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Exhibit 7(c)(b)
Ratification and Amendment to Purchase and Sale Agreement
This Ratification and Amendment to the Purchase and Sale Agreement
dated April 8, 1998 by and between Kelt-Ohio, Inc. as Seller and North Coast
Energy, Inc. as Buyer is entered into this 12th day of May 1998. Kelt-Ohio, Inc.
(hereinafter referred to as Kelt) is a Delaware corporation, with an office at
0000 Xxxxx Xxxxxxx, Xxxxxxxxx, Xxxx 00000 and North Coast Energy, Inc. is a
Delaware corporation, (hereinafter referred to as "NCE"), with offices at 0000
Xxxx Xxxxxxx, Xxxxxxxxx, Xxxx 00000.
Recitals
Whereas, on or about April 20, 1998, NCE served Kelt with a notice of
termination of the subject Purchase and Sale Agreement pursuant to the
provisions of Sections 14.1.2, 8.2.2 and 12.3 of said Agreement, and NCE
subsequently received from the escrow agent, Huntington National Bank, a return
of its One Million Dollar deposit, and
Whereas, Kelt and NCE have, since the issuance and receipt of the
notice of termination conducted further negotiations aimed at addressing various
concerns of NCE's Board of Directors, and the parties now desire to proceed,
subject to the terms and conditions of this Ratification and Amendment, with the
consummation of the transaction and to memorialize the resolution of those
issues considered by NCE's Board of Directors.
Now, Therefore, for and in consideration of the covenants and
agreements contained herein, Kelt and NCE agree as follows:
SECTION 1 - Continuing Validity
As of and effective with the ensealing of this Ratification and
Amendment, the Notice of Termination dated April 20, 1998, is hereby withdrawn
and rescinded by NCE and the Purchase and Sale Agreement dated April 8, 1998, as
amended, is considered to be in full force and effect, and subject to amendatory
provisions herein contained, is ratified, readopted and affirmed by both Kelt
and NCE.
SECTION 2
2.1.4 Exhibit "C" Gathering Systems is amended to include the attached schedule
of rights of way and easements with grantor information as a supplement to the
existing description by way of map exhibit.
2.1.5 Exhibit "D" Contracts is amended to specifically incorporate by reference
that certain agreement made and entered into as of the 15th day of June 1997 by
and between LTV Steel Company, Inc., a New Jersey Corporation, therein referred
to as Buyer and Kelt-Ohio, Inc., a Delaware corporation, therein referred to as
Seller. Paragraph 4 of Exhibit "G" is also amended accordingly.
2.1.6 Exhibit "E" is amended to include as supplemental assets the 1981 Xxxxxx
Xxxx 250-40 Drilling Rig and attendant assets, all of which were previously
designated as "Excluded Assets" and set forth on page 2 of 2 of the previous
Exhibit "F." Page 2 of 2 of the former Exhibit "F" is hereby redesignated as
page 5 of Exhibit E, Rolling Stock, Equipment, Machinery, and Tools.
2.2.5 Exhibit "F" is amended (i) to delete the previous page 2 of 2, which has
been redesignated pursuant to the foregoing amendment to Section 2.1.6 and
Exhibit "E", and (ii) to add as Excluded Assets the computer hardware and
software itemized on the attached Amendment Exhibit, being a facsimile
transmission of this date from Kelt Energy, Inc.
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2.2.6 The section is amended to include a reference to and attachment of a new
Exhibit "K", being a description of the real estate located at 0000 Xxxx
Xxxxxxx, Xxxxxxxxx, Xxxx.
e) The subsection is amended to clarify that any purchase made by NCE pursuant
to the referenced option shall include the real estate described on Exhibit "K"
attached hereto and made a part hereof, along with all building contents unless
otherwise specified as an Excluded Asset under Section 2.2, as amended. In the
event that NCE should decline to exercise its option to purchase the referenced
real estate, it shall nevertheless be entitled to remove from the premises any
property that is either considered an Asset under Section 2.1 or that has been
brought onto the premises by NCE since the Effective Date. For purposes of
removal of its property in the event of a refusal to purchase the office
building and site, NCE shall be granted a holdover tenancy of thirty (30) days
in which to relocate its property.
2.3.1 The subsection is amended to delete the requirement of a cash settlement
for the value of Ten Thousand (10,000) barrels of crude oil. For purposes of
this amendment, the parties have agreed, and by these presents do agree to
consider the removal from the storage tanks of recoverable liquid hydrocarbons
accomplished as of the Effective Date. Any crude oil or other liquid hydrocarbon
remaining in the tanks on or after the Effective Date shall be considered the
property of NCE and there shall be no cash settlement due and owing to Kelt.
2.3.2 (ii) It has been represented that the "interim reading of such COH meters"
did not occur as originally planned and the last sentence of this subsection is,
accordingly, amended to provide that "Buyer shall be entitled to recover the
proceeds of such natural gas transported for sale on or after the Effective
Date, likewise subject to applicable taxes, third party interests and
transportation costs pertaining to such natural gas revenues."
SECTION 3
3.1 Purchase Price: The Purchase Price for the Assets due as of the Effective
Date, but payable at the time of Closing, shall be $16,000,001.00 ("Purchase
Price"), payable in United States currency (Sixteen Million and One United
States Dollars).
3.2 Payment Procedures
3.2.1 Kelt and NCE acknowledge that the provisions of this section were
originally complied with, that NCE received a return of its xxxxxxx money
deposit and that upon amendment and ratification of the Purchase and Sale
Agreement it is agreed that there shall be no xxxxxxx money deposit.
3.2.2 At Closing, NCE shall pay to Kelt the Purchase Price and any Cash
Settlement as therein provided.
3.2.3 Interest. Providing Closing occurs, NCE shall pay Kelt interest at the
Interest Rate on the Purchase Price from the Effective Date to the Closing Date.
3.3 (ii) The subsection is deleted in accordance with the foregoing amendment to
subsection 2.3.1.
3.4 Escrow. This section is deleted in its entirety as it concerns the conduct
of the parties on or after the date hereof, but not before.
SECTION 4
4.1 The title due diligence period is amended to continue until the date of
Closing specified in Section 17.2 of the Agreement, as amended.
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SECTION 5
5.2 It is agreed that the Environmental Review or Due Diligence Period has
expired with no environmental grounds for termination having been asserted by
NCE. This acknowledgment is made by NCE without any waiver of the warranty
contained in Section 5.8 of the Agreement.
SECTION 8
8.2.2 For purposes of this amendment, Kelt and NCE acknowledge the satisfaction
of all requisite corporate acts and proceedings that are conditions precedent to
the consummation of the transaction with the exception of the title due
diligence review provided for in Section 4.1, as amended
SECTION 10
10.3(i) Authorization. The subsection is hereby amended to provide for the
approval of the execution of this Agreement by the Board of Directors of NCE by
May 11, 1998.
SECTION 12
12.3 NCE agrees to waive the employee retention issue as of the execution of
this Ratification and Amendment and acknowledges the satisfaction of this
particular due diligence matter.
SECTION 14
14.1.2 This subsection is amended to read "by Buyer under the provisions of
Section 4.4."
14.2.1 and 14.2.2 These subsections are amended to delete the references to the
escrow agent and its responsibilities. In all other respects the provisions of
these subsections shall remain the same.
SECTION 17
17.2 Place and Date: Closing shall occur at a mutually agreeable location in
Twinsburg, Ohio on or before May 29th, 1998, ("Closing Date").
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In Witness Whereof, the Parties have executed this Ratification and
Amendment as of the 12th day of May, 1998.
Signed and Acknowledged
In the Presence of: Kelt-Ohio, Inc.
/s/ Xxxxx X. St. Clair BY: /s/ Xxxxxx Xxx
---------------------- ---------------
Xxxxxx Xxx, President
/s/ Xxxx X. Xxxxxx
------------------
WITNESSES
North Coast Energy, Inc.
/s/ Xxx Xxxxxx BY: /s/ Xxxxx Xxxxx
-------------- ----------------
Xxxxx Xxxxx, President
/s/ Xxxxxxx X. Xxxxxxx
----------------------
WITNESSES
STATE OF OHIO )
COUNTY OF Gurensey) SS: CORPORATE ACKNOWLEDGMENT
BEFORE ME, a Notary Public, in and for said County and State, on this
12TH day of MAY, 1998, personally appeared XXXXXX XXX, to me known to be the
identical person who subscribed the name of Kelt, A Delaware Corporation, to the
foregoing instrument as its PRESIDENT, and acknowledged to me that ___he
executed the same as her/his free and voluntary act and deed and as the free and
voluntary act and deed of such corporation for the uses and purposes therein set
forth.
Xxxxxx X. Xxxx
--------------
Notary Public
My Appointment Expires:
Xxxxxx X. Xxxx Attorney at Law
------------------------------
Notary Public - State of Ohio
My Commission Has No Expiration Date
Sec. 147.03 O.R.C.
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STATE OF OHIO )
COUNTY OF SUMMIT) SS: CORPORATE ACKNOWLEDGMENT
BEFORE ME, a Notary Public, in and for said County and State, on this
12TH day of MAY, 1998, personally appeared XXXXX XXXXX, to me known to be the
identical person who subscribed the name of NCE, A Delaware Corporation, to the
foregoing instrument as its PRESIDENT, and acknowledged to me that ___he
executed the same as her/his free and voluntary act and deed and as the free and
voluntary act and deed of such corporation for the uses and purposes therein set
forth.
Xxxxxx X. XXxx
--------------
Notary Public
My Appointment Expires:
Xxxxxx X. Xxxx, Attorney at Law
-------------------------------
Notary Public - State of Ohio
My Commission Has No Expiration Date
Sec. 147.03 O.R.C.
This Instrument Prepared By:
NORTH COAST ENERGY, INC.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxx 00000
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ASSUMPTION AGREEMENT
This Assumption Agreement is by North Coast Energy, Inc., a Delaware
Corporation ('Buyer), in favor of Kelt Ohio Inc., a Delaware Corporation
("Kelt").
WHEREAS, pursuant to a Purchase and Sale Agreement dated 8 April, 1998
as amended by a Ratification and Amendment to Purchase and Sale Agreement dated
12 May, 1998 (the "Agreement") between Buyer and Kelt, Kelt agreed to sell,
transfer and assign all of its interests in real estate, leasehold property,
gathering systems, easements, rights-of-way, contracts, rolling stock, equipment
and other assets and property as more fully defined by the Agreement (the
"Assets") and conveyed this date by Kelt to Buyer pursuant to Deed, Assignment
and Xxxx of Sale; and,
WHEREAS, pursuant to the Agreement Buyer has agreed to assume general
liabilities and environmental liabilities pertaining or relating to the Assets,
and the parties have agreed to memorialize the assumption contemporaneously with
closing of the Agreement and the delivery of the Deed, Assignment and Xxxx of
Sale from Kelt to Buyer.
NOW, THEREFORE, pursuant to die express terms of the Agreement, and in
consideration of the mutual covenants and agreements therein made and contained,
the sufficiency of which are hereby acknowledged, it is agreed by and between
the parties as follows:
1. ASSUMED GENERAL LIABILITIES. Except as otherwise specifically set forth in
the Agreement and subject in particular, but without limitation, to Section 2.5
thereof, Buyer shall assume and discharge all duties, liabilities and
obligations, whether arising from activities on and after the Effective Date,
relating to the Assets, including, but not limited to, all applicable valid
recorded and unrecorded agreements, contracts and instruments, including" but
not limited to the agreements and contracts described in the Agreement, and all
duties imposed by governmental laws and regulations. Buyer shall defend,
indemnify and hold harmless Kelt, its successors, assigns, affiliates, officers,
directors and stockholders against, and in respect of, any and all damages,
claims, losses, liabilities and expenses, including without limitation,
reasonable legal, accounting and other expenses which may arise from the ASSUMED
Liabilities.
2. ASSUMPTION OF ENVIRONMENTAL LIABILITIES. Except as otherwise specifically set
forth in the Agreement and subject in particular, but without limitation to
Section 5.8 thereof any and all Environmental Liabilities for operations on, or
conditions on, relating to or arising from the Assets, whether relating to or
arising from activities before or after the Effective Date, shall be assumed and
discharged by Buyer. It is agreed that, in addition to the defined terms and not
exclusive of the meaning of such defined terms, the following are included as
Environmental Liabilities assumed by Buyer hereunder: (i) the presence of
adverse physical conditions; (ii) the duty to plug, abandon, remove or cleanup
such conditions including but not limited to oil, gas, injection, water or other
xxxxx, sumps, landfills, pits ponds, tanks, impoundments, foundations,
pipelines, and structures and equipment of any kind or description, whether
known or unknown or whether or not revealed by Buyer's investigation; and (iii)
the restoration of the Assets and surface of the land as may be required under
applicable Legal Requirements including but not limited to any lease, easement
or similar legal instrument. As of the Effective Date, all responsibility and
liability related to all such conditions, whether known or unknown, is
transferred from Kelt to Buyer. Buyer shall defend, indemnify and hold harmless
Kelt, its successors, assigns, affiliates, officers, directors and stockholders
against, and in respect of, any and all damages, claims, losses, liabilities and
expenses, including without limitation, reasonable legal, accounting and other
expenses which may arise from the Assumed Environmental Liabilities.
3. DEFINITIONS. For purposes of this Agreement the terms "Environmental
Liabilities" and "Environmental Laws" have the meanings set forth in the
Agreement.
4. EFFECTIVE DATE. This Agreement is effective for all purposes as of 12:01 a.m.
E.S.T. April 8, 1998, except as otherwise provided by the Agreement with respect
to measurements and allocations.
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5. BINDING EFFECT. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto, their successors and assigns.
IN WITNESS WHEREOF this Assumption Agreement is executed by the parties
this _____ day of _______, 1998.
"Kelt" "Buyer"
Kelt Ohio Inc.
--------------------------
A Delaware Corporation A
-------------------------
By: By:
Title: Title:
STATE OF OHIO)
) SS:
COUNTY OF ___)
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BE IT REMEMBERED that on this ___ day of ____, 1998, before me, a Notary
Public, in and for the County and State aforesaid, came ___________, ___________
of Kelt Ohio Inc., a corporation incorporated and existing under and by virtue
of the laws of the State of Delaware, and who is personally known to me to be
the same person who executed, as such officer, the within instrument of writing
on behalf of said corporation, and such person duly acknowledged the execution
of the same to be the act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my official seal the day and
year last above written.
---------------------
Notary Public
My Appointment Expires:
---------------------
STATE OF OHIO)
) SS:
COUNTY OF ___)
BE IT REMEMBERED that on this ___ day of ____, 1998, before me, a Notary
Public, in and for the County and State aforesaid, came ___________, ___________
of _______________, a corporation incorporated and existing under and by virtue
of the laws of the State of _________, and who is personally known to me to be
the same person who executed, as such officer, the within instrument of writing
on behalf of said corporation, and such person duly acknowledged the execution
of the same to be the act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my official seal the day and
year last above written.
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Date: May 1998
EXHIBIT "J"
KELT ENERGY, INC. ("KEI") GUARANTY
WHEREAS (A) On the _____ day of April 1998 KEI's subsidiary Kelt Ohio,
Inc. ("KOI") entered into a Purchase and Sale Agreement (the
("Agreement") with North Coast Energy, Inc. ("North Coast")
relating to the purchase of certain assets of KOI (as more
particularly set out in the Agreement).
(B) It is a condition of Closing that this Guaranty be provided.
NOW THEREFORE IT IS AGREED as follows:
1. In consideration of the sum of $10 and other good and
valuable consideration, the receipt of which is hereby
acknowledged, KEI hereby guarantees to North Coast full and
timely performance by KOI of all its obligations under the
Agreement.
2. The obligations of KEI hereunder shall not be affected by any
modification to the Agreement, any waiver of rights thereunder
or any liquidation, insolvency or dissolution of KOI.
3. This Guaranty shall be governed by and interpreted in
accordance with the laws of the state of Ohio.
-----------------
Kelt Energy, Inc.
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KELT OHIO INC.
EXHIBIT "K"
Description of Real Property
Situated in the Township of Xxxxx, County of Guernsey, State of Ohio and being
1.984 Acres more or less in the Northeast Quarter of Section 21, Township 2
North, Range 4 West of the United States Military land Survey and being more
particularly described as follows:
Commencing at the Northwest corner of the Northeast Quarter of Section 21,
Thence with the welt line of the Northeast Quarter of Section 21, S 06' 43'
00"'W, a distance of 2243.50 feet to a point on the south right of way line of
US 40, Thence with the south line of US 40, N 89(degree) 15' 00" E, a distance
of 1101.33 feet to an "X" xxxx found on a concrete curb the BEGINNING: Thence
with the south line of US 40 N 89(degree) 15' 000' E, a distance of 389.72 feet
to an iron pin set, Thence with the lands of now or formerly Xxxx X. Xxxxx as
found in volume 329, Page 19 of the deed records of Guernsey County, Ohio S
08(degree) 46' 34" E, a distance of 263.74 feet to an iron pin found (having
passed through an iron pin found at 14.01 feet); Thence with the north right of
way line of the B.& O. Railroad N 86(degree) 51' 36'W, a distance of 307.00 feet
to an iron pin act, Thence with the lands of now or formerly Xxxxxx Xxxx as
found in volume 301, page 662 of the deed records of Guernsey County, Ohio N
27(degree) 19' 54" W, a distance of 268.74 feet to the place of beginning and
containing 1.984 acres more or less and being all the property conveyed in
volume 323, page 713 of the deed records of Guernsey County, Ohio
Subject to all easements and lease of public record.
Iron pins set are 5/8 inch rebar 30 inches long capped XXXXXXX XX 5862.
Bearings are magnetic and for angle purposes only.
A survey of the above described property was made by Xxxxxx X. Xxxxxxx, a
Registered Surveyor #S-5862 on March 28, 1988.
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Kelt Energy Inc.
The following items, located at the Cambridge office, should be considered as
excluded from the sale.
COMPUTER HARDWARE Printer HP5si
-----------------
PC's x2 Stone Pentium 133 (currently used
by Xxxx/Xxx)
COMPUTER SOFTWARE SOGAS accounting software
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Commander budgeting software
OGRE production database*
ADP payroll software
*a copy of Ohio production has been provided.
