinary manner in accordance with good business practices or make
any change in any of its accounting methods or practices; or
j. Take any action that would or might reasonably be
expected to result in any of the conditions to Closing set forth in Article VII
hereof not being satisfied.
5.6 Maintain Assets and Operations. During the period from the
date hereof through the Closing, ▇▇▇▇▇▇▇▇▇ shall (a) carry on its business in
the usual, regular and ordinary course in a good and diligent manner consistent
with sound business practices and in compliance with all applicable laws, rules
and regulations; (b) not introduce any new method of management or operation;
(c) use its best efforts to preserve its business organization, maintain its
rights and franchises, keep available the services of its officers and
employees and preserve the goodwill and its relationships with customers,
suppliers and others having business dealings with it; (d) preserve in full
force and effect all leases, operating agreements, easements, rights of way,
permits, licenses, contracts and other agreements which relate to the Assets
(other than those expiring by their terms); (e) use its best efforts to perform
or cause to be performed all of its obligations in or under any of such leases,
agreements and contracts; (f) use its best efforts to safeguard and maintain
secure all reports and other confidential data in the possession of ▇▇▇▇▇▇▇▇▇
relating to the Assets; and (g) use its best efforts to operate its business
and activities in the same manner as they have been carried out and to maintain
the same level of expenditure as have previously been incurred in connection
with such business and activities.
5.7 Exclusive Dealing. ▇▇▇▇▇▇▇▇▇ shall not directly or
indirectly, through any representative or otherwise, solicit or entertain
offers from, negotiate with or in any manner encourage, discuss, accept or
consider any proposal of any Person relating to the acquisition of the assets
or business, in whole or in part, of ▇▇▇▇▇▇▇▇▇, whether through direct
purchase, consolidation or other business combination (other than sales of
inventory or in the ordinary course of business) so long as this Agreement has
not been terminated. ▇▇▇▇▇▇▇▇▇ recognizes that ▇▇▇▇▇ has and continues to
incur substantial time and expense in evaluating this transaction. ▇▇▇▇▇▇▇▇▇
acknowledges that ▇▇▇▇▇, in reliance on this Section 5.7, will continue to
incur
21A
additional time, effort and expense. ▇▇▇▇▇▇▇▇▇ has agreed to this provision
due to the unique terms specified in the AIP and contemplated in this
transaction.
5.8 Termination Fee. In the event that ▇▇▇▇▇▇▇▇▇ breaches Section
5.7 hereof and within twelve (12) months after such breach or termination,
▇▇▇▇▇▇▇▇▇ closes a transaction with an unrelated third party relating to the
acquisition of a Material portion of the Assets or the business of ▇▇▇▇▇▇▇▇▇
Oil, in whole or part, whether through direct purchase, merger, consolidation
or other business combination (other than sales of inventory or immaterial
portions of ▇▇▇▇▇▇▇▇▇'▇ Assets in the ordinary course), then, immediately upon
such closing, ▇▇▇▇▇▇▇▇▇ shall pay to ▇▇▇▇▇ the sum of Two Million Three Hundred
Eighty Thousand Dollars ($2,380,000). Such payment shall constitute liquidated
damages and, in the absence of fraud or bad faith, shall be in lieu of any
other penalty or remedy ▇▇▇▇▇ might otherwise seek, the parties having
determined that the actual damages resulting from the events for which such
22
liquidated damages are to be awarded would be extremely difficult and uncertain
to calculate and that liquidated damages above represent a good faith estimate
of such actual damages.
___________ __________
▇▇▇▇▇▇▇▇▇ Oil initials ▇▇▇▇▇ initials
___________ ___________ ___________ __________
___________ ___________ ___________ __________
___________ ___________ ___________ __________
___________ ___________ ___________ __________
Partners' initials
5.9 Taxes. ▇▇▇▇▇▇▇▇▇ shall pay any documentary transfer tax due
on the purchase and sale of the Assets.
5.10 Approval of Transaction. ▇▇▇▇▇▇▇▇▇ shall take all actions
necessary to approve this Agreement.
ARTICLE VI
COVENANTS OF ▇▇▇▇▇
▇▇▇▇▇ hereby covenants and agrees with ▇▇▇▇▇▇▇▇▇ as follows:
6.1 Cooperation. Subject to the terms and conditions of this
Agreement, ▇▇▇▇▇ shall cooperate with ▇▇▇▇▇▇▇▇▇ to use its best efforts to
secure all necessary consents, approvals, authorizations, exemptions and
waivers from all Persons and Governmental Entities as shall be required to be
obtained by ▇▇▇▇▇ in order to enable ▇▇▇▇▇ to consummate the transactions
contemplated hereby.
6.2 Governmental Approvals. ▇▇▇▇▇ shall use its best efforts, and
shall cooperate with ▇▇▇▇▇▇▇▇▇, to obtain all Requisite Regulatory Approvals.
6.3 Disclosure Responsibilities. ▇▇▇▇▇, as a reporting company
under Section 12 of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and listed company under the New York Stock Exchange (the "NYSE"), is
required to comply with certain disclosure requirements regarding its business
activities, including, but not limited to, the issuance of press releases and
the preparation and filing of periodic reports with the Securities and Exchange
Commission. In order to comply with the disclosure requirements of the
Exchange Act and NYSE, as well as the timing of such disclosures, all
statements to the public, including press releases, shall be at the sole
discretion of ▇▇▇▇▇.
23
6.4 Authorization of Warrant. ▇▇▇▇▇ shall take all actions to
qualify the issuance of the Warrant to ▇▇▇▇▇▇▇▇▇ Oil in compliance with all
applicable state securities laws or to comply with any available exemptions
from such qualification requirements. However, ▇▇▇▇▇ shall not be obligated to
register the Warrant, or the shares of Class A Common Stock underlying the
Warrant, under the Securities Act of 1933.
6.5 Cooperation in Exchange. ▇▇▇▇▇ will cooperate with ▇▇▇▇▇▇▇▇▇
in the completion of one or more tax-deferred exchange transactions and shall
execute such documents as are reasonably required for that purpose, provided
that ▇▇▇▇▇ shall not be required to take title to any other property, shall not
be put at any extra cost or expense, shall not be subject to any additional
liability, and the date for the Closing shall not be extended by virtue of any
requested cooperation.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇
The obligations of ▇▇▇▇▇ to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver
by ▇▇▇▇▇) on or prior to the Closing of all of the following conditions:
7.1 Accuracy of Representations and Warranties. The
representations and warranties of ▇▇▇▇▇▇▇▇▇ set forth in this Agreement shall
be true and correct in all respects as of the date when made and at and as of
the Closing.
7.2 Performance of Covenants and Agreements. ▇▇▇▇▇▇▇▇▇ shall have
duly performed and complied in all respects with the covenants, agreements and
conditions required by this Agreement to be performed or complied with by them
prior to or at the Closing. None of the events or conditions entitling ▇▇▇▇▇
to terminate this Agreement under Article IX hereof shall have occurred and be
continuing.
7.3 Consents. Any consent required for the consummation of this
purchase and sale under any agreement, contract, license or other instrument
described in any exhibit hereto or referred to herein, or for the continued
enjoyment by ▇▇▇▇▇ of any benefits of such agreement, contract, license or
other instrument after the Closing, which consent ▇▇▇▇▇▇▇▇▇ is specifically
obligated to obtain pursuant to this Agreement, shall have been obtained and be
effective.
7.4 Governmental Approvals. All Requisite Regulatory Approvals
shall have been obtained, made or lapsed and shall be in full force and effect.
7.5 Approval of Counsel. The form and substance of all legal
matters contemplated hereby and all papers delivered hereunder shall be
reasonably acceptable to Nordman, Cormany, Hair & ▇▇▇▇▇▇▇, counsel to ▇▇▇▇▇.
24
7.6 Partners' Certificate. ▇▇▇▇▇ shall have received a
certificate of ▇▇▇▇▇▇▇▇▇ Oil, substantially in the form of Exhibit 13 attached
hereto and made a part hereof, satisfactory in form and substance to ▇▇▇▇▇,
executed on behalf of ▇▇▇▇▇▇▇▇▇ Oil by its Managing General Partners, as to
compliance with the matters set forth in Sections 7.1, 7.2, 7.3 and 7.4 of this
Agreement. By signing this Agreement, each of the Partners hereby authorizes
the Managing General Partners of ▇▇▇▇▇▇▇▇▇ Oil to execute such Certificate.
7.7 Opinion of Counsel. ▇▇▇▇▇ shall have received the opinion of
▇▇▇▇▇ ▇▇▇▇▇, counsel to ▇▇▇▇▇▇▇▇▇, in form and content satisfactory to ▇▇▇▇▇,
substantially in the form of Exhibit 14 attached hereto and made a part hereof.
7.8 Closing of TEC and TOC Purchase Agreements. The Closing shall
not occur unless the Closings contemplated by the TEC Purchase Agreement and
the TOC Purchase Agreement have occurred or will occur concurrently with the
Closing.
7.9 Condition of Real Property. ▇▇▇▇▇ shall have approved title
to and the condition of the Real Property as follows:
a. A current CLTA Preliminary Title Report prepared by First
American Title Company covering the Real Property, accompanied by legible
copies of all documents referred to as exceptions in the report to the extent
reasonably available through ▇▇▇▇▇▇▇▇▇'▇ best efforts [and a map plotting all
easements] (the "PTR"), has been delivered to ▇▇▇▇▇.
b. If ▇▇▇▇▇ elects to obtain an ALTA Policy, a survey of the
Real Property shall have been prepared, at ▇▇▇▇▇'▇ expense, by a licensed
surveyor or registered civil engineer, in sufficient detail to provide for the
policy of title insurance to be purchased by ▇▇▇▇▇, certified to ▇▇▇▇▇ in a
form satisfactory to ▇▇▇▇▇, without boundary, encroachment or survey exceptions
and which shows the location of all easements and improvements. It shall be
▇▇▇▇▇'▇ sole responsibility to obtain such survey by the Title Approval Date
defined below. ▇▇▇▇▇'▇ failure to do so will be deemed ▇▇▇▇▇'▇ waiver of this
condition. If ▇▇▇▇▇ does not elect to obtain an ALTA Policy, then ▇▇▇▇▇▇▇▇▇
shall provide ▇▇▇▇▇ with a CLTA Policy at ▇▇▇▇▇▇▇▇▇'▇ expense.
c. Title shall be free of Encumbrances not approved by
▇▇▇▇▇. On or before November 8, 1996 (the "Title Approval Date"), ▇▇▇▇▇ shall
advise ▇▇▇▇▇▇▇▇▇ in writing of what exceptions to coverage, if any, are
unacceptable to ▇▇▇▇▇ (the "Title Disapproval Notice"). Notwithstanding any
other provision of this Section 7.9, ▇▇▇▇▇ hereby objects to all monetary
Encumbrances, which monetary Encumbrances (if any) ▇▇▇▇▇▇▇▇▇ shall cause to be
eliminated at the Closing except for non-delinquent real property taxes and
assessments, which shall be one of the exceptions to coverage. ▇▇▇▇▇▇▇▇▇ shall
have ten (10) business days after receipt of a Title Disapproval Notice to give
▇▇▇▇▇ notice either: (i) that ▇▇▇▇▇▇▇▇▇ will remove, on or before the Closing,
any disapproved exceptions to coverage and provide ▇▇▇▇▇ with evidence
satisfactory to ▇▇▇▇▇ of such removal; or (ii) that ▇▇▇▇▇▇▇▇▇ elects not to
cause such exceptions to coverage to be removed, in which case ▇▇▇▇▇ shall have
five (5)
25
business days thereafter to notify ▇▇▇▇▇▇▇▇▇ in writing of ▇▇▇▇▇'▇ election
(a) to waive any objectionable exceptions and to proceed with the purchase of
and to take the Real Property subject to such exceptions, but otherwise
pursuant to the terms of this Agreement, or (b) to terminate this Agreement.
If ▇▇▇▇▇ shall fail to give ▇▇▇▇▇▇▇▇▇ notice of such election within said five
(5) business days, ▇▇▇▇▇ shall be deemed to have elected to waive its objection
to the coverage and to proceed with this purchase. In the event that during
escrow any amended or supplemented PTR is issued disclosing new exceptions to
coverage, ▇▇▇▇▇ shall again have the right to give a Title Disapproval Notice
as to such new exception, in which case all the foregoing rights of the parties
following the giving of such a notice shall again apply as stated above.
▇. ▇▇▇▇▇ shall not have given written notice of disapproval
of matters related to the Real Property. ▇▇▇▇▇'▇ failure to give written
notice of disapproval on or before November 8, 1996 (the "Property Approval
Date") of all aspects and matters related to the Real Property, including size,
shape, configuration, access, easements (express, implied and by prescription),
geologic/subsidence and soil conditions, hydrologic conditions, water supply
quantity and quality, buildings, tanks, pipelines, oil and gas ▇▇▇▇▇, oils and
gas surface equipment, and the condition of all other fixed equipment shall be
deemed approval of matters relating to the Real Property. To facilitate
▇▇▇▇▇'▇ review, ▇▇▇▇▇▇▇▇▇ shall deliver to ▇▇▇▇▇ within fifteen (15) business
days after the date of this Agreement, (i) any environmental reports prepared
by or for ▇▇▇▇▇▇▇▇▇ covering all or any portion of the Real Property, without
representation or warranty as to their accuracy or validity; (ii) copies of any
service contracts now in effect, all of which are cancelable at any time, or by
the giving of not more than thirty (30) days' notice; and (iii) any well logs
and reports of water usage made to the Regional Water Quality Control Board,
the Division of Oil, Gas and Geothermal Resources and other agencies, as
applicable.
▇. ▇▇▇▇▇ shall be satisfied that there are no Hazardous
Materials, as that term is defined by all or any applicable laws, on the Real
Property or in the groundwater thereunder and ▇▇▇▇▇'▇ acceptance and approval
of an Environmental Audit and Assessment ("Phase I Report") as to the Real
Property performed at ▇▇▇▇▇'▇ direction and sole cost and expense. ▇▇▇▇▇'▇
failure to give notice of disapproval of the Phase I Report obtained by ▇▇▇▇▇,
if any, on or before the Property Approval Date shall be deemed as ▇▇▇▇▇'▇
approval thereof and acceptance of the Real Property in its present condition.
In the event such Phase I Report or any Phase II Report involving soil and/or
groundwater tests, approved in advance by ▇▇▇▇▇▇▇▇▇, discloses that the Real
Property or groundwater thereunder is contaminated with Hazardous Materials in
quantities requiring remediation or removal under existing law, ▇▇▇▇▇ shall
have the right to terminate this Agreement. Except as provided in the
succeeding sentence, ▇▇▇▇▇ agrees that the Phase I Report and any other report,
tests, and information and conclusions stated therein shall be kept
confidential and that any reporting requirements to any governmental agency or
any other third party arising therefrom shall be the sole responsibility of
▇▇▇▇▇▇▇▇▇. Notwithstanding the foregoing, in the event that any then
applicable law, statute or ordinance requires ▇▇▇▇▇ to report or disclose the
Report or Report findings to a governmental agency, then and only then shall
▇▇▇▇▇ disclose the Report findings. In no event shall ▇▇▇▇▇ be entitled
26
to conduct any soil borings or groundwater tests without ▇▇▇▇▇▇▇▇▇'▇ prior
written approval, which may be conditioned or denied in ▇▇▇▇▇▇▇▇▇'▇ sole
discretion.
▇. ▇▇▇▇▇ shall have received an affidavit, certification or
notice required by Section 1445 of the Code and the Regulations pursuant
thereto. In addition, ▇▇▇▇▇▇▇▇▇ shall have provided ▇▇▇▇▇ with the
certification required to show that withholding is not required pursuant to
California Revenue and Taxation Code Section 18662(e). In the event any of the
Partners does not qualify for the exemption from withholding under Section
1445(e) of the Code or Section 18662(e) of the California Revenue and Taxation
Code, ▇▇▇▇▇ will comply with the withholding requirement of such sections.
7.10 Termination of Operating Agreement. That certain Operating
Agreement and First Amendment to Operating Agreement, dated January 1, 1992,
entered into by and between ▇▇▇▇▇▇▇▇▇ Oil and the Partners shall be cancelled,
in writing, by the parties thereto at the Closing.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇▇▇▇
The obligations of ▇▇▇▇▇▇▇▇▇ to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver
by ▇▇▇▇▇▇▇▇▇) on or prior to the Closing of all of the following conditions:
8.1 Accuracy of Representations and Warranties. The
representations and warranties of ▇▇▇▇▇ set forth in this Agreement shall be
true and correct in all material respects as of the date when made and at and
as of the Closing.
8.2 Performance of Covenants and Agreements. ▇▇▇▇▇ shall have
duly performed and complied in all respects with the covenants, agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing. None of the events or conditions entitling
▇▇▇▇▇▇▇▇▇ to terminate this Agreement under Article IX hereof shall have
occurred and be continuing.
8.3 Resolutions. ▇▇▇▇▇▇▇▇▇ shall have received certified copies
of resolutions of the Board of Directors of ▇▇▇▇▇ approving this Agreement and
the transactions contemplated hereby.
8.4 Approval of Counsel. The form and substance of all legal
matters contemplated hereby and all papers delivered hereunder shall be
reasonably acceptable to ▇▇▇▇▇ ▇▇▇▇▇, counsel to ▇▇▇▇▇▇▇▇▇.
8.5 Governmental Approvals. All Requisite Regulatory Approvals
shall have been obtained, made or lapsed and shall be in full force and effect.
27
8.6 Officers' Certificate. ▇▇▇▇▇▇▇▇▇ shall have received a
certificate of ▇▇▇▇▇, substantially in the form of Exhibit 15 attached hereto
and made a part hereof, satisfactory in form and substance to ▇▇▇▇▇▇▇▇▇,
executed on behalf of ▇▇▇▇▇ by the President and Secretary of ▇▇▇▇▇, as to
compliance with the matters set forth in Sections 8.1, 8.2, 8.3 and 8.5 of this
Agreement.
8.7 Opinion of Counsel. ▇▇▇▇▇▇▇▇▇ shall have received the opinion
of Nordman, Cormany, Hair & ▇▇▇▇▇▇▇, counsel to ▇▇▇▇▇, in form and content
reasonably satisfactory to ▇▇▇▇▇▇▇▇▇, substantially in the form of Exhibit 16
attached hereto and made a part hereof.
8.8 Closing of TEC and TOC Purchase Agreements. The Closing shall
not occur unless the Closings contemplated by the TEC Purchase Agreement and
the TOC Purchase Agreement have occurred or will occur concurrently with the
Closing.
ARTICLE IX
TERMINATION PRIOR TO CLOSING
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
a. By the mutual written consent of ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇;
b. Subject to the right of either party to extend the
Closing as provided in Section 2.7 hereof, upon written notice by either party
to the other party if Closing has not occurred forty-five (45) days after the
execution of this Agreement;
c. By ▇▇▇▇▇ in writing if ▇▇▇▇▇▇▇▇▇ Oil or the Partners
shall be in Default;
d. By ▇▇▇▇▇▇▇▇▇ in writing if ▇▇▇▇▇ shall be in Default;
e. By ▇▇▇▇▇ if, after the date of this Agreement, there
shall have occurred a Material adverse change (or any development or condition
involving a prospective Material adverse change) in the business, financial
condition or results of operations of ▇▇▇▇▇▇▇▇▇ Oil; or
f. By ▇▇▇▇▇▇▇▇▇ if, after the date of this Agreement, there
shall have occurred a Material adverse change (or any development or condition
involving a prospective Material adverse change) in the business, financial
condition or results of operations of ▇▇▇▇▇.
9.2 Effect on Obligations. Termination of this Agreement pursuant
to this Article shall terminate all obligations of the parties hereunder,
except for the obligation under
28
Sections 3.13 and 4.5; provided, however, that termination pursuant to
paragraphs 9.1c or d hereof shall not relieve any defaulting party from any
liability to the other parties hereto.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification by ▇▇▇▇▇. ▇▇▇▇▇ agrees to indemnify, defend
and hold ▇▇▇▇▇▇▇▇▇, and agents of ▇▇▇▇▇▇▇▇▇, harmless from and against any and
all loss, liability, damage, costs and expenses (including interest, penalties,
settlements, fines, costs and expenses incurred in connection with
investigating and defending any claims or causes of action, and reasonable
attorneys' fees) that ▇▇▇▇▇▇▇▇▇ and its agents may incur or become subject to
arising out of or due to any inaccuracy of any representation or the breach of
any warranty, covenant, undertaking or other agreement of ▇▇▇▇▇ contained in
this Agreement.
10.2 Indemnification by ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇, jointly and
severally, agrees to indemnify, defend and hold ▇▇▇▇▇, and the officers,
directors, employees and agents of ▇▇▇▇▇ (collectively, the officers,
directors, employees and agents being referred to in each case as its "Related
Parties") harmless from and against any and all loss, liability, damage, costs
and expenses (including interest, penalties, settlements, fines, costs and
expenses incurred in connection with investigating and defending any claims or
causes of action, and reasonable attorneys' fees) that ▇▇▇▇▇ and its Related
Parties may incur or become subject to arising out of or due to any inaccuracy
of any representation or the breach of any warranty, covenant, undertaking or
other agreement of ▇▇▇▇▇▇▇▇▇ contained in this Agreement. ▇▇▇▇▇▇▇▇▇, jointly
and severally also agrees to indemnify, defend and hold ▇▇▇▇▇ and its Related
Parties harmless from and against any and all loss, liability, damage, costs
and expenses (including interest, penalties, settlements, fines, costs and
expenses incurred in connection with investigating and defending any claims or
causes of action, and reasonable attorneys fees) that ▇▇▇▇▇ and its Related
Parties may incur or become subject to arising out of the ▇▇▇▇▇ Litigation or
attributable to any environmental conditions caused directly or indirectly by
the acts of or failure to act by ▇▇▇▇▇ Chemical and/or its officers, employees
or agents.
10.3 Survival. The several warranties, representations, covenants
and agreements of the parties contained in this Agreement and in any other
instrument delivered pursuant hereto shall survive the Closing and shall remain
in full force and effect thereafter.
10.4 Notice and Opportunity to Defend.
a. If a party seeking indemnification (the "Indemnitee")
becomes aware of any matters that it believes may give rise to an indemnifiable
claim, or asserts any claim that it believes may be indemnifiable pursuant to
this Agreement, the Indemnitee shall give the party obligated to provide
indemnification (the "Indemnifying Party") prompt written notice of such matter
or claim, stating with particularity the nature of such matter or the
aforementioned claim and the amount thereof. Failure to provide such notice
shall not affect the
29
right of the Indemnitee to indemnification except to the extent such failure
shall have resulted in liability to the Indemnifying Party that could have been
actually avoided had such notice been provided within such required time
period.
b. If the matter that the Indemnitee believes gives rise to
an indemnifiable claim does not involve a third party claim against an
ndemnitee, the Indemnifying Party shall have thirty (30) days from the date on
which it received notice of such claim pursuant to this Section to respond to
such notice. If such Indemnifying Party accepts responsibility or does not
respond within such thirty (30)-day period, the Indemnifying Party shall
promptly pay to the Indemnitee the full amount of such claim. If the
Indemnifying Party rejects any liability with respect to such claim, it shall
give written notice of such objection to the Indemnitee within such thirty
(30)-day period and the parties shall seek to resolve such claim by agreement.
If the parties are unable to resolve such claim by agreement within sixty (60)
days following the expiration of such thirty (30)-day period mentioned above,
the parties shall be entitled to pursue, without prejudice to any of their
rights hereunder, such remedies as may be available to the parties under
applicable law.
c. In the event any action, suit, proceeding or investigation
is brought against the Indemnitee by a third party which the Indemnitee
believes may give rise to an indemnifiable claim, the Indemnitee shall
give the Indemnifying Party prompt written notice of the commencement of such
action, suit, proceeding or investigation as provided in paragraph a. of this
Section. Such Indemnifying Party shall have a period of thirty (30) days after
receipt of such notice within which to respond to such notice. If such
Indemnifying Party does not respond within such thirty (30)-day period or
rejects responsibility for such matter in whole or in part, the Indemnitee
shall be free to pursue, without prejudice to any of its rights hereunder, such
remedies as may be available to such party under applicable law. If such
Indemnifying Party accepts responsibility, such Indemnifying Party shall, as
between the Indemnitee and the Indemnifying Party, be obligated to compromise
or defend such matter, at its own expense. The Indemnitee shall employ counsel
of its choice and the Indemnifying Party shall reimburse Indemnitee for
attorneys' fees and costs. The Indemnifying Party shall cooperate fully with
the Indemnitee and its counsel in the defense against any such asserted
liability. Any compromise of such asserted liability by the Indemnitee shall
require the prior written consent of the Indemnifying Party, which shall not be
unreasonably withheld. If, however, the Indemnitee refuses its consent to a
bona fide offer of settlement that involves solely the payment of cash that the
Indemnifying Party wishes to accept, the Indemnitee may continue to pursue such
matter, free of any participation by the Indemnifying Party, at the sole
expense of the Indemnitee. In such event, the obligation of the Indemnifying
Party to the Indemnitee shall be equal to the lesser of (i) the amount of the
offer of settlement that the Indemnitee refused to accept plus the costs and
expenses of the Indemnitee prior to the date the Indemnifying Party notified
the Indemnitee of the offer of settlement; and (ii) the actual out-of-pocket
amount the Indemnitee is obligated to pay as a result of such party's
continuing to pursue such matter. An Indemnifying Party shall be entitled to
recover from the Indemnitee any additional expenses incurred by such
Indemnifying Party as a result of the decision of the Indemnitee to pursue
such matter.
30
10.5 General. The indemnification provided in this Agreement shall
apply regardless of whether the matter subject to indemnification involved an
action taken or omitted that was negligent, grossly negligent or reckless by
the Person to be so indemnified. It is understood that such indemnification is
intended to be a means of compensating the parties for any damage or liability
directly or indirectly realized by them for matters subject to such
indemnification. To the extent the indemnification provided for herein may not
be provided to any Person under law, such indemnification shall be required to
be provided to any other Person for whom such indemnification may be
permissible as herein provided.
ARTICLE XI
MISCELLANEOUS
11.1 Entire Agreement. This Agreement and related documents
executed concurrently herewith constitute the sole understanding of the parties
hereto with respect to the matters provided for herein and supersedes the AIP
and any previous agreements and understandings between the parties with
respect to the subject matter hereof. No amendment, modification or alteration
of the terms or provisions of this Agreement shall be binding unless the same
shall be in writing and duly executed by ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇.
11.2 Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ and their respective
successors and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties hereto.
11.3 Expenses. Except as provided in Sections 10.1 and 10.2
hereof, each party hereto shall be responsible for the payment of the fees and
expenses of their respective counsel, accountants and other experts.
11.4 Taking of Necessary Action. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees, subject to
applicable laws, to use all reasonable best efforts promptly to take or cause
to be taken all action and to promptly do or cause to be done all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Without limiting the foregoing and subject to the terms and conditions of this
Agreement, the parties shall use their reasonable best efforts to obtain and
make all consents, approvals, assurances and filings of or with third parties
and Governmental Entities necessary or advisable for the consummation of the
transactions contemplated by this Agreement. Each party shall cooperate with
the other in good faith to help the other satisfy its obligations hereunder.
11.5 Invalidity. Except for satisfaction of the conditions of
Article VII or VIII, and the provisions of Article X, if any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so long as the
31
economic and legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
11.6 Attorneys' Fees. In the event of any claim, dispute or
controversy arising out of or relating to this Agreement, including an action
for declaratory relief, the prevailing party in such action or proceeding shall
be entitled to recover its taxable costs or arbitration fees, and reasonable
out-of-pocket expenses, including but not limited to, telephone calls,
photocopies, expert witnesses, travel, computer expenses related to litigation,
and attorneys' fees to be fixed by the court or the arbitrator. Such recovery
shall include court costs, out-of-pocket expenses and attorneys' fees on
appeal, if any. The court shall determine who is the "prevailing party,"
whether or not the dispute or controversy proceeds to final judgment.
11.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
11.8 Headings. The headings of the articles, sections and
paragraphs of this Agreement and of the exhibits hereto are included for
convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof or thereof.
11.9 Construction and References. Words used in this Agreement,
regardless of the number or gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context shall require. Unless
otherwise specified, all references in this Agreement to articles, sections,
paragraphs or clauses are deemed references to the corresponding articles,
sections, paragraphs or clauses in this Agreement, and all references in this
Agreement to exhibits are references to the corresponding exhibits attached to
this Agreement.
11.10 Modification and Waiver. Any of the terms or conditions
of this Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof. No waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provisions hereof (whether or not similar).
32
11.11 Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party shall be
in writing and delivered personally, via telecopy (with receipt confirmed) or
by registered or certified mail, postage prepaid:
(a) if to ▇▇▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇▇▇▇ Oil Company
c/▇ ▇▇▇▇▇ Resource Development Company
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Managing General Partner
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇. ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No. (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to ▇▇▇▇▇, to:
▇▇▇▇▇ Petroleum Company
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No. (▇▇▇) ▇▇▇-▇▇▇▇
33
with copies to:
Nordman, Cormany, Hair & Compton
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
1000 Town Center Drive, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No. (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address for a party as shall be specified by like notice. Any
notice that is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party (or its agents for notices hereunder). Any notice that
is addressed and mailed in the manner herein provided shall be conclusively
presumed to have been duly given to the party to which it is addressed at the
close of business, local time of the recipient, on the third day after the day
it is so placed in the mail. Any notice that is sent by telecopy shall be
deemed to have been duly given to the party to which it is addressed upon
telephonic confirmation of the same as provided herein. A copy of any notices
delivered by telecopy shall promptly be mailed in the manner herein provided to
the party to which such notice was given.
11.12 Public Announcements. Without the prior express consent
of ▇▇▇▇▇, neither ▇▇▇▇▇▇▇▇▇ Oil nor any Partner shall make any public
statements, including, without limitation, any press releases, with respect to
this Agreement and the transactions contemplated hereby.
11.13 Governing Law; Interpretation. This Agreement shall be
construed in accordance with and governed by the laws of the State of California
(regardless of the laws that might otherwise govern under applicable California
principles of conflict of laws) as to all matters, including, but not limited
to, matters of validity, construction, effect, performance and remedies.
11.14 Jurisdiction. Any legal action or proceeding with
respect to this Agreement may be brought in the federal or state courts for the
County of ▇▇▇▇, in the State of California, and by execution and delivery of
this Agreement, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ hereby accept the jurisdiction of the
aforesaid courts.
34
IN WITNESS WHEREOF, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ have caused this Agreement
to be executed as of the date first above written.
▇▇▇▇▇ PETROLEUM COMPANY, ▇▇▇▇▇▇▇▇▇ OIL COMPANY, a
a Delaware corporation California general partnership
By: _____________________________ By: ▇▇▇▇▇ RESOURCE DEVELOPMENT
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President COMPANY, a California corporation
and Chief Executive Officer Managing General Partner
By: _____________________________ By: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President
and Secretary
▇▇▇▇▇ RESOURCE DEVELOPMENT By: HHB, INC., a California corporation
COMPANY, a California corporation Managing General Partner
By: ____________________________ By: ___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
and Secretary and Secretary
By: PASO ENERGY, INC., a California
corporation
Managing General Partner
By: _____________________________
___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as Trustee of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,President
Trust "B" Under Will of ▇▇▇▇▇▇ ▇. and Secretary
▇▇▇▇▇, Sr., Deceased
________________________________ ___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V
________________________________ ___________________________________
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
35
________________________________ ___________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
VERNIER RESOURCES CORPORATION, GENERAL WESTERN, INC.
a Texas corporation a New Mexico corporation
By: ___________________________ By: ______________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
and Secretary
By: ___________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary
________________________________ __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________ ________________________________
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of the
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust,
dated April 9, 1996 dated June 22, 1982
________________________________ _________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust,
dated June 22, 1982
Spousal Consents
The undersigned, spouses of the Partners named in this Agreement,
hereby consent to the terms and conditions of this Agreement and agree that
their community property, if any, included in the Assets, as defined herein,
is subject to this Agreement.
_________________________________ _________________________________
_________________________________ _________________________________
_________________________________ _________________________________
1
EXHIBIT 1 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN ▇▇▇▇▇ PETROLEUM COMPANY
AND ▇▇▇▇▇▇▇▇▇ OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
IN RELIANCE UPON EXEMPTIONS CONTAINED IN SECTION 4(2) OF THE SECURITIES ACT AND
REGULATION D PROMULGATED PURSUANT THERETO, NOR HAVE THE SECURITIES BEEN
QUALIFIED IN ANY STATE IN RELIANCE UPON EXEMPTIONS FROM QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY, THE SECURITIES RECEIVED HEREBY
MAY NOT BE RESOLD OR TRANSFERRED BY A SHAREHOLDER UNLESS THEY ARE SUBSEQUENTLY
REGISTERED UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS OR UNLESS
EXEMPTIONS FROM REGISTRATION AND QUALIFICATION ARE AVAILABLE.
WARRANT CERTIFICATE
For Purchase of Shares of Class A Common Stock
of
▇▇▇▇▇ PETROLEUM COMPANY
November 14, 1996
THIS CERTIFIES THAT, for value received, ▇▇▇▇▇▇▇▇▇ OIL COMPANY, a
California general partnership ("Warrant Holder"), is entitled, subject to the
terms and conditions hereinafter set forth, to purchase from ▇▇▇▇▇ PETROLEUM
COMPANY, a Delaware corporation (the "Company"), one hundred thousand (100,000)
fully paid and nonassessable shares (which number is hereinafter sometimes
referred to as the "Initial Exercise Number") of Class A Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), upon presentation
and surrender of this Warrant Certificate, together with a completed and
executed Election to Purchase in the form attached hereto, at any time during
the Exercise Period (as hereinafter defined), at the principal office of the
Company and upon payment therefore to the Company of the purchase price by wire
transfer, cash or certified check, in lawful money of the United States of
America. The Initial Exercise Number shall be subject to adjustment as
hereinafter set forth.
This Warrant ("Warrant") is issued to the Warrant Holder in partial
consideration for the transactions set forth in the Purchase and Sale Agreement
(the "Agreement"), dated as of
2
November 14, 1996, by and between the Company, the Warrant Holder and the
individual partners of the Warrant Holder.
In certain contingencies provided for below, the number of shares of
Common Stock subject to purchase hereunder or the purchase price thereof are
subject to adjustment, but the shares of Common Stock of the Company subject to
purchase hereunder are the shares of such stock of the Company as they may
exist on the date of the exercise of this Warrant, whether or not the rights or
interests represented by such shares are equivalent to the rights or interests
represented by the shares of Common Stock of the Company authorized as of the
date hereof.
This Warrant is subject to the following terms and conditions:
1. Exercise of Warrant. The purchase rights represented by this
Warrant are exercisable at the option of the holder hereof, in whole at any
time, or in part from time to time (but not as to a fractional share of Common
Stock) during the Exercise Period (as defined below). In the case of the
purchase of less than all the shares purchasable under this Warrant, the
Company shall cancel this Warrant upon the surrender hereof and shall execute
and deliver a new Warrant of like tenor for the balance of the shares
purchasable hereunder. The term "Exercise Period" shall mean and refer to the
period commencing on the date hereof and ending on November 8, 2003.
2. Price. The purchase price for each share of Common Stock
purchasable pursuant to the exercise of this Warrant (the "Exercise Price")
shall be equal to the Market Value (as defined below), plus two dollars ($2.00)
per share in funds of the United States of America (or shall be such other
amount per share if and as adjusted as provided in Section 3 below). The term
"Market Value" shall mean the average closing price per share of Class A Common
Stock traded on the New York Stock Exchange for the twenty (20) trading days
prior to the trading day before the closing of the transactions contemplated by
the Agreement (the "Closing"). For example, assuming the respective closing
prices of the Class A Common Stock for the twenty (20) trading days prior to
Closing are as follows:
10/15 $11-1/2 10/3 $11
10/14 $11-1/2 10/2 $11-1/2
10/11 $11-3/4 10/1 $11-3/4
10/10 $11-3/4 9/30 $12
10/9 $11-1/2 9/27 $12
10/8 $11 9/26 $11-3/4
10/7 $11-1/4 9/25 $11-1/2
10/6 $11 9/24 $11-1/2
10/5 $11-3/4 9/23 $11-1/4
10/4 $11-1/2 9/22 $11-1/4
the aggregate total of the closing prices is 230 and the average closing price
per share is equal to 11.5 (i.e., 230 / 20).
3
3. Adjustments to Exercise Price and Number of Shares.
3.1 The Exercise Price and number of shares of Common Stock
purchasable pursuant to the exercise of this Warrant shall be subject to
adjustment from time to time as follows:
a. Adjustment for Combinations or Consolidations of Common
Stock. In the event the Company, at any time after the date hereof (hereinafter
referred to as the "Original Issue Date"), effects a subdivision or combination
of its outstanding Common Stock into a greater or lesser number of shares, then
and in each such event, the Exercise Price and the number of shares of Common
Stock purchasable pursuant to the exercise of this Warrant shall be decreased or
increased, respectively, proportionately.
b. Adjustment for Certain Dividends and Distributions. In
the event the Company at any time after the Original Issue Date shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the maximum number of
shares (as set forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment to such number) of
Common Stock issuable in payment of such dividend or distribution shall be
deemed to be issued and outstanding as of the time of such issuance or, in the
event such a record date shall have been fixed, as of the close of business on
such record date. In each such event, the Exercise Price shall be decreased as
of the time of such issuance or, in the event such a record date shall have been
fixed, as of the close of business on such record date, by multiplying the
Exercise Price by a fraction,
(1) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding or deemed to be issued and outstanding
immediately prior to the time of such issuance or the close of business on
such record date; and
(2) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding or deemed to be issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed and such
dividend not fully paid or if such distribution is not fully made on the date
fixed therefor, the Exercise Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Exercise Price shall
be adjusted pursuant to paragraph 3.1(b) as of the time of actual payment of
such dividends or distribution.
c. Adjustments for Reclassifications and for Other Dividends
and Distributions. In the event the Company at any time after the Original
Issue Date shall effect a reclassification of its Common Stock (other than one
resulting in the issuance of additional shares of Common Stock) or shall make
or issue, or fix a record date for the determination of
4
holders of Common Stock entitled to receive, a dividend or other distribution
to its stockholders payable in securities of the Company other than shares of
Common Stock, then and in each such event provision shall be made so that the
holder of this Warrant shall receive, upon exercise thereof, the securities of
the Company which such holder would have received had this Warrant been
exercised and the Common Stock issuable on exercise been received on the date
of such event.
3.2 Upon any adjustment of the Exercise Price and of the number of
shares of Common Stock and, if applicable, other securities and property
issuable upon exercise of this Warrant, pursuant to this Section 3, the
Company, within twenty (20) days thereafter, shall cause to be prepared a
certificate of the Chief Financial Officer of the Company setting forth the
Exercise Price after such adjustment and setting forth in reasonable detail the
method of calculation used.
3.3 In case:
a. The Company shall authorize the issuance to all holders
of Common Stock of rights or warrants to subscribe for or purchase capital
stock of the Company or of any other subscription rights or warrants; or
b. the Company shall authorize the distribution to all
holders of Common Stock of evidences of its indebtedness or assets (other than
cash dividends or cash distributions payable out of consolidated earnings or
earned surplus or dividends payable in Common Stock); or
c. of any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is required,
or of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any capital reorganization or any
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination); or
d. of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
e. the Company proposes to take any other action which would
require an adjustment of the Exercise Price or number or kind of shares
issuable upon exercise of this Warrant, pursuant to this Section 3;
then the Company shall cause to be given to the registered holder of the
outstanding Warrant at its address in the records of the Company at least
thirty (30) calendar days (or fifteen (15) calendar days in any case specified
in paragraph a or b above) prior to the applicable record date hereinafter
specified, by first-class mail, postage prepaid, written notice stating (i) the
date as of which the holders of record of shares of Common Stock to be entitled
to receive any rights, warrants or distribution are to be determined or
(ii) the date on which any consolidation, merger,
5
conveyance, transfer, reorganization, reclassification, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange the shares for securities or other property, if any,
deliverable upon the consolidation, merger, conveyance, transfer,
reorganization, reclassification, dissolution, liquidation or winding up.
3.4 Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon exercise of the Warrant, the Warrant
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrant initially
issued.
4. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common
Stock, but will make a payment in cash based on the Exercise Price in effect at
that time.
5. Covenants of the Company. The Company covenants and agrees that
all shares which may be issued upon the exercise of this Warrant shall, upon
issuance, be duly authorized, validly issued, fully paid and non-assessable and
free from all preemptive rights of any stockholder and all taxes, liens and
charges with respect to the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue). The Company further
covenants and agrees that during the Exercise Period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized, and reserved, a sufficient number of shares of its Common
Stock to provide for the exercise of the rights represented by this Warrant.
6. Restrictions on Transferability of Securities; Compliance with
Securities Act.
6.1 Restrictions on Transferability. This Warrant and shares of
Common Stock issuable upon exercise of this Warrant are restricted shares and
shall not be transferable, except upon the conditions specified in this Section
6, which conditions are intended to insure compliance with the provisions of
the Securities Act of 1933, as amended (the "Securities Act"). The holder of
this Warrant shall cause any proposed transferee of this Warrant, or the shares
of Common Stock issuable upon exercise of this Warrant held by that holder, to
agree to take and hold those securities subject to the provisions and upon the
conditions specified in this Section 6.
6.2 Certain Definitions. As used in this Section 6, the term
"Restricted Securities" means (i) the Warrants, (ii) the shares of Common Stock
issuable or issued upon exercise of the Warrants, and (iii) any shares of
Common Stock of the Company issued as a dividend or other distribution with
respect to, or in exchange or in replacement of the Warrants or such shares of
Common Stock.
6.3 Restrictive Legend. Each certificate representing (i) the
Warrants, (ii) shares of the Company's Common Stock issued upon exercise of the
Warrants, or (iii) any other securities issued in respect of the Warrants or
the Common Stock issued upon exercise of the
6
Warrants upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with a
legend in the following form (in addition to any legend required under
applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), NOR HAVE THE SECURITIES
BEEN QUALIFIED UNDER ANY STATE SECURITIES LAWS. ACCORDINGLY, THE
SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS SUCH
SECURITIES ARE SUBSEQUENTLY REGISTERED UNDER FEDERAL AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS EXEMPTIONS FROM REGISTRATION AND
QUALIFICATION ARE AVAILABLE.
Upon request of a holder of such a certificate, the Company
shall remove the foregoing legend from the certificate or issue to such holder
a new certificate therefor free of any transfer legend, if, with such request,
the Company shall have received the opinion referred to in Section 6.4 to the
effect that any transfer by such holder of the securities evidenced by such
certificate will not violate the Securities Act and applicable state securities
laws.
6.4 Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in
all respects with the provisions of this Section 6.4. Prior to any proposed
transfer of any Restricted Securities, the holder thereof shall give written
notice to the Company of such holder's intention to effect such transfer. Each
such notice shall describe the manner and circumstances of the proposed
transfer in sufficient detail, and shall be accompanied (except in transactions
in compliance with Rule 144) by a written opinion of legal counsel who shall be
reasonably satisfactory to the Company, addressed to the Company and reasonably
satisfactory in form and substance to the Company's counsel, to the effect that
the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, whereupon the holder of such Restricted
Securities shall be entitled to transfer such Restricted Securities in
accordance with the terms of the notice delivered by the holder to the Company.
Each certificate evidencing the Restricted Securities transferred as above
provided shall bear the appropriate restrictive legend set forth in Section 6.3
above, except that such certificate shall not bear such restrictive legend if
the opinion of counsel letter referred to above is to the further effect that
such legend is not required in order to establish compliance with any provision
of the Securities Act.
6.5 Reports Under Securities Exchange Act of 1934. With a view to
making available to the holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the Commission that may at
any time permit a Holder to sell securities of the Company to the public
without registration, the Company agrees to use its best efforts to:
a. make and keep public information available (as provided
in Rule 144) at all times;
7
b. file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); and
c. furnish to any Holder so long as such Holder owns any of
the Restricted Securities upon request a written statement by the Company that
it has complied with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as may be reasonably requested in availing any holder of any
rule or regulation of the Commission permitting the selling of any such
Restricted Securities without registration.
7. Exchange and Replacement of Warrant. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and, in case of loss, theft or destruction, of an
indemnity agreement or bond reasonably satisfactory to it, and reimbursement to
the Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of this Warrant, if mutilated, the Company will make and
deliver a new Warrant of like tenor, in lieu of this Warrant.
8. Rights Prior to Exercise of Warrant. Prior to the exercise of this
Warrant, the holder of this Warrant shall not be entitled to any rights of a
stockholder of the Company, including without limitation the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
as to those shares of Common Stock subject to this Warrant, and shall not be
entitled to receive any notice of any proceedings of the Company except as
provided herein.
9. Notices. Any and all notices, demands, requests or other
communications required or permitted by this Warrant or by law to be served on,
given to or delivered to any party hereto by any other party to this Warrant
shall be in writing and shall be deemed duly served, given or delivered upon
delivery by facsimile transmission (confirmed by any of the methods that
follow), by courier service (with proof of service), by hand delivery, or by
certified or registered mail (return receipt requested and first-class postage
prepaid) and addressed as follows:
If to the Warrant Holder: with copies to:
▇▇▇▇▇▇▇▇▇ Oil Company ▇▇▇▇▇ ▇▇▇▇▇, Esq.
c/▇ ▇▇▇▇▇ Resource Development Co. ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇. ▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Managing General Partner
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇ Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Confirmation No. (▇▇▇)▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No. (▇▇▇) ▇▇▇-▇▇▇▇
8
If to the Company: with copies to:
▇▇▇▇▇ Petroleum Company Nordman, Cormany, Hair & ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Post Office Bin X ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Post Office Box 9100
Attn: President ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No. (▇▇▇) ▇▇▇-▇▇▇▇ Confirmation No. (▇▇▇)▇▇▇-▇▇▇▇
Any notice which is addressed and mailed in the manner herein provided shall be
conclusively presumed to have been duly given to the party to which it is
addressed at the close of business, local time of the recipient, on the third
day after the day it is so placed in the mail. Either party may change their
address for the purposes of this Warrant, by giving notice of the change, in
the manner required by this Section, to the other party.
10. Successors. This Warrant shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors, personal
representatives, successors and assigns and shall be binding upon any person,
firm, corporation or other entity to whom this Warrant and any shares of Common
Stock issuable upon exercise hereof are transferred (even if in violation of
the provisions of this Warrant) and the heirs, executors, personal
representatives, successors and assigns of such person, firm, corporation or
other entity.
11. Governing Law. This Warrant shall be construed in accordance with
and be governed by the laws of the State of Delaware, without regard to its
conflict of laws principles.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and delivered by its duly authorized officers.
▇▇▇▇▇ PETROLEUM COMPANY,
a Delaware corporation
By: _______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
and Chief Executive Officer
By: _______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
9
ELECTION TO PURCHASE
To: ▇▇▇▇▇ PETROLEUM COMPANY
The undersigned owner of the accompanying Warrant hereby irrevocably
exercises the option to purchase ___________ shares of Class A Common Stock in
accordance with the terms of such Warrant, directs that the shares issuable and
deliverable upon such purchase (together with any check for a fractional
interest) be issued in the name of and delivered to the undersigned, and makes
payment in full therefor at the Exercise Price provided in such Warrant.
COMPLETE FOR REGISTRATION OF SHARES OF COMMON STOCK ON THE STOCK TRANSFER
RECORDS MAINTAINED BY ▇▇▇▇▇ PETROLEUM COMPANY:
_______________________________________________________________________
Name of Warrant Holder
_______________________________________________________________________
Address
_______________________________________________________________________
_______________________________________________________________________
Social Security or Other Identifying Number
Signature: __________________________________
Date: _______________________________________
1
EXHIBIT 2 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN ▇▇▇▇▇ PETROLEUM COMPANY
AND ▇▇▇▇▇▇▇▇▇ OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
NORDMAN, CORMANY, HAIR & COMPTON
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
1000 Town Center Drive, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
MAIL TAX STATEMENTS TO:
▇▇▇▇▇ PETROLEUM COMPANY
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Order No. KER 1125444 A.P.N. 220-181-17-00-4
Escrow No. 1125444N 220-181-18-00-7
220-191-03-00-6
220-181-24-00-4
220-181-09-00-1
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as to an undivided 1.082875125% interest; GENERAL WESTERN,
INC., a New Mexico corporation, as to an undivided 4.331500500% interest;
VERNIER RESOURCES CORPORATION, a Texas corporation, as to an undivided
5.414375625% interest; ▇▇▇▇ ▇. ▇▇▇▇▇▇, as to an undivided 9.376932675%
interest; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as trustee of Trust "B" under the will of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., deceased, as to an undivided 15.776797915% interest;
▇▇▇▇▇ RESOURCE DEVELOPMENT COMPANY, a California corporation, as to an
undivided 13.120240000% interest; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as to an undivided
13.120240000% interest; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ AND ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, trustees of
the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust, dated June 22, 1982, as to an undivided
2.885940000% interest; ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, as trustee of the ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
Family Trust, dated April 9, 1996, as to an undivided 3.60958375% interest;
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as to an undivided 3.60958375% interest; ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, as to an undivided 7.219167500% interest; ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as to
an undivided 7.219167500% interest; ▇▇▇▇ ▇. ▇▇▇▇▇, as to an undivided
4.63551930500% interest; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V, as to an undivided 4.635519305%
interest; and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as to an undivided 3.96255705% interest, each
hereby GRANTS to ▇▇▇▇▇
2
PETROLEUM COMPANY, a Delaware corporation, the following described real
property in the County of ▇▇▇▇, State of California:
Parcel 1:
That certain portion of the East half of the Northeast quarter of
Section 33, Township 12 North, Range 24 West, S.B.B.M., described as
Parcel 1 of Parcel Map 8297 in the unincorporated area of the County
of ▇▇▇▇, State of California, as per Map recorded January 20, 1989
in Book 37, pages 134 and 135 of Parcel Maps, in the Office of the
County Recorder of said County.
EXCEPTING therefrom any vein or lode of quartz or other rock in
place bearing gold, silver, cinnabar, lead, tin, copper or other
valuable deposits within the land above described which may have
been discovered or known to exist on or prior to November 11, 1902.
EXCEPTING AND RESERVING therefrom a royalty of four percent (4%) of
all oil, gas and other hydrocarbon substances produced from zones
lying below 4,500 feet below the surface of the above described
parcel.
Parcel 2:
The East half of the Northeast quarter of Section 33, Township 12
North, Range 24 West, S.B.B.M., in the unincorporated area of the
County of ▇▇▇▇, State of California, as per the official plat
thereof on file in the Office of the Surveyor General.
EXCEPTING therefrom any vein or lode of quartz or other rock in
place bearing gold, silver, cinnabar, lead, tin, copper or other
valuable deposits within the land above described which may have
been discovered or known to exist on or prior to November 11, 1902.
EXCEPTING therefrom a portion of said land now known as Parcel 1 of
Parcel Map no. 8297 recorded January 20, 1989 in Book 37, page 134
and 135 of Parcel Maps.
EXCEPTING AND RESERVING therefrom a royalty of four percent (4%)
of all oil, gas and other hydrocarbon substances produced from zones
lying below 4,500 feet below the surface of the above described
parcel.
3
Parcel 3:
The Northwest quarter of the Northwest quarter of Section 34,
Township 12 North, Range 24 West, S.B.B.M., in the unincorporated
area of the County of ▇▇▇▇, State of California, as per the official
plat thereof on file in the Office of the Surveyor General.
EXCEPTING therefrom any vein or lode of quartz or other rock in
place bearing gold, silver, cinnabar, lead, tin, copper or other
valuable deposits within the land above described which may have
been discovered or known to exist on or prior to May 13, 1901.
EXCEPTING AND RESERVING therefrom a royalty of four percent (4%) of
all oil, gas and other hydrocarbon substances produced from zones
lying below 4,500 feet below the surface of the above described
parcel.
Dated: October 1, 1996
GENERAL WESTERN, INC., ___________________________________
a New Mexico corporation ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _____________________________ ___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇ ▇. ▇▇▇▇▇▇
and Secretary
____________________________________
▇▇▇▇▇ RESOURCE DEVELOPMENT ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as Trustee of
COMPANY, a California corporation Trust B under Will of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Deceased
By: ______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President
and Secretary ___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ RESOURCES CORPORATION,
a Texas corporation
___________________________________
By: __________________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust,
dated June 22, 1982
By: ______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary
4
___________________________________ ________________________________
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of the
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust,
dated April 9, 1996 dated June 22, 1982
__________________________________ ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
__________________________________ ________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
______________________________________ ________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V
5
STATE OF CALIFORNIA )
)
COUNTY OF ________)
On {DATE ___________________}, before me, {NOTARY NAME },
Notary Public, personally appeared { }, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person{s}
whose name{s} {is/are} subscribed to the within instrument and acknowledged to
me that {he/she/they} executed the same in {his/her/their} authorized
capacit{y/ies}, and that by {his/her/their} signature{s} on the instrument the
person{s}, or the entity upon behalf of which the person{s} acted, executed the
instrument.
WITNESS my hand and official seal.
__________________________________
STATE OF CALIFORNIA )
)
COUNTY OF ________)
On {DATE ___________________}, before me, {NOTARY NAME },
Notary Public, personally appeared { }, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person{s}
whose name{s} {is/are} subscribed to the within instrument and acknowledged to
me that {he/she/they} executed the same in {his/her/their} authorized
capacit{y/ies}, and that by {his/her/their} signature{s} on the instrument the
person{s}, or the entity upon behalf of which the person{s} acted, executed the
instrument.
WITNESS my hand and official seal.
__________________________________
[Acknowledgements to be continued]
6
▇▇▇▇▇▇▇▇▇ Oil Company
STATEMENT OF TAX DUE UNDER PROVISIONS OF THE
DOCUMENTARY STAMP ACT
and
REQUEST THAT STAMPS NOT BE MADE A PART OF THE PERMANENT RECORD
TO: County Recorder
THE TAX DUE PURSUANT TO THE PROVISIONS OF THE DOCUMENTARY STAMP ACT ON THE
DEED, TRANSFER, OR CONVEYANCE FROM: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇; General Western, Inc.,
a New Mexico corporation; Vernier Resources Corporation, a Texas corporation;
▇▇▇▇ ▇. ▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as Trustee of Trust "B" under the Will of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Deceased; ▇▇▇▇▇ Resource Development Company, a California
corporation; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Trustees of the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust, dated June 22, 1982; ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust, dated April 9,
1996; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇ ▇.
▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V; and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
[Name of Grantor(s) or Lessor(s)]
TO: ▇▇▇▇▇ Petroleum Company
[Name of Grantee(s) or Lessee(s)]
OF THE FOLLOWING BRIEFLY DESCRIBED REAL PROPERTY: T12N, R24W, Section 33
APNs 220-181-17-00-4; 220-181-18-00-7; 220-191-03-00-6;
220-181-24-00-4; 220-181-09-00-1
Amounts to: $________________ Amounts to: $___________________
(X) Unincorporated Area ( ) City of ___________________
(X) Computed on full value ( ) Computed on full value
( ) Computed on full value LESS liens ( ) Computed on full value LESS
and encumbrances remaining liens and encumbrances
remaining
Documentary Transfer Tax $____________
Computed on full value of property
conveyed
▇▇▇▇▇▇▇▇▇ Oil Company
By: ____________________________
Affix transfer Tax Stamp Here Stamp Reserved for Recorder's Coding Stamp
Date: ______________________ By:_________________________________
Title:______________________________
AFTER THE PERMANENT RECORD IS MADE, THIS DOCUMENT WILL BE ATTACHED TO THE
CONVEYING DOCUMENT AND RETURNED TO THE PARTY ENTITLED THERETO. A COPY WILL BE
MADE AND PLACED ON FILE FOR AUDITING PURPOSES.
1
EXHIBIT 3 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN ▇▇▇▇▇ PETROLEUM COMPANY AND ▇▇▇▇▇▇▇▇▇ OIL COMPANY,
A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
▇▇▇▇ OF SALE
FOR VALUABLE CONSIDERATION, ▇▇▇▇▇▇▇▇▇ OIL COMPANY, a California general
partnership ("▇▇▇▇▇▇▇▇▇ Oil"), and ▇▇▇▇▇ Resource Development Company, a
California corporation; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as Trustee of Trust "B" Under the
Will of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Deceased; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V;
▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇ ▇. ▇▇▇▇▇▇; ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; ▇▇▇▇▇▇▇ Resources
Corporation, a Texas corporation; ▇▇▇▇▇ ▇. ▇▇▇▇▇▇; General Western, Inc., a New
Mexico corporation; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustees of the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust, dated June 22, 1982; ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family
Trust, dated April 9, 1996; and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, all acting as partners of
▇▇▇▇▇▇▇▇▇ Oil and individually, jointly and severally ("Partners"), with
▇▇▇▇▇▇▇▇▇ Oil and the Partners collectively referred to herein as "Seller,"
hereby grants, bargains, transfers and sells to ▇▇▇▇▇ PETROLEUM COMPANY, a
Delaware corporation ("Buyer"), the personal property listed on Schedule A,
attached hereto and incorporated herein by this reference as though set forth
in full (the "Personal Property").
Seller represents and warrants to Buyer that it is the lawful owner of and
holds good and marketable title to the Personal Property, free and clear of
restrictions on or conditions to transfer or assignment, and free and clear of
all liens, pledges, charges or encumbrances of any nature whatsoever. Seller
and Seller's successors and assigns shall warrant and defend Seller's good and
marketable title to the Personal Property and Seller's right to sell the same
against the lawful claims and demands of all persons whomsoever.
Buyer acknowledges and agrees that it will purchase the Personal Property
AS IS and WHERE IS. Seller makes no representations or warranties regarding
the suitability of the Personal Property for any particular use.
DATED this 1st day of October, 1996.
▇▇▇▇▇ PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
and Chief Executive Officer
By: _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
"Buyer"
2
▇▇▇▇▇▇▇▇▇ OIL COMPANY, a California GENERAL WESTERN, INC.,
general partnership a New Mexico corporation
By: ▇▇▇▇▇ Resource Development Company By: _______________________________
a California corporation ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Managing General Partner and Secretary
By: __________________________ VERNIER RESOURCES CORPORATION,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. a Texas Corporation
President and Secretary
By: HHB, Inc., a California By: ________________________________
corporation ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Managing General Partner
By: ________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary
By: __________________________ _________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and Secretary
By: Paso Energy, Inc., a California _________________________________
corporation ▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing General Partner
___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as Trustee of Trust
By: __________________________ B under Will of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President Deceased
and Secretary
____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________________________ _______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust, dated ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust,
June 22, 1982 dated June 22, 1982
______________________________________ ____________________________________
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust,
dated April 9, 1996 ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________________ ____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
3
______________________________________ ____________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V
"Seller"
4
SCHEDULE A
TO EXHIBIT 3
▇▇▇▇ OF SALE ATTACHED TO AND MADE A PART OF THAT CERTAIN
PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 8, 1996,
BY AND BETWEEN ▇▇▇▇▇ PETROLEUM COMPANY AND
▇▇▇▇▇▇▇▇▇ OIL COMPANY, ET AL.
1
EXHIBIT 4 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN ▇▇▇▇▇ PETROLEUM COMPANY
AND ▇▇▇▇▇▇▇▇▇ OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
NORDMAN, CORMANY, HAIR & COMPTON
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
1000 Town Center Drive, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
MAIL TAX STATEMENTS TO:
▇▇▇▇▇ Petroleum Company
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A.P.N. 220-181-17-00-4
220-181-18-00-7
220-191-03-00-6
220-181-24-00-4
220-181-09-00-1
ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND CONTRACTS
THIS ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND CONTRACTS
("Assignment"), dated and effective as of 12:01 a.m. Pacific Standard Time, on
October 1, 1996 (the "Effective Date"), is from ▇▇▇▇▇▇▇▇▇ OIL COMPANY, a
California general partnership, and those individuals and entities listed on
Schedule A hereto (collectively, "Assignor"), whose address is ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to ▇▇▇▇▇
PETROLEUM COMPANY, a Delaware corporation ("Assignee"), whose address is ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1. Assignment. For the sum of Ten Dollars ($10) and other good and
valuable consideration, the receipt and sufficiency of which Assignor hereby
acknowledges, Assignor hereby transfers, grants, bargains, conveys and assigns
to Assignee, effective for all purposes as of the Effective Date, subject to
the terms and conditions set forth in that certain Purchase and Sale Agreement
dated November 8, 1996, by and between ▇▇▇▇▇ Petroleum Company and ▇▇▇▇▇▇▇▇▇
Oil Company, et al. ("Purchase and Sale Agreement"), and subject to all
contracts,
2
agreements, encumbrances and other matters to which the following assets are
subject as of the Effective Date, all of Assignor's right, title and interest
in and to the interests and rights described in Schedule B to this Assignment
(hereinafter collectively called and referred to as the "Assets") and all other
rights, privileges, obligations, benefits and powers conferred upon the owner
or holder of the Assets.
2. Assumptions. Assignee hereby assumes and agrees to pay, perform and
discharge its obligations under the Assets, and the agreements, associated
contracts and other burdens pertaining thereto, which accrue and relate to, or
are based upon or arise out of, events occurring after the Effective Date, all
in accordance with the terms of the Purchase and Sale Agreement.
3. Further Assurances. The parties agree to take all such further
actions and execute, acknowledge and deliver all such further documents that
are necessary or useful in carrying out the purposes of this Assignment. So
long as authorized by applicable law so to do, Assignor hereby agrees to
execute, acknowledge and deliver to Assignee all such other additional
instruments, notices, division orders, transfer orders and other documents and
to do all such other and further acts and things as may be necessary to more
fully and effectively grant, convey, transfer and assign to Assignee the Assets
conveyed hereby or intended so to be.
4. Schedules. Reference is made to Schedules A and B attached hereto
and made a part hereof for all purposes. Reference in such Schedules to
instruments on file or recorded in the public records are made for all
purposes.
5. Headings. Headings are included in this Assignment for convenience
of reference and shall in no way define, limit, extend, or describe the scope
or intent of any provision of this Assignment.
6. Successors and Assigns. This Assignment shall bind and inure to the
benefit of Assignor and Assignee and their respective successors and assigns.
7. Multiple Counterparts. This Assignment may be executed in any number
of counterparts and each counterpart hereof shall be deemed to be an original
instrument but all of such counterparts shall constitute but one assignment.
8. Recordation. To facilitate recording or filing of this Assignment,
each counterpart filed with a federal or state agency or office may contain
only those portions of Schedules A and B that describe property under the
jurisdiction of that agency or office. Assignor and Assignee have each
retained a counterpart of this Assignment with complete Schedules A and B.
Another counterpart of this Assignment with complete Schedules A and B shall be
recorded in the official real property records of ▇▇▇▇ County, California.
9. Governing Law. The provisions of this Assignment shall be governed
by and construed in accordance with the laws of the State of California,
excluding any conflicts of law, rule or principle that might refer same to the
laws of another jurisdiction.
3
▇▇▇▇▇▇▇▇▇ OIL COMPANY, a California GENERAL WESTERN, INC.,
general partnership a New Mexico corporation
By: ▇▇▇▇▇ Resource Development By: _______________________________
Company, a California corporation ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Managing General Partner and Secretary
By: __________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
President and Secretary VERNIER RESOURCES CORPORATION,
a Texas Corporation
By: HHB, Inc., a California
corporation By: _______________________________
Managing General Partner ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By: __________________________ By: _______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary
and Secretary
By: Paso Energy, Inc., a California ___________________________________
corporation ▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing General Partner
__________________________________
By: __________________________ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
and Secretary ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as Trustee of Trust B
_______________________________ under Will of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Deceased
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_____________________________________ ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Trustee of the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust, dated ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust,
June 22, 1982 dated June 22, 1982
______________________________________ ________________________________
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, as Trustee of the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Family Trust,
dated April 9, 1996 ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________________ ________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
4
______________________________________ ________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V
"Assignor"
▇▇▇▇▇ PETROLEUM COMPANY,
a Delaware corporation
By: ________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
By: ________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
"Assignee"
1
SCHEDULE A
TO EXHIBIT 4
ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND OTHER
CONTRACTS ATTACHED TO AND MADE A PART OF
THAT CERTAIN PURCHASE AND SALE AGREEMENT
DATED NOVEMBER 8, 1996,
BY AND BETWEEN ▇▇▇▇▇ PETROLEUM COMPANY AND
▇▇▇▇▇▇▇▇▇ OIL COMPANY, ET AL.
(UNRECORDED DOCUMENTS)
ASSIGNORS
1. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
2. ▇▇▇▇ ▇. ▇▇▇▇▇▇
3. VERNIER RESOURCES CORPORATION, a Texas corporation
4. GENERAL WESTERN, INC., a New Mexico corporation
5. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ FAMILY TRUST
6. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
7. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
8. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
9. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ FAMILY TRUST
10. TRUST B UNDER WILL OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., DECEASED
11. ▇▇▇▇▇ RESOURCE DEVELOPMENT COMPANY, a California corporation
12. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
13. ▇▇▇▇ ▇. ▇▇▇▇▇
14. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
15. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ V
1
SCHEDULE B TO
EXHIBIT 4
ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND OTHER
CONTRACTS ATTACHED TO AND MADE A PART OF
THAT CERTAIN PURCHASE AND SALE AGREEMENT
DATED NOVEMBER 8, 1996,
BY AND BETWEEN ▇▇▇▇▇ PETROLEUM COMPANY AND
▇▇▇▇▇▇▇▇▇ OIL COMPANY, ET AL.
(UNRECORDED DOCUMENTS)
1. Paved Road Maintenance Letter from Texaco to San ▇▇▇▇▇▇▇ Valley Air
Pollution Control District dated 9-23-92.
2. Oil Sales Agreement between Texaco Trading & Transportation (purchase no.
16P85) and ▇▇▇▇▇▇▇▇▇ Oil Company dated 6-13-88.
3. Oil Sales Agreement between ▇▇▇▇ (lease no. 20390) and ▇▇▇▇▇▇▇▇▇ Oil
Company dated 11-9-90 and Amended 2-2-96.
4. Oil Sales Agreement between ▇▇▇▇ (lease no. 28572) and ▇▇▇▇▇▇▇▇▇ Oil
Company, 90 day contract.
5. Waste Water Disposal Agreement between Oxy U.S.A., Inc. and ▇▇▇▇▇▇▇▇▇
Oil Company dated 6-1-90.
6. Water District Agreement No. 8 between West ▇▇▇▇ Water District and
▇▇▇▇▇▇▇▇▇ Oil Company dated 5-17-83.
7. Water District Agreement No. 9 between West ▇▇▇▇ Water District and
▇▇▇▇▇▇▇▇▇ Oil Company dated 1-13-87.
8. Easement and Right-of-Way Pipeline Agreement by and between Texaco Inc.,
as Grantor and Mobil Exploration and Production U.S. Inc., as Grantee
dated September 5, 1990. (CAMCL02221)
9. Private Road Easement and Right-of-Way Agreement by and between Texaco
Inc., as Grantor and Oxy U.S.A. Inc., as Grantee dated November 28,
1988. (CAMCLO2225)
10. Private Road Easement and Right-of-Way by and between Texaco Inc., as
Grantor and ▇▇▇▇▇ Petroleum Company, as Grantee dated January 3, 1989.
(CAMCLO1009)
11. Private Road Easement and Right-of-Way by and between Texaco Inc., as
Grantor and ▇▇▇▇▇ Petroleum Company, as Grantee dated January 3, 1989.
(CAMCLO1010)
12. Roadway Easement by and between Texaco Inc., as Grantor and Chevron
U.S.A. Inc., as Grantee dated December 22, 1988. (CAMCLO2223)
13. Road Right-of-Way and Easement by and between Texaco Inc., as Grantor
and ▇▇▇▇▇ ▇▇▇▇▇ Ltd., as Grantee dated September 8, 1988.
14. Road Maintenance Agreement between ▇▇▇▇▇ Petroleum Company, as Grantor
and Exxon Corporation, as Grantee dated September 8, 1988. (CAMCL01110)
2
15. Roadway Agreement by and between Texaco, as Grantor and Monarch
Cogeneration, as Grantee dated April 13, 1987.
16. Pipeline Lease Agreement from Texaco Inc., as Lessor to ▇▇▇▇▇▇▇▇▇ Oil
Company, as Lessee dated June 16, 1993.
17. Road Right-of-Way for Cogeneration (from Hwy 33) between Oxy, as Grantor
and ▇▇▇▇▇▇▇▇▇ Oil Company, as Grantee dated October 15, 1984.
18. Pipeline Right-of-Way between The Texas Company (Texaco), as Grantor,
and Union Oil Company of California, as Grantee dated May 15, 1953.
(CAMCL02229)
19. Pipeline License Agreement between Shell Western E&P Inc., as Licensor,
and ▇▇▇▇▇▇▇▇▇ Oil Company, as Licensee dated June 9, 1993.
20. Pipeline License Agreement between Mobil Exploration & Producing U.S.
Inc., as Licensor and ▇▇▇▇▇▇▇▇▇ Oil Company, as Licensee dated May 11,
1993. (CAMCL02153)
21. Pipeline License Agreement between Shell Western E&P Inc., as Licensor
and ▇▇▇▇▇▇▇▇▇ Oil Company, as Licensee dated April 13, 1993.
22. Pipeline Easement between Oxy U.S.A. Inc., as Grantor and ▇▇▇▇▇▇▇▇▇ Oil
Company, as Grantee dated June 1, 1993.
23. Consent to Pipeline Easement (BDT) between Oxy U.S.A. Inc., First Party
and South Midway BDT Service Pipeline System and ▇▇▇▇▇ Petroleum
Company, as Operator dated July 23, 1992. (CAMCL02057)
24. Pipeline License Agreement (BDT) between Mobil Exploration & Producing
U.S. Inc., South Midway BDT Service Pipeline System and ▇▇▇▇▇ Petroleum
Company, as Operator dated February 1, 1992. (CAMCL02057)
25. Pipeline License Agreement (BDT) between Texaco Exploration and
Production Inc., and South Midway BDT Service Pipeline System, and ▇▇▇▇▇
Petroleum Company, as Operator dated March 20, 1992. (CAMCL02058)
26. Pipeline License Agreement (BDT) between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Grantor
and ▇▇▇▇▇ Petroleum Company, ▇▇▇▇▇ ▇▇▇▇▇ Limited, and ▇▇▇▇▇▇▇▇▇ Oil
Company, Grantee dated March 16, 1992. (CAMCL02060)
27. Consent to Pipeline Easement (BDT) between Oxy U.S.A. Inc., South Midway
BDT Service Pipeline System and ▇▇▇▇▇ Petroleum Company dated July 23,
1992 for ▇▇▇▇▇ ▇▇▇▇▇▇ R-O-W dated March 11, 1992. (CAMCL01180)
28. Pipeline License Agreement (BDT) between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Grantor and
▇▇▇▇▇ Petroleum Company, ▇▇▇▇▇ ▇▇▇▇▇ Limited, and ▇▇▇▇▇▇▇▇▇ Oil Company,
as Grantee dated March 11, 1992. (CAMCL01180)
29. Consent to Pipeline Easement (BDT) between Oxy U.S.A. Inc., First Party
and South Midway BDT Service Pipeline System, and Berry Petroleum
Company, Operator dated July 23, 1992 for Masonic Homes of California
R-O-W dated March 13, 1992. (CAMCL02116)
30. Pipeline License Agreement (BDT) between Betsy M. Vetter, as Grantor and
Berry Petroleum Company, Chalk Cliff Limited, and Tannehill Oil Company,
as Grantee dated March 13, 1992. (CAMCL02116)
3
31. Consent to Pipeline Easement (BDT) between Oxy U.S.A. Inc., First Party
and South Midway BDT Service Pipeline System, and Berry Petroleum
Company, Operator dated July 23, 1992 for Betsy M. Vetter R-O-W dated
March 3, 1992. (CAMCL02117)
32. Pipeline License Agreement (BDT) between Masonic Homes of California, as
Grantor and Berry Petroleum Company, Chalk Cliff Limited, and Tannehill
Oil Company, as Grantee dated March 3, 1992. (CAMCL02117)
33. Pipeline License Agreement (BDT) between Oxy U.S.A. Inc, as Grantor and
Berry Petroleum Company, Chalk Cliff Limited, and Tannehill Oil Company,
as Grantee dated May 20, 1991. (CAMCL02149)
34. Pipeline License Agreement (BDT) between James F. Thacher, successor in
title to John L. Bradley, as Licensor and South Midway BDT Pipeline
System, as Licensee dated March 31, 1992. (CAMCL02056)
35. Pole Line Easement between Hinkle Resources, et al., as Grantor and
Pacific Gas and Electric Company, as Grantee dated September 15, 1984.
36. Surface Lease Agreement between Tannehill Oil Company, as Lessor and
Berry Petroleum Company, as Lessee, dated June 23, 1993. (CAMCL02151)
37. Agreement for a 6" steam line and 4" water line between Shell Western
E&P Inc., as Grantor and Tannehill Oil Company, as Grantee dated May 14,
1990.
38. Letter regarding a right-of-way for a 3" water disposal line and a 6"
steam line, to Mobil Exploration & Producing Inc. from Tannehill Oil
Company (Russell Goff) dated April 12, 1990. (CAMCL01048)
39. Pipeline License Agreement between Mobil Exploration & Producing Inc., as
Grantor and Tannehill Oil Company, as Grantee with Berry Petroleum
Company's consent, dated May 29, 1990. (CAMCL01048)
40. Pipeline License Agreement between Tannehill Oil Company, as Licensor
and Berry Petroleum Company, as Licensee dated August 9, 1995.
(CAMCL02187)
41. Pipeline License Agreement between Berry Petroleum Company, as Grantor
to Tannehill Oil Company, as Grantee dated June 23, 1993. (CAMCL02142)
42. Easement between Tannehill Oil Company, as Licensor and Mobil
Exploration & Producing, Inc. as Licensee dated September 1, 1993.
43. Temporary Access Agreement between Tannehill Oil Company, as Grantor
and Mobil Exploration & Producing, Inc., as Grantee dated June 27, 1991.
44. Phone Line Right-of-Way between Mobil Exploration & Production Inc., as
Grantor and Tannehill Oil Company, as Grantee dated August 1993.
45. Agreement (BDT) between Solar Cogeneration, Southwest Contractors and
Tannehill Oil, dated February 1992.
46. License Agreement between Monarch Cogeneration 1986-1, as Licensor and
AWAM Petroleum Inc., and Albert G. Boyce, Jr., as Licensee and Southwest
Contractors, as Contractor, (unsigned draft only), dated February 19,
1993.
47. Lease Agreement between Texaco Trading & Transportation Inc., as Lessor
and Tannehill Oil Company, as Lessee dated June 16, 1993.
4
48. Waste Water Pipeline R-O-W between Texaco Producing Inc., as Grantor and
Chalk Cliff Cogeneration, as Grantee, not dated or signed, status
unknown. (CAMCL02222)
49. Road R-O-W Agreement by and between Texaco, Inc., as Grantor and Chalk
Cliff Limited, as Grantee, dated December 12, 1988. (CAMCL02224)
50. Pipeline R-O-W Agreement by and between Texaco, Inc., as Grantor and
Berry Holding Company, as Grantee dated May 24, 1982. (CAMCL01139)
51. Private Road by and between Texaco, Inc., as Grantor and Exxon
Corporation, as Grantee dated June 27, 1988. (CAMCL02228)
52. Pipeline R-O-W Agreement by and between Texaco, Inc., as Grantor and
Berry Holding Company, as Grantee dated October 27, 1966. (CAMCL01076)
53. Pipeline Agreement by and between Texaco, Inc., as Grantor and Socony
Mobil Oil Company, as Grantee dated April 28, 1965. (CAMCL02226)
54. Pole Line R-O-W by and between The Texas Company, as Grantor and
Standard Oil Company of California, as Grantee dated May 11, 1955.
(CAMCL02227)
55. Power and Pole Line Agreement by and between the Texas Company, as
Grantor and Pacific Gas and Electric Company, as Grantee dated August 8,
1944. (CAMCL02230)
56. Pipeline Agreement by and between the Texas Company, as Grantor and
Standard Oil Company of California, as Grantee dated January 23, 1939.
(CAMCL02231)
57. Pipeline Agreement by and between The Texas Company, as Grantor and
Standard Oil Company of California, as Grantee dated November 23, 1937.
(CAMCL02232)
58. Pipeline Agreement by and between The Texas Company, as Grantor and
Standard Gasoline Company, as Grantee dated August 14, 1936.
(CAMCL02233)
59. Water Pipeline Agreement by and between The Texas Company, as Grantor
and Western Water Company, as Grantee dated January 13, 1936.
(CAMCL02234)
60. A Right-of-Way between Albert G. Boyce, Jr., et al. and Security Pacific
Leasing Corporation dated August 24, 1994.
61. A Right-of-Way between Tannehill Oil Company and Security Pacific
Leasing Corporation dated August 24, 1994.
62. An Easement between Tannehill Oil Company and Security Pacific Leasing
Corporation dated August 26, 1994.
63. An Agreement governing the Joint Venture for the Kern River-Mojave
Pipeline Lateral among Mobil Oil Corporation, Berry Petroleum
Company, Chalk Cliff Limited and Tannehill Oil Company dated December 2,
1991.
64. An Agreement governing the Joint Venture for the South Midway BDT
Service Pipeline System among Berry Petroleum Company, Chalk Cliff
Limited and Tannehill Oil Company dated January 8, 1992.
5
65. An interruptible Transportation Agreement between Mojave Pipeline
Operating Company, as Transporter and Tannehill Oil Company, as
Shipper, dated March 1, 1995.
1
EXHIBIT 5 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
NORDMAN, CORMANY, HAIR & COMPTON
Attn: Laura K. McAvoy, Esq.
1000 Town Center Drive, 6th Floor
Post Office Box 9100
Oxnard, California 93031-9100
MAIL TAX STATEMENTS TO:
Berry Petroleum Company
Jerry V. Hoffman, President
28700 Hovey Hills Road
Post Office Bin X
Taft, California 93265
A.P.N. 220-181-17-00-4
220-181-18-00-7
220-191-03-00-6
220-181-24-00-4
220-181-09-00-1
ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND CONTRACTS
THIS ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND CONTRACTS
("Assignment"), dated and effective as of 12:01 a.m. Pacific Standard Time, on
October 1, 1996 (the "Effective Date"), is from TANNEHILL OIL COMPANY, a
California general partnership, and those individuals and entities listed on
Schedule A hereto (collectively, "Assignor"), whose address is 29091 Highway
33, Maricopa, California 93252, P.O. Box 98, Taft, California 93268 to BERRY
PETROLEUM COMPANY, a Delaware corporation ("Assignee"), whose address is 28700
Hovey Hills Road, Post Office Bin X, Taft, California 93268.
1. Assignment. For the sum of Ten Dollars ($10) and other good and
valuable consideration, the receipt and sufficiency of which Assignor hereby
acknowledges, Assignor hereby transfers, grants, bargains, conveys and assigns
to Assignee, effective for all purposes as of the Effective Date, subject to
the terms and conditions set forth in that certain Purchase and Sale Agreement
dated November 8, 1996, by and between Berry Petroleum Company and
2
Tannehill Oil Company et al. ("Purchase and Sale Agreement"), and subject to
all contracts, agreements, encumbrances and other matters to which the
following assets are subject as of the Effective Date, all of Assignor's right,
title and interest in and to the interests and rights described in Schedule B
to this Assignment (hereinafter collectively called and referred to as the
"Assets") and all other rights, privileges, obligations, benefits and powers
conferred upon the owner or holder of the Assets.
2. Assumptions. Assignee hereby assumes and agrees to pay, perform and
discharge its obligations under the Assets, and the agreements, associated
contracts and other burdens pertaining thereto, which accrue and relate to, or
are based upon or arise out of, events occurring after the Effective Date, all
in accordance with the terms of the Purchase and Sale Agreement.
3. Further Assurances. The parties agree to take all such further
actions and execute, acknowledge and deliver all such further documents that
are necessary or useful in carrying out the purposes of this Assignment. So
long as authorized by applicable law so to do, Assignor hereby agrees to
execute, acknowledge and deliver to Assignee all such other additional
instruments, notices, division orders, transfer orders and other documents and
to do all such other and further acts and things as may be necessary to more
fully and effectively grant, convey, transfer and assign to Assignee the Assets
conveyed hereby or intended so to be.
4. Schedules. Reference is made to Schedules A and B attached hereto
and made a part hereof for all purposes. Reference in such Schedules to
instruments on file or recorded in the public records are made for all
purposes.
5. Headings. Headings are included in this Assignment for convenience
of reference and shall in no way define, limit, extend, or describe the scope
or intent of any provision of this Assignment.
6. Successors and Assigns. This Assignment shall bind and inure to the
benefit of Assignor and Assignee and their respective successors and assigns.
7. Multiple Counterparts. This Assignment may be executed in any number
of counterparts and each counterpart hereof shall be deemed to be an original
instrument but all of such counterparts shall constitute but one assignment.
8. Recordation. To facilitate recording or filing of this Assignment,
each counterpart filed with a federal or state agency or office may contain
only those portions of Schedules A and B that describe property under the
jurisdiction of that agency or office. Assignor and Assignee have each
retained a counterpart of this Assignment with complete Schedules A and B.
Another counterpart of this Assignment with complete Schedules A and B shall be
recorded in the official real property records of Kern County, California.
3
9. Governing Law. The provisions of this Assignment shall be governed
by and construed in accordance with the laws of the State of California,
excluding any conflicts of law, rule or principle that might refer same to the
laws of another jurisdiction.
TANNEHILL OIL COMPANY, a California GENERAL WESTERN, INC.,
general partnership a New Mexico corporation
By: Boyce Resource Development By: ________________________________
Company, a California corporation James L. Hinkle, President
Managing General Partner and Secretary
By: __________________________
Albert G. Boyce, Jr.,
President and Secretary
VERNIER RESOURCES CORPORATION,
a Texas Corporation
By: HHB, Inc., a California
corporation By: _______________________________
Managing General Partner Bettianne H. Bowen, President
By: __________________________ By: _______________________________
James L. Hinkle, President Cheryl Bailey Harrison, Secretary
and Secretary
By: Paso Energy, Inc., a California ________________________________
corporation John T. Hinkle
Managing General Partner
________________________________
By: __________________________ James L. Hinkle
John W. Tannehill, President
and Secretary __________________________________
Albert G. Boyce, Jr., as Trustee of Trust B
under Will of Albert G. Boyce, Sr., Deceased
______________________________________
William J. Boyce
______________________________________ ______________________________
Delmar R. Archibald, as Trustee of the Joy A. Archibald, as Trustee of the
Delmar R. Archibald Family Trust, dated Delmar R. Archibald Family Trust,
June 22, 1982 dated June 22, 1982
______________________________________ ______________________________
Gail Kay Tannehill, as Trustee of the John W. Tannehill
4
Gail Kay Tannehill Family Trust,
dated April 9, 1996 ____________________________________
Thomas H. Tannehill
_________________________________ ___________________________________
Lisle Q. Tannehill Mary K. Boyce
_________________________________ ___________________________________
Bettianne H. Bowen Albert G. Boyce V
"Assignor"
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: ________________________________
Jerry V. Hoffman, President
By: ________________________________
Kenneth A. Olson, Secretary
"Assignee"
1
SCHEDULE A
TO EXHIBIT 5
ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND OTHER
CONTRACTS ATTACHED TO AND MADE A PART OF
THAT CERTAIN PURCHASE AND SALE AGREEMENT
DATED NOVEMBER 8, 1996,
BY AND BETWEEN BERRY PETROLEUM COMPANY AND
TANNEHILL OIL COMPANY, ET AL.
(RECORDED DOCUMENTS)
ASSIGNORS
1. JAMES L. HINKLE
2. JOHN T. HINKLE
3. VERNIER RESOURCES CORPORATION, a Texas corporation
4. GENERAL WESTERN, INC., a New Mexico corporation
5. DELMAR R. ARCHIBALD FAMILY TRUST
6. LISLE Q. TANNEHILL
7. JOHN W. TANNEHILL
8. THOMAS H. TANNEHILL
9. GAIL KAY TANNEHILL FAMILY TRUST
10. TRUST B UNDER WILL OF ALBERT G. BOYCE, SR., DECEASED
11. BOYCE RESOURCE DEVELOPMENT COMPANY, a California corporation
12. WILLIAM J. BOYCE
13. MARY K. BOYCE
14. BETTIANNE H. BOWEN
15. ALBERT G. BOYCE V
2
SCHEDULE B TO
EXHIBIT 5
ASSIGNMENT OF LEASES, RIGHTS OF WAY, EASEMENTS AND OTHER
CONTRACTS ATTACHED TO AND MADE A PART OF
THAT CERTAIN PURCHASE AND SALE AGREEMENT
DATED NOVEMBER 8, 1996,
BY AND BETWEEN BERRY PETROLEUM COMPANY AND
TANNEHILL OIL COMPANY, ET AL.
(RECORDED DOCUMENTS)
1. A premises Lease dated August 15, 1994, between Albert G. Boyce, Jr. as
Trustee of Trust B under Will of Albert G. Boyce, Sr., et. al., as Lessor
and Security Pacific Leasing Corporation as Lessee, recorded August 26,
1994 in Book 7079, Page 2007, Official Records.
2. Agreement for the Sale and Delivery of Oil Between Monte Cristo Oil and
Development Company and Standard Oil Company, recorded March 18, 1910 in
Book 21, Page 139 of Agreements.
3. Memorandum of Operating Agreement between Tannehill Oil Company and Delmar
R. Archibald, et. al., for the production of oil and gas, recorded August
18, 1992 in Book 6715, Page 661, Official Records.
4. Road Agreement between Oxy USA, Inc. and Tannehill Oil Company, recorded
December 27, 1988 in Book 6194, Page 1339, Official Records.
5. Road Right of Way Agreement between Oxy U.S.A. Inc. and Monarch
Co-Generation 1986-1, a California limited partnership, recorded December
27, 1988 in Book 6194, Page 1351, Official Records.
6. Grant of Easement between Masonic Homes of California, a corporation and
Tannehill Oil Company, recorded March 6, 1985 in Book 5740, Page 170,
Official Records.
3
Tannehill Oil Company
STATEMENT OF TAX DUE UNDER PROVISIONS OF THE
DOCUMENTARY STAMP ACT
and
REQUEST THAT STAMPS NOT BE MADE A PART OF THE PERMANENT RECORD
TO: Kern County Recorder
THE TAX DUE PURSUANT TO THE PROVISIONS OF THE DOCUMENTARY STAMP ACT ON THE
DEED, TRANSFER, OR CONVEYANCE FROM: Tannehill Oil Company, a California general
partnership, James L. Hinkle; John T. Hinkle; Vernier Resources Corporation, a
Texas corporation; General Western, Inc., a New Mexico corporation; Delmar R.
Archibald Family Trust; Lisle Q. Tannehill; John W. Tannehill; Thomas H.
Tannehill; Gail Kay Tannehill Family Trust; Trust B under Will of Albert G.
Boyce, Sr., Deceased; Boyce Resource Development Company, a California
corporation; William J. Boyce; Mary K. Boyce; Bettianne H. Bowen; and Albert G.
Boyce V.
[Name of Grantor(s) or Lessor(s)]
TO: Berry Petroleum Company
[Name of Grantee(s) or Lessee(s)]
OF THE FOLLOWING BRIEFLY DESCRIBED REAL PROPERTY: T12N, R24W, Section 33,
APNs 220-181-17-00-4; 220-181-18-00-7; 220-191-03-00-6;
220-181-24-00-4; 220-181-09-00-1
Amounts to: $______0_________ Amounts to: $_________________
(X) Unincorporated Area ( ) City of_________________
(X) Computed on full value ( ) Computed on full value
( ) Computed on full value LESS liens ( ) Computed on full value LESS
and encumbrances remaining and encumbrances remaining
Documentary Transfer Tax $____________
Computed on full value of property
conveyed
Tannehill Oil Company
By: _________________________________
Affix transfer Tax Stamp Here Stamp Reserved for Recorder's Coding Stamp
Date: _____________________________ By:___________________________________
Title:____________________________
AFTER THE PERMANENT RECORD IS MADE, THIS DOCUMENT WILL BE ATTACHED TO THE
CONVEYING DOCUMENT AND RETURNED TO THE PARTY ENTITLED THERETO. A COPY WILL BE
MADE AND PLACED ON FILE FOR AUDITING PURPOSES.
1
EXHIBIT 6 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
NORDMAN, CORMANY, HAIR & COMPTON
Attn: Laura K. McAvoy, Esq.
1000 Town Center Drive, 6th Floor
Post Office Box 9100
Oxnard, California 93031-9100
MAIL TAX STATEMENTS TO:
BERRY PETROLEUM COMPANY
Attn: Jerry V. Hoffman
Post Office Bin X
Taft, California 93268
A.P.N. 098-170-14-00-4
ASSIGNMENT OF OIL AND GAS LEASES
THIS ASSIGNMENT OF OIL AND GAS LEASES ("Assignment"), dated and effective
as of 12:01 a.m. Pacific Standard Time, on October 1, 1996 (the "Effective
Date"), is from TANNEHILL OIL COMPANY, a California general partnership, whose
address is 29091 Highway 33, Maricopa, California 93252, P.O. Box 98, Taft,
California 93268, and those individuals and entities listed on Schedule A
(collectively "Assignor"), to BERRY PETROLEUM COMPANY, a Delaware corporation
("Assignor"), whose address is Post Office Bin X, 28700 Hovey Hills Road, Taft,
California 93268.
1. Assignment. For the sum of Ten Dollars ($10) and other good and
valuable consideration, the receipt and sufficiency of which Assignor hereby
acknowledges, Assignor hereby transfers, grants, bargains, conveys and assigns
to Assignee, effective for all purposes as of the Effective Date, subject to
the terms and conditions set forth in that certain Purchase and Sale Agreement
dated November 8, 1996, by and between Berry Petroleum Company and Tannehill
Oil Company et al. ("Purchase and Sale Agreement"), and subject to all
contracts, agreements, encumbrances and other matters to which the following
assets are subject as of the Effective Date, all of the following assets (such
assets are hereinafter collectively called and referred to as the "Assets"):
2
a. All of Assignor's right, title and interest in and to the oil,
gas and mineral leasehold estates, overriding royalty, royalty and other
interests and rights described in Schedule B to this Assignment.
b. To the extent attributable or allocable to the Assets, all of
Assignor's right, title and interest in and to (i) all wells, equipment and
facilities which constitute fixtures and are located on or used directly in
connection with production, treatment or transportation of oil and gas from the
Assets; (ii) all oil and gas produced after the Effective Date; and (iii) all
other rights, privileges, obligations, benefits and powers conferred upon the
owner or holder of the Assets.
2. Assumption. Assignee hereby assumes and agrees to pay, perform and
discharge its obligations under the Assets, and the agreements, associated
contracts and other burdens pertaining thereto, which accrue and relate to, or
are based upon or arise out of, events occurring after the Effective Date, all
in accordance with the terms of the Purchase and Sale Agreement.
3. Further Assurances. The parties agree to take all such further
actions and execute, acknowledge and deliver all such further documents that
are necessary or useful in carrying out the purposes of this Assignment. So
long as authorized by applicable law so to do, Assignor hereby agrees to
execute, acknowledge and deliver to Assignee all such other additional
instruments, notices, division orders, transfer orders and other documents and
to do all such other and further acts and things as may be necessary to more
fully and effectively grant, convey, transfer and assign to Assignee the Assets
conveyed hereby or intended so to be.
4. Governmental Assignments. Separate assignments of certain of the Oil
and Gas Leases may be executed on officially approved forms by Assignor to
Assignee in sufficient counterparts to satisfy applicable statutory and
regulatory requirements. Those assignments shall incorporate this Assignment
by reference and be deemed to contain all of the exceptions, reservations,
rights, titles, powers and privileges set forth herein and in the Purchase and
Sale Agreement as fully as though they were set forth in each such assignment.
The interests conveyed by such separate assignments are the same, and not in
addition to, the Assets conveyed herein.
5. Schedules. Reference is made to the Schedules attached hereto and
made a part hereof for all purposes. Reference in such Schedules to
instruments on file or recorded in the public records are made for all
purposes.
6. Headings. Headings are included in this Assignment for convenience
of reference and shall in no way define, limit, extend, or describe the scope
or intent of any provision of this Assignment.
7. Successors and Assigns. This Assignment shall bind and inure to the
benefit of Assignor and Assignee and their respective successors and assigns.
3
8. Multiple Counterparts. This Assignment may be executed in any number
of counterparts and each counterpart hereof shall be deemed to be an original
instrument but all of such counterparts shall constitute but one assignment.
9. Recordation. To facilitate recording or filing of this Assignment,
each counterpart filed with a federal or state agency or office may contain
only those portions of the Schedule that describe property under the
jurisdiction of that agency or office. Assignor and Assignee have each
retained a counterpart of this Assignment with complete Schedules. Another
counterpart of this Assignment with complete Schedules shall be recorded in the
official real property records of Kern County, California.
10. Governing Law. The provisions of this Assignment shall be governed
by and construed in accordance with the laws of the State of California,
excluding any conflicts of law, rule or principle that might refer same to the
laws of another jurisdiction.
TANNEHILL OIL COMPANY, a California GENERAL WESTERN, INC.,
general partnership a New Mexico corporation
By: Boyce Resource Development By: _______________________________
Company, a California corporation James L. Hinkle, President
Managing General Partner
By: __________________________
Albert G. Boyce, Jr.,
President and Secretary
By: HHB, Inc., a California VERNIER RESOURCES CORPORATION,
corporation a Texas corporation
Managing General Partner
By: _________________________________
By: __________________________ Bettianne H. Bowen, President
James L. Hinkle, President
and Secretary By: ______________________________
Cheryl Bailey Harrison, Secretary
By: Paso Energy, Inc., a California ________________________________
corporation James L. Hinkle
Managing General Partner
By: __________________________ _________________________________
John W. Tannehill, President John T. Hinkle
and Secretary
4
___________________________________ ______________________________
Albert G. Boyce, Jr., as Trustee of Trust William J. Boyce
B under Will of Albert G. Boyce, Sr., Deceased
______________________________________ ______________________________
Delmar R. Archibald, as Trustee of the Joy A. Archibald, as Trustee of the
Delmar R. Archibald Family Trust, dated Delmar R. Archibald Family Trust,
June 22, 1982 dated June 22, 1982
______________________________________ ________________________________
Gail Kay Tannehill, as Trustee of the John W. Tannehill
Gail Kay Tannehill Family Trust dated
April 9, 1996 _______________________________
Thomas H. Tannehill
______________________________________ _________________________________
Lisle Q. Tannehill Mary K. Boyce
______________________________________ _________________________________
Bettianne H. Bowen Albert G. Boyce V
"Assignor"
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: ________________________________
Jerry V. Hoffman, President
By: ________________________________
Kenneth A. Olson, Secretary
"Assignee"
1
CONSENT TO ASSIGNMENT OF OIL, GAS AND MINERAL LEASE
Albert A. Geiger and Lois J. Geiger, Lessor in that certain Oil, Gas and
Mineral Lease dated February 25, 1977, covering the following described real
property in Kern County, California, a Short Form of which lease was recorded
July 12, 1977, in Book 5040, Page 911, Official Records of Kern County,
California, and assigned by Assignment of Oil, Gas and Mineral Lease dated
August 19, 1977, and recorded July 13, 1978, in Book 5124, Page 1288, Official
Records of Kern County, from W.D. Newsome & Associates, as Assignor, to
Tannehill Oil Company, as Assignee, hereby consent to the assignment of the
aforesaid lease by Tannehill Oil Company, as Assignor, to Berry Petroleum
Company, as Assignee.
Township 29 South, Range 21 East, M.D.B & M:
Section 28: S/2 N/2 N/2 NE/4
This consent is executed effective as of _______________, 1996.
Albert A. Geiger
Lois J. Geiger
2
SCHEDULE A TO
EXHIBIT 6
ASSIGNMENT OF OIL AND GAS LEASES ATTACHED TO AND MADE A PART
OF THAT CERTAIN PURCHASE AND SALE AGREEMENT
DATED NOVEMBER 8, 1996 BY AND BETWEEN
BERRY PETROLEUM COMPANY AND TANNEHILL OIL COMPANY, ET AL.
1. JAMES L. HINKLE
2. JOHN T. HINKLE
3. VERNIER RESOURCES CORPORATION, a Texas corporation
4. GENERAL WESTERN, INC., a New Mexico corporation
5. DELMAR R. ARCHIBALD FAMILY TRUST
6. LISLE Q. TANNEHILL
7. JOHN W. TANNEHILL
8. THOMAS H. TANNEHILL
9. GAIL KAY TANNEHILL FAMILY TRUST
10. TRUST B UNDER WILL OF ALBERT G. BOYCE, SR., DECEASED
11. BOYCE RESOURCE DEVELOPMENT COMPANY, a California corporation
12. WILLIAM J. BOYCE
13. MARY K. BOYCE
14. BETTIANNE H. BOWEN
15. ALBERT G. BOYCE V
1
SCHEDULE B TO
EXHIBIT 6
ASSIGNMENT OF OIL AND GAS LEASES ATTACHED TO AND MADE A PART
OF THAT CERTAIN PURCHASE AND SALE AGREEMENT
DATED NOVEMBER 8, 1996 BY AND BETWEEN
BERRY PETROLEUM COMPANY AND TANNEHILL OIL COMPANY, ET AL.
Oil and Gas Lease, dated February 25, 1977, by and between Albert A.
and Lois J. Geiger and W. D. Newsome & Associates, a short form of which lease
was recorded July 12, 1977 in Book, 5040, Page 911, Official Records of Kern
County, regarding that certain real property described as follows:
Township 29 South, Range 21 East, M.D.B.M., Section 28 S1/2
N1/2 N1/2 NE1/4
which lease was assigned by W.D. Newsome and Associates to Tannehill Oil
Company, a California general partnership on or about August 19, 1977, and
recorded July 13, 1978, in Book 5124, Page 1288, Official Records of Kern
County.
2
Tannehill Oil Company
STATEMENT OF TAX DUE UNDER PROVISIONS OF THE
DOCUMENTARY STAMP ACT
and
REQUEST THAT STAMPS NOT BE MADE A PART OF THE PERMANENT RECORD
TO: Kern County Recorder
THE TAX DUE PURSUANT TO THE PROVISIONS OF THE DOCUMENTARY STAMP ACT ON THE
DEED, TRANSFER, OR CONVEYANCE FROM: Tannehill Oil Company, a California general
partnership; James L. Hinkle; John T. Hinkle; Vernier Resources Corporation, a
Texas corporation; General Western, Inc., a New Mexico corporation; Delmar R.
Archibald Family Trust; Lisle Q. Tannehill; John W. Tannehill; Thomas H.
Tannehill; Gail Kay Tannehill Family Trust; Trust B Under Will of Albert G.
Boyce, Sr., Deceased; Boyce Resource Development Company, a California
corporation; William J. Boyce; Mary K. Boyce; Bettianne H. Bowen; and Albert G.
Boyce V.
[Name of Grantor(s) or Lessor(s)]
TO: Berry Petroleum Company
[Name of Grantee(s) or Lessee(s)]
OF THE FOLLOWING BRIEFLY DESCRIBED REAL PROPERTY: T12N, R24W, Section 33,
APNs 220-181-17-00-4; 220-181-18-00-7; 220-191-03-00-6; 098-170-14-00-4
Amounts to: $_____5.50_______ Amounts to: $___________________
(X) Unincorporated Area ( ) City of __________________
( ) Computed on full value ( ) Computed on full value
( ) Computed on full value LESS liens ( ) Computed on full value LESS
and encumbrances remaining liens and encumbrances
remaining
Documentary Transfer Tax $____________
Computed on full value of property
conveyed
Tannehill Oil Company
By: _________________________________
Affix transfer Tax Stamp Here Stamp Reserved for Recorder's Coding Stamp
Date: _______________________ By:___________________________
Title:____________________________
AFTER THE PERMANENT RECORD IS MADE, THIS DOCUMENT WILL BE ATTACHED TO THE
CONVEYING DOCUMENT AND RETURNED TO THE PARTY ENTITLED THERETO. A COPY WILL
BE MADE AND PLACED ON FILE FOR AUDITING PURPOSES.
1
EXHIBIT 7 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
PROMISSORY NOTE
(Unsecured)
$3,700,000 Taft, California November _, 1996
FOR VALUE RECEIVED, BERRY PETROLEUM COMPANY, a Delaware corporation
("Promisor"), hereby promises to pay to SUNSET INVESTMENTS LLC, a California
limited liability company, as the assignee of TANNEHILL OIL COMPANY, a
California general partnership ("Promisee"), the sum of Three Million Seven
Hundred Thousand Dollars ($3,700,000), together with simple interest thereon at
the rate of four percent (4%) per annum commencing on _______________, 1996.
This Note shall mature on January 6, 1997, at which time all accrued interest
and unpaid principal shall be due and payable in full.
Promisor promises to pay all costs, including, without limitation,
attorneys' fees, of enforcement of any remedies, including, without limitation,
collection of the obligation evidenced hereby, upon default by Promisor in the
performance of any duty or obligation arising out of or in connection with this
Note.
All payments shall be made in lawful money of the United States.
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
Jerry V. Hoffman, President
By: _____________________________________
Kenneth A. Olson, Secretary
"Promisor"
2
THIS ALLONGE SHALL BE AFFIXED TO THAT CERTAIN PROMISSORY NOTE (THE
"NOTE"), DATED NOVEMBER 8, 1996, IN THE PRINCIPAL AMOUNT OF $3.7 MILLION
EXECUTED BY BERRY PETROLEUM COMPANY, A DELAWARE CORPORATION, FOR THE BENEFIT
OF SUNSET INVESTMENT COMPANY, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY.
This Note is partial collateral under that certain Security Agreement (the
"Security Agreement"), dated November 8, 1996, executed by Sunset Investment
Company, LLC, a California limited liability company, for the benefit of
Monarch Cogeneration 1986-1, A California Limited Partnership, a limited
partnership organized under the laws of the State of California, Caterpillar
Capital Company, Inc., a Delaware corporation, Solar Turbines Incorporated, a
Delaware corporation, and Berry Petroleum Company, a Delaware corporation. The
terms and conditions of the Security Agreement shall govern, among other
things, the payments under the Note and restrictions on the transfer of the
Note.
SUNSET INVESTMENT COMPANY, LLC,
a California limited liability
company
By: BOYCE RESOURCE DEVELOPMENT
COMPANY, a California
corporation, as a Managing
Member
Dated: November ___, 1996 By: ____________________________
Albert G. Boyce, Jr.,
President and Secretary
By: HHB, INC., a California
corporation, as a Managing
Member
Dated: November ___, 1996 By: ____________________________
James L. Hinkle,
President and Secretary
By: PASO ENERGY, INC., a California
corporation, as a Managing
Member
Dated: November ___, 1996 By: ____________________________
John W. Tannehill,
President and Secretary
1
EXHIBIT 8A TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
PROMISSORY NOTE
(Unsecured)
$450,000.00 Taft, California November _, 1996
FOR VALUE RECEIVED, BERRY PETROLEUM COMPANY, a Delaware corporation
("Promisor"), hereby promises to pay to JOHN T. HINKLE ("Promisee"), the sum of
Four Hundred Fifty Thousand Dollars ($450,000.00), together with simple
interest thereon at the rate of four percent (4%) per annum commencing on
_______________, 1996. This Note shall mature on January 6, 1997, at which
time all accrued interest and unpaid principal shall be due and payable in
full.
Promisor promises to pay all costs, including, without limitation,
attorneys' fees, of enforcement of any remedies, including, without limitation,
collection of the obligation evidenced hereby, upon default by Promisor in the
performance of any duty or obligation arising out of or in connection with this
Note.
All payments shall be made in lawful money of the United States.
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
Jerry V. Hoffman, President
By: _____________________________________
Kenneth A. Olson, Secretary
"Promisor"
2
EXHIBIT 8B TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
PROMISSORY NOTE
(Unsecured)
$450,000.00 Taft, California November _, 1996
FOR VALUE RECEIVED, BERRY PETROLEUM COMPANY, a Delaware corporation
("Promisor"), hereby promises to pay to BETTIANNE H. BOWEN ("Promisee"), the
sum of Four Hundred Fifty Thousand Dollars ($450,000.00), together with simple
interest thereon at the rate of four percent (4%) per annum commencing on
_______________, 1996. This Note shall mature on January 6, 1997, at which
time all accrued interest and unpaid principal shall be due and payable in
full.
Promisor promises to pay all costs, including, without limitation,
attorneys' fees, of enforcement of any remedies, including, without limitation,
collection of the obligation evidenced hereby, upon default by Promisor in the
performance of any duty or obligation arising out of or in connection with this
Note.
All payments shall be made in lawful money of the United States.
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
Jerry V. Hoffman, President
By: _____________________________________
Kenneth A. Olson, Secretary
"Promisor"
3
EXHIBIT 8C TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
PROMISSORY NOTE
(Unsecured)
$300,000.00 Taft, California November _, 1996
FOR VALUE RECEIVED, BERRY PETROLEUM COMPANY, a Delaware corporation
("Promisor"), hereby promises to pay to THOMAS H. TANNEHILL ("Promisee"), the
sum of Three Hundred Thousand Dollars ($300,000.00), together with simple
interest thereon at the rate of four percent (4%) per annum commencing on
_______________, 1996. This Note shall mature on January 6, 1997, at which
time all accrued interest and unpaid principal shall be due and payable in
full.
Promisor promises to pay all costs, including, without limitation,
attorneys' fees, of enforcement of any remedies, including, without limitation,
collection of the obligation evidenced hereby, upon default by Promisor in the
performance of any duty or obligation arising out of or in connection with this
Note.
All payments shall be made in lawful money of the United States.
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
Jerry V. Hoffman, President
By: _____________________________________
Kenneth A. Olson, Secretary
"Promisor"
4
EXHIBIT 8D TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
PROMISSORY NOTE
(Unsecured)
$650,000.00 Taft, California November _, 1996
FOR VALUE RECEIVED, BERRY PETROLEUM COMPANY, a Delaware corporation
("Promisor"), hereby promises to pay to WILLIAM J. BOYCE ("Promisee"), the sum
of Six Hundred Fifty Thousand Dollars ($650,000.00), together with simple
interest thereon at the rate of four percent (4%) per annum commencing on
_______________, 1996. This Note shall mature on January 6, 1997, at which
time all accrued interest and unpaid principal shall be due and payable in
full.
Promisor promises to pay all costs, including, without limitation,
attorneys' fees, of enforcement of any remedies, including, without limitation,
collection of the obligation evidenced hereby, upon default by Promisor in the
performance of any duty or obligation arising out of or in connection with this
Note.
All payments shall be made in lawful money of the United States.
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
Jerry V. Hoffman, President
By: _____________________________________
Kenneth A. Olson, Secretary
"Promisor"
5
EXHIBIT 8E TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
PROMISSORY NOTE
(Unsecured)
$925,000.00 Taft, California November _, 1996
FOR VALUE RECEIVED, BERRY PETROLEUM COMPANY, a Delaware corporation
("Promisor"), hereby promises to pay to ALBERT G. BOYCE JR., as trustee of
Trust "B" under the Will of Albert G. Boyce, Sr., deceased ("Promisee"), the
sum of Nine Hundred Twenty-Five Thousand Dollars ($925,000.00), together with
simple interest thereon at the rate of four percent (4%) per annum commencing
on _______________, 1996. This Note shall mature on January 6, 1997, at which
time all accrued interest and unpaid principal shall be due and payable in
full.
Promisor promises to pay all costs, including, without limitation,
attorneys' fees, of enforcement of any remedies, including, without limitation,
collection of the obligation evidenced hereby, upon default by Promisor in the
performance of any duty or obligation arising out of or in connection with this
Note.
All payments shall be made in lawful money of the United States.
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
Jerry V. Hoffman, President
By: _____________________________________
Kenneth A. Olson, Secretary
"Promisor"
6
EXHIBIT 8F TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
PROMISSORY NOTE
(Unsecured)
$425,000.00 Taft, California November _, 1996
FOR VALUE RECEIVED, BERRY PETROLEUM COMPANY, a Delaware corporation
("Promisor"), hereby promises to pay to ALBERT G. BOYCE, V. ("Promisee"), the
sum of Four Hundred Twenty-Five Thousand Dollars ($425,000.00), together with
simple interest thereon at the rate of four percent (4%) per annum commencing on
_______________, 1996. This Note shall mature on January 6, 1997, at which
time all accrued interest and unpaid principal shall be due and payable in
full.
Promisor promises to pay all costs, including, without limitation,
attorneys' fees, of enforcement of any remedies, including, without limitation,
collection of the obligation evidenced hereby, upon default by Promisor in the
performance of any duty or obligation arising out of or in connection with this
Note.
All payments shall be made in lawful money of the United States.
BERRY PETROLEUM COMPANY,
a Delaware corporation
By: _____________________________________
Jerry V. Hoffman, President
By: _____________________________________
Kenneth A. Olson, Secretary
"Promisor"
1
EXHIBIT 9 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
REAL PROPERTY
1. Parcel 1:
That certain portion of the East half of the Northeast quarter of
Section 33, Township 12 North, Range 24 West, S.B.B.M., described as
Parcel 1 of Parcel Map 8297 in the unincorporated area of the County
of Kern, State of California, as per Map recorded January 20, 1989
in Book 37, pages 134 and 135 of Parcel Maps, in the Office of the
County Recorder of said County.
EXCEPTING therefrom any vein or lode of quartz or other rock in
place bearing gold, silver, cinnabar, lead, tin, copper or other
valuable deposits within the land above described which may have
been discovered or known to exist on or prior to November 11, 1902.
EXCEPTING AND RESERVING therefrom a royalty of four percent (4%) of
all oil, gas and other hydrocarbon substances produced from zones
lying below 4,500 feet below the surface of the above described
parcel.
Parcel 2:
The East half of the Northeast quarter of Section 33, Township 12
North, Range 24 West, S.B.B.M., in the unincorporated area of the
County of Kern, State of California, as per the official plat
thereof on file in the Office of the Surveyor General.
EXCEPTING therefrom any vein or lode of quartz or other rock in
place bearing gold, silver, cinnabar, lead, tin, copper or other
valuable deposits within the land above described which may have
been discovered or known to exist on or prior to November 11 1902.
EXCEPTING therefrom a portion of said land now known as Parcel 1 of
Parcel Map no. 8297 recorded January 20, 1989 in Book 37, page 134
and 135 of Parcel Maps.
EXCEPTING AND RESERVING therefrom a royalty of four percent (4%)
of all oil, gas and other hydrocarbon substances produced from zones
lying below 4,500 feet below the surface of the above described
parcel.
2
Parcel 3:
The Northwest quarter of the Northwest quarter of Section 34,
Township 12 North, Range 24 West, S.B.B.M., in the unincorporated
area of the County of Kern, State of California, as per the official
plat thereof on file in the Office of the Surveyor General.
EXCEPTING therefrom any vein or lode of quartz or other rock in
place bearing gold, silver, cinnabar, lead, tin, copper or other
valuable deposits within the land above described which may have
been discovered or known to exist on or prior to May 13, 1901.
EXCEPTING AND RESERVING therefrom a royalty of four percent (4%)
of all oil, gas and other hydrocarbon substances produced from zones
lying below 4,500 feet below the surface of the above described
parcel.
2. Oil and Gas Lease, dated February 25, 1977, by and between Albert A.
and Lois J. Geiger and W.D. Newsome and Associates, regarding that
certain real property described as follows:
Township 29 South, Range 21 East, M.D.B.M., Section 28 S1/2
N1/2 N1/2 NE1/4
and assigned by W.D. Newsome and Associates to Tannehill Oil
Company, a California general partnership on or about August
19, 1977
1
EXHIBIT 10 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
ALLOCATION OF PURCHASE PRICE
THE PARTIES AGREE TO THE ALLOCATION OF PURCHASE PRICE
AS REPRESENTED ON IRS FORM 8594 ATTACHED HERETO
FORM 8594 ASSET ACQUISITION STATEMENT OMB No. 1545-1021
(Rev Jan 1996) UNDER SECTION 1060
Department of the Treasury Attachment
Internal Revenue Service Sequence No. 61
Attach to your Federal income tax return
Name as Shown on return Identification number as shown on return
Tannehill Oil Company 94-1546098
Check the box that identifies you Buyer (X) Seller
Part 1 General Information - to be completed by all filers.
1. Name of other party to the transaction
Berry Petroleum Company
Other party's identification number
77-0079387
Address (number, street, and room or suite no.)
28700 Hovey Hills Road, P.O. Bin X
Taft, California 93268
2. Date of Sale 3. Total sales price
October 1, 1996 $2,285,000
Part II Assets Transferred - to be completed by all filers of an original
statement
4. Assets Aggregate Fair Market Value Allocation of Sales price
(Actual Amount for Class I)
Class I $ $
Class II $ $
Class III $ $ 2,285,000
Class IV $ $
Total $ $ 2,285,000
5. Did the buyer and seller provide for an allocation of the sales price in
the sales contract or in another written document signed by both parties?
(X) Yes No
If Yes, are the aggregate fair market values listed for each of asset
Classes I, II, III and IV the amounts agreed upon in your sales contract
or in a separate written document?
(X) Yes No
6. In connection with the purchase of the group of assets, did the buyer also
purchase a license or a covenant not to complete, or enter into a lease
agreement, employment contract, management contract, or similar
arrangement with the seller (or managers, directors, owners, or employees
of the seller)?
Yes (X) No
If Yes, specify (a) the type of agreement, and (b) the maximum amount of
consideration (not including interest) paid or to be paid under the
agreement. See the instructions for line 6.
For Paperwork Reduction Act Notice, see instructions.
Cat. No. 63768Z Form 8592 (Rev. 1-96)
2/19/96 Published by Tax Management Inc., a subsidiary of The Bureau of
National Affairs, Inc. 8594.I
2
Form 8594 (Rev. 1-96)
Page 2
Part III Supplemental Statement - To be completed only if amending an
original statement or previously filed supplemental statement
because of an increase or decrease in consideration.
7. Assets Allocation of Sales Price Increase or Redetermined Allocation
as previously reported (Decrease) of Sales Price
Class I $ $ $
Class II $ $ $
Class III $ $ $
Class IV $ $ $
Total $ $ $
8. Reason(s) for increase or decrease. Attach additional sheets if more
space is needed.
9. Tax year and tax return form number with which the original form 8594 and
any supplemental statements were filed.
8594.2 Published by Tax Management Inc., a Subsidiary of The
Bureau of National Affairs, Inc. 2/19/96
1
FORM 8594 ASSET ACQUISITION STATEMENT OMB No. 1545-1021
(Rev Jan 1996) UNDER SECTION 1060
Department of the Treasury Attachment
Internal Revenue Service Sequence No. 61
Attach to your Federal income tax return
Name as Shown on return Identification number as shown on return
Berry Petroleum Company 77-0079389
Check the box that identifies you (X) Buyer ( ) Seller
Part 1 General Information - to be completed by all filers.
1. Name of other party to the transaction
Tannehill Oil Company
Other party's identification number
94-1546098
Address (number, street, and room or suite no.)
P.O. Box 98
Taft, California 93268
2. Date of Sale 3. Total sales price
October 1, 1996 $2,285,000
Part II Assets Transferred - to be completed by all filers of an original
statement
4. Assets Aggregate Fair Market Value Allocation of Sales Price
(Actual Amount for Class I)
Class I $ $
Class II $ $
Class III $ $ 2,285,000
Class IV $ $
Total $ $ 2,285,000
5. Did the buyer and seller provide for an allocation of the sales price in
the sales contract or in another written document signed by both parties?
(X) Yes No
If Yes, are the aggregate fair market values listed for each of asset
Classes I, II, III and IV the amounts agreed upon in your sales contract
or in a separate written document?
(X) Yes No
6. In connection with the purchase of the group of assets, did the buyer also
purchase a license or a covenant not to complete, or enter into a lease
agreement, employment contract, management contract, or similar
arrangement with the seller (or managers, directors, owners, or employees
of the seller)?
Yes (X) No
If Yes, specify (a) the type of agreement, and (b) the maximum amount of
consideration (not including interest) paid or to be paid under the
agreement. See the instructions for line 6.
For Paperwork Reduction Act Notice, see instructions.
Cat. No. 63768Z Form 8592 (Rev. 1-96)
2
Form 8594 (Rev. 1-96) 77-0079387
Page 2
Part III Class III, Intangible Amortizable Assets Only - Complete if
applicable. The amounts shown below also must be included under
Class III assets in Part II. Attach additional sheets if more
space is needed.
Assets Fair Market Value Useful Life Allocation of Sales Price
$ $
$ $
$ $
$ $
$ $
Part IV Supplemental Statement - To be completed only if amending an
original statement or previously filed supplemental statement
because of anincrease or decrease in consideration N/A
7. Assets Allocation of Sales Price Increase or Redetermined Allocation
as Previously Reported (Decrease) of Sales Price
Class I $ $ $
Class II $ $ $
Class III $ $ $
Class IV $ $ $
Totals $ $
8. Reason(s) for increase or decrease. Attach additional sheets if more
space is needed.
9. Tax year and tax return form number with which the original form 8594 and
any supplemental statements were filed.
1
EXHIBIT 11 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
CERTIFICATE OF SATISFACTION TO THE PURCHASE AND SALE AGREEMENT
ENTERED INTO NOVEMBER 8, 1996
(PARAGRAPH 2.12(e) THEREOF)
The undersigned parties to that certain Purchase and Sale Agreement by and
between Berry Petroleum Company, a Delaware corporation, and Tannehill Oil
Company, a California general partnership, and Boyce Resource Development
Company, a California corporation; Albert G. Boyce, Jr., as Trustee of Trust
"B" Under the Will of Albert G. Boyce, Sr., Deceased; William J. Boyce;
Albert G. Boyce V; Mary K. Boyce; John T. Hinkle; Bettianne H. Bowen; Vernier
Resources Corporation, a Texas corporation; James L. Hinkle; General Western,
Inc., a New Mexico corporation; Delmar R. Archibald and Joy A. Archibald,
Trustees of the Delmar R. Archibald Family Trust, Dated June 22, 1982; Lisle Q.
Tannehill; John W. Tannehill; Gail Kay Tannehill, as Trustee of the Gail Kay
Tannehill Family Trust, Dated April 9, 1996; and Thomas H. Tannehill, as
partners of Tannehill Oil Company, and individually, to be entered into this
8th day of November, 1996, declare that all conditions to the Closing have been
satisfied and the transaction is Closed.
BERRY PETROLEUM COMPANY, TANNEHILL OIL COMPANY, a
a Delaware corporation California general partnership
By: ___________________________ By: BOYCE RESOURCE DEVELOPMENT
Jerry V. Hoffman, President COMPANY, a California
and Chief Executive Officer corporation
Managing General Partner
By: ___________________________
Kenneth A. Olson, Secretary By: ___________________________
Albert G. Boyce, Jr., President
and Secretary
By: HHB, INC., a California corporation
Managing General Partner
By: __________________________
James L. Hinkle, President
and Secretary
By: PASO ENERGY, INC., a
California corporation
Managing General Partner
By: ____________________________
John W. Tannehill, President
and Secretary
1
EXHIBIT 12 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
ESCROW INSTRUCTIONS
FIRST AMERICAN TITLE INSURANCE COMPANY
MAIN OFFICE: 4540 CALIFORNIA AVENUE, SUITE 100 (93309)
MAILING ADDRESS: P.O. BOX 1945, BAKERSFIELD, CA 93303
TELEPHONE (805) 327-5311
FACSIMILE (805) 327-8533
E S C R O W I N S T R U C T I O N S
FIRST AMERICAN TITLE INSURANCE COMPANY CONDUCTS ESCROW BUSINESS UNDER
CERTIFICATE OF AUTHORITY NO. 2787 ISSUED BY THE STATE OF CALIFORNIA
DEPARTMENT OF INSURANCE.
FINAL DRAFT
Escrow Officer: NANCY J. SMITH Property: REAL PROPERTY AND
ASSIGNMENT OF
LEASES
Escrow Number: 1125444N
Date: November 4, 1996
To:FIRST AMERICAN TITLE INSURANCE COMPANY
THESE INSTRUCTIONS ARE ENTERED INTO PURSUANT TO THAT CERTAIN PURCHASE AND SALE
AGREEMENT DATED WHEN EXECUTED BY BERRY PETROLEUM COMPANY AND TANNEHILL OIL
COMPANY, A GENERAL PARTNERSHIP, BOYCE RESOURCES DEVELOPMENT COMPANY, A
CALIFORNIA CORPORATION; ALBERT G. BOYCE, JR., AS TRUSTEE OF TRUST B UNDER THE
WILL OF ALBERT G. BOYCE SR., DECEASED; WILLIAM J. BOYCE; ALBERT G. BOYCE V;
MARY K. BOYCE; JOHN T. HINKLE; BETTIANNE H. BOWEN; VERNIER RESOURCES
CORPORATION, A TEXAS CORPORATION; JAMES L. HINKLE; GENERAL WESTERN, INC., A
NEW MEXICO CORPORATION; DELMAR R. ARCHIBALD AND JOY A. ARCHIBALD, TRUSTEES OF
THE DELMAR R. ARCHIBALD FAMILY TRUST, DATED JUNE 22, 1982; LISLE Q. TANNEHILL;
JOHN W. TANNEHILL; GAIL KAY TANNEHILL, AS TRUSTEE OF THE GAIL KAY TANNEHILL
FAMILY TRUST, DATED APRIL 9, 1996; AND THOMAS H. TANNEHILL, AS PARTNERS OF
TANNEHILL OIL COMPANY AND INDIVIDUALLY A COPY OF WHICH IS ATTACHED HERETO.
AS ESCROW HOLDER YOU SHALL BE CONCERNED ONLY WITH THOSE SPECIFIC PROVISIONS OF
SAID CONTRACT SET FORTH AND ENUMERATED THEREIN AS FOLLOWS:
#1.3, #1.5, #1.11,
#2.1, #2.2, #2.3, #2.6 #2.7 CLARIFICATION: DISTRIBUTION OF SALE PROCEEDS AND
RECORDATION OF DOCUMENTS WITH KERN COUNTY RECORDER WILL BE HANDLED AT THE
OFFICE OF ESCROW HOLDER, FIRST AMERICAN TITLE INSURANCE COMPANY, 4540
CALIFORNIA #100, BAKERSFIELD, CA. 93309. THIS ESCROW TO CLOSE CONCURRENTLY
WITH ESCROWS #1128321N AND #1125444N,
#2.8 AND #2.9 CLARIFICATION: PARTIES TO SUPPLY ESCROW HOLDER WITH INFORMATION
SO PRORATIONS CAN BE HANDLED THROUGH ESCROW OR NOTIFY ESCROW HOLDER BY MUTUAL
WRITTEN INSTRUCTIONS THAT PRORATIONS WILL BE HANDLED OUTSIDE OF THIS ESCROW;
2
#2.11, #2.12 CLARIFICATION: DOCUMENTS TO BE DEPOSITED INTO ESCROW OR PARTIES TO
NOTIFY ESCROW HOLDER BY MUTUAL WRITTEN INSTRUCTIONS THAT SAID DOCUMENTS HAVE
BEEN DELIVERED OUTSIDE OF ESCROW, #2.14, ARTICLES VII AND VIII, DOCUMENTS WILL
BE DEPOSITED AND APPROVED BY COUNSEL PRIOR TO CLOSE OF ESCROW.
ALL PARTIES AGREE THAT TRANSFER OF SAID PROPERTY IS NOT BEING HANDLED THROUGH
THE BULK SALE PROCESS. ESCROW HOLDER WILL NOT CONDUCT ANY UCC SEARCHES. NO
TITLE INSURANCE OR GUARANTEES OF TITLE WILL BE ISSUED BY ESCROW HOLDER WITH
REGARD TO PERSONAL PROPERTY BEING TRANSFERRED IN THIS ESCROW. A CLTA POLICY OF
TITLE INSURANCE WILL BE ISSUED BY FIRST AMERICAN TITLE INSURANCE COMPANY IN THE
AMOUNT AS SHOWN IN ALLOCATION FOR REAL PROPERTY AND COST FOR SAME WILL BE PAID
BY TANNEHILL OIL COMPANY OTHERS LISTED AS SELLERS HEREIN.
ANY AND ALL OTHER PROVISIONS OF SAID CONTRACT NOT ENUMERATED ABOVE IMPOSE NO
DUTIES ON YOU AS ESCROW HOLDER AND ARE MATTERS OF AGREEMENT AND UNDERSTANDING
BETWEEN THE PARTIES WITH WHICH YOU SHALL NOT BE CONCERNED.
THE ATTACHED GENERAL PROVISIONS AND PAGE #1B ARE HEREBY MADE A PART OF THESE
INSTRUCTIONS.
TANNEHILL OIL COMPANY AND
OTHERS SEE ATTACHED SIGNATURE
BLOCK
BERRY PETROLEUM COMPANY
SEE ATTACHED SIGNATURE BLOCK
1
EXHIBIT 13 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
CERTIFICATE OF COMPLIANCE TO THE
PURCHASE AND SALE AGREEMENT
ENTERED INTO NOVEMBER 8, 1996
(PARAGRAPH 7.6 THEREOF)
The undersigned certifies that Tannehill Oil Company has complied with the
matters set forth in Sections 7.1, 7.2, 7.3 and 7.4 of that certain Purchase
and Sale Agreement by and between Berry Petroleum Company, a Delaware
corporation, and Tannehill Oil Company, a California general partnership, and
Boyce Resource Development Company, a California corporation; Albert G. Boyce,
Jr., as Trustee of Trust "B" Under the Will of Albert G. Boyce, Sr., Deceased;
William J. Boyce; Albert G. Boyce V; Mary K. Boyce; John T. Hinkle; Bettianne
H. Bowen; Vernier Resources Corporation, a Texas corporation; James L. Hinkle;
General Western, Inc., a New Mexico corporation; Delmar R. Archibald and Joy A.
Archibald, Trustees of the Delmar R. Archibald Family Trust, dated June 22,
1982; Lisle Q. Tannehill; John W. Tannehill; Gail Kay Tannehill, as Trustee of
the Gail Kay Tannehill Family Trust, dated April 9, 1996; and Thomas H.
Tannehill, as partners of Tannehill Oil Company, and individually, entered into
on November 8, 1996.
Date: ___________________ TANNEHILL OIL COMPANY, a California
general partnership
By: BOYCE RESOURCE DEVELOPMENT
COMPANY, a California corporation,
Managing General Partner
By: ______________________________
Albert G. Boyce, Jr., President
and Secretary
By: HHB, INC., a California corporation,
Managing General Partner
By: ______________________________
James L. Hinkle, President and Secretary
By: PASO ENERGY, INC., a California
corporation, Managing General Partner
By: ______________________________
John W. Tannehill, President
and Secretary
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EXHIBIT 14 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
FORM OF OPINION OF COUNSEL
TO TANNEHILL OIL COMPANY
______________, 1996
Berry Petroleum Company
Attn: Jerry V. Hoffman
President and Chief Executive Officer
28700 Hovey Hills Road
Post Office Bin X
Taft, CA 93268
Re: Berry Petroleum Company / Tannehill Oil Company,
Asset Purchase and Sale Transaction
Gentlemen:
We have acted as counsel to Tannehill Oil Company, a California general
partnership ("Tannehill"), and individuals and entities that are partners of
Tannehill Oil Company (the "Partners"), in connection with the sale of
substantially all the assets of Tannehill and certain undivided mineral
interests of the Partners to Berry Petroleum Company, a Delaware corporation
("Berry"), pursuant to that certain Purchase and Sale Agreement, dated
______________, 1996, by and between Tannehill, the Partners and Berry
(the "Agreement").
In rendering the opinions set forth below, we have assumed the due
authorization, execution and delivery of the Agreement by Berry.
Based on the foregoing, and in reliance thereon, but subject to the
qualifications herein set forth, we are of the opinion that:
1. Tannehill is a general partnership duly organized and validly
existing under, and by virtue of, the laws of the State of California and
is in good standing under such laws. Tannehill has requisite power to own and
operate its properties and assets, and to carry on its business as presently
conducted.
2. Tannehill and the Partners have full power and authority to execute
and deliver the Agreement and to perform their obligations under the terms of
the Agreement.
3. All partnership action on the part of Tannehill and its Partners
necessary for the authorization, execution, delivery and performance of the
Agreement, and the consummation of the transactions contemplated thereby, has
been taken. The Agreement has been duly executed
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and delivered by Tannehill and its Partners and constitutes a legal, valid and
binding obligation of Tannehill and its Partners, enforceable against them in
accordance with its respective terms, except as such enforceability may be
limited by or subject to (a) any bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditor's rights generally and
(b) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
4. The Partners executing the Agreement are the beneficial owners of an
aggregate of one hundred percent (100%) of the partnership interests in
Tannehill (the "Partnership Interests"). There are no outstanding options,
warrants, rights of first refusal, or other rights calling for the issuance of,
or any security convertible into or exchangeable for, Partnership Interests and
no other person or entity has any right in or to the Partnership Interests.
5. No consent, approval or authorization of or designation of Tannehill
or the Partners is required in connection with the valid execution and delivery
of the Agreement, or the consummation of the transactions contemplated thereby
on the Closing thereof, except as such have been obtained or made prior to or
upon the date hereof.
6. To our best knowledge, no default exists and no event has occurred
which would constitute a default under, or violation in the due performance and
observance of any term, covenant or condition, or breach of, Tannehill's
Partnership Agreement or any indenture, license, lease, franchise, mortgage,
instrument, or other agreement to which Tannehill or its Partners are a party,
or by which Tannehill or its Partners or their properties may be bound; or (a)
an event that would permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or other
obligation of Tannehill or its Partners; (b) an event that would result in the
creation or imposition of any lien, charge, or encumbrance on any asset of
Tannehill or its Partners; or (c) an event that would conflict with any order,
rule, or regulation directed to Tannehill or its Partners by any court or
governmental agency or body having jurisdiction over it.
7. Except as disclosed in the Tannehill Disclosure Letter (as defined
in the Agreement), to our best knowledge, there is no suit, action,
arbitration, or legal, administrative, or other proceeding or governmental
investigation pending or threatened against or affecting Tannehill or its
Partners or any of their businesses or properties or financial or other
condition.
8. Except as disclosed in the Tannehill Disclosure Letter, there are no
agreements, written or oral, between Tannehill or its Partners and any other
party that affect, directly or indirectly, the Assets (as defined in the
Agreement).
We are members of the bar of the State of California, and accordingly we
do not purport to be experts on, or to be qualified to express any opinion
herein concerning, nor do we express any opinions herein concerning, any law
other than federal law and the laws of the State of California.
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This opinion letter is limited to the matters expressly stated herein and
no opinion or other statement may be inferred or implied beyond the matters
expressly stated herein. This opinion letter is addressed to Berry for the
benefit of Berry and is only for Berry's use in connection with the Agreement.
This opinion letter may not be relied upon by any other person or entity
without prior written consent. This opinion is as of this date, and we
expressly decline any undertaking to advise you of any matters arising
subsequent to the date hereof which would cause us to amend any portion of the
foregoing in whole or in part.
Very truly yours,
cc: Nordman, Cormany, Hair & Compton
Attn: Laura K. McAvoy, Esq.
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EXHIBIT 15 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
CERTIFICATE OF COMPLIANCE TO THE
PURCHASE AND SALE AGREEMENT
ENTERED INTO NOVEMBER 8, 1996
(PARAGRAPH 8.6 THEREOF)
The undersigned certify that Berry Petroleum Company has complied with the
matters set forth in Sections 8.1, 8.2, 8.3 and 8.5 of that certain Purchase
and Sale Agreement by and between Berry Petroleum Company, a Delaware
corporation, and Tannehill Oil Company, a California general partnership, and
Boyce Resource Development Company, a California corporation; Albert G. Boyce,
Jr., as Trustee of Trust "B" Under the Will of Albert G. Boyce, Sr., Deceased;
William J. Boyce; Albert G. Boyce V; Mary K. Boyce; John T. Hinkle; Bettianne
H. Bowen; Vernier Resources Corporation, a Texas corporation; James L. Hinkle;
General Western, Inc., a New Mexico corporation; Delmar R. Archibald and Joy A.
Archibald, Trustees of the Delmar R. Archibald Family Trust, dated June 22,
1982; Lisle Q. Tannehill; John W. Tannehill; Gail Kay Tannehill, as Trustee of
the Gail Kay Tannehill Family Trust, dated April 9, 1996; and Thomas H.
Tannehill, as partners of Tannehill Oil Company, and individually, entered into
on November 8, 1996.
Date: ___________________ BERRY PETROLEUM COMPANY,
a Delaware corporation
By: ______________________________
Jerry V. Hoffman, President
and Chief Executive Officer
By: _____________________________
Kenneth A. Olson, Secretary
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EXHIBIT 16 TO THAT CERTAIN PURCHASE AND SALE AGREEMENT
BY AND BETWEEN BERRY PETROLEUM COMPANY
AND TANNEHILL OIL COMPANY, A CALIFORNIA GENERAL PARTNERSHIP, ET AL.
FORM OF OPINION OF COUNSEL
TO BERRY PETROLEUM COMPANY
__________________, 1996
Tannehill Oil Company
c/o Boyce Resource Management Company
Attn: Mr. Albert G. Boyce, Jr.
Managing General Partner
120 Manteca Avenue
P.O. Box 871
Manteca, CA 95336
Re: Berry Petroleum Company / Tannehill Oil Company,
Asset Purchase and Sale Transaction
Gentlemen:
We have acted as counsel to Berry Petroleum Company, a Delaware
corporation ("Berry"), in connection with the purchase of substantially all the
assets of Tannehill Oil Company, a California general partnership, and certain
undivided mineral interests from individuals and entities that are partners of
Tannehill Oil Company (collectively, "Tannehill"), by Berry, pursuant to that
certain Purchase and Sale Agreement, dated ______________, 1996, by and between
Tannehill and Berry (the "Agreement").
In rendering the opinions set forth below, we have assumed the due
authorization, execution and delivery of the Agreement by Tannehill.
1. Berry is a corporation duly organized and validly existing under, and
by virtue of, the laws of the State of Delaware and is in good standing under
such laws. Berry has requisite corporate power to own and operate its
properties and assets, and to carry on its business as presently conducted.
2. Berry has full corporate power and authority to execute and deliver
the Agreement and to perform its obligations under the terms of the Agreement.
3. All corporate action on the part of Berry necessary for the
authorization, execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated thereby, has been taken. The
Agreement has been duly executed and delivered by Berry and constitutes a
legal, valid and binding obligation of Berry, enforceable against it in
2
accordance with its respective terms, except as such enforceability may be
limited by or subject to (a) any bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditor's rights generally and
(b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4. No consent, approval or authorization of or designation of Berry is
required in connection with the valid execution and delivery of the Agreement
by Berry, or the consummation by Berry of the transactions contemplated
thereby on the Closing thereof, except as such have been obtained or made prior
to or upon the date hereof.
5. To our best knowledge, there is no suit, action, arbitration, or
legal, administrative, or other proceeding or governmental investigation that
is material to the transactions contemplated by the Agreements pending or
threatened against or affecting Berry or any of its businesses or properties or
financial or other condition.
We are members of the bar of the State of California, and except for our
opinion set forth in Paragraph 1 above, we do not purport to be experts on, or
to be qualified to express any opinion herein concerning, nor do we express any
opinions herein concerning, any law other than federal law and the laws of the
State of California.
This opinion letter is limited to the matters expressly stated herein and
no opinion or other statement may be inferred or implied beyond the matters
expressly stated herein. This opinion letter is addressed to Tannehill for the
benefit of Tannehill and is only for Tannehill's use in connection with the
Agreement. This opinion letter may not be relied upon by any other person or
entity without prior written consent. This opinion is as of this date, and we
expressly decline any undertaking to advise you of any matters arising
subsequent to the date hereof which would cause us to amend any portion of the
foregoing in whole or in part.
Very truly yours,
NORDMAN, CORMANY, HAIR & COMPTON
cc: Roger Coley, Esq.
