ALL ENCUMBRANCES, AND BUYER AGREES TO
PURCHASE AND ACCEPT FROM SELLER, ALL OF THE MEMBERSHIP INTERESTS.
1.2
EXCLUDED ASSETS AND LIABILITIES.
THE ASSETS ("EXCLUDED ASSETS")
AND LIABILITIES OF THE COMPANY DESCRIBED ON EXHIBIT D ARE EXCLUDED FROM THIS
PURCHASE AND SHALL BE DISTRIBUTED OR TRANSFERRED TO, OR ASSUMED BY, SELLER OR A
DESIGNEE OF SELLER IMMEDIATELY PRIOR TO CLOSING PURSUANT TO APPROPRIATE
DOCUMENTS APPROVED IN ADVANCE BY BUYER.
SELLER OR ITS DESIGNEE TO WHOM ANY OF
THE FOREGOING ASSETS ARE DISTRIBUTED OR TRANSFERRED SHALL EXPRESSLY ASSUME ALL
LIABILITIES AND OBLIGATIONS RELATED TO THE FOREGOING.
2.
PURCHASE PRICE.
2.1
BASE PURCHASE PRICE.
THE PURCHASE PRICE FOR THE ASSETS IS FORTY
TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS ($42,700,000) (THE "BASE PURCHASE
PRICE").
2.2
DEPOSIT.
WITHIN THREE (3) DAYS OF THE EXECUTION OF THIS
AGREEMENT, BUYER SHALL DELIVER TO SELLER, IN CASH BY WIRE-TRANSFER IN
IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY SELLER, A DEPOSIT IN AN
AMOUNT EQUAL TO TWO MILLION ONE HUNDRED THIRTY FIVE THOUSAND ($2,135,000)
4
(SUCH AMOUNT TOGETHER WITH ALL ACCRUED INTEREST THEREON, THE "DEPOSIT").
PRIOR
TO CLOSING, THE DEPOSIT SHALL BE MAINTAINED BY SELLER IN AN INTEREST BEARING
ACCOUNT.
THE DEPOSIT SHALL BE DISTRIBUTED TO SELLER AND CREDITED TO THE BASE
PURCHASE PRICE AT CLOSING, OR IF THIS AGREEMENT IS TERMINATED, SHALL BE
DISTRIBUTED OR RETAINED PURSUANT TO ARTICLE 13.
IN THE EVENT THE DEPOSIT IS NOT
DELIVERED TO SELLER AS PRESCRIBED, THIS AGREEMENT SHALL TERMINATE.
2.3
CERTAIN DEFINITIONS.
AS USED IN THIS AGREEMENT, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS (OTHER CAPITALIZED TERMS ARE DEFINED
THROUGHOUT THIS AGREEMENT):
(A)
"OIL AND GAS PROPERTIES" MEANS (IN EACH CASE OTHER THAN THE EXCLUDED
ASSETS)
(I)
ALL OF THE COMPANY'S RIGHT, TITLE AND INTEREST IN, TO AND
UNDER THE OIL, GAS AND/OR MINERAL LEASES DESCRIBED ON EXHIBIT A ATTACHED HERETO
(THE "LEASES"), WHETHER OR NOT SUCH INTERESTS ARE ACCURATELY OR COMPLETELY
DESCRIBED ON EXHIBIT A, AND ALL OF THE COMPANY'S OIL AND GAS LEASEHOLD, MINERAL,
ROYALTY, OVERRIDING ROYALTY, SURFACE OR OTHER INTERESTS IN THE LANDS COVERED BY
THE LEASES OR IN THE LANDS DESCRIBED ON EXHIBIT A (COLLECTIVELY, THE "LAND"),
TOGETHER WITH ALL THE PROPERTY AND RIGHTS INCIDENT THERETO, INCLUDING WITHOUT
LIMITATION ALL OF THE COMPANY'S RIGHTS IN, TO AND UNDER ALL OPERATING
AGREEMENTS; POOLING, COMMUNITIZATION AND UNITIZATION AGREEMENTS; FARMOUT
AGREEMENTS; JOINT VENTURE AGREEMENTS; PRODUCT PURCHASE AND SALE CONTRACTS;
TRANSPORTATION, PROCESSING, TREATMENT OR GATHERING AGREEMENTS; LEASES; PERMITS
(THE "PERMITS"); RIGHTS-OF-WAY (THE "RIGHTS-OF-WAY"); SURFACE USE AGREEMENTS;
SURFACE LEASES; SURFACE ESTATES; EASEMENTS (THE "EASEMENTS"); LICENSES; OPTIONS;
DECLARATIONS; ORDERS; CONTRACTS; AND INSTRUMENTS IN ANY WAY RELATING TO THE
LEASES OR LAND;
(II)
ALL OF THE COMPANY'S RIGHT, TITLE AND INTEREST IN AND TO THE
WELLS SITUATED ON OR USED IN CONJUNCTION WITH OPERATIONS ON THE LEASES AND/OR
LAND OR ON LAND POOLED, COMMUNITIZED OR UNITIZED THEREWITH ("POOLED LAND"),
INCLUDING, WITHOUT LIMITATION, ALL PRODUCING, NON-PRODUCING, INJECTION, DISPOSAL
AND WATER SUPPLY WELLS AND THE WELLS LISTED ON EXHIBIT B ATTACHED HERETO
(COLLECTIVELY, THE "WELLS");
(III)
ALL OF THE COMPANY'S RIGHT, TITLE AND