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ASSET EXCHANGE AGREEMENT
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THIS ASSET EXCHANGE AGREEMENT (this "Agreement")
is made and entered into as of this 11th day of February, 2005, by
and between Arrow River Energy, L.P., a Texas limited partnership ("Arrow
River"), and The Exploration Company of Delaware, Inc., a Delaware
corporation ("TXCO"). Arrow River or TXCO may be
periodically referred to herein as a "Party," and Arrow
River and TXCO may be periodically referred to herein as the "Parties."
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WHEREAS, Arrow River owns the Arrow River
Properties and TXCO owns the TXCO Properties; and
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WHEREAS, Arrow River desires to exchange the
Arrow River Properties for the TXCO Properties and TXCO desires to exchange
the TXCO Properties for the Arrow River Properties, all on the terms set
forth in this Agreement;
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NOW THEREFORE, for and in consideration of
the mutual covenants herein contained, the Parties have agreed as follows:
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ARTICLE ONE
DEFINITIONS
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1.1 Defined Terms. The
following capitalized terms have the following assigned meanings throughout
this Agreement:
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"Affiliate" means with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such Person; for purposes of this definition,
"control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of an
entity, whether through the ownership of voting securities or otherwise.
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"Amended and Restated Comanche Ranch Deep Rights JOA"
means an operating agreement in the form of Schedule 1.1(a) attached
hereto.
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"Amended and Restated Peña Creek JOA" means an
operating agreement in the form of Schedule 1.1(b) attached hereto.
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"Applicable Time" means the Official United States of
America time for the Central Time Zone as calculated by the National
Institute of Standards and Technology and the U.S. Naval Observatory.
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"Arrow River" is defined in the Preamble.
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"Arrow River Assignment" means the Assignment from Arrow
River to TXCO, which shall be substantially in the form attached hereto as Schedule
1.1(c).
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"Arrow River Confidential Information" is defined in
Section 5.2(c).
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"Arrow River Derivative Information" is defined in
Section 5.2(c).
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"Arrow River Facilities" means the pipelines, surface
equipment and other central facilities owned by Arrow River that are used for
the purpose of transporting, treating and/or processing gas production from
any two (2) or more of the Cage Ranch Excluded Wells and that are not used
exclusively in connection with a single Cage Ranch Excluded Well.
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"Arrow River Group" is defined in Section 5.2(b).
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"Arrow River Indemnified Parties" means Arrow River, its
Affiliates, and its directors, stockholders, officers, partners, employees,
agents, consultants, attorneys, representatives, and to the extent permitted
hereunder successors, transferees and assignees.
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"Arrow River Information and Data" means all (1)
abstracts, title opinions, title reports, title policies, lease and land
files, surveys, analyses, compilations, correspondence, filings with and
reports to regulatory agencies, other documents and instruments that relate
specifically to the Arrow River Oil and Gas Interests; (2) computer databases
that are owned by or licensed to Arrow River that relate specifically to the
Arrow River Oil and Gas Interests; and (3) all other books, records, files
and magnetic tapes containing financial, title or other information that
relate to the Arrow River Oil and Gas Interests.
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"Arrow River Oil and Gas Interests" means all of the oil
and gas leasehold interests described in Exhibit A attached hereto, to
the extent, and only to the extent, that the lands covered thereby are NOT
included within the Cage Ranch Excluded Units.
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"Arrow River Properties" means the Arrow River Oil and
Gas Interests, the Arrow River Information and Data and the Arrow River
Proprietary Data.
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"Arrow River Proprietary Data" means all proprietary data
owned by Arrow River relating to the Arrow River Oil and Gas Interests which
shall include, without limitation, (a) all privileged or confidential data,
(b) all seismic data and information and licenses thereto, (c) all
interpretive geological and geophysical information which may reveal the
methods used by Arrow River in interpreting geological and geophysical
information, economic analysis, and any information or other similar
proprietary data which might reveal Arrow River's economic guidelines or
other methods or systems by which Arrow River conducts its economic analysis,
and (d) any similar proprietary data.
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"Business Day" means each calendar day consisting of
twenty-four (24) hours from midnight to midnight, except each such day when
federally chartered banks are required to be closed.
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"Cage Ranch Excluded Wells" means those wells located on
the Cage Ranch described in Exhibit B attached hereto that are owned
by Arrow River and not included within the Arrow River Properties.
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"Cage Ranch Excluded Units" means the production and/or
pooled units for the Cage Ranch Excluded Wells described in Exhibit B
attached hereto.
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"Cage Ranch Excluded Wells JOA" means that certain
Amended and Restated Operating Agreement dated February 1, 2005, among CMR,
as Operator, and Arrow River and Doughtie, as non-operators, as amended from
time to time.
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2
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"Chemical Substances" means any chemical substances,
including, but not limited to, any sort of pollutants, contaminants,
chemicals, raw materials, intermediates, products, industrial, solid, toxic
materials or Hazardous Materials, wastes, petroleum products (including crude
oil or any component thereof), salt water, brine, asbestos, or Naturally
Occurring Radioactive Materials ("NORM").
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"Claims" means any and all direct or indirect demands,
claims, notices of violation, filings, investigations, administrative
proceedings, actions, causes of action, suits, other legal proceedings,
payments, charges, judgments, assessments, liabilities, damages,
deficiencies, penalties, fines, obligations, responsibilities, costs and
expenses paid or incurred, or diminutions in value of any kind or character
(whether or not asserted prior to the date hereof, and whether in law or in
equity, tort, contract or statutory, known or unknown, fixed or unfixed,
conditional or unconditional, based on negligence, strict liability or
otherwise, choate or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, contingent or otherwise), including, without
limitation, (a) penalties and interest on any amount payable to a third party
as a result of the foregoing, (b) any legal or other expenses reasonably incurred
in connection with investigating or defending any claim, demand or legal
proceeding, whether or not resulting in any liability, and (c) all amounts
paid in settlement of claims, demands, or legal proceedings.
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"Claim Notice" is defined in Section 6.4.
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"Closing" means the consummation of the transactions
described in this Agreement, by transfer of the Arrow River Properties from
Arrow River to TXCO, the transfer of the TXCO Properties from TXCO to Arrow
River, and completion of all matters ancillary thereto as provided in this
Agreement.
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"Closing Date" is defined in Section 2.2(a).
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"CMR" means CMR Energy, L.P., a Texas limited
partnership.
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"CMR Assignment" means the Assignment and Bill of Sale
from TXCO to CMR, which shall be substantially in the form attached hereto as
Schedule 1.1(d).
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"Code" means the Internal Revenue Code of 1986, as
amended, along with the related treasury regulations.
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"Comanche Ranch Shallow Rights JOA" means an operating
agreement in the form of Schedule 1.1(e) attached hereto.
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"Damages" means causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without limitation,
interest, penalties and reasonable attorneys' fees, disbursements and
expenses, and excluding, specifically, punitive, treble, exemplary,
special, indirect, consequential, remote or speculative damages of either
Arrow River or TXCO.
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"Disclosure Schedules" means the schedules, attachments
and exhibits attached to this Agreement.
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"Doughtie" means Doughtie Exploration Company, a Texas
corporation.
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"DTPA" is defined in Section 5.5.
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3
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"Effective Time" means 7:00 a.m., Applicable Time, on
February 1, 2005.
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"Encumbrance" means any charge, claim, interest,
condition, lien, option, pledge, security interest, right of first refusal, or
restriction of any kind.
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"Environmental Claim" means any and all claims, demands,
losses, liabilities (including, without limitation, STRICT LIABILITIES),
judgments, settlements, suits, causes of action or proceedings for the
personal injury, disease or death of any person (including, without
limitation, directors, officers, employees, agents and representatives),
damage to, loss or destruction of any of the Arrow River Properties, the TXCO
Properties, or other personal property and assets, real or personal, damage
to the environment, or damage to natural resources, whether arising by
statutory authority or made, asserted or prosecuted by or on behalf of any
Third Party (whether based on any theory of tort including, but not limited
to, negligent acts or omissions, contract, statutory liability, or strict
liability without fault or otherwise) which arise or are alleged to arise
under or relate to any Environmental Law. Environmental Claim includes any
damages, settlement amounts, fines and penalties assessed or costs of
complying with any orders or decrees of courts, administrative tribunals or
other governmental entities (other than those compliance costs related to
Environmental Cleanup Liability) associated with resolving such claims,
demands, liabilities (including, without limitation, STRICT LIABILITIES),
actions, suits or proceedings and any costs, expenses and fees, including,
without limitation, reasonable attorneys', consultants', experts' and
engineers' fees and costs, incurred in the investigation, defense and
resolution of such claims, demands, liabilities (including, without
limitation, STRICT LIABILITIES), actions, suits and proceedings.
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"Environmental Cleanup Liability" means the Lowest Cost
Response currently required to be incurred in order to comply with the
provisions of any Environmental Law in effect on the date of this Agreement
or the provisions of any order or decree in effect on the date of this
Agreement of any court or administrative or regulatory tribunal or agency
enforcing any Environmental Law, to contain, remove, remediate, respond to,
clean up, or abate any release of Chemical Substances or other contamination
or pollution of the air, surface water, groundwater, land surface or
subsurface strata related to the operation, use, possession, maintenance,
ownership or abandonment of the Arrow River Properties or the TXCO
Properties, as applicable, whether such release, contamination or pollution
is located on, within, under or above real property included in such assets
("on site") or is located off site, including, but not limited to,
any release of Chemical Substances or other contamination or pollution
arising out of or resulting from the manufacture, generation, formulation,
processing, labeling, distribution, introduction into commerce, or on site or
off site use, treatment, handling, storage, disposal, or transportation of
any Chemical Substances. Environmental Cleanup Liability includes, without
limitation, any judgments, damages, settlements, costs or expenses
(including, without limitation, attorneys', consultants' and experts' fees
and expenses) incurred with respect to (a) any investigation, study,
assessment, legal representation, cost recovery by a governmental agency or
Third Party, or monitoring or testing in connection therewith, (b) the Arrow
River Properties or the TXCO Properties as a result of actions or measures
necessary to implement or effectuate any such containment, removal,
investigation, remediation, response, cleanup or abatement, and (c) the
resolution of such liabilities.
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4
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"Environmental Laws" means all statutes, rules,
regulations, controlling judicial decisions or legal requirements relating to
health or the protection of the environment, including, without limitation,
those pertaining to the protection, preservation or regulation of endangered
species, wetlands or other protected lands, and those regulating emission,
releases or discharges of Chemical Substances, the pollution, protection or
cleanup of the environment or damage to removal or remediation (including,
without limitation, the sampling, testing and other investigation relating to
any Environmental Claim that leads to Environmental Cleanup Liability) of
real property and natural resources (including, but not limited to, ambient
air, surface water, groundwater, and land surface or subsurface strata)
including, without limitation, legal requirements contained in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
42 U.S.C. § 9601 et seq., as amended ("CERCLA"); the
Resources Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et
seq., as amended ("RCRA"); the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. 99-499, as amended ("SARA");
the Clean Air Act, 42 U.S.C. § 7401, et seq., as amended; the Federal
Water Pollution Control Act, 33 U.S.C. § 2601 et seq., as amended; the
National Environmental Policy Act, 42 U.S.C. § 4321, et seq., as amended
("NEPA"); and the Safe Drinking Water Act, 42 U.S.C. §
300 j-l, et seq., as amended; and/or any other federal, state or local laws,
statutes, ordinances, rules, regulations or orders (including decisions of
any court or administrative body) relating to emissions, release or
discharges of Chemical Substances, the pollution, protection or cleanup of
the environment as specified above. "Environmental Laws" shall also
mean the Toxic Substance Control Act, 25 U.S.C. § 1502, et seq., as
amended ("TSCA") and/or any other federal, state (including,
without limitation, laws with respect to trespass, nuisance and other torts
or similar legal theories which may be applied to establish liability or
responsibility for Environmental Cleanup Liability or Environmental Claims)
or local laws, statutes, ordinances, rules, regulations or orders (including
decisions of any court or administrative body) relating to the following
(solely as they pertain to the pollution, protection or cleanup of the
environment or environmental damage to or remediation of environmental damage
to real property and natural resources including, but not limited to, ambient
air, surface water, groundwater, and land surface or subsurface strata): (i)
release, containment, management, use, storage, disposal, removal,
remediation, response, cleanup or abatement of any sort of Chemical
Substances, including, without limitation, asbestos, asbestos-containing
materials and/or polychlorinated biphenyls; (ii) the manufacture, generation,
formulation, processing, labeling, distribution, introduction into commerce,
use, treatment, handling, storage, disposal or transportation of any Chemical
Substances; (iii) exposure of persons, including employees of the parties
hereto, to any Chemical Substances and other occupational safety or health
matters; or (iv) the physical structure or condition of a building, facility,
fixture or other structure.
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"Flournoy" means Flournoy Family Properties, Ltd., a
Texas limited partnership.
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"Governmental Authority" shall mean any court, tribunal
or federal, state or local (including, without limitation, tribal)
commission, board, bureau or agency.
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"Hazardous Materials" means any substance now or
hereafter defined as a "Hazardous Substance" or a "Hazardous
Waste" under CERCLA or RCRA.
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5
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"Hydrocarbons" means all severed crude oil, natural gas,
casinghead gas, drip gasoline, natural gasoline, petroleum, natural gas
liquids, condensate, products, liquids and other hydrocarbons and other
minerals or materials of every kind and description.
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"Indemnity Claim Notice" is defined in Section 6.4.
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"Law" shall mean any applicable statute, law (including
common law), ordinance, regulation, rule, ruling, order, award, ruling, writ,
injunction, judgment, decision, determination, decree or other official act
of or by any Governmental Authority.
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"Lien" means any Encumbrance, mortgage, lien, pledge,
charge, security interest, claim, easement, right, agreement, instrument,
obligation, burden or defect.
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"LLOG" means LLOG Texas Exploration, L.P., a Texas
limited partnership
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"Lowest Cost Response" means a response to an
Environmental Cleanup Liability that is reasonably expected to provide the
lowest cost necessary for the reporting, investigation, monitoring, removal,
cleanup, remediation, restoration or correction of such condition, to bring
such condition into compliance with Environmental Laws in effect at the time
of such response to the reasonable satisfaction of any Governmental
Authorities with jurisdiction.
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"Net Profits Interest" means the net profits interest
reserved by Arrow River in the Arrow River Assignment.
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"Organizational Documents" means, with respect to an
entity, the certificate of incorporation, charter, by-laws, certificate of
limited partnership, partnership agreement, certificate of formation, limited
liability company agreement, operating agreement or other similar organizational
document or instrument governing such entity.
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"Original Arrow River Properties JOA" means,
collectively, those two certain Operating Agreements dated effective April
25, 2002, (1) among Saxet (predecessor to CMR), as Operator, and Flournoy, as
non-operator, and (2) among Saxet (predecessor to CMR), as Operator, and LLOG
and Doughtie, as non-operators, as amended from time to time.
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"Original Comanche Ranch Deep Rights JOA" means that
certain Operating Agreement dated effective February 1, 2001, among Saxet
(predecessor to CMR), as Operator, and TXCO, Doughtie, Brian E. O'Brien, Tom
Brown, Inc., and Flournoy, as non-operators, as amended from time to time.
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"Original Peña Creek JOA" means that certain
Operating Agreement dated effective September 1, 2002, among Saxet
(predecessor to CMR), and TXCO, as Operators, and LLOG, Doughtie, and
Flournoy, as non-operators, as amended from time to time.
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"Party" or "Parties" is defined in the
Preamble.
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"Person" means any natural person, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization, business, Governmental Authority or other
entity.
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"Preamble" shall mean the introductory paragraph of this
Agreement.
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"Saxet" means Saxet Energy, Ltd., a Texas limited
partnership.
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"Southern Ranches Prospect JOA" means an operating
agreement in the form of Schedule 1.1(f) attached hereto.
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"Tax" or "Taxes" means all taxes,
charges, fees, levies or other assessments, including but not limited to, all
net income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, social
security, unemployment, excise, estimated, severance, property or other
taxes, duties, fees, assessments or charges of any kind whatsoever, including
any interest, penalties or additional amounts attributable thereto imposed by
any federal, state, local or foreign Governmental Authority.
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"Third Party" means any Person other than Arrow River or
TXCO, or any of their Affiliates.
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"Third Party Claim" means any Claim that is initiated by
a Third Party.
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"Transaction Documents" means this Agreement, the Arrow
River Assignment, the CMR Assignment, the TXCO Assignment the Arrow River
Disclosure Schedules, the TXCO Disclosure Schedules, all other agreements,
instruments, and assignments among the Parties executed and delivered in
connection with the transactions described in any of the foregoing agreements
and instruments, and all exhibits and attachments to such agreements and instruments.
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"TXCO" is defined in the Preamble.
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"TXCO Assignment" means the Assignment and Bill of Sale
from TXCO to Arrow River, which shall be substantially in the form attached
hereto as Schedule 1.1(g).
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"TXCO Confidential Information" is defined in Section
5.2(b).
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"TXCO Contracts" means the contracts, agreements and
commitments described on Schedule 3.9 attached hereto.
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"TXCO Derivative Information" is defined in Section
5.2(b).
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"TXCO Equipment" means all equipment, fixtures, physical
facilities or interests therein (including, but not limited to, gathering
lines, pipelines, platforms and gas plants) of every type and description to
the extent that the same are used or held for use in connection with the
exploration, production or development of the TXCO Oil and Gas Interests, but
expressly excluding that certain pipeline system commonly known as the
"Maverick-Dimmit Pipeline" owned by Maverick-Dimmit Pipeline, Ltd.
("Maverick-Dimmit"), and described as follows: an
approximately 69-mile natural gas pipeline system and appurtenant easements,
rights-of-way, fixtures, equipment, meters and compressors, situated in
Maverick and Dimmit Counties, Texas, as shown on Exhibit D attached
hereto and as more particularly described in that certain Conveyance, Assignment
and Bill of Sale dated effective June 1, 2002, from Aquila Southwest Pipeline
Corporation, as "Assignor," to Maverick-Dimmit, as
"Assignee," recorded in Book 679, Pages 486 through 495 of the
Official Public Record of Maverick County, Texas.
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"TXCO Group" is defined in Section 5.2(b).
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"TXCO Hydrocarbons" means all Hydrocarbons produced from
the TXCO Oil and Gas Interests and either (a) in storage tanks as of the
Effective Time or (b) sold on or after the Effective Time.
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"TXCO Indemnified Parties" means TXCO, its Affiliates,
and its directors, stockholders, managers, officers, partners, employees,
agents, consultants, attorneys, representatives, and to the extent permitted
hereunder successors, transferees and assignees.
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"TXCO Information and Data" mean all (1) abstracts, title
opinions, title reports, title policies, lease and land files, surveys,
analyses, compilations, correspondence, filings with and reports to
regulatory agencies, other documents and instruments that relate specifically
to the TXCO Properties; (2) computer databases that are owned by or licensed
to TXCO that relate specifically to the TXCO Oil and Gas Interests; and (3)
all other books, records, files and magnetic tapes containing financial,
title or other information that relate to the TXCO Oil and Gas Interests.
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"TXCO Oil and Gas Interests" means all of the oil and gas
leasehold interests described on Exhibit C attached hereto.
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"TXCO Payment Rights" means all (a) accounts, instruments
and general intangibles (as such terms are defined in the Uniform Commercial
Code of Texas) attributable to the TXCO Oil and Gas Interests or the
Hydrocarbons produced therefrom with respect to any period of time on or
after the Effective Time; and (b) liens and security interests in favor of TXCO,
whether choate or inchoate, under any law, rule or regulation or under any of
the TXCO Contracts (i) arising from the ownership, operation or sale or other
disposition on or after the Effective Time of any of the TXCO Oil and Gas
Interests or the Hydrocarbons produced therefrom or (ii) arising in favor of
TXCO as the operator of the TXCO Oil and Gas Interests.
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"TXCO Permits" means all franchises, licenses, permits,
approvals, consents, certificates and other authorizations and other rights
granted by governmental authorities and all certificates of convenience or
necessity, immunities, privileges, grants and other rights, that relate to
the TXCO Oil and Gas Interests or the ownership or operation of any thereof.
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"TXCO Properties" means the TXCO Oil and Gas Interests,
TXCO Contracts, TXCO Hydrocarbons, TXCO Payment Rights and TXCO Related
Assets.
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"TXCO Proprietary Data" means all proprietary data owned
by TXCO relating to the TXCO Oil and Gas Interests which shall include,
without limitation, (a) all privileged or confidential data, (b) all seismic
data and information and licenses thereto, (c) all interpretive geological
and geophysical information which may reveal the methods used by TXCO in
interpreting geological and geophysical information, economic analysis, and
any information or other similar proprietary data which might reveal TXCO's
economic guidelines or other methods or systems by which TXCO conducts its
economic analysis, and (d) any similar proprietary data.
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"TXCO Related Assets" means all realty and personalty
related to, used in connection with or held for use in connection with, the
TXCO Oil and Gas Interests, including, without limitation, the TXCO Wells,
the TXCO Equipment, the TXCO Surface Contracts, the TXCO Information and Data,
the TXCO Permits and the TXCO Proprietary Data.
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"TXCO Surface Contracts" means all leases, easements,
privileges, right-of-way, agreements, licenses or other agreements relating
strictly to the use or ownership of surface and sub-surface properties and structures
that are used or held for use in connection with the exploration, production
or development of the TXCO Oil and Gas Interests.
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"TXCO Wells" means all oil, condensate or natural gas
wells, water source wells, and water and other types of injection wells
either located on the TXCO Oil and Gas Interests or used or held for use in
connection with the TXCO Oil and Gas Interests under a TXCO Surface Contract,
whether producing, operating, shut-in or temporarily abandoned.
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"USD" means United States Dollars, the official currency
of the United States of America.
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ARTICLE TWO
EXCHANGE OF THE PROPERTIES
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2.1 Exchange of the Properties.
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(a) On
the Closing Date and upon the terms and subject to the conditions set forth
herein, and effective as of the Effective Time, (i) subject to the
reservation by Arrow River of the Net Profits Interest in the Arrow River
Assignment, Arrow River agrees to transfer, assign, and deliver to TXCO, the
Arrow River Properties, and TXCO agrees to accept and assume from Arrow
River, the Arrow River Properties, and (ii) TXCO agrees to transfer, assign,
and deliver to Arrow River, an undivided ninety-eight percent (98%) interest
in and to the TXCO Properties, and Arrow River agrees to accept and assume
from TXCO, such undivided ninety-eight percent (98%) interest in and to the
TXCO Properties.
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(b) On the
Closing Date and upon the terms and subject to the conditions set forth
herein, and effective as of the Effective Time, (i) CMR agrees to execute the
Southern Ranches Prospect JOA and the Amended and Restated Pena Creek JOA,
pursuant to which TXCO will be designated as operator thereunder, (ii) TXCO
agrees to transfer, assign, and deliver to CMR, an undivided two percent (2%)
interest in and to the TXCO Properties, and CMR agrees to accept and assume
from TXCO, such undivided two percent (2%) interest in and to the TXCO
Properties and (iii) TXCO agrees to execute the Comanche Ranch Shallow Rights
JOA and the Amended and Restated Comanche Ranch Deep Rights JOA, pursuant to
which CMR will be designated as operator thereunder.
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2.2 Closing.
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(a) Closing
shall occur at the offices of Locke Liddell & Sapp LLP, 600 Travis
Street, Suite 3400, Houston, Texas 77002, at 10:00 a.m., on February 11, 2005
(the "Closing Date").
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(b) At Closing,
Arrow River shall deliver, or cause to be delivered, as applicable:
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(i) To TXCO,
five (5) counterpart originals of the Arrow River Assignment, executed and
acknowledged by Arrow River, pursuant to which Arrow River assigns to TXCO,
the Arrow River Properties and reserves the Net Profits Interest;
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(ii) To TXCO,
three (3) counterpart originals of the Southern Ranches Prospect JOA and
three (3) counterpart originals of a memorandum thereof, executed by CMR;
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(iii) To TXCO,
three (3) counterpart originals of the Amended and Restated Pena Creek JOA
and three (3) counterpart originals of a memorandum thereof, executed by
Arrow River and CMR;
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(iv) To TXCO,
three (3) counterpart originals of the Comanche Ranch Shallow Rights JOA and
three (3) counterpart originals of a memorandum thereof, executed by Arrow
River and CMR;
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(v) To TXCO,
three (3) counterpart originals of the Amended and Restated Comanche Ranch
Deep Rights JOA and three (3) counterpart originals of a memorandum thereof,
executed by CMR;
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(vi) To TXCO, a
certificate, as to Arrow River's non-foreign status as set forth in Treasury
Regulation 1.1445-2(b), in the form of Schedule 2.2(b), executed by
Arrow River;
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(vii) To TXCO,
certificates, dated the Closing Date and signed by the Secretary or an
Assistant Secretary of the general partner of Arrow River, certifying as to
(A) the completeness and correctness of attached copies of Arrow River's
Organizational Documents, (B) resolutions of the board of directors and
stockholders of the general partner of Arrow River and/or such other
authorizations as may be required pursuant to Arrow River's Organizational
Documents, approving the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby and
(C) the incumbency and signatures of the officers of the general partner of
Arrow River who executed or who will be executing, as the case may be, this
Agreement and any other certificate or document delivered in connection
herewith;
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(vii) To TXCO,
certificates, dated as of a date not more than ten (10) days prior to the
Closing Date, duly issued by the appropriate governmental authorities in the
State of Texas, showing that Arrow River is validly existing, in good
standing and authorized to do business in the State of Texas;
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(ix) To TXCO,
copies of the Arrow River Information and Data and the Arrow River
Proprietary Data; and
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(x) To TXCO,
such other documents, instruments, agreements and certificates as TXCO may
reasonably request in connection with the consummation of the transactions
contemplated by this Agreement on the terms set forth herein.
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(c) At Closing,
TXCO shall deliver, or cause to be delivered, as applicable:
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(i) To Arrow
River, five (5) counterpart originals of the TXCO Assignment, executed and
acknowledged by TXCO, pursuant to which TXCO assigns to Arrow River, an
undivided ninety-eight percent (98%) interest in and to the TXCO Properties;
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(ii) To CMR,
five (5) counterpart originals of the CMR Assignment, executed and
acknowledged by TXCO, pursuant to which TXCO assigns to CMR, an undivided two
percent (2%) interest in and to the TXCO Properties;
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(iii) To Arrow
River, three (3) counterpart originals of the Southern Ranches Prospect JOA
and three (3) counterpart originals of a memorandum thereof, executed by
TXCO;
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10
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(iv) To Arrow
River, three (3) counterpart originals of the Amended and Restated Pena Creek
JOA and three (3) counterpart originals of a memorandum thereof, executed by
TXCO;
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(v) To Arrow
River, three (3) counterpart originals of the Comanche Ranch Shallow Rights
JOA and three (3) counterpart originals of a memorandum thereof, executed by
TXCO;
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