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HomeMy WebLinkAbout925786 000346 Well: Blackjack Federal et al COUNTY OF LiNCOLN § § § PLE,^SE RETURN TO: TOGAC PO BOX 671787 HOUSTON, TX 77267-1787 STATE OF WYOMING ASSIGNMENT AND BILL OF SALE THIS ASSIGNMENT AND BILL OF SALE ("Assignment"), effective as of 7:00 a.m., local time, on January 1,2007, the ("Effective Time"), is made by CONOCOPHILLIPS COMPANY, a Delaware cor- poration ("Assignor"), whose address is 600 North Dairy Ashford, Houston, Texas 77079, to AGS OIL & GAS HOLDINGS, INC. 4400 S FEDERAL BLVD #2-D ENGLEWOOD, CO 80110 Assignee was the successful bidder for the Assets, as described below, at the auction conducted by The Oil & Gas Asset Clearinghouse, L.P. on December 13, 2006 ("Auction"), and has conducted an independent investigation into the nature and extent of the Assets; and Assignee herein purchases and acquires Assignor's interest in such properties and assumes associated contractual rights and obligations on the tenns and conditions ~et forth in this Assignment. For good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged by Assignor, Assignor does hereby grant, bargain, transfer, convey, set over, assign, and deliver unto Assignee, its successors and assigns, all of Assignor's right, title and interest in, and all privileges and obligations appurtenant to, the following described property rights and interests, (such property rights and interests, SA VE AND EXCEPT the Excluded Assets described in the succeeding paragraph, are hereinafter collectively referred to as the "Assets"): (a) The oil, gas and mineral leases, operating rights and other interests in oil and gas described in Exhibit A attached hereto and incorporated herein, INSOFAR AND ONLY INSOFAR as such leases cover and include the lands, depths and rights described in Schedule 1 of Exhibit A (such leases,operating rights and interests, limited as shown on Exhibit A, shall be referred to hereinafter as the "Leases "); (b) All hydrocarbon liquids and gases produced &om or attributable to the Leases, or any unit of which a Lease is a part, after the Effective Time; (c) To the extent assignable or transferable, (i) except as set forth in (ii) below, all penn its, licenses, servitudes, contracts and agreements directly related to the Leases, including all operating agreements; partnership, joint venture, farmout, farmin, dry hole, bottom hole, acreage contribution, purchase and acquisition agreements; salt water disposal agreements; easements, surface use and/or right-of- way agreements; unitization or pooling agreements, declarations and orders and the properties covered and the units created thereby; and all other contracts and contractual rights, obligations and interests applicable to the Leases, and (ii) only those hydrocarbon sales, purchase, gathering, marketing, exchange, processing, treating, &actionating, compression and transportation agreements described in Schedule 2 of Exhibit A, INSOFAR AND ONLY INSOFAR as (i) and (ii) cover and apply to the Leases, including those listed in Schedule 2 of Exhibit A; RECEIVED 1/3/2007 at 2:13 PM RECEIVING # 925786 BOOK: 645 PAGE: 346 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY Sale 212C Lot #64 09~5786 000347 (d) All producing, shut-in, temporarily abandoned, abandoned, plugged, water source, water injection and other injection and disposal wells, tank batteries, structures, pipe lines, fixtures, equipment, spare parts, tools, pipelines, buildings, personal property, appurtenances and improvements located on or appurtenant to the Leases and used in connection with the operation of the Leases or the gathering, treating, compression, transportation and processing of production from the Leases, whether or not operating or abandoned; and (e) All other tangibles, miscellaneous interests or other assets on or being used in connection with the Leases, including (subject to Section 17) all lease files, right-of-way files, well files (including well logs ), production records, division order files, abstracts, title opinions, and contract files, insofar as they are directly related to the Leases, the Units, or the Wells (the "Property Records"). THERE IS EXCEPTED FROM THIS ASSIGNMENT AND RESERVED UNTO ASSIGNEE THE FOLLOWING, WHICH ARE SPECIFICALLY EXCLUDED FROM THE ASSETS ("Excluded Assets"): (a) Unless the ASSIGNOR and ASSIGNEE otherwise agree in writing and enter into a separate data license agreement, (i) seismic, geological, geochemical, or geophysical data (including cores and other physical samples or materials from wells or tests) belonging to ASSIGNOR or lioensed from third parties, and (ii) interpretations of seismic, geological, geochemical or geophysioal data belonging to ASSIGNOR or licensed from third parties; (b) ASSIGNOR's intellectual property used in developing or operating the Property, including without limitation, proprietary computer software, computer software licensed' from third parties, patents, pending patent applications, trade secrets, copyrights, names, marks and logos;,""" (c) ASSIGNOR's right, title and interest in easements, rights-of-way, licenses, pennits, servitudes, surface leases, surface use agreements, and similar rights and interests, to the extent they are attributable and allocable to rights and interests retained by ASSIGNOR (if any); (d) ASSIGNOR's corporate, financial and tax records, and legal files, except that ASSIGNOR will provide ASSIGNEE with copies of any tax records that are necessary for ASSIGNEE's ownership, administration or operation of the Property; (e) Notwithstanding any other provision of this Assignment to the contrary, any records or infonnation that ASSIGNOR considers proprietary or confidential (including without limitation, employee infonnation, internal valuation data, business plans, reserve reports, transaction proposals and related infonnation and correspondence, business studies, bids and documents protected by any privilege), or which ASSIGNOR cannot legally provide to ASSIGNEE because of third party restrictions; (t) All trade credits, rebates, adjustments and refunds attributable to Assignor's interest that relate to any period prior to the Effective Time, including transportation tax credits and refunds, take-or-pay claims, insurance premium adjustments, and audit adjustments under applicable contracts; all deposits, cash, checks in process of collection, cash equivalents, accounts and notes receivable and other funds attributable to any period of time prior to the Effective Time; and all proceeds, benefits, income or revenues accruing (and any security or other deposits made) with respect to the Assets prior to the Effective Time; (g) All claims and causes of action of Assignor arising from acts, omissions, events or damage to or destruction of the Assets, occurring prior to the Effective Time, and claims for refund or loss carry Sale 212C Lot #64 0925786 000348 forwards with respect to any production, severance, windfall profit, ad valorem or other taxes attributable to any period before the Effective Time, income or franchise tax and any taxes attributable to any Excluded Assets; (h) All oil, gas and mineral rights and interests in and to all areas and depths not expressly included within the definition of Leases, and all pipelines and other facilities located on the leases, areas and lands described in Exhibit "A" which are not associated with or utilized in connection with the Leases; (i) All of Assignor's remote tenninal units, radio control alanns, radio towers, personal computer equipment, communication equipment, and vehicles wherever located, third party property located on or used in connection with the Leases, all leased property and contracts for support services (except for those leases and contracts specifically listed in Exhibit A, Schedule 2) and any personal property that may have been used on the Leases but is presently warehoused at an Assignor or third party site not located on the Leases; (j) All of Assignor's interests in any gas processing plants and facilities and their associated pipelines and gathering lines; and (k) All hydrocarbon liquids and gases produced from or attributable to the Leases, or any unit of which a Lease is a part, which at the Effective Time are owned by Assignor and are in storage, and all swaps, futures and derivatives backed by or related to such hydrocarbons; TO BA VE AND TO HOLD the Assets unto Assignee, its successors and assigns, forever. This Assignment is made and accepted subject to the following: 1. This Assignment is made and accepted subject to all royalties, overriding royalties, burdens and encumbrances affecting the Assets and without any warranty of title, express or implied. 2. The Assets herein assigned are subject to all the tenns and provisions of the Leases; to their propor- tionate share of all overriding royalty interests, lessor's royalties, net profit interests, carried interests, reversionary interests and other interests, encumbrances and burdens on the production therefrom; to all covenants, conditions, obligations and conditions in instruments and assignments in the chain of title of the Leases; and to all other encumbrances affecting the Assets in existence on the date this Assignment is executed. Assignee hereby assumes and agrees to pay, perfonn and dis- charge its proportionate share of all obligations under the Leases and the agreements relating to the Leases herein assigned. The references herein to obligations and encumbrances shall not be deemed to ratifY or create any rights in third parties. 3. In order to effect this Assignment under the rules and regulations of the Bureau of Land Management, Minerals Management Service, or other federal or state governmental or tribal entities, authorities or agencies, Assignor, or Assignor and Assignee, have executed, or will execute, certain separate assignments of interests in individual oil, gas and mineral leases, which interests are included in the Assets, for filing with and for approval by such governmental or tribal entities, authorities, or agencies. Such separate assignments (i) are or will be on fonns prescribed, suggested or approved by such governmental or tribal entities, authorities or agencies, (ii) evidence the conveyance or assignment of the applicable Assets herein made, but do not constitute any additional conveyance or assignment of the Assets described or of any rights therein, (iii) are not intended to modifY, and shall not modifY, any of the tenns, covenants or conditions set forth herein Sale 212C Lot #64 0925786 000349 and are not intended to create and shall not create any additional covenants or warranties of or by Assignor to Assignee, and (iv) shall be deemed to contain all of the exceptions, reservations, warranties, rights, titles, power, privileges, terms and provisions hereof, as fully as though they were set forth at length in each such separate assignment. This Assignment, insofar as it pertains to those Assets as to which separate assignments have been, or will be, executed for filing with and approval by any governmental or tribal entity, authority or agency, is made and accepted subject to the approval of the appropriate governmental or tribal entities, authorities or agencies and to the terms of such approval if and to the extent required by law. 4. Assignee accepts the Assets in their present condition "AS IS, WHERE IS and WITH ALL FAULTS". Without limiting the generality of the foregoing, Assignor makes no representation or warranty as to (i) the amount, value, quality, quantity, volume or deliverability of any oil, gas or other minerals or reserves in, under or attributable to the Assets; (ii) the environmental condition of the Assets; (Hi) any geological, engineering or other interpretations of economic valuation; (iv) the status of any payout accounts; or (v) predictions as to when any event will or will not occur or is likely to occur. The items of personal property, equipment, improvements, fixtures and appurtenances conveyed as part of the Assets are sold "AS IS, WHERE IS," and Assignor makes no, and disclaims any, representation or warranty, whether express or implied, and whether by common law, statute or otherwise, as to (i) merchantability, (ii) fitness for any particular purpose, (iii) conformity to models or samples of materials, and (iv) condition. 5. Assignor hereby gives and grants to Assignee, its successors and assigns, to the extent so transferable, full power and right of substitution and subrogation in and to all covenants and warranties by others heretofore given or made in respect to the Assets or any part thereof. 6. Reference is made to the land descriptions contained in the documents of title recorded as described in Exhibit A. To the extent that any land descriptions in Exhibit A are incorrect or not legally' sufficient, the land descriptions contained in the documents so recorded are incorporated by this reference. Unless provided otherwise, all recording references in Exhibit A are to the official real property or oil and gas lease records of Lincoln County, Wyoming, as indicated on Exhibit A. The provisions of this Assignment relating specifically to title to real property, due to applicable law, must be governed by the laws of the state of Colorado. All other provisions of this Assignment shall be governed, construed and enforced in accordance with the laws of the state of Texas, without regard to principles of conflicts of laws otherwise applicable to such determinations.. 7. To the extent that this Assignment conveys to Assignee property interests of separate and distinct character in the same lands, including but not limited to a leasehold interest and a mineral servitude, royalty interest or an overriding royalty interest in the same lands, the parties agree that neither merger of title nor confusion of interests shall occur, and Assignee shall own such property interests as separate and distinct property interests in the same manner that they were owned by Assignor. 8. It is specifically provided that if the assignment or attempted assignment of any of the Leases without the consent of the lessor, or any party from whom consent to assign is necessary, would constitute a breach or result in a forfeiture thereof, this Assignment shall become effective with respect thereto only upon receipt of such consent. 9. All costs and revenues associated with the Assets attributable to periods prior to the Effective Time shall remain the responsibility of or for the account of Assignor. All costs and revenues associated Sale 212C Lot #64 · , 0925786 000350 with the Assets attributable to periods after the Effective Time shall be the responsibility of or for the account of Assignee. 10. Prior to the Auction, Assignor has pennitted Assignee and its representatives to examine, in a data room maintained by The Oil & Gas Asset Clearinghouse, L.P., abstracts of title, title opinions, title files, ownership maps, lease files, assignments, division orders, payout statements, agreements, production, operational, contract, well, regulatory, environmental, engineering, accounting and other files, books, records and data pertaining to the Leases and Assets. Assignor has also pennitted Assignee to conduct physical inspections of the Assets. Assignee agrees, represents and warrants that any conclusions drawn therefrom are the result of its own independent review and judgment. Assignee specifically assumes the risk oftitle to and description of the Assets. Assignee agrees, represents and warrants that prior to the Auction it has reviewed the infonnation provided by Assignor and public records, and it has examined the status of title of the Leases and Assets as Assignee may deem necessary. Assignee agrees, represents and warrants that it has conducted all necessary due diligence with respect to title and condition (including environmental condition) of the Assets and has satisfied itself with respect thereto. Assignor makes no warranty or representation, express or implied, with respect to the accuracy, completeness or materiality of the information, records and data now, heretofore or hereafter made available to Assignee in connection with the Assets or this Assignment, including, without limitation, any description of the Assets, quality or quantity of hydrocarbon reserves, if any, production rates, r~ompletion opportunities, decline rates, gas balancing information, allowables or other regulatory matters, potential for production of hydrocarbons from the Assets, any estimate with respect to the value of the Assets, any proj~tions as to events that could or could not occur, and any other matters contained in or omitted from any information or material furnished to Assignee by Assignor. Any and all such data, infonnation and material furnished by Assignor is provided as a convenience only and any reliance on or use of same is at Assignee's sole risk. Assignor and its affiliates, and their officers, directors, employees, agents, consultants, trustees or representatives, shall have no liability to Assignee or its affiliates, and their officers, directors, employees, agents, consultants, trustees or representatives, resulting from any use, authorized or unauthorized, of the infonnation, records and data relating to the Assets provided by or on behalf Assignor. 11. Assignee further represents and warrants to Assignor as of the date of the Auction that: ' (a) The execution, delivery and perfonnance of this Assignment have been duly and validly authorized by all requisite authorizing action, corporate, partnership or othetwise, on the part of Assignee. (b) Except as disclosed in Exhibit B or disclosed to Assignee prior to delivery of this Assignment, there is no action, suit, proceeding, claim or investigation by any person, entity, administrative agency or governmental body pending or, to the best of its knowledge, threatened, against Assignee before any court or governmental agency that seeks to restrain or prohibit, or to obtain substantial damages from Assignee, with respect to this Assignment or the consummation of all or part of the transaction contemplated in this Assignment. (c) Assignee has not incurred any obligation or liability, contingent or othetwise, for brokers' or finders' fees in connection with this Assignment and the transaction provided herein, except any as may arise in connection with the Auction. Sale 212C Lot #64 0.925786 000351. (d) Assignee is an experienced and knowledgeable investor and operator in the oil and gas business and is aware of its risks. Prior to entering into this Assignment, Assignee was advised by such legal, tax, engineering and other professional counsel it deemed necessary, and Assignee has relied solely on its own independent analysis, evaluation and investigation of, and judgment with respect to, the business, economic, legal, tax or other consequences of this transaction including its own estimate and appraisal of the extent and value of the petroleum, natural gas and other reserves of the Assets Assignee understands and accepts the risks and absence of liquidity inherent in ownership of the Assets. (e) Assignee is acquiring the Assets for its own account, not with a view toward, nor for the sale in connection with, any distribution thereof, nor with any intention of distributing or selling any interests in the Assets in violation of the Securities Act of 1933 or any other applicable federal or state securities laws and regulations. In entering into this transaction, Assignee has complied with all applicable federal and state securities laws and regulations. Except for traditional mortgage financing from reputable financial institutions, Assignee has not sought or solicited, nor is Assignee participating with, investors, partners or other third parties in order to fund the consideration for this Assignment, and all funds used by Assignee in connection with this transaction are Assignee's own funds. I 1 I 12. The obligations, duties and liabilities Assignee assumes upon a~ceptance of this Assignment are as follows: ' (a) Assignee shall assume all of Assignor's plugging, replugging, abandonment, removal, disposal and restoration obligations associated with the Assets, including, but not limited to, (i)all necessary and proper plugging, replugging, abandonment, removal and disposal of the wells; structures and equipment located on or comprising a part of the Assets, (ii) the necessary and proper capping and burying all associated flow lines, (iii) the proper abandonment and restoration of all oil and gas leasehold, fee, and other property comprising a part of the Assets, both surface and subsurface, as may be required by applicable laws, regulations or contract, and (iv) any necessary disposal of naturally occurring radioactive material ("NORM"). Assignee shall be responsible for the plugging and abandonment of any wells drilled and the removal of any structures placed on the Assets. All plugging, replugging, abandonment, removal, disposal, and restoration operations shall be in compliance with applicable laws and regulations and be perfonned in a good and workmanlike manner. (b) Assignee shall assume all liabilities, duties and obligations that arise on or after the Effective Time from ownership or operation of the Assets including, but not limited to: (i) all liabilities and obligations of Assignee and Assignor from and after the Effective Time with respect to compliance with all applicable rules, regulations, statutes, penn its and orders, including, but not limited to plugging, replugging and abandoning any wells, the restoration of any well sites, tank battery sites and gas plant sites, the proper removal, disposal and abandonment of any wastes or fix- tures, and the proper capping and burying of all flow lines, which are included in the j1ssets; (ii) all duties, liabilities and obligations arising on or after the Effective Time under any contr cts or agree- ments affecting the Assets in existence at the Effective Time, including those listed n Exhibit A, and all obligations and benefits with respect to gas production, sales or processing imbalances with third parties; (iii) all duties, liabilities and obligations that arise under the Leases, assignments in the chain of title of the Leases, and burdens on production; and (iv) all other duties, liabilities and obligations assumed by Assignee under this Assignment. Sale 212C Lot #64 0925786 000352 (c) Except as otherwise expressly provided in paragraph 13(b) of this Assignment, Assignee shall assume all environmental obligations and liabilities associated with the Assets, which shall mean all liabilities, obligations, expenses (including without limitation, all attorney's fees), fines, penalties, costs, claims, suits or damages (including natural resource damages) of any nature, including personal injury, illness, disease or wrongful death, associated with the Assets and attributable to or resulting ITom: (i) pollution or contamination of soil, groundwater or air, either on or off the Assets and any other contamination of or adverse effect upon the environment, (ii) underground injection activities and waste disposal onsite or off site, (iii) clean-up responses, remedial, control or compliance costs including the required cleanup or remediation of spills, pits, ponds or lagoons including any subsurface or surface pollution caused by such spills, pits, ponds or lagoons, (iv) noncompliance with applicable land use, pennitting, surface disturbance, licensing or notification requirements, and (v) violation of any federal, state or local environmental or land use law. (d) The consideration for this Assignment is inclusive of the amount, if any, attributable to production which Assignor is entitled to receive without making payment and which other third parties are obligated to make up, without any other compensation, under applicable contracts, as a result of imbalances in production or sales ITom the Assets at the Effective Time at any wells, in any pipelines, at any gas plant or in storage. The consideration for this Assignment is also inclusive of the amount, if any, attributable to any production which Assignor is obligated to provide and make up me of charge, and which other third parties are entitled to take without paying for, under applicable contracts, as a result of any imbalances in production or sales ITom the Assets at any wells, in any pipelines, at any gas plant or in storage. Assignee shall be obligated for all liabilities, and shall have all benefits, arising out of any imbalances associated with the Assets, whether in the well, in the field, or as a result of any regulatory action. (e) WAIVER OF CONSUMER RIGHTS Assignee waives its rights under the Texas Deceptive Trade Practices - Consumer Protection Act, Section 17.41 et seq., Business & Commerce Code, a law that gives consumers special rights and protections, After consultation with an attorney of Assignee's selection, Assignee voluntary consents to this waiver. In order to evidence its ability to grant such waiver, Assignee hereby represents and warrants to Assignor that Assignee (i) is in the business of seeking or acquiring, by purchase or lease, goods or services for commercial or business use, (ii) has knowledge and experience in financial and business matters that enable it to evaluate the merits and risks of the transaction contemplated hereby, (iii) is represented by legal counsel with connection with this Assignment and (iv) is not in a significantly disparate bargaining position. 13. The following indemnity provisions shall apply under this Assignment: (a) With the exception of those items for which Assignor expressly indemnifies Assignee under paragraph 13(b) of this Assignment, Assignee agrees to indemnify, defend and hold Assignor hannless from and against any and all claims, demands, losses, damages, punitive damages, costs, expenses, causes of action or judgments of any kind or character ("Claims") with respect to all liabilities and obligations or alleged or threatened liabilities and obligations, including Claims for personal injury, illness, disease, wrongful death, damage to property, environmental damage or pollution, and liability based on strict liability or condition of the Assets, attributable to or arising out of (i) Assignee's acts or omissions and (ii) the ownership or operation of the Assets by Assignee, Assignor or its predecessors in interest in and to the Assets, at any time, including, Sale 212C Lot #64 09257~6 000353 without limitation, any interest, penalty, reasonable attorney's fees and other costs and expenses in- curred in connection therewith or the defense thereof, whether or not caused in whole or in part by (and including) any sole or concurrent negligence or strict liability of Assignor, or the condition of the Assets. (b) If Assignor is notified in writing by Assignee of Assignee's claim under this paragraph 13(b) within six (6) months after January 1,2007, Assignor agrees to indemnify, defend and hold Assignee harmless from and against any and all Claims with respect to all liabilities and obligations or alleged or threatened liabilities and obligations, including Claims for personal injury, illness, dis- ease, wrongful death, damage to property, environmental damage or pollution, and liability based on strict liability or condition of the Assets, which arise or are asserted prior to the Effective Time and are attributable to the ownership or operation of the Assets by Assignor prior to the Effective Time including, without limitation, any interest, penalty, reasonable attorney's fees and other costs and expenses incurred in connection therewith or the defense thereof. Assignor shall have no obligation to Assignee under this paragraph 13(b) for any matter for which it is not notified in writing by Assignee within six (6) months after January I, 2007. It is agreed and understood, moreover, that Assignor's indemnity pursuant to this paragraph 13(b) shall be limited only to Claims against Assignee by third parties, including governmental agencies. The indemnification obligations set forth in this paragraph 13(b) shall, after January 1,2007 be the sole and exclusive remedies of Assignee with respect to the matters addressed herein, regardless of any of Assignor's warranties or representations. This paragraph 13(b) shall not apply to any liabilities or obligations (including indemnity obligations) assumed by Assignee pursuant to paragraphs 12(a), 12(b) or 13(f). (c) Assignor shall be responsible for any and all Claims arising out of the accounting or payment of proceeds of production to royalty owners and working interest owners in the Leases and/or units comprising a part of the Assets, insofar as such Claims relate to or arise out of actions of Assignor or events prior to the Effective Time and shall defend, indemnify and hold Assignee harmless from and against all such claims. Assignee shall be responsible for all of said types of Claims insofar as they relate to periods of time from and after the Effective Time and shall defend, indemnify and hold Assignor hannless therefrom. (d) Assignor and Assignee, respectively, hereby agree to indemnify and hold the other harmless from and against any Claim for a brokerage or finder's fee or commission in connection with this Assignment or the Auction to the extent such Claim arises from or is attributable to the actions of the indemnifying party, including, without limitation, any and all losses, damages, punitive damages, attorney's fees, costs and expenses of any kind or character arising out of or incurred in connection with any such Claim or defending against the same. (e) Assignee shall protect, indemnify and hold Assignor hannless from and against any and all Claims arising under applicable state or federal securities laws in connection with this Assignment and the sale or exchange of the Assets or any portion thereof by Assignor to Assignee or its assignees as provided herein or the subsequent sale or other disposition of the Assets or any portion thereof by Assignee, its affiliates or assignees. Assignee shall protect, indemnify, defend and hold Assignor hannless from and against any and all Claims arising as a result of any dealings Assignee may have with its partners, investors, financial institutions, assignees and any other third parties with respect to this Assignment and the Assets, including any dealings in violation of Assignee's warranties and representations in paragraphs II (d) and (e) hereof. Sale 212C Lot #64 Ö925786 000354 (f) Assignee acknowledges that it has been informed that oil and gas producing forma- tions can contain naturally occurring radioactive material ("NORM"). Some or all of the equipment, material, appurtenances, improvements and fixtures subject to this Assignment may have levels of NORM above background levels, A health hazard may exist in connection with this equipment, Therefore, Assignee may need to follow safety procedures when handling this equipment. Assignee agrees to indemnify, defend and hold Assignor harmless from and against any and all claims, demands, losses, damages, punitive damages, costs, expenses, causes of action or judgments of any kind or character with respect to all liabilities and obligations, or alleged or threatened liabilities and obligations, including claims for personal injury, illness, disease, wrongful death, damage to property, environmental pollution or contamination, cleanup expenses and liability based on strict liability or condition of the Assets, attributable to or arising out of the existence of NORM on the equipment, material, appurtenances, improvements and fixtures subject to this Assignment, including, without limitation, any interest, penalty, reasonable attorney's fees and other costs and expenses incurred in connection therewith or the defense thereof, whether or not caused by (and including) any sole or concurrent negligence or strict liability of Assignor, or the condition of the Assets. (g) The indemnities of Assignor herein shall not cover or include any amounts for which Assignee may legally recoup from other third party owners without judicial process, or that for which Assignee is reimbursed by any third party. There shall be no upward or downward adjustment in the consideration for this Assignment as a result of any matter for which Assignee or Assignor is indemnified under this Assignment. With respect to any Claim for which an indemni- fying party may be required to provide partial or full indemnity, or for which a party may be obligated to defend in warranty, such party shall have the right, but not the obligation, to participate fully in the defense of any such Claim. Reasonable attorneys' fees, court costs, interest, penalties and other expenses incurred in connection with the defense of such Claims shall be included in Assignor's and Assignee's indemnities herein. All indemnities of Assignee and Assignor herein shall extend to and cover the parent, subsidiary and affiliated companies and the officers, directors, employees and agents of the indemnified party and its parent, subsidiary and affiliated companies. 14. Assignee shall be solely responsible for all filings and recording of this Assignment and any other instruments that must be filed or recorded to effectuate transfer of the Assets. If Assignee is attempting to succeed Assignor as operator of any portion of the Assets, Assignee shall promptly file all appropriate fonns, declarations or bonds with federal, state and tribal agencies relative to its assumption of operations and Assignor shall cooperate with Assignee in connection with such filings. Assignor shall not be responsible for any loss to Assignee because of Assignee's failure to file or record documents correctly or promptly. ASSIGNEE shall provide ASSIGNOR a recorded copy of each Assignment Document and other recorded instruments, and approved copies of the Assignment Documents and other federal, state, tribal or local transfer documents, as soon as they are available. IS. With respect to tax matters and incidental expenses associated with the Auction or this Assignment, Assignor and Assignee agree as follows: (a) Assignee shall bear and pay (i) all state, local or tribal sales, transfer, gross proceeds or similar taxes incident to or caused by the transfer of the Assets to Assignee; (ii) all documentary, transfer and other state, local and tribal taxes incident to the transfer of the Assets to Assignee; and (iii) all filing, recording or registration fees for any assignment or conveyance delivered hereunder. Sale 212C Lot #64 Ó925786 000355 Each party shall bear its own respective expenses incurred in connection with the Auction and this Assignment, including its own consultants' fees, attorneys' fees, accountants' fees, filing fees, and other similar costs and expenses. (b) Assignor and Assignee agree that this transaction is not subject to the reporting requirement of Section 1060 of the Internal Revenue Code of 1986, as amended, and that, therefore, IRS Fonn 8594, Asset Acquisition Statement, is not required to be and will not be filed for this transac- tion. In the event the parties mutually agree that a filing of Fonn 8594 is required, the parties will confer and cooperate in the preparation and filing of their respective fonns to reflect a consistent reporting of the agreed upon allocation. (c) Assignor shall be responsible for and shall pay all taxes attributable to or arising from the ownership or operation of the Assets prior to the Effective Time. Assignee shall be responsible for and shall pay all taxes attributable to or arising from the ownership or operation of the Assets after the Effective Time. Any party which pays such taxes for the other party shall be entitled to prompt reimbursement upon evidence of such payment. Each party shall be responsible for its own federal income taxes, if any, as may result from this transaction. (d) If this transaction is detennined to result in state sales or transfer taxes, Assignee shall be solely responsible for any and all such taxes due on the Assets acquired by Assignee by virtue of this transaction. If Assignee is assessed such taxes, Assignee shall promptly remit same to the taxing authority. If Assignor is assessed such taxes, Assignee shall reimburse Assignor for any such taxes paid by Assignor to the taxing authority. 16. At Assignor's option and as soon as practical after the Auction, Assignor shall transfer to Assignee all funds held by Assignor in suspense related to proceeds of production and attributable to third parties' interests in the Leases, including funds suspended awaiting minimum disbursement requirements, funds suspended under division orders and funds suspended for title and other defects. If such funds are transferred, Assignee agrees to administer all such accounts and assumes all payment obligations relating thereto in accordance with all applicable laws, rules and regulations, and shall be liable for the payment thereof to the proper parties. 17. All of Assignor's Property Records concerning the Assets to be provided to Assignee shall be transmitted within sixty (60) days after the Auction at a location to be specified by Assignee. Any transportation, postage or delivery costs from Assignor's offices shall be at Assignee's sole cost, risk and expense. If Assignor retains any original Property Records, Assignee shall have the right to access and review those original Property Records during nonna1 business hours. Assignee agrees to maintain the Property Records for seven (7) years after the Auction. Assignee shall provide Assignor and its representatives reasonable access to and the right to copy such Property Records for the purposes of (i) preparing and delivering any accounting provided under this Assignment and adjusting, prorating and settling the charges and credits provided in this Assignment; (ii) complying with any law, rule or regulation affecting Assignor's interest in the Assets prior to the Effective Time; (iii) preparing any audit of the books and records of any third party relating to Assignor's interest in the Assets prior to the Effective Time, or responding to any audit prepared by such third parties; (iv) preparing tax returns; (v) responding to or disputing any tax audit; or (vi) asserting, defending or otherwise dealing with any claim or dispute under this Assignment. Assignee shall notifY Assignor before destroying any property records. If, within thirty (30) days following receipt of ASSIGNEE's notice, ASSIGNOR notifies ASSIGNEE that ASSIGNOR desires to Sale 212C Lot #64 0925786 000356 retain such Property Records, ASSIGNEE shall refrain from the destruction of such -Property Records and, at ASSIGNOR's expense, deliver such Property Records to ASSIGNOR. 18. Assignee agrees that within thirty (30) days after the Auction or within thirty (30) days after operations are actually transferred, whichever is later, it will remove or cause to be removed the names and marks used by Assignor and all variations and derivatives thereof and logos relating thereto &om the Assets and will not thereafter make any use whatsoever of such names, marks and logos. 19. Except as otherwise expressly provided herein, all communications required or pennitted under this Assignment shall be in writing and any communication or delivery hereunder shall be deemed to have been duly given and received when actually delivered to the address of the party to be notified as set forth below and addressed as follows: Ifto Assignor: ConocoPhilIips Company 800 Plaza Office Building Bartlesville, OK 74004 Attention: Manager, Real Property Administration Fax No.: (918) 661-1332 Telephone: (918) 661-0366 with copy to: ConocoPhilIips Company 600 North Dairy Ashford P. O. Box 2197 Houston, Texas 77252 Attention: Scott D. Anderson Fax No.: (281) 293-6988 Telephone: (281) 293-6017 AGS OIL & GAS HOLDINGS, INC. 4400 S FEDERAL BLVD #2-D ENGLEWOOD, CO 80110 ATTENTION: ROBERT T. WILSON PHONE (303) 761-5624 FAX (303) 761-5325 If to Assignee: Provided, however, that any notice required or pennitted under this Assignment will be effective if given verbally within the time provided, so long as such verbal notice is followed by written notice thereof in the manner provided herein within twenty-four (24) hours following the end of such time period. Any party may, by written notice so delivered to the other, change the address to which delivery shall thereafter be made. 20. Assignee shall comply with all current and subsequently amended applicable laws, ordinances, rules, and regulations applicable to the Assets and Assignee's ownership or operation thereof, and shall promptly obtain and maintain all penn its required by governmental authorities in connection with the Assets. 21. This Assignment and all of the tenns, provisions, covenants, indemnities, obligations and conditions herein contained shall be binding upon and inure to the benefit of and be enforceable by the Assignor, Assignee and their respective successors, legal representatives, heirs and assigns; Sale 212C Lot #64 /, ,~9SZ5786 000357 provided, however, no assignment, transfer, conveyance or encumbrance of the Assets shall be made unless the same is made expressly subject to this Assignment, and unless the vendee, assignee or transferee assumes all or the applicable part of the obligations hereunder. All the tenns, provisions, covenants, indemnities, obligations and conditions provided in this Assignment shall be deemed to be covenants running with the land and Leases, and any transfer or other disposition of the Leases shall be made subject to all such tenns, provisions, covenants, indemnities, obligations and conditions herein contained. 22. If ASSIGNEE sells, transfers or assigns all or a portion of the Assets, (i) the Purchase and Sale Agreement shall remain in effect between ASSIGNEE and ASSIGNOR as to the Assets regardless of such sale or assignment (and ASSIGNEE will remain obligated thereunder), and (ii) ASSIGNEE shall require its successors and assigns expressly to assume its obligations under this Assignment and the Purchase and Sale Agreement, to the extent related or applicable to the Assets or portion thereof acquired by them. Any assignments in violation of this provision shall be null and void. 23. This Assignment may be executed by Assignor and Assignee in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute one and the same Assignment. 24. As between Assignor and Assignee, the terms of this Assignment shall control over any conflicting provision in any agreement executed by Assignor or Assignee with The Oil & Gas Asset Clearinghouse, L,P. and any bidder registration, addendum or other document executed by Assignee in connection with the Auction, IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment on this ~ day of Dtc£C..fG..N\.'P-.~ , 2006 but effective for all purposes as of the Effective Time. ASSIGNOR: By: Name: Title: ~ STATE OF TEXAS § § COUNTY OF HARRIS § This instrument was acknowledged before me on -,2.--(3 - ,2006 by Scott D. Anderson, as attomey- in-fact of ConocoPhillips Company, a Delaware corporation, on behalf of said corp ~,\,~~ VY"I. l..~~.. ·.f,"- ~.... tit\ n J! ~~. .:,;r ~ ~,,:J'¡ór'\.~\" tl ""UlI"~ In witness whereof, I hereunto set my hand and official seal. TERI J. BRUTON Notary Public. State of Texlls My Commission Expires February 2B, 2010 Sale 212C Lot #64 . 0925786 000358 ASSIGNEE: AGS on. & GAS HOLDINGS, INC. By: ~.¡: U~ Name: ROBERT T. WILSON Title: PRESIDENT STATE OF TEXAS § § COUNTY OF HARRIS § This instrument was acknowledged before me on ~E..C.. \ ~ , 200~ by K'b'Be.:R'T" T. Lù(h"sOr{ I as :p~{.bErl T'" of AG $ 0 \ \-. € G AS H-Ol-~ {N.~$ I 'I:.rtc.. . , on behalf of said ~~DRA""CO"', . My Commission Expires: ~..JÃ.-'U~ 0004~ Notãry Public in and for the State of Texas II~..."".... ~, ~Þ" I-'~ f"ì :.t' o /} 'A!."~' j "¡r¡¡,:ì LUCIlLE VAN AlLEN MY g2.MMISSION EXPIRES """t8lllber 28. 2010 -- Sale 212C Lot #64 0325786 000359 ~ ß ß Il. a: a: ~ l- I- 0 2 Z ~ <1 ~ "I. - .¡, ~ - j - :; ~ N ~ W (J) u.i ~~ (J) N ~~ ~ .: (J)Z '" ~!}I "Ï ZN - DJ- ~ . :; ~~ ~ ~~ ~ ":.(J) Z CDW ~ oñ(J) ~. (f <1~ DJ. 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