Purchase and Sale Agreement (2015)Full Document 

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PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

NEW ATLAS HOLDINGS, LLC

AS SELLER

AND

ARP PRODUCTION COMPANY, LLC

AS BUYER


TABLE OF CONTENTS

Page

ARTICLE 1

DEFINITIONS

1

1.1

Definitions; References and Construction

1

ARTICLE 2

SALE OF MEMBERSHIP INTERESTS/PURCHASE PRICE

16

2.1

Purchase and Sale of Membership Interests

16

2.2

Purchase Price

16

2.3

Purchase Price Adjustments

16

2.4

Preliminary Settlement Statement

18

2.5

Final Settlement Statement

18

2.6

Allocated Values

19

ARTICLE 3

LOSS AND CASUALTY / INSPECTION OF ASSETS / TITLE DEFECTS / ENVIRONMENTAL DEFECTS

20

3.1

Notice of Casualty Loss

20

3.2

Casualty Loss

20

3.3

Access

20

3.4

General Disclaimer of Title and Environmental Warranties and Representations

21

3.5

Title Defect Notices

22

3.6

Title Benefit Notices

22

3.7

Seller’s Right to Cure

22

3.8

Remedies for Title Defects

23

3.9

Remedies for Title Benefits

24

3.10

Exclusive Remedy for Title Defects

24

3.11

Title Defect Amount

24

3.12

Title Benefit Amount

25

3.13

Thresholds

25

3.14

Title Dispute Resolution

26

3.15

Environmental Assessment

27

3.16

Environmental Defects

28

3.17

Seller’s Right to Cure

29

3.18

Remedies for Environmental Defects

29

3.19

Exclusive Remedies

30

3.20

Environmental Dispute Resolution

30

3.21

Environmental Thresholds

31

ARTICLE 4

ALLOCATION OF RESPONSIBILITIES AND INDEMNITIES

32

4.1

Opportunity for Review

32

4.2

Seller’s Indemnity Obligation

32

4.3

Buyer’s Indemnity Obligation

32

4.4

Claim Periods, Deductible, Threshold, Cap and Materiality Exclusion

32

4.5

Notice of Claims

33

4.6

Defense of Non-Party Claims

34

4.7

Waiver of Certain Damages

35

4.8

Survival of Claims

35

4.9

Exclusive Remedy

35

4.10

Extent of Indemnification

35

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TABLE OF CONTENTS

(cont.)

Page

ARTICLE 5

DISCLAIMER

36

ARTICLE 6

SELLER’S REPRESENTATIONS AND WARRANTIES

36

6.1

Organization and Good Standing

36

6.2

Authority; Authorization of Agreement

37

6.3

No Violations

37

6.4

Capitalization

37

6.5

Liability for Brokers’ Fees

38

6.6

Legal Proceedings

38

6.7

Bankruptcy

38

6.8

Taxes

38

6.9

Material Contracts

38

6.10

No Violation of Laws

40

6.11

Preferential Purchase Rights

40

6.12

Imbalances; Payout Balances

40

6.13

Royalties, Etc

40

6.14

Current Commitments

40

6.15

Tax Partnerships

40

6.16

Investment Company

40

6.17

Regulatory Status

40

6.18

Easements

41

6.19

Oil and Gas Operations

41

6.20

Current Bonds

41

6.21

No Undisclosed Material Liabilities

41

6.22

Conduct of Company

41

6.23

Employees and Employee Benefit Plans

41

ARTICLE 7

BUYER’S REPRESENTATIONS AND WARRANTIES

42

7.1

Organization and Good Standing

42

7.2

Authority; Authorization of Agreement

42

7.3

No Violations

42

7.4

Liability for Brokers’ Fees

43

7.5

Claims, Disputes and Litigation

43

7.6

Bankruptcy

43

7.7

Independent Evaluation

43

7.8

Financing; Resources and Other Capabilities

43

7.9

Regulatory

43

7.10

Buyer Financial Statements

43

7.11

Securities Law Compliance

43

ARTICLE 8

COVENANTS

44

8.1

Conduct of Business

44

8.2

Return of Information

46

8.3

Bonds and Other Credit Support

46

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TABLE OF CONTENTS

(cont.)

Page

8.4

Record Retention

47

8.5

Notifications

47

8.6

Release of Liens

47

8.7

Consents

47

8.8

Preferential Purchase Rights

48

8.9

Efforts

49

8.10

Records in Seller’s Possession

49

8.11

Investigation

49

ARTICLE 9

CONDITIONS PRECEDENT TO CLOSING

50

9.1

Conditions Precedent to Seller’s Obligation to Close

50

9.2

Conditions Precedent to Buyer’s Obligation to Close

50

9.3

Condition Precedent to Obligation of Each Party to Close

51

ARTICLE 10

THE CLOSING

51

10.1

Closing

51

10.2

Obligations of Seller at Closing

51

10.3

Obligations of Buyer at Closing

52

ARTICLE 11

TERMINATION

52

11.1

Grounds for Termination

52

11.2

Effect of Termination

53

ARTICLE 12

TAXES

54

12.1

Cooperation on Tax Matters

54

12.2

Proration of Property Taxes

54

12.3

Transfer Taxes

54

ARTICLE 13

MISCELLANEOUS

55

13.1

Notices

55

13.2

Transaction and Filing Costs

56

13.3

Amendments and Severability

56

13.4

Successors and Assigns

57

13.5

Headings

57

13.6

Governing Law; Jurisdiction; Waiver of Trial by Jury

57

13.7

Public Announcements

57

13.8

No Third Party Beneficiaries

57

13.9

Construction

58

13.10

Schedules

58

13.11

Conspicuousness of Provisions

58

13.12

Execution in Counterparts

58

13.13

Entire Agreement

58

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PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (together with the Exhibits and Schedules made a part hereof, this "Agreement"), dated May 18, 2015 (the "Execution Date"), is made by and between New Atlas Holdings, LLC, a Delaware limited liability company ("Seller"), and ARP Production Company, LLC, a Delaware limited liability company ("Buyer"). Seller and Buyer are sometimes hereinafter referred to individually as a "Party" and collectively as the "Parties".

WHEREAS, Seller is the sole member of, and owns 100% of the limited liability company membership interests (the "Membership Interests") in ATLS Production Company, LLC (the "Company").

WHEREAS, Seller desires to sell and Buyer desires to purchase the Membership Interests.

NOW, THEREFORE, for a good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions; References and Construction. In this Agreement, capitalized terms have the meanings provided in this Article 1, unless defined elsewhere in this Agreement. All defined terms include both the singular and the plural of such terms and any reference in this Agreement to gender includes all genders. All references to Sections refer to Sections in this Agreement, and all references to Exhibits or Schedules refer to Exhibits or Schedules to this Agreement and such Exhibits and Schedules are made a part of this Agreement. The terms "herein", "hereinafter," "hereof," and "hereunder" refer to this Agreement as a whole and not to any particular Section or subparagraph of a Section unless the context otherwise requires. The word "including" or any variation thereof shall mean including without limitation and does not limit any general statement that it follows to the specific or similar items or matters immediately following it. The words "shall" and "will" are interchangeably used throughout this Agreement and shall accordingly be given the same meaning, regardless of which word is used. When calculating the period of time before which, within which, or following which any act is to be done or step taken pursuant to this Agreement, the reference date and the last Day in the date range provided shall be included in calculating such period unless otherwise expressly provided.

"3.8(c) Assets" has the meaning set forth in Section 3.8(c).

"3.18(c) Assets" has the meaning set forth in Section 3.18(c).

"11.1(d) Proceeding" has the meaning set forth in Section 11.1(d).

"Accounting Referee" means one of the U.S. big four accounting firms mutually agreed upon by the Parties, together with any experts such firm may require in order to settle a particular dispute.

"Adjusted Purchase Price" has the meaning set forth in Section 2.2.

1


"Adjustments" means the adjustments to the Base Purchase Price pursuant to Section 2.3.

"AFEs" has the meaning set forth in Section 6.14.

"Affiliate" means any Person that, directly or indirectly, through one or more entities, controls or is controlled by or is under common control with the Person specified. For the purpose of the immediately preceding sentence, the term "control" means the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or agency or otherwise; provided that (a) with respect to Seller, the term "Affiliate" shall not include Atlas Resource Partners, L.P. or any of its subsidiaries and (b) with respect to Buyer, the term "Affiliate" shall not include Atlas Energy Group, LLC or any of its subsidiaries (other than Atlas Resource Partners, L.P. and its subsidiaries).

"Aggregate Defect Deductible" means an amount equal to 3% of the Base Purchase Price.

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