PURCHASE AND SALE AGREEMENT

 

As used herein, the term "Permitted Encumbrances" shall mean:

(1)  Lessors' royalties, overriding royalties, payments out of production, reversionary interests and other burdens affecting Seller's Net Revenue Interest if the net cumulative effect of such burdens does not operate to (i) reduce the Net Revenue Interest of Seller in any Unit to less than the Net Revenue Interest for such Unit as set forth in Exhibit "B"; or (ii) increase the Working Interest of Seller in any such Unit to greater than the Working Interest therefore as set forth in Exhibit "B" (unless Seller's Net Revenue Interest therein is increased in the same proportion);

 

(2)   Preferential rights to purchase and required third party consents to assignments and similar agreements with respect to which (i) waivers or consents are obtained from the appropriate parties prior to the Title Notice Date; or (ii) the appropriate time period for asserting such rights has expired prior to the Title Notice Date, following notice to such parties in compliance with the applicable agreements, without an exercise of such rights;

 

(3)  Non-consent penalties applied against the interest of Seller arising under applicable operating agreements, which are scheduled on Exhibit "B" (including non-consent balances) and taken into account in the calculation of the interests shown on Exhibit "B";

 

(4)   Easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations which do not interfere with or detract from the operations, value or use of the Subject Properties by Buyer;

 

(5)    Such Title Defects as Buyer has waived or released or is deemed to have waived pursuant to the terms of this Agreement;

 

(6)   The terms and conditions of all Leases and contracts, provided the same do not result in a decrease in the Net Revenue Interest or an increase of the Working Interest in any of the Units (unless Seller's Net Revenue Interest therein is increased in the same proportion) or that do not interfere with or detract from the operations, value or use of the Subject Properties by Buyer;

 

(7)   Rights of reassignment, to the extent any exist as of the date of this Agreement, upon the surrender or expiration of any lease;

 

(8)   Liens for taxes or assessments not yet due or not yet delinquent; and

 

(9)   Liens, if any, to be released at Closing in a form acceptable to Buyer.

(f)   Definition of Allocated Value. The term "Allocated Value" shall be the value agreed upon by the Parties for the Units as set forth in Exhibit "B".

 

(g)   Increase in Net Revenue Interest/Decrease in Working Interest. Subject to the rights of Buyer and Seller under Section 6(d) to terminate this Agreement, should Buyer and Seller determine after the execution hereof and prior to Closing that Seller's Net Revenue Interest is great er than as shown on Exhibit "B" or that Seller's Working Interest is lesser than as shown on Exhibit "B" and such change exceeds the threshold amount in Section 6(e), Buyer and Seller agree to adjust the Purchase Price to reflect such change(s) in interest and Seller shall correct such Exhibit "B" and convey such interests to Buyer.

(a)  Inspection. Prior to Closing and upon reasonable prior notice to Seller, Buyer will have access to and the opportunity to inspect the Subject Property for all purposes, including without limitation, for the purposes of detecting the presence of hazardous or toxic substances, pollutants or other contaminants, environmental hazards, naturally occurring radioactive materials (NORM), produced wate r, air emissions, contamination of the surface and subsurface and any other Environmental Defect (defined below). Prior to the Closing and subject to the provisions of this Section, Buyer will have satisfied itself as to the physical and environmental surface and subsurface condition of the Subject Property and method of operation and, except as set forth herein and in Seller's representations, warranties or indemnities, to accept an assignment of the Subject Property at Closing on an "AS IS, WHERE IS" basis, "WITH ALL FAULTS" _Buyer recognizes that the Subject Properties are operated by party other than Seller and that Seller's ability to obtain access to the Subject Properties, and the manner and extent of such access, is subject to such third party operator. Buyer agrees to comply fully with the rules, regulations and instructions issued by the operator of the Subject Properties regarding the actions of Buyer while upon, entering or leaving the Subject Properties, and Buyer agrees to not unreasonably inte rfere with the normal operation of the Subject Properties. All environmental reports prepared or obtained by Buyer or its representatives shall be maintained in strict confidence and for use solely in connection with its evaluation of the Subject Properties. Such reports shall not be disclosed to any other party except for Buyer's affiliates and partners without Seller's prior written consent. Buyer shall maintain in strict confidence the results of any environmental report if Closing does not occur. If Buyer exercises rights of access under this Section or otherwise, or conducts examinations or inspections under this Section or otherwise, then (a) such access, examination and inspection shall be at Buyer's sole risk, cost and expense and Buyer waives and releases all claims against Seller (and its affiliates and the respective partners. directors, officers, employees, attorneys, contractors and agents of such parties) arising in any way therefrom or in any way connected therewith or arising in connection wi th the conduct of its directors, officers, employees, attorneys, contractors and agents in connection therewith and (b) Buyer shall indemnify, defend and hold harmless Seller (and its affiliates and the respective partners, officers, directors, employees, attorneys, contractors and agents of such parties) from any and all claims, actions, causes of action liabilities, damages, losses, costs or expenses (including, without limitation, court costs and attorneys fees), or liens or encumbrances for labor or materials, arising out of or in any way connected with such matters.

 

(b)  Notice of Environmental Defect. Buyer will notify Seller in writing of any Environmental Defect (defined below) it discovers as soon as reasonably practicable after its discovery, but in no event less than five (5) business days prior to the Closing Date. Any notice provided hereunder shall include appropriate evidence to substantiate the Buyer's position, including a description of the Environmental Defect, the Environmental Law applicable to the Environmental Defect and Buyer's basis for believing tha t Seller is subject to liability pursuant to such Environmental Law, the portion of the Subject Property affected by the Environmental Defect, the amount by which Buyer believes the value of the Subject Property has been reduced because of the Environmental Defect and the evidence, computations and information upon which Buyer's belief is based. Buyer will be deemed to have conclusively waived any Environmental Defect about which it fails to notify Seller in writing within the applicable period specified in the preceding sentence.

 

 

 

(c)  Procedure. If Buyer properly notifies Seller of an Environmental Defect, Buyer shall have the option to either (i) waive the Environmental Defect and proceed to Closing, or (ii) request that Seller correct the Environmental Defect, but Seller shall have no obligation to correct any Environmental Defect. If Seller elects not to correct an Environmental Defect, Seller may, at its sole option, either (i) reduce the Purchase Price to account for such Environmental Defect in an am ount not to exceed the Allocated Value (defined above) of the affected portion of the Subject Property and convey such affected Subject Property to Buyer or (ii) retain title to the affected Subject Property and refund the Allocated Value (defined above) of the affected Subject Property. If Seller elects to attempt to correct the Environmental Defect, Seller will have ninety (90) days following the Closing Date to attempt to correct the Environmental Defect. With respect to an Environmental Defect that Seller is unable to correct within such ninety (90) day period following the Closing Date, Seller may, at its sole option, (i) refund to Buyer a portion of the Purchase Price to account for such Environmental Defect in an amount not to exceed the Allocated Value (defined above) of the affected Subject Property and require Buyer to retain title to the affected Subject Property, or (ii) refund the Allocated Value (defined below) of the affected Subject Property and require Buyer to immediately reassign the affec ted Subject Property to Seller if such property had been previously assigned to Buyer.

 

(d)  Definition of Environmental Defect. As used herein, an "Environmental Defect" shall mean a condition affecting a Subject Property that is a violation of Environmental Law and which would cost, on an individual Well basis, in excess of five thousand dollars ($5,000.00) to remediate or, in the aggregate for all Wells, in excess of fifteen thousand dollars ($15,000.00) to remediate.

 

(e)  Definition of Environmental Laws. As used herein, the term "Environmental Laws" shall mean (i) the common law, and (ii) any and all federal, state and local statutes, regulations, rules, orders, ordinances or permits of any governmental authority which pertain to h ealth, the environment, wildlife and natural resources in effect in any and all jurisdictions in which the Subject Property is located, including without limitation, the Clean Air Act, as amended, and the Federal Water Pollution Control Act, as amended, the Oil Pollution Act of 1990 ("OPA90"), as amended, the Rivers and Harbors Act of 1899, as amended, the Safe Drinking Water Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), as amended, the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), as amended, the Resource Conservation and Recovery Act ("RCRA"), as amended, the Hazardous and Solid Waste Amendments Act of 1984, as amended, the Toxic Substances Control Act, as amended, and the Hazardous Materials Transportation Act, as amended.

(a)   Operations. Until Closing, Seller shall do the following:

(b)   Negative Covenants. Until Closing, Seller shall not do any of the following with regard to the Subject Property without first notifying Buyer in writing:

(c)   Seller shall cooperate with Buyer in attempting to obtain all permissions, approvals and consents as may be required to consummate the transactions contemplated in this Agreement.

(a)   Seller's Conditions The obligations of Seller at Closing are subject, at the option of Seller, to the following conditions, any one or more of which may be waived, in whole or in party, by Seller:

 

 

 

(i)  that all representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects at and as a Closing as if such representations and warranties were made at and as of Closing;

 

(ii)  that Buyer shall have performed and satisfied in all material respects all covenants and agreements required by this Agreement to be performed or satisfied by Buyer at or prior to Closing; and

 

(iii)  at the Closing Date, no suit, action or other proceeding shall be pending or threatened in which it is sought to restrain or prohibit the performance of or to obtain damages or other relief in connection with this Agreement or the transactions contemplated hereby;

(b)   Buyer's Conditions The obligations of Buyer at Closing are subject, at the option of Buyer, to the following conditions, any one or more of which may be waived, in whole or in part, by Buyer:

(i)  that all representations and warranties of Seller contained in this Agreement and in any agreements or documents delivered in connection herewith shall be true and correct in all material respects at and as of Closing as if such representations and warranties were made at and as of Closings;

 

(ii)  that Seller shall have performed and satisfied in all material respects all covenants and agreements required by this Agreement to be performed or satisfied by Seller at or prior to Closing;

 

(iii)  since the date of this Agreement, there shall have been no material adverse change in the condition of the Leases or Wells, except depreciation of personal property through ordinary wear and tear and depletion resulting from production; and

 

(iv)  at the Closing Date, no suit, action or other proceeding shall be pending or threatened in which it is sought to restrain or prohibit the performance of or to obtain damages or other relief in connection with this Agreement or the transactions contemplated hereby.

10.   Closing. This Agreement may be executed by either party and transmitted to the other party by facsimile transmission, and the facsimile transmission shall be deemed to be an original. Seller and Buyer shall negotiate a "Preliminary Closing Settlement Statement" three (3) business days prior to Closing respecting adjustments to the Purchase Price. At the Closing, the following shall occur:

 

(a)    Buyer and Seller shall agree upon a "Closing Settlement Statement," which shall include adjustments to the Purchase Price, which are known as of the Closing Date, as follows:

(i)  The estimated amount to be received by Buyer, including any applicable bonuses, for Seller's interest in the quantity of saleable oil in storage on the Effective Date, net of all applicable taxes and net of any charges attributable to such oil that are deducted under the Contract by the purchaser before remitting payment, which estimated amount shall be corrected to the actual amount received in the Final Settlement Statement (defined below);

 

(ii)  The amount of all operating and capital expenditures that are attributable to the Leases, Wells, Units or Equipment for the period from the Effective Date to the Closing Date;

 

(iii)  The amount received by Sellers for the sale or other disposition of produced natural gas and crude oil, net of all taxes for which Seller was not reimbursed, for the period from the Effective Date to the Closing Date;

 

(iv)  The amount of proceeds (other than accounts receivable) received by Seller for disposition, after the Effective Date, of any substances produced from the Subject Property; and

 

(v)  Any ad valorem, property, production, severance and similar taxes and assessments on the Subject Property for the calendar year 2010 which have been paid by the Seller. Upon receipt of an invoice for ad valorem taxes for 2010, Buyer shall forward a copy of same to Seller and Seller shall be responsible for payment to Buyer of 6/12ths of the same within thirty (30) days of receipt of such statement. In the event Seller receives such ad valorem tax statement, Seller shall forward such statement to Buyer and Seller shall deliver 6/12ths of the ad valorem tax to Buyer prior to the date on which such taxes are due and payable. It is the intent of this provision that Seller shall bear its proportionate part of ad valorem taxes for tax year 2010 only.

(b)   Seller shall execute, acknowledge and deliver the following:

The Final Purchase Price provided for under this Agreement excludes any sales taxes or other taxes in connection with the sale of property pursuant to this Agreement. If a determination is ever made that a sales tax or other transfer tax applies, Buyer and Seller shall be liable for such tax equally. Buyer and Seller shall also be equally liable for any applicable conveyance, transfer and recording fees, and real estate transfer stamps or taxes imposed on any transfer of property pursuant to this Agreement.

 

(d)  Seller shall deliver the Records to Buyer.

 

(e)   Seller shall deliver exclusive possession of the Subject Property to Buyer.

 

(f)   Seller shall deliver a full and complete release of the following: 1.) that certain mortgage executed and effective on June 30, 2008 and recorded under Document No. 20081598126 and 2.) that certain mortgage executed on December 22, 2009 but effective on December 30, 2009 and recorded under Document No. 20100417682.

 

(g)   The Parties shall execute and deliver any necessary side letter agreements to fulfill the purpose of this Agreement.

(a)  Final Settlement Statement. Not more than ninety (90) days after the Closing, Seller shall prepare and deliver to Buyer, in accordance with this Agreement, a Final Settlement Statement setting forth each adjustment or payment which was not fmally determined as of the Closing and showing the calculation of such adjustments. As soon as practicable after receipt of the Final Settlement Statement, Buyer shall deliver to Seller a written report containing any changes which Buyer p roposes be made to the Final Settlement Statement. The parties shall undertake with diligence to agree with respect to the amounts due pursuant to such post-Closing adjustments no later than one hundred twenty (120) days after the Closing. The date upon which such agreement is reached or upon which the Final Purchase Price is established shall be called the "Final Settlement Date". In the event that (1) the Final Purchase Price is more than the amount paid to Seller at Closing, Buyer shall pay to Seller in immediately available funds the amount of such difference, or (2) the Final Purchase Price is less than the amount paid to Seller at Closing, Seller shall pay to Buyer in immediately available funds the amount of such difference. Payment by Buyer or Seller shall be made within ten (10) business days of the Final S ettlement Date.

 

(b)Additional Payments Received. After the Final Settlement Date, Seller covenants and agrees that it will hold and promptly transfer and deliver to Buyer, from time to time as and when received by it, any cash, checks with appropriate endorsements (using its reasonable efforts not to convert such checks into cash), or other property that it may receive which belongs to Buyer, and will account to Buyer for all such receipts.

 

 

(c)   Assumption of Obligations. From and after the Effective Date, Buyer assumes, will be bound by, and agrees to perform all express and implied covenants and obligations of Seller relating to the Subject Property, whether arising under (i) the Leases, prior assignments of the Leases, the Contracts, the Easements, the Permits or any other contractually-binding arrangements to which the Subject Property (or any component thereof) may be subject and which will be binding on Buyer and/or the Subject Prop erty (or any component thereof) after the Closing or (ii) any applicable laws, ordinances, rules and regulations of any governmental or quasi-governmental authority having jurisdiction over the Subject Property. Buyer also assumes Seller's proportionate part of the expenses and costs of plugging and abandoning the Wells and restoration of operation sites, all in accordance with the applicable laws, regulations and contractual provisions.

 

(d)  Buyer understands and agrees that the Subject Property is subject to all existing Contracts relating to the Subject Property. Buyer shall assume and be responsible for all such obligations of Seller as of the Effective Date.

 

(e)  Buyer and Seller agree to execute and deliver from time to time such further instruments and do such other acts as may be reasonably necessary to effectuate the purposes of this Agreement.

12.   Costs and Revenues After Effective Date. Seller shall be responsible for the payment of all costs, liabilities and expenses incurred in the ownership and operation of the Subject Property prior to the Effective Date and not yet paid or satisfied. All payments for hydrocarbons produced prior to the Effective Date shall be the property of Seller. Buyer shall remit production proceeds for production prior to the Effective Date, if any, received by Buyer from the sale of hy drocarbons belonging to Seller. Buyer shall be responsible for payment (at Closing or thereafter if not reflected on the Preliminary Closing Settlement Statement) of all costs, liabilities and expenses incurred in the ownership and operation of the Subject Property after the Effective Date to the Closing Date. Such costs and expenses shall include any necessary and reasonable expenses incurred by Seller in the operation, protection or maintenance of the Subject Property. All payments for hydrocarbons produced on or after the Effective Date shall be the property of Buyer. Seller shall remit production proceeds for production on or after the Effective Date, if any, received by Seller from sale of hydrocarbons belonging to Buyer, less expenses which Buyer is responsible for paying pursuant to this section, to Buyer immediately upon receipt. To the extent possible, adjustments shall be made to the Purchase Price to account for such costs and revenues in the Preliminary Closing Settlement Statement or if not liqu idated by such date, they shall be addressed in the Final Settlement Statement.

 

13.  Casualty Loss. If, prior to the Closing Date, any portion of the Subject Property shall be destroyed by fire or other casualty, Buyer shall have the right to treat any resulting loss affecting such property as a Title Defect under Section 6 above. Should the portion of Subject Property affected be material in Buyer's reasonable opinion, Buyer shal l have the right to exclude the affected Subject Property from this Agreement by giving notice thereof to Seller, in which event both parties shall negotiate in good faith any adjustment to the Purchase Price to account for the casualty loss.

 

 

14.  Independent Investigation and Disclaimer. The express representations of Seller set forth in this Agreement are exclusive and in lieu of any and all other representations. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE ASSIGNMENT OR THE DEED SELLER DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY OTHER REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO BUYER, INCLUDING ANY STATEMENTS, REPRESENTATIONS, OPINIONS, INFORMATION OR ADVICE WHICH MAY HAVE BEEN PROVIDED AS AN ACCOMMODATION TO THE BUYER BY AN OFFICER, SHAREHOLDER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT OR REPRESENTATIVE OF SELLER, OR ANY ENGINEER OR ENGINEERING FIRM, OR ANY OTHER AGENT, CONSULTANT, OR REPRESENTATIVE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE ASSIGNMENT OR THE DEED, SELLER MAKES ABSOLUTELY NO REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY, AS TO (a) TITLE TO ANY OF THE SUBJECT PROPERTY, (b) THE ABILITY OF ANY COMPONENT OF THE SUBJECT PROPERTY TO PRODUCE ANY HYDROCARBONS, (c) THE AMOUNTS, QUALITY OR DELIVERABILITY OF HYDROCARBON RESERVES ATTRIBUTABLE TO THE SUBJECT PROPERTY, OR ANY PART THEREOF, (d) GEOLOGICAL, GEOPHYSICAL OR OTHER INTERPRETATION OR ANY ECONOMIC EVALUATION, (e) PRESENT OR FUTURE SALES PRICES, OPERATING COSTS, OR OTHER ECONOMIC FACTORS, OR (f) THE CONDITION OR STATE OF REPAIR OF ANY WELL OR EQUIPMENT RELATING TO THE SUBJECT PROPERTY. BUYER ACKNOWLEDGES AND AFFIRMS THAT IT HAS EXERCISED ITS RIGHT TO INSPECT THE SUBJECT PROPERTY, AND EACH COMPONENT THEREOF; HAS SATIS FIED ITSELF AS TO ITS PHYSICAL AND ENVIRONMENTAL CONDITIONS, BOTH SURFACE AND SUBSURFACE; AND FURTHER THAT BUYER HAS MADE ITS OWN INDEPENDENT INVESTIGATION, ANALYSIS AND EVALUATION OF THE SUBJECT PROPERTY, AND EACH COMPONENT THEREOF (INCLUDING BUYER'S OWN ESTIMATE AND APPRAISAL OF THE EXTENT AND VALUE OF THE PETROLEUM, NATURAL GAS AND OTHER HYDROCARBON RESERVES RESPECTING EACH COMPONENT OF THE SUBJECT PROPERTY). THE PERSONAL PROPERTY (SURFACE AND SUBSURFACE) CONVEYED AS PART OF THE SUBJECT PROPERTY ARE SOLD HEREUNDER "WHERE IS, AS IS, WITH ALL FAULTS", AND WITHOUT ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED OR STATUTORY, REGARDING THE CONDITION OR STATE OF REPAIR OF ANY OF THE EQUIPMENT COMPRISING PART OF THE SUBJECT PROPERTY.

 

15.  Indemnification.

(a) BY SELLER. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, SELLER AGREES TO INDEMNIFY AND HOLD HARMLESS BUYER, ITS OFFICERS, D IRECTORS, EMPLOYEES AND AGENTS, FROM ALL CLAIMS, LOSSES, COSTS, LIABILITIES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND COSTS) ARISING OUT OF OR RESULTING FROM SELLER'S OWNERSHIP OR OPERATION OF THE SUBJECT PROPERTY PRIOR TO THE EFFECTIVE DATE. PROVIDED, HOWEVER, THE FOREGOING INDEMNITY DOES NOT COVER OR INCLUDE ANY ENVIRONMENTAL DEFECT THAT AROSE OR OCCURRED PRIOR TO THE EFFECTIVE DATE IF (A) THE ENVIRONMENTAL DEFECT DOES NOT OTHERWISE QUALIFY AS AN ENVIRONMENTAL DEFECT AS DEFINED IN SECION 7(d) OF THIS AGREEMENT, (B)

BUYER DISCLOSED SUCH ENVIORNMENTAL DEFECT TO SELLER UNDER SECTION 7 OF THIS AGREEMENT OR (C) SUCH ENVORNMENTAL DEFECT WAS DISCLOSED UNDER ANY ENVIRONMENTAL REPORT OBTAINED BY BUYER UNDER SECTIO 7(a) OF THIS AGREEMENT. FURTHER, SELLER SHALL NOT HAVE ANY LIABILITY FOR INDEMNIFICATION UNDER THIS SECTION 15(A) FOR ENVIRONMENTAL DEFECTS THAT AROSE OR OCCURRED PRIOR TO THE EFFECTIVE DATE UNLESS PURCHASER HAS PROVIDED WRITTEN NOTICE OF SUCH ENVIRONMENTAL DEFECT SPECIFYING THE LOCATION AND NATURE OF SUCH ENVIRONMENTAL OBLIGATIONS WITHIN SIX (6) MONTHS FROM THE CLOSING. SELLER'S LIABILITY UNDER SECTION 15(a) FOR ENVIRONMENTAL DEFECTS SHALL NOT EXCEED TEN PERCENT (10%) OF THE PURCHASE PRICE.

 

(b)  BY BUYER. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, BUYER AGREES TO INDEMNIFY AND HOLD HARMLESS SELLER, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, FROM ALL CLAIMS, LOSSES, COSTS, LIABILITIES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND COSTS) ARISING OUT OF OR RESULTING FROM BUYER'S OWNERSHIP OR OPERATION OF THE SUBJECT PROPERTY AFTER THE CLOSING DATE.

(a)   Further Assurances. Seller agrees to execute any documents which it has the authority to execute, whether before or after the Closing, to aid Buyer in clearing or perfecting title and ownership to the Subject Property, and to facilitate the receipt of the proceeds of the sale of the production therefrom and attributable thereto. Buyer shall make any request for execution of such document in writing and shall provide Seller with a copy of the document.

 

(b)  Entire Agreement. This Agreement together with the Exhibits attached hereto, shall constitute the complete agreement between the parties hereto and shall supersede all prior agreements, whether written or oral, including but not limited to that certain Letter of Intent, dated June 2, 2010, and any representations or conversations with respect to the Subject Property.

 

(c)  Confidentiality. If the Closing does not occur, Buyer will use its best efforts to keep all the information furnished by Seller to Buyer hereunder or in contemplation hereof strictly confidential, and will not use any of such information to Buyer's advantage or in competition with Seller, except to the extent such information (i) was already in the public domain, not as a result of disclosure by Buyer, (ii) was already known to Buyer, (iii) is developed by Buyer independently from the information supplied by Seller, or (iv) is furnished to Buyer by a third party independently of Buyer's investigation pursuant to the transaction contemplated by this Agreement.

 

(d)  Notices. All communications required or permitted under this Agreement shall be in writing and may be sent by facsimile. Such communication shall be deemed made when actually received, or if mailed by registered or certified mail, postage prepaid, addressed as set forth below, shall be deemed made three days after such mailing. Faxes will be deemed to be received when reflected in the fax confirmation sheet. Either party may, by written notice to the other, change the address for mailing such notices.

(e)  Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their successors and assigns; provided, no assignment of this Agreement by either party shall be made without the express written consent of the other party.

 

(f)  Counterparts. This Agreement may be executed in any number of counterparts, which taken together shall constitute one instrument and each of which shall be considered an original.

 

(g)  Law Applicable. This Agreement, other documents delivered pursuant hereto all disputes and the legal relations between the Parties shall be governed and construed in accordance with the laws of the State of Texas, without giving effect to principles of conflicts of laws that would result in the application of the laws of anther jurisdiction. The Parties agree to venue in Dallas County, Texas for all disagreements, differences or claims made by the Buyer and/or the Seller.

 

(h)  Incorporation of Exhibits. All exhibits and schedules referred to herein are attached hereto and are made a part hereof by this reference.

 

(i)  Survival. Except for the special warranty of title which is incorporated in the Assignment, all other indemnities, representations, warranties and provisions of this Agreement shall survive the Closing for a period of one (1) year after the Effective Date at which time all such indemnities, representations, warranties and other provisions hereof shall expire, except with respect to any claims which have been asserted in a written notice delivered to the party against whom suc h claim is made within said one (1) year time period, which claims shall then survive for their applicable statute of limitations.

 

(j)   Assignment Neither Party may assign its rights or delegate its duties hereunder except with the prior, written consent of the other Party.

 

 

(k)  Headings. The headings of the articles and sections of this Agreement are for guidance and convenience of reference only and shall not limit or otherwise affect any of the terms and provisions of this Agreement.

 

(l)  Timing. Time is of the essence in this Agreement.

 

(m)  Attorneys' Fees. The prevailing party in any dispute hereunder shall be entitled to recover its attorneys' fees and costs.

 

(n)  Expenses. All fees, costs and expenses incurred by the Parties in negotiating this Agreement and in consummating the transactions contemplated by this Agreement shall be paid by the Party that incurred such fees, costs and expenses.

 

(o)  Amendment and Waiver. This Agreement may be altered, amended or waived only by a written agreement executed by the Party to be charged. No waiver of any provision of this Agreement shall be construed as a continuing waiver of the provision.

 

(p)  Successors and Assigns. This Agreement is binding upon and shall inure to the benefit of the Parties and, except where prohibited, their successors, representatives or assigns.

 

(q)  Third-Party Beneficiaries. Unless expressly stated to the contrary, no third party is intended to have any rights, benefits or remedies under this Agreement.

 

(r)  Severance. If any provision of this Agreement is found to be illegal or unenforceable, the other terms of this Agreement shall remain in effect and this Agreement shall be construed as if the illegal or unenforceable provision had not been included.