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EDGE PETROLEUM CORP
|
8-K
Dec 15, 8:34 AM ET
EDGE PETROLEUM CORP 8-K
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Contents
144
ARTICLE I DEFINITIONS
ARTICLE II SALE AND PURCHASE OF EQUITY INTERESTS
ARTICLE III PURCHASE PRICE
ARTICLE IV ADJUSTMENTS TO PURCHASE PRICE
4.1.1. the amount of any direct costs and expenses incurred and actually paid or to be paid by Seller or the Subs (including, without duplication, charges properly
payable under any applicable joint operating agreement or other agreement providing for joint interest billings) that are attributable to acquiring, owning, operating, producing and maintaining the Properties during the period of time from the Effective Time through the Closing Date (excluding any such costs and expenses to be paid which are excused, rejected or otherwise no longer payable by Seller or the Subs pursuant to an Order of the Bankruptcy Court), including capital expenditures (but excluding any capitalized (i) interest or (ii) general and administrative expenses) and general and administrative costs reimbursements not to exceed Five Hundred Thousand Dollars (US$500,000) per month;
4.1.2. to the extent such proceeds were not received by Seller or Subs as of the Closing Date or were received by Subs before the Closing Date and were not distributed to Seller in accordance with Section 7.8, the value of the following items, net of any applicable severance taxes and royalties which are the obligation of Buyer: (a) all oil and other Hydrocarbons in pipelines or in tanks above the pipelines or in tanks above the pipeline sales connection, which value shall be determined by multiplying $50/bbl times the volume, in each case at the Effective Time that is credited to the Properties, (b) all unsold inventory of gas plant products attributable to the Properties at the Effective Time, each such value to be the market value or, if applicable, the contract price in effect as of the Effective Time, and (c) all gas imbalance volumes related to the Properties owed to Seller or Subs by a third party as of the Effective Time multiplied by $3.00 MMBtu;
4.1.3. without duplication of 4.1.2, the amount of all proceeds (i) paid to Buyer, (ii) which are paid to Subs after the Closing Date, or (iii) which were paid to Subs prior to the Closing Date but which were not distributed to Seller pursuant to Section 7.8, including proceeds from the sale of production, net of all applicable Ad Valorem Taxes and applicable severance taxes and royalties paid by Buyer, attributable to the Properties for periods of time prior to the Effective Time;
4.1.4. the amount of the Benefit Values for all Title Benefits as finally determined in accordance with the terms of Article X; and
4.1.5. any other amount expressly denominated as an increase in the Purchase Price as provided for in this Agreement.
4.2.1. the amount of all proceeds paid or to be paid to Seller or to the Subs and distributed to the Seller (excluding proceeds which relate to the items set forth in Section 4.1.2 and proceeds to which Section 4.2.8 relates), including proceeds from the sale of production, net of all applicable taxes and royalties paid by Seller or the Subs, attributable to the Properties for periods of time after the Effective Time through the Closing Date;
4.2.2. an amount equal to all Ad Valorem Taxes that are attributable to periods of time prior to the Effective Time and which have either (i) not been paid by Seller or a Sub prior to the Closing Date or (ii) which have not otherwise been taken into
account as a downward adjustment to the Purchase Price (or as an offset to an upward adjustment to the Purchase Price);
4.2.3. the amounts, if any, relating to the aggregate of all the Allocated Values of all Retained Properties.
4.2.4. the amount of the Defect Values for all Title Defects;
4.2.5. with respect to each Adverse Environmental Condition (other than any Adverse Environmental Condition relating to any Retained Properties), the Final Remediation Amount;
4.2.6. all gas imbalance volumes related to the Properties owed by Seller or the Subs to a third party as of the Effective Time which are to be paid by Buyer pursuant to Sections 15.1 and 15.4 multiplied by $3.00 MMBtu;
4.2.7. the amount of the Gas Pricing Downward Adjustment;
4.2.8. the amount of the Closing Date Hedge Values; and
4.2.9. any other amount expressly denominated as a decrease in the Purchase Price as provided for in this Agreement.
4.3.1. To adjust the Purchase Price for the apportionment of Taxes, the parties agree to adjust the Purchase Price, downward or upward, as appropriate, pursuant to the provisions of Section 19.11.5 to the extent not otherwise taken into account in Sections 4.1 or 4.2.
4.3.2. For purposes of the making adjustments to the Purchase Price, to the extent not otherwise provided for under Article IV, those other items of expenses and accounts payable in relation to the Properties or that constitute Assumed Obligations and are paid or payable before and after the Effective Time on an annual, quarterly, monthly or other regular periodic basis (“Prorated Expense Items”) shall be prorated as of the Effective Time and apportioned, such that (i) Buyer, through its acquisition of the Subs, will receive the economic benefit or burden, as applicable, of all such items on and after the Effective Time and (ii) Seller shall receive the economic benefit or burden, as applicable, of all such items for the period prior to the Effective Time. After the Closing Date, (x) if Buyer receives any bills or accounts or any reimbursement for prepaid expenses in relation to Prorated Expense Items that are attributable in whole to the period prior to the Effective Time, then Buyer shall promptly forward the same to Seller (for payment, in the case of any such bills or accounts), (y) if Seller receives any bills or accounts or any reimbursement for prepaid expenses in relation to the Prorated Expense Items that are attributable in whole to the period on or after the Effective Time, then Seller shall promptly forward the same to Buyer (for payment, in the case of any such bills or accounts) and (z) if Buyer or Seller receive any bills or accounts or any reimbursements for prepaid expenses in relation to the Prorated Expense Items that are
attributable in part to the period prior to the Effective Time, and in part to the period on and after the Effective Time, the amount thereof shall be apportioned between Seller, on the one hand, and Buyer, on the other hand, respectively, as of the Effective Time, based on the number of days in such period falling prior to the Effective Time, on the one hand, and on and after the Effective Time, on the other hand. In the case of bills or accounts referred to in clause (z), the party receiving the same shall be required to pay only such portion of such bill or account for which it is responsible in accordance with this Section 4.3.2.
4.3.3. Seller will include in the Preliminary Purchase Price Seller’s good faith calculation of the prorations provided for in Section 4.3.2. If final bills or accounts in relation to any Prorated Expense Items or rent receivable referred to in Section 4.3.2 are not available or have not been issued prior to that date for any Prorated Expense Item, the Seller shall estimate the amount of each such item in good faith, and such estimate shall be reflected in the Preliminary Purchase Price. The amount payable by Buyer at the Closing will be increased or decreased to reflect the net amount owing between the parties as shown on such Preliminary Purchase Price, using such estimates where necessary. Final adjustment between the Parties as to any estimated item used in the preparation of the Closing Statement in accordance with this Section 4.3.3 shall be made pursuant to Article XIV.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SUBS
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER
6.1.1. Organization. Buyer is a corporation validly existing and in good standing under the laws of the State of Delaware. Buyer is in good standing and duly qualified to do business in each other jurisdiction in which the conduct of its business or ownership or leasing of its properties makes such qualification or registration necessary, and, as of Closing, will be qualified to do business and be in good standing under the laws of each applicable jurisdiction if so required in order to hold and operate the business of the Subs.
6.1.2. Authority. Buyer has the power to enter into and perform its obligations under this Agreement and has taken all proper corporate action to authorize it entering into this Agreement and performing its obligations hereunder.
6.1.3. Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, by Buyer will (i) conflict with, result in a violation, default, acceleration or breach of the terms of (with or without notice or passage of time), or create in any Person the right to accelerate, terminate, modify or cancel (A) the organizational documents of Buyer, or (B) any material contract of Buyer, or (ii) conflict with or result in a violation or breach of any Law applicable to the Buyer.
6.1.4. Enforceability. This Agreement has been duly executed and delivered on behalf of Buyer and constitutes the legal, valid and binding obligation of Buyer, enforceable in accordance with its terms, except as limited by bankruptcy or other similar Laws applicable generally to creditor’s rights and as limited by general equitable principles.
6.1.5. Investment Representation. Buyer has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the Equity Interests contemplated hereby, and is able to bear the economic risk of such investment indefinitely.
6.1.6. Knowledgeable Investor. Buyer is an experienced and knowledgeable investor in the oil and gas business. Prior to entering into this Agreement, Buyer was advised by and has relied solely on its own expertise and legal, tax, engineering, and other professional counsel concerning this Agreement, the Properties and the value thereof.
6.1.7. Closing Funds. Buyer has, as of the date hereof, access to sufficient committed funds, and, will have at the Closing, sufficient funds to enable the payment to Seller by wire transfer of the Purchase Price in accordance with Article XIII and otherwise to perform Buyer’s obligations under this Agreement. Buyer has submitted written evidence of available cash or a commitment for financing, or other evidence of ability to consummate the transactions contemplated hereby that is satisfactory to Seller’s advisors and such written evidence is true, complete and accurate in all respects and there has not been and there will not be any modifications thereto prior to the Closing.
6.1.8. No Further Distribution. Buyer is acquiring the Equity Interests for its own account and not for distribution or resale in any manner that would violate any state or federal securities Law.
6.1.9. Buyer’s Ability to Take Title. Subject to Bankruptcy Court approval, Buyer is unaware of any fact or circumstance that would preclude or inhibit unconditional approval of Seller’s sale and Buyer’s purchase of the Equity Interests by any Governmental Authority, including meeting existing or increased bonding requirements.
6.1.10. Litigation. There are no (i) suits, actions, investigations, proceedings or litigation before or by any Governmental Authority that are pending or, to Buyer’s knowledge, threatened, or (ii) judgments, orders or decrees outstanding, in each case of
subparts (i) and (ii) of this paragraph, against Buyer or any Affiliate of Buyer that would materially hinder or impede the consummation by Buyer of the transactions contemplated by this Agreement.
6.1.11. Finder’s Fees. Buyer has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees in respect to this transaction for which any member of the Seller Group shall have any responsibility whatsoever.
ARTICLE VII COVENANTS
7.1.1. not (a) act in any manner with respect to the Properties other than in the normal, usual and customary manner, consistent with prior practice or in accordance with Seller’s current limited operating budget, subject to the terms and conditions of this Agreement; (b) dispose of, encumber or relinquish any of the Properties (other than relinquishment resulting from the expiration of a non-producing Lease still in its primary term or the abandonment of a Lease not operated by a Sub); (c) waive, compromise or settle any material right or claim with respect to any of the Properties; (d) except with respect to those matters identified in Schedule 5.17, without prior written approval of Buyer (which approval will not be unreasonably withheld) make capital or workover expenditures with respect to the Properties in excess of Four Hundred Thousand Dollars (US$400,000) (net to the respective Sub’s interest), except when required by an emergency when there shall have been insufficient time to obtain advance consent (provided, that Seller will promptly notify Buyer of any such emergency expenditures); (e) enter into any Material Contract included in the definition of Properties or make a material change or modification to any existing Material Contract included in the definition of Properties, except for agreements relating to sales of inventory and purchases of inventory from suppliers in the Ordinary Course of Business and consistent with past practices; (f) sell, lease, dispose of or otherwise distribute any material portion of the Properties, except for sales, leases, dispositions and distributions of Hydrocarbons and inventory in the Ordinary Course of Business and consistent with past practices; (g) mortgage or pledge any of the Properties or subject any Properties to any Lien other than Permitted Encumbrances; (h) take or omit to take any action that would result in a breach of any of the representations, warranties or covenants made by Seller, EPEC and Miller in this Agreement; (i) with respect to a Property operated by such Sub, take any action or omit to take any action which act or omission would reasonably be anticipated to have a Material Adverse Effect on the Properties; or (j) agree in writing or otherwise to take any of the foregoing actions;
7.1.2. promptly after the Auction, send out all notices and make all filings required to obtain the approvals, consents or waivers listed on Schedule 5.3 and thereafter use commercially reasonable efforts to preserve relationships with all third parties having business dealings with respect to the Properties;
7.1.3. until Closing continue to maintain all insurance with respect to the Properties currently in force with the same coverages and limits as are in effect at the date hereof;
7.1.4. promptly after the Auction, use commercially reasonable efforts to obtain the approvals, consents or waivers listed on Schedule 5.3 if required in connection with the sale and purchase of the Equity Interests as contemplated hereby;
7.1.5. perform and comply in all material respects with all covenants and conditions contained in agreements relating to the Properties to which such Sub owns an interest;
7.1.6. pay all Taxes and assessments or cause the payment of all Taxes and assessments with respect to the Properties that are owed by such Sub that becomes due and payable prior to the Closing Date;
7.1.7. promptly notify Buyer of the receipt of any written notice received by Seller or the Subs after the date hereof under any Contract, including any necessary elections to participate in any proposed operations, promptly consult with Buyer about any material matters concerning the Properties, and with Buyer’s prior written approval, participate in such operations, make such elections or take such actions necessary to preserve and maintain Seller’s or Subs’ interests in the Properties; provided, however, in the event Buyer and Seller disagree with respect to any decision to participate or not participate, as the case may be, in such operations, such disagreement shall be referred to the Bankruptcy Court to be resolved by the Bankruptcy Court on an expedited basis. Buyer’s approval of any action restricted by Section 7.1.1 or this Section 7.1.7 shall be considered granted within ten (10) days (unless a shorter time is reasonably required by the circumstances and such shorter time is specified in Seller’s written notice) of Seller’s notice to Buyer requesting such consent unless Buyer notifies Seller to the contrary in writing during that period. In the event any action taken pursuant to this Section 7.1.7 results in a change in any Net Revenue Interest or Working Interest set forth on Exhibit B-1, Buyer and Seller shall promptly supplement Exhibit B-1 to reflect such change. In the event of an emergency, Seller may take such action as a prudent operator would take and shall notify Buyer of such action promptly thereafter;
7.1.8. prior to the Closing Date, at Seller’s election, either (i) transfer all Employee Benefit Plans of each Sub to Seller, or (ii) terminate all Employee Benefit Plans of each Sub, in accordance with all applicable provisions of such Employee Benefit Plans, state and federal Law and the Plan;
7.1.9. prior to the Closing Date, pay all outstanding and undisputed invoices approved by the Bankruptcy Court that are associated with the Properties arising solely
with respect to those costs and expenses for which the Seller shall receive a Purchase Price adjustment pursuant to Section 4.1.1;
7.1.10. prior to the Closing Date, transfer each Sub’s accounts payable and long term liabilities not attributable to any Property, including, without limitation, to the extent such Agreement has not already been rejected in the Bankruptcy Case the liabilities arising under the Gas Gathering and Compression Services Agreement with the Frontier Midstream, LLC, to Seller; and
7.1.11. comply in all material respects with all Applicable Laws effective as of the date hereof.
7.1.12. From the date hereof through the Closing Date, Seller shall provide access to Seller’s office to a designee of Buyer for the purpose of converting Seller’s accounting and land systems to those compatible with the systems of Buyer. Seller shall provide reasonable cooperation and assistance to such designee in connection with such initial conversion. In consideration of such assistance by Seller, Buyer shall indemnify the Seller Group pursuant to the provisions of Section 7.2(c) for damages sustained by any member of the Seller Group in connection with such Seller’s assistance provided pursuant to this Section 7.1.12.
7.1.13. On the Business Day prior to the Closing Date, Seller shall, if not previously terminated, use commercially reasonable efforts to cause the termination of the Hedge Contracts in effect on May 14, 2009.
7.1.14.
(i) declare, set aside, make or pay any non cash dividend or other non-cash distribution in respect of the capital stock of any Sub or repurchase, redeem or otherwise acquire for non-cash consideration any outstanding shares of the capital stock or other securities of, or other ownership interests in, any Sub;
(ii) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Sub or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of the Subs;
(iii) effect any recapitalization, reclassification, stock split, or like change in the capitalization of any Sub;
(iv) amend the certificate of incorporation or bylaws of any of the Subs;
(v) except for (1) trade payables, (2) indebtedness under existing lines of credit, (3) any extension, renewal or refinancing of existing indebtedness, and (4) indebtedness for borrowed money incurred or guarantees issued in the Ordinary Course of Business borrow monies for any reason, draw down on any line of credit or debt obligation, or become the guarantor, surety, endorser or otherwise liable for any debt, obligation or liability (contingent or otherwise) of any other Person;
(vi) subject any of the Properties to any Lien, except for (A) Permitted Encumbrances, or (B) Liens arising in the Ordinary Course of Business or by operation of Law, or subject the Equity Interests to any Lien;
(vii) repurchase, discharge or satisfy any claim, debt or obligation of any of the Subs other than (1) in the Ordinary Course of Business, or (2) pursuant to the terms of any Contract as in effect on the date of this Agreement or permitted to be entered into thereafter;
(viii) subject to Section 7.3, permit any of the Subs to enter into, or agree to enter into, any merger or consolidation with, any corporation or other Person;
(ix) fail to maintain, in full force and effect, to the extent commercially reasonably available, insurance coverage that is equivalent in all material respects to the insurance coverage currently in effect for Seller and the Subs; or
(x) authorize, or commit or agree to take, any of the actions referred to in subsections (i) through (xii) above.
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
ARTICLE IX CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
ARTICLE X TITLE MATTERS
10.2.1. Within ten (10) Business Days after Seller’s receipt of a Title Defect Notice, Seller shall notify Buyer in writing if Seller disagrees with the Title Defects claimed therein and/or the Defect Values set forth therein. If Seller fails to provide written objection(s) within such ten (10) Business Day period, Seller shall be deemed to have agreed with such Title Defects and Defect Values and the Purchase Price shall be reduced by such Defect Values as set forth in Article IV. If Seller provides written notice of any disagreement with respect to any such claimed Title Defect and/or Defect Values, then Seller and Buyer shall promptly enter into good faith negotiations for ten (10) days, and shall attempt to agree in writing on such matters. If Seller and Buyer reach written agreement, the value agreed by such parties shall be the Defect Values for such Title Defects and the Purchase Price shall be reduced by an amount equal to such agreed Defect Values as set forth in Article IV.
10.2.2. If Seller and Buyer cannot reach agreement concerning either the existence of a Title Defect or the Defect Value within ten (10) days after Seller’s notice to Buyer of any disagreement with respect to any claimed Title Defects and/or Defect Value, then such parties shall submit such dispute to a mutually acceptable attorney licensed to practice law in the state in which such Lease, Well or Fee Interest is located and having at least ten (10) years experience in oil and gas title matters for prompt resolution; provided, however, that if at any time any attorney so chosen fails or refuses to perform hereunder, a new attorney shall be chosen by Seller and Buyer. In the event Seller and Buyer cannot agree upon such mutually acceptable attorney within five (5) Business Days of the receipt of such written request, Seller and Buyer hereby agree that the attorney shall be selected by the Senior Chaired Professor of Oil and Gas Law at the University of Texas School of Law or the next most Senior Chaired Professor of Oil and Gas Law at the University of Texas School of Law in the event the most Senior Chaired Professor is unable or unwilling to serve. The cost of any such attorney shall be borne 50% by Seller and 50% by Buyer. For any such dispute resolution process, Seller and Buyer shall present a written statement of their respective positions on the dispute to the attorney within three (3) Business Days after the selection of the attorney is confirmed pursuant to the terms hereof, and within ten (10) Business Days of receipt of such statements the attorney shall make a determination of all points of disagreement in accordance with the terms and conditions of this Agreement. The determination by the attorney shall be conclusive and binding on the parties hereto and shall be enforceable against either Seller or Buyer in any court of competent jurisdiction, and the value, if any, determined by the attorney with respect to a Title Defect shall be the Defect Value for such Title Defect. If necessary to complete such determination, the Closing Date shall be deferred until the attorney has made a determination of the disputed issues with respect thereto and all subsequent dates and required activities having reference to the Closing Date shall be correspondingly deferred; provided, however, that unless the parties mutually agree to the contrary, the Closing Date shall not be deferred pursuant to this Section 10.2.2 for more than ten (10) Business Days.
10.2.3. If the determination has not been made by the attorney by the Closing Date, the procedures set forth in Section 10.5.3 shall govern.
10.2.4. Notwithstanding any other provision hereof to the contrary, in the event that any Title Defect is not waived in writing by Buyer, or cured on or before the Closing Date to Buyer’s reasonable satisfaction, then Seller and Buyer hereby agree that Seller shall cause the applicable Sub to assign to Seller the affected Lease, Well and/or Fee Interest, as applicable, to which the Title Defect relates or pertains (the “Affected Property”), in which case the Affected Property shall, subject as hereinafter provided, be deleted from this Agreement and the Purchase Price shall be reduced by an amount equal to the Allocated Value of such Affected Property; provided, however, that if the Title Defect affecting the Affected Property is cured within sixty (60) days of the Closing Date, and Seller gives notice to Buyer of its election within such time period, Seller shall have the right to sell and reassign the Affected Property to the applicable Sub by executing and delivering to the applicable Sub a recordable reassignment of such Affected Property substantially in the form of the Bill of Sale, Assignment and Assumption Agreement attached hereto as Exhibit C (the “Assignment”), with the required revisions and necessary changes, and Buyer hereby agrees that it shall cause the applicable Sub to purchase and accept the reassignment of the Affected Property for the Allocated Value thereof, subject to the terms and conditions of this Agreement as if the Affected Property had not been assigned from the applicable Sub to the Seller. Seller shall receive the Allocated Value for such Affected Property simultaneously with the reassignment thereof to the applicable Sub.
10.3.1. If, because of the Title Defect, title to a particular Lease, Well or Fee Interest fails completely with the effect that the respective Sub has no ownership interest in the relevant Lease, Well or Fee Interest, the Defect Value shall be the Allocated Value of such Lease, Well or Fee Interest.
10.3.2. If a Title Defect exists because a Sub owns a Net Revenue Interest in a Lease, Well or Fee Interest that is less than the NRI for such Lease, Well or Fee Interest as set forth on Exhibit B, then the Defect Value with respect to such Title Defect shall be the amount equal to the product of (i) the Allocated Value for such Lease, Well or Fee Interest multiplied by (ii) a fraction, the numerator of which is the difference between (x) the NRI for such Lease, Well or Fee Interest set forth on Exhibit B minus (y) the NRI for such Lease, Well or Fee Interest agreed or determined to be owned by such Sub and the denominator of which is the NRI for such Lease, Well or Fee Interest set forth on Exhibit B.
10.3.3. If a Title Defect that is not specifically extinguished by the Confirmation Order is a Lien upon a Lease, Well or Fee Interest then Seller shall either (a) instruct Buyer to pay at Closing out of the Purchase Price the sum necessary to be paid to the obligee to remove the Title Defect from such Lease, Well or Fee Interest (the aggregate of all such amounts, the “Liquidated Title Defect Payment”), or (b) retain the obligation of such Title Defect and elect to challenge the validity thereof (or of any portion thereof), in which case Buyer shall extend reasonable cooperation to Seller in such efforts at no risk or expense to Buyer; provided, however, that if such Title Defect is not cured by three (3) Business Days prior to Closing, it shall constitute a Title Defect.
10.3.4. If a Title Defect represents an obligation or burden upon a Lease, Well or Fee Interest for which the economic detriment to Buyer is not liquidated but can be estimated with reasonable certainty, the Defect Value with respect to such Title Defect shall be the sum Seller and Buyer mutually agree upon in writing in good faith as the present value of the adverse economic effect such Title Defect will have on such Lease, Well or Fee Interest. If Seller and Buyer cannot reach such written agreement as to such Defect Value, then such dispute shall be resolved in the manner set forth in Section 10.2.
10.3.5. The Defect Value shall take into consideration all of the applicable guidelines as are set forth in Sections 10.3.1, 10.3.2, 10.3.3 and 10.3.4 above.
10.3.6. Notwithstanding anything to the contrary set forth in this Agreement, (i) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for individual Title Defects that have a Defect Value that does not exceed One Hundred Thousand Dollars (US$100,000) (“Individual Title Deductible”); and (ii) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for all Title Defects unless the sum of the Defect Values with respect to all such Title Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds a threshold equal to One Million Five Hundred Thousand Dollars (US$1,500,000) (“Aggregate Title Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price or other remedies equal to the sum of Defect Values with respect to Title Defects that exceed the Aggregate Title Deductible.
10.5.1. Within ten (10) days after Buyer’s receipt of a Title Benefit Notice, Buyer shall notify Seller in writing if Buyer disagrees with the Title Benefits claimed therein and/or the Benefit Values set forth therein. If Buyer fails to provide written objection(s) within such ten (10) day period, Buyer shall be deemed to have agreed with such Title Benefits and Benefit Values and such Benefit Values will be credited as an offset against any Defect Values for Title Defects, if any, with the remaining Benefit Value after offset being an increase to the Purchase Prices as set forth in Article IV. If Buyer provides written notice of any disagreement with respect to any such claimed Title Benefit and/or Benefit Values, then Seller and Buyer shall promptly enter into good faith
negotiations for ten (10) days and shall attempt to agree in writing on such matters. If Seller and Buyer reach written agreement, the value agreed by Seller and Buyer shall be the Benefit Values for such Title Benefits and will be credited as an offset against any Defect Values for Title Defects, if any, with the remaining Benefit Value after offset being an increase to the Purchase Price as set forth in Article IV.
10.5.2. If Seller and Buyer cannot reach written agreement concerning either the existence of a Title Benefit or the Benefit Value within ten (10) days after Buyer’s notice of any disagreement with respect to any claimed Title Benefits and/or Benefit Value, then Seller and Buyer shall submit such dispute to a mutually acceptable attorney licensed to practice law in the state in which such Lease, Well or Fee Interest is located and having at least ten (10) years experience in oil and gas title matters for prompt resolution; provided, however, that if at any time any attorney so chosen fails or refuses to perform hereunder, a new attorney shall be chosen by Seller and Buyer. In the event Seller and Buyer cannot agree upon such mutually acceptable attorney within five (5) Business Days of the receipt of such written request, Seller and Buyer hereby agree that the attorney shall be selected by the Senior Chaired Professor of Oil and Gas Law at the University of Texas School of Law or the next most Senior Chaired Professor of Oil and Gas Law at the University of Texas School of Law in the event the most Senior Chaired Professor is unable or unwilling to serve. The cost of any such attorney shall be borne 50% by Buyer and 50% by Seller. For any such dispute resolution process, Buyer and Seller shall present a written statement of their respective positions on the dispute to the attorney within three (3) Business Days after the attorney is selected pursuant to the terms hereof, and within ten (10) Business Days of receipt of such statements the attorney shall make a determination of all points of disagreement in accordance with the terms and conditions of this Agreement. The determination by the attorney shall be conclusive and binding on the parties and shall be enforceable against either Seller or Buyer in any court of competent jurisdiction, and the value determined by the attorney with respect to a Title Benefit shall be the Benefit Value for such Title Benefit.
10.5.3. If the attorney does not make a determination of the disputed issues prior to the Closing Date, the Closing will proceed and such determination shall be made by such attorney after the Closing Date and prior to the determination of the Final Purchase Price unless the amount in dispute with respect to the matters set forth in this Article X would meet the threshold for a termination right of either Seller or Buyer as set forth in Section 17.1.5, in which case the Closing Date shall be deferred and all subsequent dates and required activities having reference to the Closing Date shall be correspondingly deferred; provided, however, that unless the parties mutually agree to the contrary, the Closing Date shall not be deferred pursuant to this Section 10.5.3 for more than ten (10) Business Days, and the Agreement may thereafter be terminated pursuant to Section 17.1.5.
ARTICLE XI ENVIRONMENTAL MATTERS
11.4.1. Within ten (10) Business Days after Seller’s receipt of an Adverse Environmental Condition Notice, Seller shall notify Buyer in writing if Seller disagrees with any Adverse Environmental Condition or Buyer Remediation Amount set forth therein. If Seller fails to provide such notice, (a) Seller shall be deemed to have agreed with such Adverse Environmental Condition, and such Buyer Remediation Amount set forth with respect to the relevant Adverse Environmental Condition, and the Buyer Remediation Amount shall become the “Final Remediation Amount” for such Adverse Environmental Condition, and (b) the Purchase Price shall be reduced by such Final Remediation Amount as set forth in Section 4.2.5. If Seller provides such notice of disagreement, then Seller and Buyer shall promptly enter into good faith negotiations and shall attempt to agree in writing on the Remediation Amount, if any, with respect to each relevant Adverse Environmental Condition agreed in writing by Seller and Buyer (such
agreed amount, the “Agreed Remediation Amount” which shall become the “Final Remediation Amount” for such Adverse Environmental Condition), and the Purchase Price shall be reduced by any such Final Remediation Amount as set forth in Section 4.2.5.
11.4.2. If Seller and Buyer cannot reach agreement as to whether an Adverse Environmental Condition exists and/or as to the Remediation Amount for any Adverse Environmental Condition agreed in writing by Seller and Buyer, in each case within twenty (20) days after Seller’s notice of its disagreement with an Adverse Environmental Condition Notice, then Buyer and Seller may agree to (a) elect to have the subject Lease, Well of Fee Interest (and any integrally related Facilities, as agreed in writing between Seller and Buyer) assigned from the applicable Sub to Seller, and removed from the list of Leases, Wells and Fee Interests in exchange for a reduction of the Purchase Price by an amount equal to the Allocated Value of such Retained Properties; provided, however, that the aggregate reduction in the Purchase Price for all Retained Properties, if any, shall be limited to ten percent (10%) of the Purchase Price; (b) permit Seller to fully remove, remediate and resolve such Adverse Environmental Condition, at Seller’s sole cost, provided that, if feasible, Seller shall (i) complete such removal, remediation and resolution prior to Closing, and (ii) provide, at its sole cost, evidence reasonably satisfactory to Buyer, acting in a commercially reasonable good faith manner, that no Adverse Environmental Condition existed, or that the Adverse Environmental Condition that did exist has been fully removed, remediated and resolved; or, if neither of the preceding subsections (a) and (b) resolves the issues between Buyer and Seller; (c) submit the questions as to whether an Adverse Environmental Condition exists and, if so, the Remediation Amount for such Adverse Environmental Condition to the Bankruptcy Court for final resolution (if it determines that an Adverse Environmental Condition exists, its determination of the Remediation Amount therefor being the “Bankruptcy Court Remediation Amount” which shall become the “Final Remediation Amount” for such Adverse Environmental Condition), in which case the Purchase Price shall be reduced by such Final Remediation Amount for such Adverse Environmental Condition. If necessary, the calculation of the Final Remediation Amount shall be deferred unless the amount in dispute with respect to the matters set forth in this Article XI would meet the threshold for a termination right of Seller or Buyer, in which case the Closing Date shall be deferred and all subsequent dates and required activities having reference to the Closing Date shall be correspondingly deferred until the Bankruptcy Court has made a determination of the disputed issues with respect thereto; provided, however, that unless the parties mutually agree to the contrary, the Closing Date shall not be deferred pursuant to this Section 11.4.2 for more than ten (10) Business Days and the Agreement may thereafter be terminated pursuant to Section 17.1.6.
11.4.3.
(i) If, within fifteen (15) days prior to the date the final settlement of the Purchase Price adjustment is completed pursuant to Section 14.1 and within sixty (60) days of the Closing Date, Seller has provided to Buyer evidence satisfactory to Buyer, acting in a commercially reasonable good faith manner, that the Adverse Environmental Condition has been fully removed, remediated and resolved, such Lease, Well or Fee Interest shall no longer be Retained Properties, and Seller shall assign to the applicable Sub, by an assignment in substantially the form of the Assignment, with the required revisions and necessary changes, the Lease, Well or Fee Interest, as applicable, and Buyer hereby agrees to cause the applicable Sub to accept the assignment of such Lease, Well or Fee Interest, and to pay to the Seller the Allocated Value (concurrently with such assignment) for such Lease, Well or Fee Interest in accordance with this Agreement.
(ii) As to any Retained Properties still subject to Adverse Environmental Conditions, Buyer, at its option may (A) offer Seller an extension of the remediation period on such terms and conditions as Buyer may, in its sole discretion, elect to impose, and Seller may accept or reject such extension; (B) waive the relevant Adverse Environmental Condition, in which case such Lease, Well or Fee Interest shall no longer be Retained Properties, and Seller shall assign to the appropriate Sub by an assignment in substantially the form of the Assignment, with the required revisions and necessary changes, the Lease, Well or Fee Interest, as applicable and Buyer hereby agrees to cause the applicable Sub to accept the assignment of such Lease, Well or Fee Interest, and to pay to Seller the Allocated Value (concurrently with such assignment) for such Lease, Well or Fee Interest in accordance with this Agreement; or (C) eliminate the affected Lease, Well or Fee Interest from the application of this Agreement, and retain the previously withheld portion of the Preliminary Purchase Price related to such Lease, Well or Fee Interest, free and clear of any claim by Seller with respect thereto, and thereupon any and all rights of Buyer in or to such Lease, Well or Fee Interest shall terminate.
ARTICLE XII SUSPENSE FUNDS HELD BY SELLER OR SUBS
ARTICLE XIII CLOSING
13.3.1. Seller shall deliver a certified copy of the Confirmation Order, which Order shall not have been reversed or modified on appeal or, if such appeal is pending, such Order shall not have been stayed;
13.3.2. Seller shall deliver to Buyer a certificate signed by an officer of Seller certifying that all of the conditions precedent to the effectiveness of the Plan have been satisfied or waived in writing in accordance with the Plan;
13.3.3. Seller shall cause each reorganized Sub to execute and deliver to Buyer (or to an Affiliate of Buyer designated in writing by Buyer pursuant to written notice delivered to Seller no less than five (5) Business Days prior to the Closing Date) the original certificates representing the Equity Interests of such Sub, duly endorsed in blank or accompanied by transfer powers and with all requisite transfer tax stamps attached;
13.3.4. The Deposit shall, together with the interest earned thereon, be paid over to Seller or to Seller’s designee or designees;
13.3.5. Buyer shall deliver via wire transfer to an account specified by Seller, in immediately available funds, the Preliminary Purchase Price, less the Deposit, and less the Liquidated Title Defect Payment;
13.3.6. Buyer shall deliver via wire transfer to account(s) specified by the applicable payee(s) the Liquidated Title Defect Payment;
13.3.7. Seller shall deliver to Buyer documentation of the Property transfers pursuant to Section 9.9;
13.3.8. Seller shall deliver to Buyer written resignations or evidence of removal of each of the directors and officers of the Subs;
13.3.9. Seller shall deliver to Buyer the executed Lender Release referred to in Section 9.6;
13.3.10. Seller shall deliver to Buyer the Non-Foreign Affidavit; and
13.3.11. Seller shall transfer to a Sub designated by Buyer the Suspense Funds in Seller’s and the Subs’ possession.
ARTICLE XIV POST-CLOSING ADJUSTMENTS
14.6.1. From and after the Closing Date, Buyer will cause each Sub to, and each Sub hereby agrees to, receive the Subs A/R, the Severance Tax Abatement Amount and the New Mexico Withholding Tax Amount (collectively, the “Accounts Receivable”)
reflected in the books and records of each applicable Sub generally in accordance with the billing and receipt practices presently applied by each such Sub in the receipt of its Accounts Receivable. In connection with such receipts by a Sub, if a payment is received from an account debtor who has not designated the invoice being paid thereby, such payment will be applied to the earliest invoice outstanding with respect to indebtedness of such account debtor, except for those invoices which are subject to a dispute to the extent of such dispute.
14.6.2. Buyer will, on or before the tenth (10) Business Day of each calendar month commencing with the second complete calendar month following the Closing Date, deliver to Seller a written report (“Collection Report”) of the following information with respect to the Accounts Receivable:
14.6.3. If, after the Closing Date, any Sub or Buyer receives any remittance from any account debtors with respect to the Accounts Receivable, Buyer will cause the applicable Sub to, and such Sub hereby agrees to, endorse such remittance to the order of Seller and forward it to Seller upon receipt thereof.
14.6.4. In the event Seller receives any remittance from or on behalf of any account debtor with respect to accounts receivable arising from invoices issued by any Sub subsequent to the Closing for services rendered and/or Hydrocarbons sold subsequent to the Closing Date, Seller agrees to endorse such remittance to the order of the applicable Sub and forward it to such Sub immediately upon receipt thereof.
ARTICLE XV ASSUMPTION BY BUYER
ARTICLE XVI RISK OF LOSS
ARTICLE XVII TERMINATION AND REMEDIES
17.1.1. The parties hereto may terminate this Agreement by mutual written consent at any time prior to the Closing Date.
17.1.2. Either Buyer or Seller may terminate this Agreement by written notice to the other if (i) subject to the provisions of Section 10.2.2, Section 10.5.3 and Section 11.4.2, the transactions contemplated hereby do not close on or before January 13, 2010; provided, however, that neither Seller nor Buyer may terminate this Agreement pursuant to this Section 17.1.2(i) if such party’s failure to comply with its obligations under this Agreement caused the Closing not to occur on or before the Scheduled Closing Date or (ii) the Bankruptcy Court approves an Alternative Transaction that was entered into in accordance with the Bidding Procedures Order.
17.1.3. Buyer may terminate this Agreement by delivery of written notice to Seller at any time prior to the Scheduled Closing Date if: (a) the Bankruptcy Court has not entered the Confirmation Order by the Petition Date plus One Hundred Five (105) days, or the Confirmation Order is entered by such date but is stayed by order of the Bankruptcy Court or by some other federal district or appeals court (and such stay is not terminated by the Petition Date plus One Hundred Five (105) days; (b) Seller has breached any representation, warranty or covenant in this Agreement in any material respect and such breach results in a Material Adverse Effect and Seller has failed to cure such breach within a reasonable time period after receiving written notice from Buyer of such breach; (c) the Bankruptcy Cases have been converted to cases under Chapter 7 of the Bankruptcy Code; (d) the Bankruptcy Cases have been dismissed; (e) the Bankruptcy Court has entered an Order for the appointment of a trustee or examiner with managerial powers, other than at the request of Buyer, under Bankruptcy Code Section 1104 and such trustee or examiner takes any action to interfere with or impair the transactions contemplated by this Agreement; (f) Seller executes an Alternative Agreement; (g) Seller takes affirmative steps to effect an Alternative Transaction pursuant to an Alternative Agreement except as otherwise provided for in the Bidding Procedures Order; or (h) any event, circumstance, condition, fact, effect or other matter has occurred or exists which would, or would be reasonably likely to, give rise to the failure of any of the conditions to the obligations of Buyer set forth in Article IX of this Agreement and cannot be cured within five (5) Business Days prior to the Scheduled Closing Date.
17.1.4. Seller may terminate this Agreement by delivery of written notice to Buyer at any time prior to the Closing Date if Buyer has breached any representation, warranty or covenant in this Agreement in any material respect and Buyer has failed to cure such breach within five (5) Business Days after receiving written notice from Seller of such breach.
17.1.5. Either Seller or Buyer, as applicable, may terminate this Agreement by delivery of written notice to the other if the aggregate of (a) the sum of all Defect Values plus, (b) the sum of all Final Remediation Amounts plus, (c) the sum of the Allocated Values of all Retained Properties plus, (d) the sum of all Casualty Losses (to the extent not covered by insurance or condemnation award), less (e) the sum of all Title Benefits, exceeds twenty percent (20%) of the Purchase Price.
17.1.6. Either Seller or Buyer, as applicable, may terminate this Agreement by delivery of written notice to the other, if the aggregate of (a) all Final Remediation Amounts, and (b) the Allocated Value of all Retained Properties exceeds twenty percent (20%) of the Purchase Price.
ARTICLE XVIII ADDITIONAL COVENANTS
18.3.1. After the Closing, Buyer shall cause EPEC, and EPEC hereby agrees to, promptly pursue the certification of additional areas and Wells for severance tax abatement, where applicable, in the Flores/Bloomberg area in Starr County, Texas, in accord with subparts (a) and (b) below.
18.3.2. After the Closing, Buyer shall cause EPEC, and EPEC hereby agrees to, promptly pursue the certification of additional areas and Wells for severance tax abatement, where applicable, in the Properties other than the Flores/Bloomberg area in Starr County, Texas, in accord with subparts (a) and (b) below.
18.3.3. From and after the Closing Date, Buyer shall cause EPEC to, and EPEC hereby agrees to, file with the appropriate taxing authority of the State of Texas claims for sales tax refunds relating to purchases made by Seller or EPEC prior to the Effective Time, which in each case have not been received or paid over to Seller or EPEC as of the Closing Date.
ARTICLE XIX MISCELLANEOUS
19.11.1. Except as set forth in this Agreement or the Bidding Procedures Order, each of the parties hereto shall pay its own fees and expenses incident to the negotiation and preparation of this Agreement and the consummation of the transactions contemplated hereby, including brokers’ fees. Buyer shall be responsible for the cost of all fees for the recording of transfer documents. All other costs shall be borne by the
party incurring them. Unless otherwise provided by this Agreement, all Taxes imposed by Taxing Authorities are the obligation of and shall be borne by the party incurring such Taxes. Buyer and Seller will use commercially reasonable efforts and cooperate in good faith to exempt the sale by Seller and the purchase by Buyer of the Equity Interests from any sales, use, stamp, real estate transfer, documentary, registration, recording and other similar taxes (collectively, “Transfer Taxes”) and to minimize any such Transfer Taxes. If a determination is ever made that a Transfer Tax applies, Buyer shall be liable for such tax. BUYER SHALL INDEMNIFY AND HOLD SELLER GROUP HARMLESS WITH RESPECT TO THE PAYMENT OF ANY OF SUCH TAXES, INCLUDING ALL INTEREST, FINES AND PENALTIES ASSESSED THEREON. THE INDEMNITY AND HOLD HARMLESS OBLIGATION CONTAINED IN THE PRECEDING SENTENCE SHALL SURVIVE THE CLOSING.
19.11.2. Buyer has structured the purchase of the Subs as a sale of the stock of the Subs by Seller and without the conversion of any of the Subs into a single member limited liability company. To the extent that structuring the transaction as a stock sale rather than as a conversion of the Subs into single member limited liability companies followed by the sale of the membership interests in such limited liability companies, treated as disregarded entities for federal income tax purposes, results in any state Tax liabilities for the Seller and/or the Subs, Buyer agrees to pay for any state Tax liability of the Seller and/or the Subs resulting from the transaction being structured as a sale of stock of the Subs as contemplated hereby, up to a maximum amount of $1,500,000.00. Seller shall provide Buyer and its tax advisors with the opportunity at Buyer’s sole cost and expense to participate in the determination of the additional state Tax liability and to review the Tax Returns in accordance with Section 19.11.5(g).
19.11.3. Tax Information. Buyer and Seller agree to furnish or cause to be furnished to each other, upon written request, as promptly as practicable, such information and assistance relating to the Subs, the Equity Interests and the Properties (including access to books and records) as is reasonably necessary for the filing of all Tax Returns, the making of any election, rendition or protest relating to Taxes, the preparation for any audit by any Taxing Authority, and the prosecution or defense of any claim, suit or proceeding relating to any Tax.
19.11.4. Tax-Sharing Agreements. Any Tax-Sharing Agreement between the Seller and any Sub or between Subs, and all obligations or liabilities arising under any such agreements, shall be terminated effective immediately prior to the Effective Time and shall have no further effect for any taxable year (whether the current year, a future year, or a past year).
19.11.5. Responsibility and Proration of Taxes, Preparation of Tax Returns; Payment of Taxes.
(i) Consistent with the Purchase Price adjustments of Article IV, Seller shall be liable for all Ad Valorem Taxes which shall be accrued
up to and including the Effective Time. The Buyer shall be liable for all Ad Valorem Taxes accrued after the Effective Time.
(ii) Seller shall file a combined report that includes the Subs’ information through the Closing Date and shall be liable for all Texas franchise Taxes of the Subs through the Closing Date, including any Texas franchise Tax liability attributable to the sale of the Equity Interests by Seller. Buyer shall be responsible for Texas franchise Taxes of the Subs for periods after the Closing Date.
(iii) Seller shall be liable for all income and other Taxes of the Subs attributable to income, production or activity through the Closing Date, including any Tax liability attributable to the sale of the Equity Interests by Seller. Buyer shall be responsible for income and other Taxes of the Subs attributable to income, production or activity for periods occurring after the Closing Date.
(iv) With respect to Ad Valorem Taxes, in the case of any taxable period that includes (but does not end on) the Effective Time (the “Straddle Period”), the Ad Valorem Taxes accrued as of the Effective Time shall be equal to the amount of such Ad Valorem Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days during the Straddle Period up to and including the Effective Time, and the denominator of which is the number of days in the Straddle Period. The party liable for any Ad Valorem Tax shall have all available rights to legally contest the Tax, provided, however, that the Buyer shall control, but shall allow the Seller (at Seller’s request and expense) to participate in, any contest with respect to Ad Valorem Taxes for a Straddle Period).
(v) In the case of Straddle Periods for all other Taxes any allocation and responsibility for such Taxes shall be based on the actual revenue and expenses before and after the Effective Time or if the Tax cannot be calculated on that basis, then such Taxes shall be pro rated as provided in (iv) immediately above. Seller shall be responsible for such Taxes that are attributable to periods before the Effective Time and Buyer shall be responsible for such Taxes that are attributable to periods from and after the Effective Time.
19.11.6. Certain Other Taxes. All Transfer Taxes (including any penalties and interest) incurred in connection with this Agreement, if any, shall be paid by Seller when due, and Seller shall file all necessary Tax Returns and other documentation with respect to any such transfer Taxes, and, if required by Applicable Law, Buyer will, and will cause Subs to, join in the execution of any such Tax Returns and other documentation and will cooperate with Seller to take such commercially reasonable actions as will minimize or reduce the amount of such Taxes.
19.11.7. Tax Audits.
19.11.8. Resolution of Certain Disputes. In the event that Seller or Buyer disputes the application or interpretation of any provision of Sections 19.11.5, 19.11.7 and 19.11.12 hereof, or the amount, allocation or calculation, payment or reimbursement of Taxes, if any, owed by such party thereunder, such party shall deliver to the other a statement setting forth, in reasonable detail, the nature of and/or the dollar amount of any disagreement so asserted. Seller and Buyer shall attempt in good faith to resolve such dispute within twenty (20) days following the commencement of such dispute. If Seller and Buyer are unable to resolve such dispute within such twenty (20) day period, the dispute shall be resolved by the Accounting Referee. The Accounting Referee shall determine, only with respect to the specific disagreements submitted in writing by Seller and Buyer, the manner in which such item or items in dispute should be resolved; provided, however, that the dollar amount of any such item or items shall be determined within the range of dollar amounts proposed by Seller, on the one hand, and Buyer, on the other hand. The Accounting Referee shall be directed to make such determination promptly, but in no event later than thirty (30) days after acceptance of its appointment. Any finding by the Accounting Referee shall be a reasoned award stating the findings of fact and conclusions of law (if any) on which it is based, shall be final and binding upon the parties and shall be the sole and exclusive remedy between the parties regarding the disputed items so presented. The fees and expenses of the Accounting Referee shall be
shared by Seller and Buyer (A) in proportion to each party’s respective liability for Taxes which are the subject of the dispute as determined by the Accounting Referee, or (B) in equal proportions if the subject of the dispute involves Tax Returns for which no Taxes are due. The parties shall otherwise bear their own expenses incurred in any dispute resolution pursuant to this Section 19.11.8.
19.11.9. Refunds and Tax Benefits. Any refunds of Taxes (together with any interest with respect thereto) paid to or in respect of the Subs (including any amounts credited against income tax to which Buyer, its Affiliates or any of the Subs becomes entitled) and that relate to Tax periods or portions thereof ending on or before the Effective Time for Ad Valorem Taxes and the Closing Date for all other Taxes shall be for the account of Seller. Buyer shall pay over to Seller any such refund or the amount of any such credit (in each case, together with any interest with respect thereto) within fifteen (15) days after receipt or entitlement thereto. Any refunds or credits of Taxes (together with any interest with respect thereto) of the Subs for any Straddle Period shall be apportioned between Seller and Buyer consistent with Section 19.11.5(a). Buyer shall, if Seller so requests and at Seller’s expense, prepare, execute and file any claims for refunds or credits, or cause the Subs to prepare, execute and file any claims for refunds or credits, to which Seller is entitled under this Section 19.11.9. Buyer shall permit Seller to control the prosecution of any such refund at Seller’s sole cost.
19.11.10. Certain Elections. To the extent permitted by Law, Buyer shall not permit the Subs to carry back any loss, deduction or credit to any taxable period that ends on, prior to or which includes the Closing Date.
19.11.11. FIRPTA. Seller shall furnish to Buyer on or before the Closing Date a certification of its non-foreign status consistent with the requirements set forth in Section 1445 of the Code and the Treasury Regulations.
19.11.12. Allocation of Purchase Price. As soon as reasonably practicable following the Closing Date, Buyer and Seller shall use commercially reasonable efforts to agree upon an allocation of the Purchase Price among the Properties of the Subs.
19.14.1. Without limiting any party’s right to appeal any Order of the Bankruptcy Court, the parties agree that the Bankruptcy Court will have exclusive jurisdiction over any disputes arising under this Agreement.
19.14.2. In the event the Bankruptcy Court does not have jurisdiction over a dispute that arises under this Agreement, or for whatever reason fails or refuses to take jurisdiction over any other dispute arising hereunder then, except as otherwise expressly set forth in this Agreement, the parties hereby agree, to the fullest extent permitted by Law, to submit all controversies, disputes and claims arising hereunder and not otherwise resolved by the parties in writing to the exclusive jurisdiction of the appropriate State of Texas court located in Harris County, Texas or, to the extent permitted by Law, the federal courts in the Southern District of Texas (to whose jurisdiction the parties hereby irrevocably, unqualifiedly and unconditionally submit), and to any appellate court from any therefrom, in any dispute arising out of or relating to this Agreement, and each party hereby irrevocably, unqualifiedly and unconditionally agrees that all claims and Losses in respect of any such dispute may be heard and determined in such State of Texas court, or to the extent permitted by Law, in such federal court. Each of the parties hereby irrevocably, unqualifiedly and unconditionally waives, to the fullest extent it may effectively do so, any defense of any inconvenient forum or improper venue to the maintenance of any such dispute in any such court and any right of jurisdiction on account of its place of residence or domicile. Each of the parties irrevocably, unqualifiedly and unconditionally consents to the service of any and all process in any such dispute in such State of Texas or federal court by the sending of such process to each of the applicable parties at the addresses and in the manner specified in Section 19.1, or as otherwise may be permitted or required by Applicable Law. Each of the parties agrees that the final judgment in any such dispute, following exhaustion of all remedies by appeal, shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
19.14.3. EACH OF THE PARTIES HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY DISPUTE ARISING HEREUNDER AND CONSENTS TO TRIAL WITHOUT A JURY, AS EVIDENCED BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT.