EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
Dated May 1, 1998
By and Among
Future Petroleum Corporation, a Utah Corporation;
Energy Capital Investment Company PLC,
an English investment company;
EnCap Equity 1994 Limited Partnership,
a Texas limited partnership; and
NCI Enterprises, Inc.,
a Texas corporation
TABLE OF CONTENTS
Page
RECITALS: 1
ARTICLE I Definitions, References and Construction 2
Section 1.1. Certain Defined Terms 2
Section 1.2. References and Construction 4
ARTICLE II Agreement to Purchase and Sell Interests 5
Section 2.1. Conveyance of LP Interests 5
Section 2.2. Purchase Price and Payment for LP Interests 5
Section 2.3. Conveyance of GP Interest 5
Section 2.4. Purchase Price and Payment for GP Interest 5
ARTICLE III Representations and Warranties of Sellers 5
Section 3.1. Organization and Existence 5
Section 3.2. Power and Authority 5
Section 3.3. Valid and Binding Agreement 6
Section 3.4. Non-Contravention 6
Section 3.5. Approvals 6
Section 3.6. Pending Litigation 7
Section 3.7. Title to Interest. 7
Section 3.8. The Partnership 7
Section 3.9. Investment Experience 7
Section 3.10. Investment Intent 8
Section 3.11. Restricted Securities 8
Section 3.12. Legend 8
Section 3.13. Accuracy of Information. 8
Section 3.14. No Solicitation 9
Section 3.15. Accredited Investor 9
Section 3.16. Disclaimer of Warranties 9
ARTICLE IV Representations and Warranties of Buyer 9
Section 4.1. Organization and Existence 9
Section 4.2. Power and Authority 9
Section 4.3. Valid and Binding Agreement 10
Section 4.4. Non-Contravention 10
Section 4.5. Approvals 10
Section 4.6. Pending Litigation 10
Section 4.7. Knowledgeable Purchaser 10
Section 4.8. Closing Shares. 11
Section 4.9. SEC Filings 11
ARTICLE V Certain Covenants Regarding Information and
Confidentiality 11
Section 5.1. Access to Information 11
Section 5.2. Confidentiality 12
ARTICLE VI Conditions Precedent to the Obligations of the Parties;
Termination Rights 13
Section 6.1. Conditions Precedent to the Obligations of Buyer 13
Section 6.2. Conditions Precedent to the Obligations of Sellers 13
ARTICLE VII Closing of Transaction 14
Section 7.1. The Closing 14
Section 7.2. Sellers' Closing Obligations 14
Section 7.3. Buyer's Closing Obligations 15
Section 7.4. Delivery of Files 16
Section 7.5. Agreement Regarding Execution and Delivery 16
ARTICLE VIII Certain Agreements Regarding Partnership Costs and
Expenses and Other Matters 16
Section 8.1. Partnership Costs and Expenses 16
Section 8.2. Production Proceeds 17
ARTICLE IX Agreement Regarding Specified Breach 17
ARTICLE X Notices 19
ARTICLE XI Commissions 20
ARTICLE XII Miscellaneous Matters 20
Section 12.1. Survival of Provisions 20
Section 12.2. Further Assurances 20
Section 12.3. Binding Effect; Successors and Assigns 21
Section 12.4. Expenses 21
Section 12.5. Entire Agreement 21
Section 12.6. Public Statements 21
Section 12.7. Injunctive Relief 21
Section 12.8. Deceptive Trade Practices 21
Section 12.9. Amendments 22
Section 12.10. Severability 22
Section 12.11. No Waiver. 22
Section 12.12. Governing Law. 22
Section 12.13. Counterparts 22
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT dated May 1, 1998, is made by and among
Future Petroleum Corporation, a Utah corporation ("Buyer"), Energy Capital
Investment Company PLC, an English investment company ("Energy PLC"), EnCap
Equity 1994 Limited Partnership, a Texas limited partnership ("EnCap LP"), and
NCI Enterprises, Inc., a Texas corporation ("NCI").
RECITALS:
A. Reference is herein made to NCI-Shawnee Limited Partnership, a Texas
limited partnership (the "Partnership").
B. NCI is the sole general partner of the Partnership and herein
sometimes called the "GP Seller". The interest of NCI as a general partner in
the Partnership is herein called the "GP Interest".
C. Energy PLC and EnCap LP are the limited partners of the Partnership
and are herein sometimes called the "LP Sellers". The interest of Energy PLC as
a limited partner in the Partnership is herein called the "Energy PLC LP
Interest". The interest of EnCap LP as a limited partner in the Partnership is
herein called the "EnCap LP Interest". The Energy PLC Interest and the EnCap
LP Interest are herein collectively called the "LP Interests".
D. GP Seller and LP Sellers are herein sometime called "Sellers". The
GP Interest and the LP Interests are herein sometimes called the "Interests".
E. GP Seller desires to sell to Buyer, and Buyer desires to purchase
from GP Seller, the GP Interest, on the terms and conditions contained herein.
F. Each LP Seller desires to sell to Buyer, and Buyer desires to
purchase from each LP Seller, such LP Seller's respective LP Interest, on the
terms and conditions contained herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual covenants and agreements contained herein, Buyer and Sellers do hereby
agree as follows:
1
ARTICLE I
Definitions, References and Construction
Section 1.1. Certain Defined Terms. When used in this Agreement, the
following terms shall have the respective meanings assigned to them in this
Section 1.1 or in the section, subsections or other subdivisions referred to
below:
"Agreement" shall mean this Agreement, as hereafter changed, amended or
modified in accordance with the terms hereof.
"Buyer" shall have the meaning assigned to such term in the introductory
paragraph to this Agreement.
"Closing" and "Closing Date" shall have the respective meanings assigned
to such terms in Section 7.1.
"Closing Costs" shall mean the reasonable third party out-of-pocket
costs and expenses incurred by Buyer and LP Sellers in connection with the
preparation, negotiation and execution of this Agreement and all related
documents, including the fees and expenses of legal counsel to LP Sellers.
"Closing Shares" shall mean the shares of Common Stock described in
Sections 2.2 and 2.4.
"Commission" shall mean the Securities and Exchange Commission (or any
successor body thereto).
"Common Stock" shall mean shares of common stock of Buyer, $0.01 par
value per share, and any shares issued or issuable with respect thereto by way
of a stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
"Consolidated" refers to the consolidation of any person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to
a person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such person and
its properly consolidated subsidiaries.
"Effective Date" shall mean (a) when used with respect to the GP
Interest, 6:59 a.m. local time on December 1, 1997, and (b) when used with
respect to the LP Interests, 7:00 a.m. local time on December 1, 1997.
2
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated under such Act.
"Future Nevada" shall mean Future Energy Corporation, a Nevada
corporation and a wholly-owned subsidiary of Buyer.
"Future Texas" shall mean Future Petroleum Corporation, a Texas
corporation.
"GAAP" shall mean those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of Buyer
and its Consolidated subsidiaries, are applied for all periods after the date
hereof in a manner consistent with the manner in which such principles and
practices were applied to the Initial Financial Statements.
"GP Seller" shall have the meaning assigned to such term in Paragraph B
of the Recitals hereto.
"Initial Financial Statements" shall have the meaning assigned to such
term in Section 4.9.
"Interests" shall have the meaning assigned to such term in Paragraph D
of the Recitals hereto.
"LP Interest" shall have the meaning assigned to such term in Paragraph
C of the Recitals hereto.
"LP Sellers" shall have the meaning assigned to such term in Paragraph C
of the Recitals hereto.
"Notes" shall have the meaning assigned to such term in Section 7.3(e).
"Partnership" shall have the meaning assigned to such term in Paragraph
A of the Recitals hereto.
"Partnership Agreement" shall mean that certain Agreement of Limited
Partnership establishing the Partnership dated as of October 28, 1994, as
amended.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
all rules and regulations under such Act.
"Security Related Documents" shall mean the agreements, documents and
other instruments listed in Exhibit 2.1--Security Related Documents.
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"Sellers" shall have the meaning assigned to such term in Paragraph D of
the Recitals hereto.
Section 1.2. References and Construction.
(a) All references in this Agreement to articles, sections,
subsections and other subdivisions refer to corresponding articles, sections,
subsections and other subdivisions of this Agreement unless expressly provided
otherwise.
(b) Titles appearing at the beginning of any of such subdivisions are
for convenience only and shall not constitute part of such subdivisions and
shall be disregarded in construing the language contained in such
subdivisions.
(c) The words "this Agreement", "this instrument", "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.
(d) Words in the singular form shall be construed to include the
plural and vice versa, unless the context otherwise requires. Pronouns in
masculine, feminine and neuter genders shall be construed to include any other
gender.
(e) Unless the context otherwise requires or unless otherwise provided
herein, the terms defined in this Agreement which refer to a particular
agreement, instrument or document also refer to and include all renewals,
extensions, modifications, amendments or restatements of such agreement,
instrument or document, provided that nothing contained in this subsection
shall be construed to authorize such renewal, extension, modification,
amendment or restatement.
(f) Examples shall not be construed to limit, expressly or by
implication, the matter they illustrate.
(g) The word "includes" and its derivatives means "includes, but is
not limited to" and corresponding derivative expressions.
(h) No consideration shall be given to the fact or presumption that
one party had a greater or lesser hand in drafting this Agreement.
(i) All references herein to "$" or "dollars" shall refer to U.S.
Dollars.
(j) Exhibits 2.1--Security Related Documents, 6.2(d), 7.2(a), 7.2(b),
7.2(c), and 7.3(e) are attached hereto. Each such Exhibit is incorporated
herein by reference for all purposes and references to this Agreement shall
also include such Exhibit unless the context in which used shall otherwise
require.
4
ARTICLE II
Agreement to Purchase and Sell Interests
Section 2.1. Conveyance of LP Interests. At the Closing, and on
the terms and subject to the conditions set forth in this Agreement, each LP
Seller shall sell to Buyer, and Buyer shall purchase and accept from the LP
Seller, such LP Seller's LP Interest effective as of the Effective Date.
Section 2.2. Purchase Price and Payment for LP Interests. In
consideration of the transfer by each LP Seller to Buyer of such LP Seller's
LP Interest, Buyer shall tender to such LP Seller an aggregate purchase price
consisting of (a) a promissory note in the principal amount set forth opposite
such LP Seller's name below and (b) the number of shares of Common Stock set
forth opposite such LP Seller's name below:
Seller Principal Amount No.of Shares
Energy PLC $247,653.12 18,762
EnCap LP $412,346.88 31,238
Section 2.3. Conveyance of GP Interest. At the Closing, and on the
terms and subject to the conditions set forth in this Agreement, GP Seller
shall sell to Buyer, and Buyer shall purchase and accept from GP Seller, the
GP Interest effective as of the Effective Date.
Section 2.4. Purchase Price and Payment for GP Interest. In
consideration of the transfer by GP Seller to Buyer of the GP Interest, Buyer
shall tender to GP Seller an aggregate purchase price consisting of 150,000
shares of Common Stock.
ARTICLE III
Representations and Warranties of Sellers
Each Seller hereby severally and as to itself represents and warrants to
Buyer as follows (except it is agreed that the representations and warranties
contained in Sections 3.8(d) and 3.8(e) are being made by each LP Seller only
to its knowledge without having made any independent investigation with
respect to the matters referenced in such Sections):
Section 3.1. Organization and Existence. Such Seller is duly formed
and validly existing under the laws of the jurisdiction of its formation.
5
Section 3.2. Power and Authority. Such Seller has all requisite power
and authority to execute, deliver, and perform this Agreement and each other
agreement, instrument, or document executed or to be executed by it in
connection with the transactions contemplated hereby to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery, and performance by such Seller of this Agreement and each
other agreement, instrument, or document executed or to be executed by it in
connection with the transactions contemplated hereby to which it is a party,
and the consummation by it of the transactions contemplated hereby and
thereby, have been duly and validly authorized by all necessary action on its
part.
Section 3.3. Valid and Binding Agreement. This Agreement has been duly
executed and delivered by such Seller and constitutes, and each other
agreement, instrument, or document executed or to be executed by it in
connection with the transactions contemplated hereby to which it is a party
has been, or when executed will be, duly executed and delivered by it and
constitutes, or when executed and delivered will constitute, a valid and
legally binding obligation of such Seller, enforceable against it in
accordance with their respective terms, except that such enforceability may be
limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium,
and similar laws affecting creditors' rights generally and (b) equitable
principles which may limit the availability of certain equitable remedies
(such as specific performance) in certain instances.
Section 3.4. Non-Contravention. Neither the execution, delivery, and
performance by such Seller of this Agreement and each other agreement,
instrument, or document executed or to be executed by it in connection with
the transactions contemplated hereby to which it is a party nor the
consummation by it of the transactions contemplated hereby and thereby do and
will (a) conflict with or result in a violation of any provision of the
partnership agreement or other governing instruments of such Seller, (b)
conflict with or result in a violation of any provision of, or constitute
(with or without the giving of notice or the passage of time or both) a
default under, or give rise (with or without the giving of notice or the
passage of time or both) to any right of termination, cancellation, or
acceleration under, any bond, debenture, note, mortgage, indenture, lease,
contract, agreement, or other instrument or obligation to which such Seller is
a party or by which such Seller or any of its properties may be bound,
(c) result in the creation or imposition of any lien or other encumbrance upon
the properties of such Seller, or (d) violate any applicable law, rule or
regulation binding upon such Seller.
Section 3.5. Approvals. No consent, approval, order, or authorization
of, or declaration, filing, or registration with, any court or governmental
agency or of any third party is required to be obtained or made by such Seller
in connection with the execution, delivery, or performance by such Seller of
this Agreement and each other agreement, instrument, or document executed or
to be executed by such Seller in connection with the transactions contemplated
hereby to which it is a party or the consummation by it of the transactions
contemplated hereby and thereby.
6
Section 3.6. Pending Litigation. There are no pending suits, actions,
or other proceedings in which such Seller is a party which affect such
Seller's Interest or which affect the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
Section 3.7. Title to Interest. Such Seller (a) owns beneficially
and of record such Seller's Interest and (b) has the absolute right to and,
upon execution and delivery of the Assignment at Closing will, sell, assign,
and transfer such Seller's Interest to Buyer free and clear of all Liens. For
purposes of this Section, the term "Lien" shall mean any mortgage, pledge,
security interest, lien, option, right, restriction on transfer or encumbrance
of any nature other than restrictions that may be imposed by any federal or
state securities laws or those that arise under the terms of the Partnership
Agreement. Except by operation of this Agreement or the Partnership
Agreement, there are no existing options, warrants, calls, subscriptions or
other rights, agreements, commitments or claims of any nature granted or
binding upon such Seller's granting or vesting in any party any claim or
potential claim to such Seller's Interest.
Section 3.8. The Partnership.
(a) The Partnership is duly formed and validly existing as a limited
partnership under the laws of the State of Texas.
(b) The Partnership has all requisite partnership power and authority
to own its properties and other assets and to conduct its business as
currently conducted.
(c) Such Seller is in compliance in all material respects with the
terms and provisions of the Partnership Agreement.
(d) All expenses and liabilities of the Partnership have been, and are
being, paid timely by the Partnership in all material respects.
(e) There are no material liabilities of the Partnership other than as
disclosed in (i) the Partnership's audited balance sheet as of December 31,
1996, and the related audited statements of income, stockholders' equity and
cash flows for the year then ended, and the notes and schedules thereto, and
(ii) the Partnership's unaudited balance sheet as of December 31, 1997, other
than liabilities which have arisen since December 31, 1997, in the ordinary
course of business.
7
Section 3.9. Investment Experience. Such Seller is able to bear
the economic risks of its investment in the Closing Shares, and consequently
without limiting the generality of the foregoing, it is able to hold the
Closing Shares acquired pursuant to the terms hereof for an indefinite period
of time and has a sufficient net worth to sustain a loss of all or a portion
of its investment in the Closing Shares in the event such loss should occur.
Such Seller has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of an investment
in the Closing Shares.
Section 3.10. Investment Intent. Such Seller is acquiring the
Closing Shares for its own account for investment and not with view to the
distribution, resale, subdivision, or fractionalization thereof, and it has no
present plans to enter into any contract, undertaking, agreement, or
arrangement for any such distribution, resale, subdivision, or fractionalizat-
ion.
Section 3.11. Restricted Securities. Such Seller is aware that it
must bear the economic risk of its investment in the Closing Shares for an
indefinite period of time because the Closing Shares have not been registered
under the Securities Act or under the securities laws of any state of the
United States, and therefore cannot be sold unless they are subsequently
registered under the Securities Act and any applicable state securities laws
or unless an exemption from such registration is available. Such Seller also
recognizes that no U.S. federal or state agency has passed upon the Closing
Shares to be issued hereunder to date or made any finding or determination as
to the fairness of an investment in such shares. Such Seller agrees that the
Closing Shares acquired by it hereunder shall not be sold, assigned, pledged,
hypothecated or otherwise transferred unless they are registered under the
Securities Act and applicable state securities laws or unless an exemption
from such registration is available.
Section 3.12. Legend. Such Seller acknowledges that a legend in
substantially the following form will be placed on any certificate(s)
evidencing the Closing Shares issued hereunder:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS AND ARE "RESTRICTED SECURITIES" WITHIN
THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE WITH THE SECURITIES
ACT."
Such Seller further understands that Buyer may refuse to register transfer of
the Closing Shares issued hereunder in the absence of compliance with Rule 144
unless it furnishes Buyer with a "no-action" or interpretive letter from the
Commission or an opinion of counsel reasonably acceptable to Buyer stating
that the transfer may be effected without registration under the Securities
Act.
Section 3.13. Accuracy of Information. All information which such
Seller has provided to Buyer or its agents or representatives concerning its
suitability to hold the Closing Shares following the transactions contemplated
hereby is complete, accurate and correct.
8
Section 3.14. No Solicitation. Such Seller was not any time
solicited by any leaflet, public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement, or any other form of
general advertising or solicitation in connection with the offer, sale or
purchase of the Closing Shares under this Agreement.
Section 3.15. Accredited Investor. Such Seller is an "accredited
investor," as such term is defined in Regulation D promulgated pursuant to the
Securities Act.
Section 3.16. Disclaimer of Warranties. Other than those expressly set
out in this Article III, each Seller hereby expressly disclaims any and all
representations or warranties with respect to such Seller's Interest or the
transaction contemplated hereby, and Buyer agrees that such Seller is selling
its respective Interest to Buyer "where is" and "as is". Specifically as a
part of (but not in limitation of) the foregoing, Buyer acknowledges that each
Seller has not made, and each Seller hereby expressly disclaims, any
representation or warranty (express, implied, under common law, by statute or
otherwise) (a) as to the condition of the Partnership's oil and gas properties
(INCLUDING WITHOUT LIMITATION, EACH SELLER DISCLAIMS ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY
TO MODELS OR SAMPLES OF MATERIALS), (b) as to the compliance by the
Partnership with applicable environmental laws, (c) as to the status of title
to the Partnership's oil and gas properties, or (d) as to the extent of oil,
gas and/or other mineral reserves, the recoverability of or the cost of
recovering any of such reserves, the value of reserves, prices (or anticipated
prices) at which production has been or will be sold and the ability to sell
oil or gas production from the Partnership's oil and gas properties.
ARTICLE IV
Representations and Warranties of Buyer
Buyer represents and warrants to the Sellers as follows:
Section 4.1. Organization and Existence. Buyer is a corporation duly
organized, legally existing and in good standing under the laws of the State
of Utah.
Section 4.2. Power and Authority. Buyer has full corporate power and
corporate authority to execute, deliver, and perform this Agreement and each
other agreement, instrument, or document executed or to be executed by it in
connection with the transactions contemplated hereby to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery, and performance by Buyer of this Agreement and each other
agreement, instrument, or document executed or to be executed by Buyer in
connection with the transactions contemplated hereby to which it is a party,
and the consummation by it of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action of Buyer.
9
Section 4.3. Valid and Binding Agreement. This Agreement has been duly
executed and delivered by Buyer and constitutes, and each other agreement,
instrument, or document executed or to be executed by Buyer in connection with
the transactions contemplated hereby to which it is a party has been, or when
executed will be, duly executed and delivered by Buyer and constitutes, or
when executed and delivered will constitute, a valid and legally binding
obligation of Buyer, enforceable against it in accordance with their
respective terms, except that such enforceability may be limited by
(a) applicable bankruptcy, insolvency, reorganization, moratorium, and similar
laws affecting creditors' rights generally and (b) equitable principles which
may limit the availability of certain equitable remedies (such as specific
performance) in certain instances.
Section 4.4. Non-Contravention. The execution, delivery, and
performance by Buyer of this Agreement and each other agreement, instrument,
or document executed or to be executed by Buyer in connection with the
transactions contemplated hereby to which it is a party and the consummation
by it of the transactions contemplated hereby and thereby do not and will not
(a) conflict with or result in a violation of any provision of the charter or
bylaws or other governing instruments of Buyer, (b) conflict with or result in
a violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of
termination, cancellation, or acceleration under, any bond, debenture, note,
mortgage, indenture, lease, contract, agreement, or other instrument or
obligation to which Buyer is a party or by which Buyer or any of its
properties may be bound, (c) except as contemplated by this Agreement, result
in the creation or imposition of any lien or other encumbrance upon the
properties of Buyer, or (d) violate any applicable law, rule or regulation
binding upon Buyer.
Section 4.5. Approvals. No consent, approval, order, or authorization
of, or declaration, filing, or registration with, any court or governmental
agency or of any third party is required to be obtained or made by Buyer in
connection with the execution, delivery, or performance by Buyer of this
Agreement and each other agreement, instrument, or document executed or to be
executed by Buyer in connection with the transactions contemplated hereby to
which it is a party or the consummation by it of the transactions contemplated
hereby and thereby, other than compliance with any applicable requirements of
the Securities Act and any applicable state securities laws.
Section 4.6. Pending Litigation. There are no pending suits, actions,
or other proceedings in which Buyer is a party which affect the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
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Section 4.7. Knowledgeable Purchaser. Buyer is a knowledgeable
purchaser, owner and operator of oil and gas properties, has the ability to
evaluate (and in fact has evaluated) the Interests for purchase, and is
acquiring the Interests for its own account and not with the intent to make a
distribution within the meaning of the Securities Act of 1933 (and the rules
and regulations pertaining thereto) or a distribution thereof in violation of
any other applicable securities laws.
Section 4.8. Closing Shares. The Closing Shares have been duly
authorized for such issuance and, when issued and delivered by Buyer in
accordance with the provisions of this Agreement, will be validly issued,
fully paid, and nonassessable. The issuance of the Closing Shares under this
Agreement is not subject to any preemptive or similar rights.
Section 4.9. SEC Filings. Buyer is current in its obligations to file
all periodic report and proxy statements with the Commission required to be
filed under the Exchange Act. Buyer's Annual Report on Form-10KSB for the
year ended December 31, 1997 (in this Section called the "SEC Document") does
not contain an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of circumstances then existing.
The audited Consolidated financial statements and unaudited Consolidated
interim financial statements of Buyer included in the SEC Document (the
"Initial Financial Statements") present fairly in all material respects, in
conformity with GAAP applied on a consistent basis, the Consolidated financial
position of Buyer as of the date thereof and its Consolidated results of
operations and changes in financial position for the period then ended. Since
December 31, 1997, there have been no material developments, transactions or
events affecting Buyer (other than developments or events affecting the oil
and gas exploration and production industry generally) other than as disclosed
by Buyer in the SEC Document or to Sellers in writing. There are no material
liabilities of Buyer (contingent or otherwise), other than as disclosed in the
SEC Document and the financial statements included therein.
ARTICLE V
Certain Covenants Regarding Information and Confidentiality
Section 5.1. Access to Information. From the date hereof until Closing,
each Seller will use its reasonable best efforts to give Buyer, and its
attorneys and other representatives, access at all reasonable times to the
books and records of the Partnership and to any contract files, lease or other
title files, production files, well files and other files of the Partnership
pertaining to the ownership of the Partnership's properties, and each Seller
will use its reasonable best efforts to arrange for Buyer, and its attorneys
and other representatives, to have access to any such files in the respective
office of the Partnership. No Seller shall be obligated to provide Buyer with
access to any records or data which such Seller cannot provide to Buyer
without, in its reasonable opinion, breaching confidentiality agreements with
other parties. Buyer recognizes and agrees that all materials made available
to it (whether pursuant to this Section or otherwise) in connection with the
transactions contemplated hereby are made available to it as an accommodation
and without representation or warranty of any kind as to the accuracy and
completeness of such materials. From the date hereof until Closing, Buyer
will furnish each Seller and its attorneys and other representatives such
information with respect to Buyer as such Seller shall from time to time
reasonably request. Buyer shall not be obligated to provide Sellers with
access to any records or data which Buyer cannot provide to Sellers without,
in its reasonable opinion, breaching confidentiality agreements with other
parties.
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Section 5.2. Confidentiality.
(a) Each Receiving Party (as defined below) agrees that all
Confidential Information (as defined below) shall be kept confidential by the
Receiving Party and shall not be disclosed by the Receiving Party in any
manner whatsoever; provided, however, that (i) any of such Confidential
Information may be disclosed to such directors, officers, employees, and
authorized representatives (including without limitation attorneys,
accountants, consultants, and financial advisors) of the Receiving Party
(collectively, for purposes of this Section, "Receiving Party
Representatives") as need to know such information for the purpose of
evaluating the transactions contemplated hereby (it being understood that each
Receiving Party Representative shall be informed by the Receiving Party of the
confidential nature of such information and shall be required to treat such
information confidentially and that the Receiving Party and a Receiving Party
Representative shall be responsible for any breach of this Section by such
Receiving Party Representative), (ii) any disclosure of Confidential
Information may be made to the extent to which the Disclosing Party (as
defined below) consents in writing, (iii) Confidential Information may be
disclosed by the Receiving Party or any Receiving Party Representative to the
extent that, in the opinion of counsel for the Receiving Party or such
Receiving Party Representative, the Receiving Party or such Receiving Party
Representative is legally compelled to do so, provided that, prior to making
such disclosure, the Receiving Party or such Receiving Party Representative,
as the case may be, advises and consults with the Disclosing Party regarding
such disclosure and provided further that the Receiving Party or such
Receiving Party Representative, as the case may be, discloses only that
portion of the Confidential Information as is legally required. The Receiving
Party agrees that none of the Confidential Information will be used for any
purpose other than in connection with the transactions contemplated hereby.
The term "Confidential Information", as used herein, means all information
(irrespective of the form of communication) obtained by or on behalf of the
Receiving Party from the Disclosing Party or its representatives pursuant to
this Section and all similar information obtained from the Disclosing Party or
its representatives by or on behalf of the Receiving Party prior to the date
of this Agreement, other than information which (A) was or becomes generally
available to the public other than as a result of disclosure by the Receiving
Party or any Receiving Party Representative, (B) was or becomes available to
the Receiving Party on a nonconfidential basis prior to disclosure to the
Receiving Party by the Disclosing Party or its representatives, or (C) was or
becomes available to the Receiving Party from a source other than the
Disclosing Party and its representatives, provided that such source is not
known by the Receiving Party (after reasonable due inquiry) to be bound by a
legal, contractual or fiduciary obligation to the Disclosing Party. As used
in this Section, the term "Receiving Party" shall mean (x) Buyer, when the
Disclosing Party is a Seller, and (y) a Seller, when the Disclosing Party is
Buyer. As used in this Section, the term "Disclosing Party" shall mean (xx)
Buyer, when the Receiving Party is a Seller, and (yy) a Seller, when the
Receiving Party is Buyer.
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(b) If this Agreement is terminated, the Receiving Party shall
promptly return at its expense, and shall cause all Receiving Party
Representatives to promptly return at the Receiving Party's or such Receiving
Party Representatives' expense, all Confidential Information to the Disclosing
Party without retaining any copies thereof, provided that such portion of the
Confidential Information as consists of notes, compilations, analyses,
reports, studies, or other documents prepared by the Receiving Party or the
Receiving Party Representatives shall be destroyed (and the Receiving Party
and each Receiving Party Representative shall certify such destruction in
writing to the Disclosing Party if requested by the Disclosing Party).
ARTICLE VI
Conditions Precedent to the Obligations of the Parties; Termination Rights
Section 6.1. Conditions Precedent to the Obligations of Buyer. The
obligations of Buyer under this Agreement are subject to each of the following
conditions being met:
(a) Each and every representation of each Seller under this Agreement
shall be true and accurate in all material respects as of the date when made
and shall be deemed to have been made again at and as of the time of Closing
and shall at and as of such time of Closing be true and accurate in all
respects except as to changes specifically contemplated by this Agreement or
consented to by Buyer.
(b) Each Seller shall have performed and complied in all material
respects with (or compliance therewith shall have been waived by Buyer) each
and every covenant, agreement and condition required by this Agreement to be
performed or complied with by each Seller prior to or at the Closing.
(c) No suit, action or other proceedings shall, on the date of
Closing, be pending or threatened before any court or governmental agency
seeking to restrain, prohibit, or obtain damages or other relief in connection
with the consummation of the transactions contemplated by this Agreement.
If any such condition on the obligations of Buyer under this Agreement is not
met as of the Closing Date, or in the event the Closing does not occur on or
before the Closing Date, and (in either case) Buyer is not in breach of its
obligations hereunder in the absence of a Seller also being in breach of its
obligations hereunder, this Agreement may, at the option of Buyer, be
terminated, in which case the parties shall have no further obligations to one
another hereunder (other than the obligations under Sections 5.2 and Article
XI which will survive such termination).
Section 6.2. Conditions Precedent to the Obligations of Sellers.
The obligations of Sellers under this Agreement are subject to the each of the
following conditions being met:
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(a) Each and every representation of Buyer under this Agreement shall
be true and accurate in all material respects as of the date when made and
shall be deemed to have been made again at and as of the time of Closing and
shall at and as of such time of Closing be true and accurate in all respects
except as to changes specifically contemplated by this Agreement or consented
to by Sellers.
(b) Buyer shall have performed and complied in all material respects
with (or compliance therewith shall have been waived by Sellers) each and
every covenant, agreement and condition required by this Agreement to be
performed or complied with by Buyer prior to or at the Closing.
(c) No suit, action or other proceedings shall, on the date of
Closing, be pending or threatened before any court or governmental agency
seeking to restrain, prohibit, or obtain damages or other relief in connection
with the consummation of the transactions contemplated by this Agreement.
(d) Sellers shall have received an opinion of counsel reasonably
acceptable to Sellers dated the Closing Date covering the matters described in
Exhibit 6.2(d) and in a form reasonably acceptable to Sellers.
If any such condition on the obligations of Sellers under this Agreement is
not met as of the Closing Date, or in the event the Closing does not occur on
or before the Closing Date, and (in either case) a Seller is not in breach of
its obligations hereunder in the absence of Buyer also being in breach of its
obligations hereunder, this Agreement may, at the option of a Seller, be
terminated, in which case the parties shall have no further obligations to one
another hereunder (other than the obligations under Section 5.2 and Article XI
which will survive such termination).
ARTICLE VII
Closing of Transaction
Section 7.1. The Closing. The closing (herein called the "Closing") of
the transaction contemplated hereby shall take place in the offices of
Xxxxxxxx & Xxxxxx, P.C., at 1700 Chase Tower, 000 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxx, at 10:00 a.m. Central Daylight Time, on April 30, 1998, or at such
other date and time as the Buyer and Sellers may mutually agree upon (such
date and time being herein called the "Closing Date").
Section 7.2. Sellers' Closing Obligations. At the Closing:
(a) each LP Seller shall execute and deliver that certain
Assignment of Limited Partner Interest (the "LP Assignment"),
substantially in the form attached hereto as Exhibit 7.2(a) in all
material respects;
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(b) GP Seller shall execute and deliver that certain Assignment
of General Partner Interest (the "GP Assignment"), substantially in the
form attached hereto as Exhibit 7.2(b) in all material respects;
(c) each Seller shall execute and deliver that certain Amendment
No. 1 to Registration Rights Agreement, substantially in the form
attached hereto as Exhibit 7.2(c) in all material respects;
(d) each Seller shall have tendered to the Partnership the cash
amounts to be recontributed to the Partnership as provided in Section
8.1.
Section 7.3. Buyer's Closing Obligations. At the Closing, Buyer
shall:
(a) deliver to Sellers a certificate of existence and good
standing with respect to Buyer issued by appropriate public officials
of the State of Utah and dated no earlier than three business days prior
to the Closing Date;
(b) deliver to Sellers a certificate of existence and good
standing with respect to Future Texas issued by appropriate public
officials of the State of Texas and dated no earlier than three business
days prior to the Closing Date;
(c) deliver to Sellers a certificate of existence and good
standing with respect to Future Nevada issued by appropriate public
officials of the State of Nevada and dated no earlier than three
business days prior to the Closing Date;
(d) deliver to Sellers an "Omnibus Certificate" of the Secretary
and President of each of Buyer, Future Texas and Future Nevada, which
shall contain the names and signatures of the officers of Buyer, Future
Texas and Future Nevada, respectively, authorized to execute this
Agreement and the other documents contemplated hereby to which entity is
a party and which shall certify to the truth, correctness and
completeness of the following exhibits attached thereto: (i) a copy of
the resolutions duly adopted by the Board of Directors of Buyer, Future
Texas and Future Nevada (as applicable), with respect to the execution,
delivery and performance of this Agreement and the other documents
contemplated hereby to which such entity is a party; (ii) a copy of the
charter documents of Buyer, Future Texas and Future Nevada (as
applicable); and (iii) a copy of the bylaws of Buyer, Future Texas and
Future Nevada (as applicable);
(e) execute and deliver to LP Sellers the respective Renewal
Promissory Notes substantially in the form set forth in the attached
Exhibit 7.3(e) in all material respects (the "Notes");
(f) issue and deliver to Sellers the Closing Shares;
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(g) execute and deliver (or cause to be executed and delivered)
to LP Sellers each of the Security Related Documents and any collateral
to be delivered at Closing thereunder; and
(h) execute and deliver that certain Amendment No. 1 to
Registration Rights Agreement substantially in the form attached hereto
as Exhibit 7.2(c) in all material respects.
Section 7.4. Delivery of Files. Within 30 days after the Closing, GP
Seller shall deliver (or cause to be delivered) to Buyer the limited
partnership files, records and other materials for the Partnership.
Notwithstanding the foregoing, to the extent such files or other materials
include items which cannot be provided to Buyer without, in the reasonable
opinion of GP Seller, breaching confidentiality agreements with other parties,
GP Seller shall have no obligation to furnish (or cause to be furnished) such
items; provided, that if requested by Buyer, GP Seller shall identify any such
agreement and use their reasonable best efforts to obtain an amendment or
waiver of such agreement to permit such materials to be delivered to Buyer.
Sellers may retain copies of all or any parts of the files or other materials
so furnished, and all costs of copying such files shall be borne by Sellers.
So long as such files or other materials so delivered by GP Seller to Buyer
are maintained by Buyer, Buyer shall permit Sellers and their representatives
to have access to the same; for a period of three years after Closing Buyer
shall advise Sellers before it destroys any such files, records or other
materials (and will, if requested by Sellers, deliver to Sellers any files or
other materials it intends to destroy).
Section 7.5. Agreement Regarding Execution and Delivery. Buyer,
for itself and on behalf of the Partnerships, hereby acknowledges and agrees
that (a) the consummation of the transactions contemplated hereunder,
including without limitation the extension of credit under the Notes, the
guarantee by the Partnership of the Notes, and the granting of liens and
security interests by Buyer, the Partnership and other parties to secure the
Notes and such guarantee, are intended to be simultaneous for all intents and
purposes, and (b) Buyer, the Partnership and such other parties shall be
deemed to have executed and delivered each Security Related Document,
immediately prior to or simultaneously with the extension of credit under the
Notes.
ARTICLE VIII
Certain Agreements Regarding Partnership Costs and Expenses and Other
Matters
Section 8.1. Partnership Costs and Expenses. Each of the
Sellers agrees that at the Closing it shall contribute cash to the Partnership
in the respective amount set forth opposite such Seller's name below:
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Seller Amount
Energy PLC $14,258.82
EnCap LP $23,741.18
NCI $473.40
Upon receipt by the Partnership of the amounts set forth above and the closing
of the transactions contemplated hereby, there shall be no further adjustments
hereunder or otherwise among the parties to take into account the Effective
Date of the transfer of the GP Interest and the LP Interests hereby (and the
revenues, costs and expenses attributable to the Partnership, whether before
or after the Effective Date), it being agreed by the parties hereto that Buyer
shall assume full responsibility for any and all costs and expenses of the
Partnership, whether incurred before or after the Effective Date and (without
limitation) whether an administrative or capital cost or expense of the
Partnership.
Section 8.2. Production Proceeds. Notwithstanding that, by the
terms of the various Security Related Documents, Future Texas and the
Partnership are and will be assigning to LP Sellers all of the "Production
Proceeds" (as defined therein) accruing to the property covered thereby, so
long as no Default (as defined in that certain Purchase and Sale Agreement
dated as of November 25, 1997, by and among Buyer, LP Sellers and Gecko Booty
1994 I Limited Partnership) has occurred Future Texas and the Partnership may
continue to receive from the purchasers of production all such Production
Proceeds, subject, however, to the liens created under the Security Related
Documents, which liens are hereby affirmed and ratified. Upon the occurrence
of a Default, LP Sellers may exercise all rights and remedies granted under
the Security Related Documents, including the right to obtain possession of
all Production Proceeds then held by Future Texas and the Partnership or to
receive directly from the purchasers of production all other Production
Proceeds. In no case shall any failure, whether purposed or inadvertent, by
LP Sellers to collect directly any such Production Proceeds constitute in any
way a waiver, remission or release of any of their rights under the Security
Related Documents, nor shall any release of any Production Proceeds by LP
Sellers to Future Texas or the Partnership constitute a waiver, remission, or
release of any other Production Proceeds or of any rights of LP Sellers to
collect other Production Proceeds thereafter.
ARTICLE IX
Agreement Regarding Specified Breach
(a) The representations and warranties of Sellers contained in
Sections 3.8(d) and (e) shall survive the Closing until the one-year
anniversary of the Closing Date (in this Article IX called the "Survival
Date").
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(b) Subject to the terms and conditions of this Article IX, each
Seller severally (and not jointly and severally) agrees to indemnify and hold
harmless Buyer from and against any and all claims, actions, liabilities,
damages, costs and expenses (including court costs and attorneys' fees) (in
this Article IX, "Damages") incurred by Buyer by reason of or resulting from a
breach by such Seller of its representations and warranties contained in
Sections 3.8(d) and (e).
(c) No Seller shall have any indemnification obligation under this
Article IX unless before the Survival Date it shall have received from Buyer
written notice of the claim for or in respect of which indemnification is
sought (in this Article IX, the "Notice"). The Notice shall set forth with
reasonable specificity (i) the basis under this Article, and the facts that
otherwise form the basis, of such claim and (ii) the estimate of the amount
of the Damages and a calculation or explanation of how such amount was
arrived.
(d) Any amounts due and owing Buyer by a Seller hereunder shall be
satisfied solely by the transfer and assignment by such Seller to Buyer of the
number of Closing Shares determined by the following formula: A = B/C, where
"A" is the number of Closing Shares, where "B" is such Seller's several share
of the Damages, and where "C" is the Average Price. Such transfer and
assignment shall be made by a Seller within 20 days of the date on which it
receives the Notice, unless such Seller in good faith disputes the claim set
forth in the Notice, in which event such transfer and assignment shall be made
within 20 days of the date on which such dispute is resolved (provided such
dispute is resolved in favor of Buyer). As used in this subsection (d), the
term "Average Price" shall equal the average of the last reported sales prices
for the Common Stock for the 15 consecutive Trading Days (as defined below)
immediately preceding the date of the Notice (or the date on which the dispute
is resolved, if applicable and provided the dispute is resolved in favor of
Buyer). The last reported sales price for each day shall be the last reported
sale price of the Common Stock on such date on the exchange where it is
primarily traded, or, if the Common Stock is not traded on an exchange, the
Common Stock shall be valued at the last reported sale price on such date on
the NASDAQ National Market System, or, if the Common Stock is not reported on
the NASDAQ National Market System or any similar system of automated
dissemination of quotations of securities prices, the Common Stock shall be
valued at the closing bid price (or average of bid prices) last quoted on such
date as reported by an established quotation service for over-the-counter
securities. As used above, the term "Trading Days" shall mean (i) if the
Common Stock is listed or admitted for trading on any generally recognized
U.S. securities exchange, days on which such securities exchange is open for
business and (ii) if the Common Stock is quoted on the NASDAQ National Market
System or any similar system of automated dissemination of quotations of
securities prices, days on which trades may be made on such system.
(e) Notwithstanding anything to the contrary herein, no
indemnification shall be required to be made by Sellers pursuant to this
Article IX except to the extent that the aggregate amount of the Damages
exceeds $10,000.
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(f) Notwithstanding anything to the contrary herein, (i) the maximum
aggregate number of Closing Shares GP Seller shall be obligated to transfer
and assign to Buyer hereunder shall be 150,000 and (ii) the maximum aggregate
number of Closing Shares LP Sellers shall collectively be obligated to
transfer and assign to Buyer hereunder shall be 50,000.
ARTICLE X
Notices
All notices and other communications required under this Agreement shall
(unless otherwise specifically provided herein) be in writing and be delivered
personally, by recognized commercial courier or delivery service (which
provides a receipt), by telecopier (with receipt acknowledged), or by
registered or certified mail (postage prepaid), at the following addresses:
If to LP Sellers: Energy Capital Investment Company PLC
EnCap Equity 1994 Limited Partnership
% EnCap Investments L.C.
0000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
Fax No.: 000-000-0000
with a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
If to GP Seller: NCI Enterprises, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
Fax No.: 000-000-0000
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If to Buyer: 0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Fax No.: 000-000-0000
and shall be considered delivered on the date of receipt. Either Buyer or a
Seller may specify as its proper address any other post office address within
the continental limits of the United States by giving notice to the other
party, in the manner provided in this Article, at least ten (10) days prior to
the effective date of such change of address.
ARTICLE XI
Commissions
Each Seller severally agrees to indemnify and hold harmless Buyer from
and against any and all claims, obligations, actions, liabilities, losses,
damages, costs or expenses (including court costs and attorneys fees) of any
kind or character arising out of or resulting from any agreement, arrangement
or understanding alleged to have been made by, or on behalf of, such Seller
with any broker or finder in connection with this Agreement or the
transactions contemplated hereby. Buyer agrees to indemnify and hold harmless
Sellers from and against any and all claims, obligations, actions,
liabilities, losses, damages, costs or expenses (including court costs and
attorneys fees) of any kind or character arising out of or resulting from any
agreement, arrangement or understanding alleged to have been made by, or on
behalf of, Buyer with any broker or finder in connection with this Agreement
or the transactions contemplated hereby.
ARTICLE XII
Miscellaneous Matters
Section 12.1. Survival of Provisions. All representations and
warranties made herein by Buyer and Sellers shall be continuing and shall be
true and correct on and as of the date of Closing with the same force and
effect as if made at that time, and (except as provided in Article IX) all of
such representations and warranties shall survive the Closing and the delivery
of the Assignments. The provisions of, and the obligations of the parties
under, Article VIII (to the extent the same are, by mutual agreement, not
performed at Closing), and Articles IX through XII inclusive shall survive the
Closing and the delivery of the Assignments.
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Section 12.2. Further Assurances. From time to time after the Closing,
at the request of any party hereto and without further consideration, each
Seller, on the one hand, and Buyer, on the other hand, shall execute and
deliver to the requesting party such instruments and documents and take such
other action (but without incurring any material financial obligation) as such
requesting party may reasonably request in order to consummate more fully and
effectively the transactions contemplated hereby.
Section 12.3. Binding Effect; Successors and Assigns. The Agreement
shall be binding on the parties hereto and their respective successors and
permitted assigns. Buyer, on the one hand, or a Seller, on the other hand,
shall have the right to assign its rights under this Agreement, without the
prior written consent of Sellers or Buyer (as applicable) first having been
obtained.
Section 12.4. Expenses. LP Sellers, on the one hand, and Buyer, on the
other hand, shall each bear and pay one-half of all Closing Costs.
Section 12.5. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto with respect to subject matter hereof and
supersedes all prior agreements, understandings, negotiations, and discussions
among the parties with respect to such subject matter. Time is of the essence
in this Agreement.
Section 12.6. Public Statements. Sellers and Buyer shall consult with
each other with regard to all publicity and other releases at or prior to
Closing concerning this Agreement and the transactions contemplated hereby
and, except as required by applicable law or the applicable rules or
regulations of any governmental body or stock exchange, neither Buyer, on the
one hand, nor a Seller, on the other hand, shall issue any publicity or other
release without furnishing the other a copy of such publicity or release no
less than one business day prior to release.
Section 12.7. Injunctive Relief. The parties hereto acknowledge and
agree that irreparable damage would occur in the event any of the provisions
of this Agreement (including Section 5.2) were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement, and shall be entitled to
enforce specifically the provisions of this Agreement, in any court of the
United States or any state thereof having jurisdiction, in addition to any
other remedy to which the parties may be entitled under this Agreement or at
law or in equity.
Section 12.8. Deceptive Trade Practices. To the extent applicable to
the transaction contemplated hereby or any portion thereof, Buyer can and does
expressly waive the provisions of the Texas Deceptive Trade Practices-Consumer
Protection Act, Section 17.41 et seq., Texas Business & Commerce Code, other
than Section 17.555, which is not waived, and all other consumer protection
laws of the State of Texas, or any other state, applicable to this transaction
that may be waived by the parties. In connection with such waiver, Buyer
represents to Sellers that they (a) are in the business of seeking or
acquiring by purchase or lease, goods or services for commercial or business
use, (b) have knowledge and experience in financial and business matters that
enable them to evaluate the merits and risks of the transactions contemplated
hereby and (c) are not in a significantly disparate bargaining position.
21
Section 12.9. Amendments. This Agreement may be amended, modified,
supplemented, restated or discharged (and provisions hereof may be waived)
only by an instrument in writing signed by Buyer and Sellers; provided, that
any amendment, modification, supplement, restatement, discharge or waiver to
or under any document or other instrument relating to the securitization of
the Notes shall require the written consent of the Buyer and the LP Sellers
(and not the GP Seller)
Section 12.10. Severability. If any provision of this Agreement is
held to be unenforceable, this Agreement shall be considered divisible and
such provision shall be deemed inoperative to the extent it is deemed
unenforceable, and in all other respects this Agreement shall remain in full
force and effect; provided, however, that if any such provision may be made
enforceable by limitation thereof, then such provision shall be deemed to be
so limited and shall be enforceable to the maximum extent permitted by
applicable law.
Section 12.11. No Waiver. The failure of any party hereto to insist
upon strict performance of a covenant hereunder or of any obligation
hereunder, irrespective of the length of time for which such failure
continues, shall not be a waiver of such party's right to demand strict
compliance in the future. No consent or waiver, express or implied, to or of
any breach or default in the performance of any obligation hereunder shall
constitute a consent or waiver to or of any other breach or default in the
performance of the same or any other obligation hereunder.
Section 12.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
Section 12.13. Counterparts. This Agreement may be executed in
counterparts, all of which are identical and all of which constitute one and
the same instrument.
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IN WITNESS WHEREOF, this Agreement is executed by the parties hereto on
the date set forth above.
"SELLERS":
ENERGY CAPITAL INVESTMENT COMPANY PLC
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Director
ENCAP EQUITY 1994 LIMITED PARTNERSHIP
By: ENCAP INVESTMENTS L.C., General Partner
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
NCI ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
"BUYER":
FUTURE PETROLEUM CORPORATION, a Utah
Corporation
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: President
