MAY RETAIN THE ORIGINALS OF SUCH
FILES AND OTHER RECORDS AS SELLER HAS DETERMINED MAY BE REQUIRED FOR LITIGATION,
TAX, ACCOUNTING, AND AUDITING PURPOSES AND PROVIDE PURCHASER WITH COPIES
THEREOF, EXCLUDING, HOWEVER, THE EXCLUDED ASSETS (AS DEFINED IN SECTION 1.3);
AND
(J)
NOTWITHSTANDING (I) ANY REPRESENTATIONS OF SELLER CONTAINED
HEREIN CONCERNING THE QUANTUM OF SELLER'S OWNERSHIP IN INTEREST IN THE
PROPERTIES AND (II) THE LEGAL DESCRIPTIONS ASSOCIATED WITH EACH PROPERTY, IT IS
THE INTENTION OF SELLER AND PURCHASER THAT THIS INSTRUMENT COVERS ALL OF THE
INTEREST OF SELLER IN THE PROPERTIES AND ALL OTHER PROPERTY INTERESTS OF SELLER
OF A SIMILAR NATURE WHICH ARE SITUATED IN ANDREWS, BORDEN, CARSON, CRANE,
DAWSON, GAINES, GLASSCOCK, GRAY, HUTCHINSON, LOVING, MARTIN, MIDLAND, PECOS,
POTTER, REAGAN, REEVES, UPTON, WARD AND WHARTON COUNTIES, TEXAS AND EDDY COUNTY,
NEW MEXICO.
Section 1.3
Excluded Assets.
Notwithstanding the foregoing, the Assets shall not include the following listed
items which are excepted, reserved and excluded from the purchase and sale
contemplated hereby (collectively, the "Excluded Assets"):
(A)
ALL CORPORATE, FINANCIAL, INCOME AND FRANCHISE TAX AND LEGAL
RECORDS OF SELLER THAT RELATE TO SELLER'S BUSINESS GENERALLY (WHETHER OR NOT
RELATING TO THE ASSETS), AND ALL BOOKS, RECORDS AND FILES THAT RELATE TO THE
EXCLUDED ASSETS AND THOSE RECORDS RETAINED BY SELLER PURSUANT TO SECTION 1.2(I)
AND COPIES OF ANY OTHER RECORDS RETAINED BY SELLER PURSUANT TO SECTION 1.5;
(B)
THE EQUIPMENT, MACHINERY, LICENSES, FIXTURES AND OTHER TANGIBLE
PERSONAL PROPERTY DESCRIBED IN SECTIONS 1.2(F)(I), (II), (III) AND (IV);
(C)
ALL RIGHTS TO ANY REFUND OF TAXES OR OTHER COSTS OR EXPENSES BORNE
BY SELLER OR SELLER'S PREDECESSORS IN INTEREST AND TITLE ATTRIBUTABLE TO PERIODS
PRIOR TO THE EFFECTIVE TIME;
(D)
ALL RIGHTS RELATING TO THE EXISTING CLAIMS AND CAUSES OF ACTION
EXCEPT THOSE DESCRIBED IN PART (B) OF EXHIBIT 5.7 HERETO;
(E)
SELLER'S AREA-WIDE BONDS, PERMITS AND LICENSES OR OTHER PERMITS,
LICENSES OR AUTHORIZATIONS USED IN THE CONDUCT OF SELLER'S BUSINESS GENERALLY;
7
(F)
ALL TRADE CREDITS, ACCOUNT RECEIVABLES, NOTE RECEIVABLES,
TAKE-OR-PAY AMOUNTS RECEIVABLE, AND OTHER RECEIVABLES ATTRIBUTABLE TO THE ASSETS
WITH RESPECT TO ANY PERIOD OF TIME PRIOR TO THE EFFECTIVE TIME;
(G)
ANY AND ALL SEISMIC, GEOLOGIC OR GEOPHYSICAL INFORMATION AND DATA
THAT ARE (I) COVERED BY AN OBLIGATION OF CONFIDENTIALITY (PROVIDED HOWEVER,
SELLER SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS TO OBTAIN AUTHORITY TO
DISCLOSE AND TRANSFER THE INFORMATION AND DATA) OR (II) COVERED BY A PROHIBITION
AGAINST TRANSFER (PROVIDED, HOWEVER, SELLER SHALL USE ITS COMMERCIALLY
REASONABLE EFFORTS TO OBTAIN AUTHORITY TO TRANSFER THE INFORMATION AND DATA);
(H)
ANY AND ALL PREVIOUS OFFERS AND ECONOMIC ANALYSES ASSOCIATED WITH
THE PURCHASE, SALE OR EXCHANGE OF THE PROPERTIES, INTERNAL RESERVE DATA,
CONFIDENTIALITY INTERNAL COMMUNICATIONS, PERSONNEL INFORMATION, TAX INFORMATION,
INFORMATION COVERED BY A NON-DISCLOSURE OBLIGATION, INFORMATION COVERED BY A
PROHIBITION AGAINST TRANSFER AND INFORMATION COVERED BY A LEGAL PRIVILEGE; AND
(I)
ALL ITEMS LISTED IN EXHIBIT 1.3(I).
Section 1.4
Effective Time; Proration of Costs
and Revenues.
(A)
POSSESSION OF THE ASSETS SHALL BE TRANSFERRED FROM SELLER TO
PURCHASER AT THE CLOSING, BUT