Exhibit 10.1

 

 

PURCHASE AND SALE AGREEMENT

 

 

EASTERN AMERICAN NATURAL GAS TRUST,

 

As Seller

 

and

 

ENERGY CORPORATION OF AMERICA

 

As Buyer

 

January 3, 2013

 

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PURCHASE AND SALE AGREEMENT

 

This Purchase and Sale Agreement (“Agreement”) is made and entered into on
January 3, 2013, by and among Eastern American Natural Gas Trust, a Delaware
statutory trust (the “Trust” or the “Seller”) acting through The Bank of New
York Mellon Trust Company, N.A., as trustee for the Trust (“Trustee”), and
Energy Corporation of America, a West Virginia corporation (“ECA” or “Buyer”). 
Buyer and Seller are referred to herein individually as a “Party” and
collectively as the “Parties”.

 

RECITALS

 

WHEREAS, the Trust was formed under the Delaware Business Trust Act pursuant to
an Amended and Restated Trust Agreement dated as of January 1, 1993 (the “Trust
Agreement”) by and among Eastern American Energy Corporation, a West Virginia
corporation (“EAEC”), as trustor, and Wilmington Trust Company, a banking
corporation organized under the laws of the State of Delaware, and Bank of
Montreal Trust Company, a trust company organized under the laws of the State of
New York, as trustees; and

 

WHEREAS, EAEC was a wholly-owned subsidiary of ECA, and was subsequently merged
with and into ECA; and

 

WHEREAS, The Bank of New York Mellon Trust Company, N.A. currently serves as
trustee of the Trust; and

 

WHEREAS, the Trust was formed to acquire and hold net profits interests (the
“Net Profits Interests”) created from the working interests owned by ECA in
certain producing gas wells and proved development well locations located in
West Virginia and Pennsylvania (the “Underlying Properties”); and

 

WHEREAS, the Net Profits Interests include a royalty interest (the “Royalty
NPI”) set forth in the Royalty NPI Conveyance from EAEC to Bank of Montreal
Trust Company, as trustee under the Trust Agreement, delivered to be effective
as of January 1, 1993 and recorded as set forth in Exhibit A to this Agreement
(the “NPI Conveyance”), a copy of which is attached as Exhibit B to this
Agreement; and

 

WHEREAS, the Royalty NPI is passive in nature, and ownership of the Royalty NPI
does not confer any management control or authority over the operation of the
Underlying Properties; and

 

WHEREAS, the NPI Conveyance provided that it transferred to the Trustee, on
behalf of the Trust, as a net profits interest, a variable undivided interest in
and to the Subject Interests (as defined therein), insofar and only insofar as
the same relate to the Wells (as defined therein), sufficient to cause the Trust
to receive that volume of Trust Gas (as defined therein), calculated and
delivered in kind or paid in money in accordance with the further terms and
conditions of the NPI Conveyance; and

 

WHEREAS, the NPI Conveyance defines a “Well” to mean the bore hole of each Gas
well identified in Exhibit A-1 and Exhibit A-2 to the NPI Conveyance and is
expressly limited to

 

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the gas produced from the surface of the ground to a depth of one hundred feet
(100’) below the depth of the deepest producing horizon in each Well; and

 

WHEREAS, from time to time certain Wells originally subject to the Royalty NPI
have been released from the Royalty NPI; and

 

WHEREAS, the Trust is required to sell the Royalty NPI, and the Trustee is
required to liquidate the Trust and distribute the proceeds of the sale of the
Royalty NPI to the holders of beneficial interest in the Trust in accordance
with the terms of the Trust Agreement; and

 

WHEREAS, the Trust entered into a Purchase and Sale Agreement dated October 24,
2012 with a third party (the “October 24, 2012 Agreement”), pursuant to which
the third party agreed to purchase the Royalty NPI pursuant to the terms and
conditions thereof; and

 

WHEREAS, under the Trust Agreement, ECA had various preferential purchase
rights, including a right of first refusal to purchase any or all of the Royalty
NPI from the Trust at the same price and upon the same terms as those set forth
in the October 24, 2012 Agreement; and

 

WHEREAS, pursuant to a letter dated November 5, 2012, ECA notified Trustee of
its exercise of its right of first refusal to purchase the Royalty NPI; and

 

WHEREAS, the Parties are entering into this Agreement in order to set forth the
terms of the sale of the Royalty NPI by the Trust to Buyer, which terms are the
same as those set forth in the October 24, 2012 Agreement except for terms
relating to the substitution of Buyer for the third party; and

 

WHEREAS, Buyer understands that Buyer is not acquiring any interest whatsoever
in the Term NPI (unless the context otherwise requires, this and other terms
used and capitalized but not defined in this Agreement having the meanings
ascribed to them in the Trust Agreement) held by the Trust; and

 

WHEREAS, the sale of the Royalty NPI pursuant to this Agreement is intended to
be, and shall be, made on the terms and conditions set forth herein, including,
without limitation, the conditions that the sale of the Royalty NPI shall be
made on an AS IS, WHERE IS, basis, without any recourse of the Buyer to the
Trust, the Trustee or any other person for any amount or obligation whatsoever
after the Closing contemplated by this Agreement (other than the rights of the
Buyer under the NPI Conveyance); any and all claims or potential claims, whether
for matters known or unknown, being waived and absolutely and unconditionally
released by the execution and delivery of this Agreement as set forth herein.

 

NOW, THEREFORE, for and in consideration of the mutual promises hereinafter set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto covenant and
agree as follows:

 

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Article 1
DEFINITIONS

 

“Affiliate” means any person which (a) controls either directly or indirectly a
Party, or (b) is controlled directly or indirectly by such Party, or (c) is
directly or indirectly controlled by a person which directly or indirectly
controls such Party, for which purpose “control” shall mean the right to
exercise fifty percent (50%) or more of the voting rights in the appointment of
the directors or similar representation of a person, and for which purpose and
for the purpose of other provisions of this Agreement “person” shall mean any
individual, corporation, government, partnership, company, group, authority,
association or other entity.

 

“Agreement” is defined in the preamble.

 

“Assignment” is defined in Section 6.2.1.

 

“Business Day” means each weekday which is not a day on which banks in Austin,
Texas, are generally authorized or obligated, by law or executive order, to
close.

 

“Buyer” is defined in the preamble.

 

“Closing” is defined in Section 6.1.

 

“Closing Date” is defined in Section 6.1.

 

“EAEC” is defined in the recitals.

 

“ECA” is defined in the recitals.

 

“Net Profits Interests” is defined in the recitals.

 

“NPI Conveyance” is defined in the recitals.

 

“Party” and “Parties” is defined in the preamble.

 

“Royalty NPI” is defined in the recitals.

 

“Seller” is defined in the preamble.

 

“Trust” is defined in the preamble.

 

“Trustee” is defined in the preamble.

 

“Trust Agreement” is defined in the recitals.

 

“Underlying Properties” is defined in the recitals.

 

Article 2
SALE AND PURCHASE OF PROPERTIES; EXCLUDED ASSETS

 

2.1                               Sale and Purchase of Properties.  Subject to
the terms and conditions of this Agreement, Seller hereby agrees to sell,
assign, convey and deliver to Buyer, and Buyer hereby agrees to purchase and
acquire from Seller, on the terms set forth herein, all of Seller’s right, title

 

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and interest in and to the Royalty NPI.  All persons are referred to the NPI
Conveyance for the terms thereof and for specific descriptions of the Royalty
NPI created under the NPI Conveyance.

 

2.2                               Rights to Distributions.  The sale of the
Royalty NPI shall occur at the Closing (as defined below).  After the Closing
occurs, the rights of the Parties to payment pursuant to the NPI Conveyance
shall be as follows:

 

2.2.1.                        Seller is and shall remain entitled to any
quarterly payment to be made pursuant to the NPI Conveyance for the quarter
ended September 30, 2012, which payment was made by ECA to Seller during the
month of December 2012; and

 

2.2.2.                        Buyer shall be entitled to any quarterly payment
to be made pursuant to the NPI Conveyance for the quarter commencing October 1,
2012 and ending December 31, 2012, which payment is expected to be made by ECA
to Buyer during the month of March 2013, and to any and all subsequent quarterly
payments under the NPI Conveyance.

 

2.3                               Excluded Assets.  The assets to be conveyed
hereunder do not include any assets or right of any nature whatsoever other than
Seller’s right, title and interest in and to the Royalty NPI as set forth in
Section 2.2 above.  Without limiting the preceding sentence in any way, the
assets to be conveyed hereunder do not include any interest in either (a) any
other royalty interests held by Seller or any of Seller’s other assets, or (b)
any right to any net profits or other payments from or relating to any of the
Wells listed on Exhibit C hereto, which Wells have previously released from the
Royalty NPI by Seller.

 

2.4                               Buyer’s Right to Assign Rights to Affiliate. 
Buyer shall have the right to assign its rights hereunder to an entity under
Buyer’s control; provided, however, that no such assignment shall relieve Buyer
of its obligations hereunder.  Buyer shall notify Seller of any such assignment
in writing delivered not later than three business days prior to the Closing. 
In the event of any such assignment, Buyer shall ensure that its assignee
performs the obligations of Buyer hereunder; Buyer shall duly and punctually
perform any such obligation to the extent that its assignee fails to do so; and
Buyer shall remain liable for any failure of such assignee to perform any such
obligation.

 

Article 3
CONSIDERATION

 

3.1                               Consideration.  In consideration for the
Royalty NPI, Buyer shall deliver to Seller at Closing Six Million Five Hundred
Thousand U.S. Dollars ($6,500,000), subject to adjustment as set forth in
Section 3.2 hereof (such amount, as so adjusted, being herein called the
“Purchase Price”).

 

3.2                               Gas Price Adjustment to the Purchase Price. 
The October 24, 2012 Agreement provided that “[i]f natural gas prices (measured
by reference to the NYMEX December 2012 contract) close at a price below $3.709
(such price being five percent (5%) lower than the closing

 

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price of the NYMEX December 2012 contract of $3.904 on October 18, 2012) on the
business day prior to the date on which the right of first refusal held by ECA
under the Trust Agreement lapses or is waived, the Purchase Price shall be
decreased by the same percentage as the percentage decrease in natural gas
prices as so measured.  If the closing price of the NYMEX December 2012 contract
is not below $3.709 on the business day prior to the date on which the right of
first refusal held by ECA under the Trust Agreement lapses or is waived, no
adjustment shall be made to the Purchase Price pursuant to this Section 3.2.” 
Buyer exercised its right of first refusal on November 5, 2012 and pursuant to
the aforesaid purchase price adjustment provision Buyer is entitled to an
adjustment of Five Hundred Eighty Two Thousand Seven Hundred Twenty Five Dollars
($582,725.00), and as a result the total adjusted Purchase Price to be delivered
to Seller is Five Million Nine Hundred Seventeen Thousand Two Hundred and
Seventy Five Dollars ($5,917,275.00).

 

3.3                               No Other Adjustments to the Purchase Price. 
Except as set forth in Section 3.2  hereof, no other adjustments shall be made
to the Purchase Price.  Without limiting the foregoing, payments attributable to
the Royalty NPI shall be allocated between Seller and Buyer as provided in
Section 2.2, regardless of whether a Royalty NPI payment includes production
revenue or costs that precede or follow the Closing Date.

 

Article 4
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Buyer that each of the statements made in this
Article 4 is true and correct as of the date of this Agreement.

 

4.1                               Organization.  Seller is statutory trust
formed under the Delaware Business Trust Act.

 

4.2                               Authority.  Seller has full power to enter
into and perform its obligations under this Agreement and has taken all proper
action to authorize entering into this Agreement and to perform its obligations
hereunder.

 

4.3                               Enforceability.  This Agreement and all
documents and instruments required hereunder have been duly executed and
delivered by or on behalf of Seller.  This Agreement and all such documents and
instruments executed and delivered by or on behalf of Seller at Closing
constitute legal, valid, and binding obligations of Seller enforceable in
accordance with their respective terms, except to the extent enforceability may
be affected by bankruptcy, reorganization, insolvency, or similar laws affecting
creditors’ rights generally.

 

4.4                               No Conflict.  Seller’s execution, delivery,
and performance of this Agreement and the transactions contemplated hereby will
not: (a) violate or conflict with any provision of Seller’s documents of
formation or other governing documents, (b) result in the breach of any term or
condition of, or constitute a default under any agreement or instrument to which
Seller is a party or by which Seller or the Royalty NPI is bound, or (c) violate
or conflict with any applicable judgment, decree, order, permit, law, rule or
regulation.  There are no governmental consents required in connection with the
consummation of the transactions contemplated hereby, other than approvals from
governmental entities customarily obtained post-closing.

 

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4.5                               Finder’s Fees.  Seller has incurred no
liability, contingent or otherwise, for broker’s or finder’s fees in respect of
this transaction for which Buyer shall have any responsibility whatsoever.

 

4.6                               Limitations of Seller’s Warranties.  The
conveyance of the Royalty NPI is made without warranty of title, express or
implied.  SELLER CONVEYS THE ROYALTY NPI AS-IS, WHERE-IS AND WITH ALL FAULTS AND
EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED OR EXPRESS WARRANTY OF (A)
MERCHANTABILITY, (B) FITNESS FOR A PARTICULAR PURPOSE, (C) CONFORMITY TO MODELS
OR SAMPLES OF MATERIALS AND (D) FREEDOM FROM REDHIBITORY VICES OR DEFECTS. 
SELLER ALSO EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED OR EXPRESS WARRANTY AT
COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO THE ACCURACY OF ANY OF THE
INFORMATION FURNISHED WITH RESPECT TO THE EXISTENCE OR EXTENT OF RESERVES OR THE
VALUE OF THE ROYALTY NPI BASED THEREON OR THE CONDITION OR STATE OF REPAIR OF
ANY OF THE PROPERTIES. THIS DISCLAIMER AND DENIAL OF WARRANTY ALSO EXTENDS TO
THE EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO THE PRICES BUYER AND
SELLER ARE OR WILL BE ENTITLED TO RECEIVE FROM PRODUCTION OF HYDROCARBONS, IT
BEING UNDERSTOOD THAT ALL RESERVE, PRICE AND VALUE ESTIMATES UPON WHICH BUYER
HAS RELIED OR IS RELYING HAVE BEEN DERIVED BY THE INDIVIDUAL EVALUATION OF
BUYER. BUYER HEREBY WAIVES ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
WITH RESPECT TO THE ACCURACY, COMPLETENESS OR MATERIALITY OF THE INFORMATION,
REPORTS, PROJECTIONS, MATERIALS, RECORDS, AND DATA NOW, HERETOFORE, OR HEREAFTER
FURNISHED OR MADE AVAILABLE TO BUYER IN CONNECTION WITH THE ROYALTY NPI OR THIS
AGREEMENT (INCLUDING ANY DESCRIPTION OF THE ROYALTY NPI, ANY NET PROFITS
INTERESTS, QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY), PRODUCTION
RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, PRICING ASSUMPTIONS, ABILITY
OR POTENTIAL FOR PRODUCTION OF HYDROCARBONS, ENVIRONMENTAL CONDITION OF ANY
PROPERTIES, OR ANY OTHER MATTERS CONTAINED IN ANY OTHER MATERIAL FURNISHED OR
MADE AVAILABLE TO BUYER BY SELLER OR BY SELLER’S AGENTS OR REPRESENTATIVES). 
ANY AND ALL SUCH INFORMATION, REPORTS, PROJECTIONS, MATERIALS, RECORDS, AND DATA
NOW, HERETOFORE OR HEREAFTER FURNISHED BY SELLER IS PROVIDED AS A CONVENIENCE
ONLY AND ANY RELIANCE ON OR USE OF SAME IS AT BUYER’S SOLE RISK.

 

Article 5
REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller that each of the statements made in this
Article 5 is true and correct as of the date of this Agreement.

 

5.1                               Organization.  Buyer is a West Virginia
corporation organized, validly existing and in good standing under the laws of
the State of West Virginia.  Buyer is in good standing and

 

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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.

 

5.2                               Authority.  Buyer has full power to enter into
and perform its obligations under this Agreement and has taken all proper action
to authorize entering into this Agreement and to perform its obligations
hereunder.

 

5.3                               Enforceability.  This Agreement and all
documents and instruments required hereunder have been duly executed and
delivered by Buyer.  This Agreement and all such documents and instruments
executed and delivered by Buyer at Closing constitute legal, valid, and binding
obligations enforceable in accordance with their respective terms, except to the
extent enforceability may be affected by bankruptcy, reorganization, insolvency,
or similar laws affecting creditors’ rights generally.

 

5.4                               No Conflicts.  Buyer’s execution, delivery,
and performance of this Agreement and the transactions contemplated hereby will
not: (a) violate or conflict with any provision of Buyer’s documents of
formation or other governing documents, (b) result in the breach of any term or
condition of, or constitute a default or cause the acceleration of any
obligation under any agreement or instrument to which Buyer is a party or by
which it is bound, or (c) violate or conflict with any applicable judgment,
decree, order, permit, law, rule or regulation.

 

5.5                               Buyer’s Experience and Advisors.  Buyer is an
experienced and knowledgeable investor in the oil and gas business.  Buyer has
relied solely on its own expertise and advisors in making its determination to
enter into this Agreement.  Prior to entering into this Agreement, to the extent
Buyer deemed appropriate, Buyer was advised by and has relied solely on its own
legal, tax, engineering, financial, and other professional advisors or counsel
concerning this Agreement, the Royalty NPI and the value thereof.

 

5.6                               Finder’s Fees.  Buyer has incurred no
liability, contingent or otherwise, for broker’s or finder’s fees in respect of
this transaction for which Seller shall have any responsibility whatsoever.

 

Article 6
CLOSING; TERMINATION RIGHTS

 

6.1                               The Closing.  The closing of the purchase and
sale of the Royalty NPI pursuant to this Agreement (“Closing”) shall be held at
10:00 a.m. local time in the offices of the Trustee located at 919 Congress
Avenue, Suite 500, Austin, Texas 78701 on January 10, 2013, or at such other
location, time or date as the Parties may agree (the “Closing Date”).

 

6.2                               Closing Deliveries.  At the Closing, the
following events shall occur, each event under the control of one Party hereto
being a condition precedent to the events under the control of the other Party,
and each event being deemed to have occurred simultaneously with the other
events:

 

6.2.1.                        Seller shall execute and deliver to Buyer, and
Buyer shall execute and receive, one or more instruments of assignment, in the
form attached hereto as Exhibit D,

 

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(the “Assignment”) and such other documents as may be reasonably necessary to
convey Seller’s interest in the Royalty NPI to Buyer in accordance with the
provisions hereof;

 

6.2.2.                        Buyer shall deliver via wire transfer to an
account specified by Seller, in immediately available funds, the Purchase Price;

 

6.2.3.                        Seller shall provide to Buyer a certificate of
non-foreign status that complies with Section 1445 of the Internal Revenue Code
of 1986, in a form attached hereto as Exhibit E; and

 

6.2.4.                        The Parties shall execute and deliver each other
instrument required hereunder to be executed and delivered at the Closing.

 

6.3                               Termination Rights.  This Agreement may be
terminated as provided below.

 

6.3.1.                        Buyer may terminate this Agreement by delivery of
written notice to Seller at any time on or prior to the Closing Date if, as of
the Closing Date, Seller has breached any representation, warranty or covenant
in this Agreement in any material respect (and without regard to any standard of
materiality set forth in any representation, warranty or covenant of Seller
herein) and Seller has failed to cure such breach within a reasonable time
period after receiving written notice of such breach.

 

6.3.2.                        Seller may terminate this Agreement by delivery of
written notice to Buyer at any time on or prior to the Closing Date if, as of
the Closing Date, Buyer has breached any representation, warranty or covenant in
this Agreement in any material respect (and without regard to any standard of
materiality set forth in any representation, warranty or covenant of Buyer
herein) and Buyer has failed to cure such breach within a reasonable time period
after receiving written notice of such breach.

 

6.4                               Effect of Termination.  The exercise of such
right of termination under Section 6.3.1 or Section 6.3.2 will not be an
election of remedies.  If this Agreement is terminated pursuant to Section 6.3.1
or Section6.3.2, all obligations of the Parties under this Agreement will
terminate except the obligations of the Parties in this Section 6.4 and Article
11 will survive and the terminating Party will be entitled to pursue all
remedies available at law for damages or other relief, in equity or otherwise.

 

Article 7
POST-CLOSING MATTERS

 

7.1                               Receipts and Credits.  Payments attributable
to the Royalty NPI shall be allocated between Seller and Buyer as provided in
Section 2.2, regardless of whether a Royalty NPI payment includes production
revenue or costs that precede or follow the Closing Date.  In the event that
Buyer receives a payment due to Seller, Buyer shall fully disclose, account for,
and transmit the same to Seller promptly. In the event that Seller receives a
payment due to Buyer, Seller shall fully disclose, account for, and transmit the
same to Buyer promptly.

 

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Article 8
ADDITIONAL COVENANTS

 

8.1               Further Assurances.  After the Closing, Seller and Buyer shall
execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered such instruments and take such other action as may be necessary or
advisable to carry out their respective obligations under this Agreement and
under any exhibit, document, certificate or other instrument delivered pursuant
hereto.  Seller shall use commercially reasonable efforts to cooperate with
Buyer’s efforts to obtain all approvals and consents required by or necessary
for the transactions contemplated by this Agreement that are customarily
obtained after Closing.

 

8.2               Expense Reimbursement.  Buyer has agreed to reimburse Seller
for the out of pocket expenses incurred by the third party in connection with
the October 24, 2012 Agreement, which Seller agreed to pay pursuant to Section
8.2 of the October 24, 2012 Agreement.  The amount totals Seventeen Thousand
Eight Hundred and Fifty Dollars ($17,850.00).

 

Article 9
RELEASE

 

9.1                               Release.  As set forth elsewhere herein, the
sale of the Royalty NPI pursuant to this Agreement is made on the terms and
conditions set forth herein, including, without limitation, the condition that
the sale of the Royalty NPI is being made on an AS IS, WHERE IS, basis, without
any representations or warranties by Seller other than those expressly set forth
herein, and without any recourse of the Buyer to the Trust, the Trustee, or any
other person for any amount or obligation whatsoever after the Closing (other
than the rights of the Buyer under the NPI Conveyance).  Buyer hereby absolutely
and unconditionally releases each of Seller and the Trustee from any and all
claims or potential claims, whether for matters known or unknown, relating to
Buyer’s purchase of the Royalty NPI or to any other matter arising under or
relating to the transactions contemplated by this Agreement.

 

Article 10
ARBITRATION

 

Except as elsewhere provided in this Agreement, any controversy, dispute or
claim between the Parties arising under this Agreement shall be determined by
binding arbitration, the conduct of which shall be governed by the Commercial
Arbitration Rules of the American Arbitration Association.

 

10.1        Determination.  The arbitration shall be before a three-person panel
of arbitrators, with Buyer and Seller each selecting one arbitrator, and the two
arbitrators so selected choosing the third arbitrator. The arbitrators selected
to act hereunder under the Commercial Arbitration Rules of the American
Arbitration Association shall be qualified by education and experience to pass
on the particular question in dispute. The arbitrators shall promptly hear and
determine (after due notice of hearing and giving the parties a reasonable
opportunity to be heard) the questions submitted, and shall render their
decision within sixty (60) days after appointment of the third arbitrator. The
arbitration shall be held in Travis County, Texas. The arbitration will be
governed by and construed in accordance with the laws of the State of Texas,
without giving effect to any choice of law principles.

 

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10.2        Decision Binding.  The decision of the arbitrators, or the majority
thereof, made in writing shall be final and binding upon the Parties as to the
questions submitted, shall be enforceable against any Party in any court of
competent jurisdiction, and Buyer and Seller will abide by and comply with such
decision. The expenses of arbitration, including reasonable compensation to the
arbitrators, shall be borne equally by the Parties.

 

Article 11
MISCELLANEOUS

 

11.1                        Notice.  All notices required or permitted under
this Agreement shall be in writing and shall be delivered personally, by
certified mail, postage prepaid and return receipt requested, by fax, or by
electronic transmittal (such as Email and pdf’s) as follows:

 

Seller:

 

Eastern American Natural Gas Trust, care of The Bank of New York Mellon Trust
Company, N.A., as Trustee

 

 

 

 

 

Address: 919 Congress Avenue, Suite 500

 

 

Austin, Texas 78701

 

 

Attention: Michael J. Ulrich

 

 

Telephone: (512) 236-6599

 

 

Fax: (512) 236-9275

 

 

Email: michael.ulrich@bnymellon.com

 

 

 

Buyer:

 

Energy Corporation of America

 

 

 

 

 

Address: 501 56th Street

 

 

Charleston, WV 25304

 

 

Attention: Donald C. Supcoe

 

 

Telephone: (304) 925-6100

 

 

Fax: (304) 925-3285

 

 

Email: dsupcoe@energycorporationofamerica.com

 

or to such other place within the United States of America as either Party may
designate as to itself by written notice to the other.  All notices given by
personal delivery or mail shall be effective on the date of actual receipt at
the appropriate address. Notices given by fax or electronic transmittal shall be
effective upon actual receipt if received during recipient’s normal business
hours or at the beginning of the next Business Day after receipt if received
after the recipient’s normal business hours.  All notices by fax or electronic
transmittal shall be confirmed in writing on the day of transmission by either
mailing by postage prepaid certified mail with return receipt requested, or by
personal delivery.

 

11.2                        Governing Law.  Except for matters mandatorily
governed by the real property laws of the state in which the properties subject
to the Royalty NPI are located, this Agreement

 

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and the obligations of the Parties hereunder will be governed by and construed
in accordance with the laws of the State of Texas, without giving effect to any
choice of law principles.

 

11.3                        Entire Agreement; No Third Party Beneficiaries. 
This Agreement, together with the Exhibits attached hereto and the certificates,
documents, instruments and writings that are delivered pursuant hereto,
constitutes the entire agreement and understanding of the Parties in respect of
its subject matter and supersedes all prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof or the transactions contemplated
hereby.  Except as contemplated by Section 2.4 hereof, there are no third party
beneficiaries having rights under or with respect to this Agreement.

 

11.4                        Amendment; Waiver.  No amendment, modification,
replacement, termination or cancellation of any provision of this Agreement will
be valid, unless the same shall be in writing and signed by Buyer and Seller. 
No waiver by any Party of any default, misrepresentation or breach of warranty
or covenant hereunder, whether intentional or not, may be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising because of any prior
or subsequent such occurrence.

 

11.5                        Severability.  The provisions of this Agreement will
be deemed severable and the invalidity or unenforceability of any provision will
not affect the validity or enforceability of the other provisions hereof;
provided, however, that if any provision of this Agreement, as applied to any
Party or to any circumstance, is adjudged by a court of competent jurisdiction,
arbitrator, or mediator not to be enforceable in accordance with its terms, the
Parties agree that the court of competent jurisdiction, arbitrator, or mediator
making such determination will have the power to modify the provision in a
manner consistent with its objectives such that it is enforceable, and/or to
delete specific words or phrases, and in its reduced form, such provision will
then be enforceable and will be enforced.

 

11.6                        Construction.  The Parties have participated jointly
in the negotiation and drafting of this Agreement.  If an ambiguity or question
of intent or interpretation arises, this Agreement will be construed as if
drafted jointly by the Parties and no presumption or burden of proof will arise
favoring or disfavoring any Party because of the authorship of any provision of
this Agreement.  Any reference to any federal, state, local, or foreign law will
be deemed also to refer to such law as amended and all rules and regulations
promulgated thereunder, unless the context requires otherwise. The words
“include,” “includes” and “including” will be deemed to be followed by “without
limitation.”  Pronouns in masculine, feminine, and neuter genders will be
construed to include any other gender, and words in the singular form will be
construed to include the plural and vice versa, unless the context otherwise
requires.  The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder”
and words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited.  The Exhibits identified in
this Agreement are incorporated herein by reference and made a part hereof.
References herein to any Section or Article shall be references to a Section or
Article of this Agreement unless the context clearly requires otherwise.

 

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11.7                        Confidentiality.  After Closing, Seller shall
maintain, and shall cause its Affiliates, and each of its and their respective
employees, consultants, representatives and agents to maintain, as confidential
all information in their possession insofar as such information is applicable to
the Royalty NPI conveyed to Buyer.  Notwithstanding anything in this Section
11.7 to the contrary, neither Seller nor any of its respective Affiliates or its
respective employees, consultants, representatives or agents, shall be required
to maintain as confidential any information (a) that becomes, through no
violation of the provisions of this Section 11.7, part of the public domain by
publication or otherwise; (b) which is obtained by a Party or its Affiliates
from a source that is not known to it to be prohibited from disclosing such
confidential information to a Party or its Affiliates by an obligation of
confidentiality to the other Party to this Agreement; (c) which is developed
independently by a Party or its Affiliates without use of the any information
confidential hereunder; or (d) which Seller is required to disclose pursuant to
any law, rule or regulation applicable to Seller.

 

11.8                                        Headings.  The Article and Section
headings contained in this Agreement are inserted for convenience only and will
not affect in any way the meaning or interpretation of this Agreement.

 

11.9                                        Counterparts.  This Agreement may be
executed in two or more counterparts, each of which will be deemed an original
but all of which together will constitute one and the same instrument.  Delivery
of an executed counterpart of this Agreement by fax shall be equally as
effective as delivery of an original executed counterpart of this Agreement. 
Any Party delivering an executed counterpart of this Agreement by fax also shall
deliver an original executed counterpart of this Agreement, but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability and binding effect of this Agreement.

 

11.10                                 Expenses and Fees.  Each of the Parties
hereto shall pay its own fees and expenses incident to the negotiation and
preparation of this Agreement and consummation of the transactions contemplated
hereby, including brokers’ fees.  Without limiting the generality of the
foregoing, all conveyance fees, recording charges and other fees and charges
incurred in connection with the consummation of the transactions contemplated
hereby shall be paid by Buyer when due, and Buyer shall, at its own expense,
file all necessary documentation with respect to all such fees and charges.

 

11.11                                 Transfer Taxes.  In the event any federal,
state or local sales, transfer, gross proceeds, use and similar taxes are
incident or applicable to the transfer of the Royalty NPI to Buyer under this
Agreement, or caused by the transfer of the Royalty NPI to Buyer, such taxes
shall be paid by Buyer.

 

11.12                                 Limitation on Damages.  Notwithstanding
any term or provision of this Agreement to the contrary, in no event shall any
party to this Agreement be liable for any consequential, special, exemplary,
punitive or similar damages or lost profits arising out of or relating to this
Agreement.

 

11.13                 Survival.  All of the representations and warranties made
by either Party in this Agreement or pursuant hereto in any certificate,
instrument, or document executed in connection herewith by either Party shall
survive the consummation of the transactions described herein for

 

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a period of six (6) months from the Closing Date, after which time no Party may
bring a claim for a breach or default thereof.

 

11.14                 Legal Fees and Costs.  If a Party institutes a judicial or
other legal proceeding with respect to the subject matter of this Agreement, the
prevailing Party in such a proceeding will be entitled to recover from the
non-prevailing Party, in addition to any other relief to which such prevailing
Party shall be entitled, the expenses incurred by the prevailing Party in such
proceeding, including, without limitation, reasonable attorneys’ fees, costs,
and necessary disbursements at all court levels.

 

11.15                 Limitation of Liability.  It is expressly understood and
agreed by the parties hereto that (i) this Agreement is executed and delivered
by the Trustee not individually or personally, but solely as Trustee of the
Trust in the exercise of the powers and authority vested in it and (ii) under no
circumstances whatsoever shall the Trustee be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken by
the Trust under this Agreement or for any other claim of any nature of Buyer
relating to any matter contemplated by the Agreement or otherwise arising in
connection with the transactions contemplated by this Agreement.  Buyer hereby
expressly and absolutely and unconditionally waives and releases any and all
claims of any nature, for matters known and unknown, and contingent or
otherwise, that Buyer might have or have had against the Trustee as a result of
or otherwise in connection with or relating to any matter relating to the
transactions contemplated by this Agreement.

 

11.16                 Waiver of Jury Trial.  EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND A JURY TRIAL IN ANY
JUDICIAL PROCEEDING IN ANY WAY RELATED TO THIS AGREEMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, OR THE RELATIONSHIPS OF THE PARTIES HERETO.  THIS
WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING FROM ANY
SOURCE INCLUDING, BUT NOT LIMITED TO, THE CONSTITUTION OF THE UNITED STATES OR
ANY STATE THEREIN, COMMON LAW OR ANY APPLICABLE STATUTE OR REGULATION. EACH
PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVING ITS RIGHT TO DEMAND A TRIAL BY JURY.  THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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Executed as of the date set forth above.

 

 

SELLER:

 

 

 

EASTERN AMERICAN NATURAL GAS TRUST

 

 

 

By:

The Bank of New York Mellon Trust Company, N.A., as Trustee

 

 

 

 

 

By:

/s/ Michael J. Ulrich

 

 

Name:

Michael J. Ulrich

 

 

Title:

Vice President

 

Signature Page to Purchase and Sale Agreement

 

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BUYER:

 

 

 

ENERGY CORPORATION OF AMERICA

 

 

 

 

 

By:

/s/  Donald C. Supcoe

 

 

Name:

Donald C. Supcoe

 

 

Title:

Executive Vice President

 

Signature Page Purchase and Sale Agreement

 

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