PURCHASE AND SALE AGREEMENT Hoskins Mound Prospect, Brazoria County, Texas August 22, 2007
Exhibit
2.1
▇▇▇▇▇▇▇
Mound Prospect, Brazoria County, Texas
August
22, 2007
***************************
This
Purchase and Sale Agreement (as the same may be amended from time to time by
mutual agreement of the parties, the "Agreement")
is
entered into as of the date above stated between CrossPoint Energy Holdings,
LLC, a Texas limited liability company (“Seller”),
and
ERG Resources, L.L.C., a Texas limited liability company, or its assigns
(“Buyer”).
*****************************
In
consideration of the mutual covenants, conditions and considerations provided
below, and for other good, fair and valuable consideration, the receipt,
adequacy and reasonable equivalency of which are hereby acknowledged, Buyer
and
Seller agree as follows:
| 1. |
Definitions.
Certain terms with their initial letters capitalized are defined
in
Section 21 at the end of this Agreement or elsewhere
herein.
|
| 2. |
The
Subject Interests.
Effective as of July 1, 2007 (the “Effective
Date”),
Seller shall assign and convey to Buyer all of Seller's interest
in and to
the following, all of which are collectively referred to in this
Agreement
as the "Subject
Interests,"
subject to all Permitted
Encumbrances:
|
| a. |
All
of Seller's right, title and interest (of whatever kind or character,
whether legal or equitable, and whether vested or contingent) in
and to
all Hydrocarbons, oil, gas and other minerals (collectively and
individually, "Hydrocarbons")
in and under and that may be produced from the lands (the "Subject
Lands")
described in Exhibit A, including, without limitation, interests
in any
and all Hydrocarbon leases covering any part of the Subject Lands
(the
"Subject
Leases"),
overriding royalty interests, production payments and net profits
interests in any part of the Subject Lands or Subject Leases, fee
royalty
interests, fee mineral interests and other interests in Hydrocarbons
in
any part of the Subject Lands (all of the foregoing, together with
all of
the rights, titles and interests described or referred to Sections
1.b.,
1.c. and 1.d., being herein called the "Subject
Interests"),
whether the Subject Lands are described in any of the descriptions
set out
in Exhibit A or by reference to another instrument for
description;
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| b. |
All
right, title and interest of Seller in and to all presently existing
and
valid Hydrocarbon unitization, pooling and/or communitization agreements,
declarations and/or orders and the properties covered or included
in the
units (including, without limitation, units formed under orders,
rules,
regulations, or other official acts of any federal, state or other
authority having jurisdiction, voluntary unitization agreements,
designations and/or declarations and any "working interest units"
(created
under operating agreements or otherwise) which relate to any of the
Subject Interests;
|
| c. |
All
right, title and interest of Seller in all presently existing and
valid
production sales (and sales related) contracts, operating agreements
and
other agreements and contracts which relate to any of the Subject
Interests, or which relate to the exploration, development, operation,
or
maintenance of the Subject Interests or the treatment, storage,
transportation, or marketing of production from or allocated to the
Subject Interests; and
|
| d. |
All
right, title and interest of Seller in and to (a) all materials,
supplies,
machinery, equipment, improvements and other personal property and
fixtures (including, but not limited to all ▇▇▇▇▇, wellhead equipment,
pumping units, flow lines, tanks, buildings, injection facilities,
salt
water disposal facilities, compression facilities, gathering systems
and
other equipment), (b) all easements, rights-of-way, surface leases
and
other surface rights, (c) all permits and licenses, (d) the Seismic
Data
and (e) all other appurtenances, used or held for use in connection
with
or related to the exploration, development, operation, or maintenance
of
any of the Subject Interests, or the treatment, storage, transportation,
or marketing of production from or allocated to the Subject Land,
Subject
Leases or other Subject Interests;
but
|
| e. |
Provided
however that
the Subject Interests do not include the Retained Assets, and Seller
shall
retain the right to receive and retain proceeds from the collection,
sale
or licensing of any of the Retained
Assets.
|
| 3. |
Purchase
Price for Subject Interests and for Certain ▇▇▇▇▇.
The purchase price for the Subject Interests is the sum of Two Million
One
Hundred Eighty Thousand Dollars ($2,180,000) (the "Purchase
Price")
and assumption of certain liabilities.
|
| a. |
Payment
of Purchase Price.
Buyer shall pay to Seller at Closing, to an account designated by
Seller
in cash
or immediately available funds,
the sum of (a) the Purchase
Price minus (b) the Deposit.
|
| b. |
Deposit.
Buyer has paid a deposit of Four Hundred Thousand Dollars ($400,000)
(the
“Deposit”)
to Seller. If Buyer does not terminate this Agreement by notice to
Seller
on or before the end of the Inspection Period (defined in Section
9), the
Deposit and interest accrued thereon shall become non-refundable
and shall
be retained by Seller whether or not the purchase and sale contemplated
hereby (the “Transaction”)
is consummated. If the Transaction is consummated, the Deposit principal
shall be credited to the Purchase Price at Closing.
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| c. |
Assumption
of Obligations.
At Closing, Buyer shall assume the obligations of Seller pertaining
to all
costs, obligations and liabilities arising out of or attributable
to the
Subject Interests which arise from or relate to events occurring
or
conditions existing on or after the Effective Date or accruing after
the
Effective Date; provided
that
(i) Seller shall remain responsible for any obligations of Seller
pertaining to all costs, obligations and liabilities arising out
of or
attributable to the Subject Interests which arise from or relate
to events
occurring or conditions existing before the Effective Date or accruing
before the Effective Date which arise from contractual obligations
or
negligent acts of Seller; and (ii) Seller's liability for breaches
of the
representations and warranties herein and for obligations or claims
under
this Section 3.c. shall expire at the end of twelve (12) months after
the
Effective Date.
|
| d. |
Purchase
of Certain ▇▇▇▇▇.
At Closing, Buyer shall also purchase, for an aggregate cash price
of One
Hundred Twenty Thousand Dollars ($120,000) (the “ORRI
Purchase Price”),
(i) a 1.5% of 8.8ths overriding royalty interest in the Subject Leases
conveyed by Seller to Drawbridge Special Opportunities Fund LP by
Conveyance of Overriding Royalty Interest dated January 4, 2006,
and
recorded as Document 2006027361 in the Official Records of Brazoria
County, Texas, and (ii) a 1.5% of 8.8ths overriding royalty interest
in
the Subject Leases conveyed by Seller to ▇. ▇. ▇▇▇▇▇ Special Opportunities
Fund LP by Conveyance of Overriding Royalty Interest dated January
4,
2006, and recorded as Document 2006027360 in the Official Records
of
Brazoria County, Texas (together, the “▇▇▇▇▇
▇▇▇▇▇”).
|
| 4. |
Closing.
The sale and purchase of the Subject Interests (the "Closing")
shall take
place no later than September 6, 2007 (herein
called the “Scheduled
Closing Date”)
and
shall be held at
Seller’s office in Frisco, Texas, or such other place, date and time as
Buyer and Seller shall mutually agree in
writing. If Seller has not obtained all required consents and waivers
of
Preferential Rights or Title Defects on or before the Scheduled Closing
Date, Seller shall be entitled to extend the Scheduled Closing Date
for
one or more periods (not exceeding an aggregate of 30 days) to enable
it
to attempt to obtain such consents and
waivers.
|
| 5. |
Conveyance.
At Closing, upon receipt of the Purchase Price,
minus a credit for the principal amount of the Deposit,
Seller shall deliver to Buyer an executed and acknowledged Assignment,
▇▇▇▇ of Sale and Assumption Agreement (“Assignment”)
substantially in the form of Exhibit B, subject
to Seller’s rights (a) to be paid and retain the proceeds from the grant
of a third-party
license of the Seismic Data pursuant to the July 5, 2007 notice
letter from Chevron U.S.A. Inc., a copy of which has been received
by
Buyer (the “Committed
License Grant”
and (b) to be paid and retain twenty three percent (23%) of the proceeds
payable from a sale or license grant of the Seismic Data to Seitel
within
one year after the Closing. At
Closing, upon receipt of the ORRI Purchase Price, Seller will deliver
to
Buyer an assignment of the ▇▇▇▇▇ ▇▇▇▇▇ in a form similar to the
Conveyances which created the ▇▇▇▇▇
▇▇▇▇▇.
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| 6. |
Revenue
and Expense Adjustments.
At Closing, settlement between Buyer and Seller shall be made for
operating expenses, drilling and completion expenses and any other
expenses attributable to the Subject Interests on or after the Effective
Date, and revenue generated on or after Effective Date, as well as
tax
matters applicable to the Subject Interests.
|
| a. |
The
conveyance by Seller shall be effective as of 7 a.m., Central Daylight
Time, on the Effective Date.
|
| b. |
All
proceeds from the sale of production prior to the Effective Date
shall be
the property of Seller. Seller shall be responsible for payment of
all
expenses attributable to the Subject Interests prior to the Effective
Date.
|
| c. |
Buyer
shall be responsible for payment of all drilling,
completing and
operating expenses attributable to the Subject Interests on
and
after the Effective Date.
|
| d. |
Until
the Closing, prior to commencing the drilling or reworking of any
well on
the Subject Leases, Seller will submit to Buyer a cost estimate,
description of the location and reasonable supporting documentation
and
allow Buyer a period of five (5) days in which to make its views
known,
and, in any event, if the estimated expenditure is One Hundred Thousand
Dollars ($100,000) or more, Seller will not commence such drilling
or
reworking operation without the prior written approval of Buyer,
except
in the event of an emergency. In the event of an emergency, Seller
shall
act, without Buyer’s prior written consent, as a reasonably prudent
operator would act in the same or similar circumstances.
|
| e. |
Seller
shall be responsible for all Taxes relating to the Subject Interests
prior
to the Effective Date. As used herein, “Taxes”
means all taxes, charges, fees, duties, levies, withholdings, deposits,
penalties or other assessments imposed by any federal, state, local,
foreign or other authority, including income, alternative minimum
income,
gross receipts, premium, excise, property, intangibles, production,
severance, ad valorem, value added, sales, gains, use, license, capital
stock, transfer, franchise, margin, payroll, withholding, social
security
or other taxes, including any interest, estimated payments, penalties
or
additions attributable thereto.
|
| f. |
Buyer
shall be responsible for all Taxes relating to the Subject Interests
on
and after
the Effective Date.
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| 7. |
Representations
and Warranties of Seller.
Seller represents and warrants to Buyer as
follows:
|
| a. |
Organization.
Seller is a limited liability company, duly organized, validly existing
and in good standing under the laws of the State of
Texas.
|
| b. |
Authority
and Conflicts.
Seller
has full power and authority under the Texas Limited Liability Company
Act
to enter into this Agreement and to perform its obligations hereunder.
The
execution and delivery of this Agreement by Seller
does not, and the consummation of the Transaction shall not:
(a) violate, conflict with or require the consent of any person or
entity under any provision of the Governing Documents of Seller;
(b)
conflict with, result in a breach of, constitute a default (or an
event
that with the lapse of time or notice or both would constitute a
default)
or require any consent, authorization or approval under any agreement
or
instrument to which Seller
is
a party or to which any of the Subject Interests or Seller
is
bound, except as disclosed in Exhibit C; (c) violate any provision
of or
require any consent, authorization, or approval under any Laws applicable
to Seller
or
the Subject Interests; or, (d) result in the creation of any lien,
charge,
or encumbrance on any of the Subject
Interests.
|
| c. |
Authorization.
The execution and delivery of this Agreement has been, and the performance
of this Agreement and the Transaction shall be at the time required
to be
performed, duly and validly authorized by all requisite action on
the part
of Seller.
|
| d. |
Enforceability.
This Agreement has been duly executed and delivered on behalf of
Seller
and constitutes, and the Assignment when duly executed and delivered
at
Closing will constitute, the legal and binding obligation of Seller,
enforceable in accordance with its terms, except as enforceability
may be
limited by applicable bankruptcy, reorganization, or moratorium statues,
equitable principles, or other similar laws affecting the rights
of
creditors generally.
|
| e. |
Warranty
of Title.
Seller warrants and agrees to defend the title to the Subject Interests
against the lawful claims and demands of all persons or entities
claiming
or to claim the same, or any part thereof, by, through, or under
Seller,
but not otherwise, subject to all Permitted Encumbrances.
|
| f. |
Litigation
and Claims.
Except as is set forth on Exhibit "D," to the knowledge of Seller,
no
cause of action, administrative proceeding, lawsuit or other litigation
is
pending that will have a material adverse effect on the ownership
or
operation of any of the Subject Interests, other than proceedings
relating
to the industry generally and to which Seller is not a named party
and is
not likely to become one.
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| g. |
Approvals
and Preferential Rights.
To the best of Seller’s knowledge, Exhibit C contains a complete and
accurate list of all agreements which may require approvals to be
obtained
by Seller for the assignment of the Subject Interests to Buyer and
which
contain all applicable Preferential
Rights.
|
| 8. |
Representations
by Buyer.
Buyer represents to Seller that:
|
| a. |
Organization.
Buyer is a Texas limited liability company, duly organized, validly
existing and in good standing under its jurisdiction of
organization.
|
| b. |
Authority.
Pursuant to its Governing Documents, Buyer has the power and authority
to
acquire, own and hold the Subject Interests and to perform the obligations
required by this Agreement.
|
| c. |
Financial
Ability.
Buyer will have, at the time of Closing, the funds to perform its
payment
obligations created by this
Agreement.
|
| 9. |
Inspection
Period.
|
| a. |
Due
Diligence.
The Inspection
Period
(herein so called) commenced
on
the date hereof and shall continue until the close of business on
August
31, 2007. Prior to the end of the Inspection Period, Buyer shall
complete
its examination of and shall satisfy itself with the condition
of
title to the Subject Interests at its own expense. However, (a) Seller
shall make available to Buyer, at Seller’s place of business or elsewhere
convenient to Seller, all of Seller's title opinions, certificates
of
title, abstracts of title, title data, records, files, leases, agreements,
declarations, orders, contracts, permits, licenses, easements and
other
information relating to the Subject Interests and access to each
property
for a physical inspection, and (b) Seller shall instruct all of its
attorneys, contractors, employees, agents and officers to cooperate
fully
with Buyer and its Representatives and assist them in the due diligence
efforts.
Seller
shall make
reasonable efforts to obtain any
consents needed under contractual confidentiality provisions, if
any,
and,
in the event said consents are able to be obtained by Seller’s reasonable
efforts,
furnish Buyer a copy of all gas contracts, gas transportation and
treating
agreements, operating agreements and all amendments to each.
The above-described information to be provided by Seller shall be
provided
for the convenience of Buyer only and shall not form the sole basis
of
Buyer’s decision to purchase the Subject Interests or in any way alter,
alleviate, waive, void or reduce Buyer’s obligation to examine and satisfy
itself with the condition of title to the Subject Interests.
Seller will, at Seller's expense, use reasonable diligence to obtain
all
consents and waivers of preferential or other rights to purchase
from
third parties and governmental authorities as may be reasonably
necessary to the conveyance, assignment, and transfer to Buyer of
the
Subject Interests. As
used herein, “Representative,”
with respect to a particular person or entity, means any director,
officer, employee, agent, consultant, advisor other representative
of such
person or entity, including legal counsel, accountants and financial
advisors.
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| b. |
Title
Defects.
Buyer
shall, promptly after the discovery of any Title Defect, disclose
to
Seller such Title
Defect.
Further, Buyer shall, no later than five (5) Business Days after
the end
of the Inspection Period, furnish in writing to Seller, a list of
all such
Title
Defects
and allow Seller a reasonable opportunity to explain and/or cure
the same.
Any and all Title Defects not furnished in writing to Seller or furnished
more than five (5) days after the end of the Inspection Period shall
be
waived by Buyer and shall in no event form all or a part of the basis
for
adjustments to the Purchase
Price.
|
| c. |
Title
Defects; Termination.
If a Title Defect exists, then, in any such event, Buyer may, at
its
option, as its sole and exclusive remedy, terminate this Agreement
at any
time on or before Closing without liability or penalty and obtain
a refund
of the principal of the Deposit. If Buyer does not elect to terminate,
Buyer shall be deemed to have waived all Title Defects, and the Closing
will be held on the Scheduled Closing Date, without reduction of
the
Purchase Price. If Seller has not been able to cure all Title Defects
on
or before the Scheduled Closing Date (as the same may have been extended
pursuant to Section 4), and if Buyer does not waive such Title Defects,
Seller may, at its option, terminate this Agreement and its obligations
hereunder, without liability or
penalty.
|
| 10. |
Conditions.
The consummation of the Transaction will be subject to the following
conditions unless waived by Buyer:
|
| a. |
The
representations and warranties by Seller set forth herein shall be
true
and correct in all material respects at the
Closing.
|
| b. |
There
shall no Title Defects which have not been cured at or before the
Closing.
|
| c. |
All
waivers of Preferential Rights shall have been obtained or waived
by
Buyer.
|
| d. |
Seller
shall have delivered to Buyer the duly executed and acknowledged
Assignment.
|
| e. |
At
or promptly after the Closing, Seller will deliver to Buyer all written
lease, operating, title, accounting and other records related to
the
Subject Interests and electronic copies of all such records which
it
maintains in electronic format.
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| 11. |
Disclaimers. THE
EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS
AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS
AND
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION,
ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY,
NATURE, CLASSIFICATION, VALUE OR VOLUME OF THE RESERVES, IF ANY,
OF
HYDROCARBONS IN OR UNDER THE SUBJECT LEASES, OR THE ENVIRONMENTAL
CONDITION OF THE SUBJECT INTERESTS, AND SELLER MAKES NO REPRESENTATIONS
OR
WARRANTIES WITH RESPECT THERETO. THE ITEMS OF PERSONAL PROPERTY,
EQUIPMENT, IMPROVEMENTS, FIXTURES AND APPURTENANCES CONVEYED AS PART
OF
THE ASSETS ARE SOLD HEREUNDER “AS IS, WHERE IS,” AND NO WARRANTIES OR
REPRESENTATIONS WHATSOEVER OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF CONDITION, QUALITY, QUANTITY, MERCHANTABILITY
OR
FITNESS FOR A PARTICULAR PURPOSE, ARE GIVEN BY OR ON BEHALF OF
SELLER.
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| 12. |
Brokerage
Fees.
Seller shall be responsible for any valid claims of brokers or finders
acting, or claiming to be acting,
by, through, under or on
behalf of Seller. Buyer will be responsible for any valid claims
of
brokers or finders acting, or claiming to be acting,
by, through, under or on
behalf of Buyer.
|
| 13. |
Further
Assurances, Intent.
It is Seller's intent to convey to Buyer all of the Subject Interests.
Seller agrees to execute and deliver to Buyer all instruments, conveyances
and other documents and to do such other acts not inconsistent with
this
Agreement or the form of Assignment as may be necessary or advisable
to
carry out Seller's and Buyer's intent.
|
| 14. |
Notices.
Any notices, requests, demands or other communications given under
this
Agreement must be given in writing and (i) delivered by personal
delivery
or courier service or mailed by prepaid first class mail or (ii)
made by
facsimile transmission to the party to whom such notice or communication
is directed, to the address or facsimile number of such party stated
below
or otherwise provided to or obtained by the sending party, with a
copy to
the other persons, if any, indicated. Any notice or other communication
shall be deemed to have been given (whether actually received or
not) on
the day it is mailed or delivered or, if transmitted by facsimile,
on the
day of receipt of good transmission notification to the sender's
telecopy
machine. Any party may change its address, telephone number or facsimile
number for purposes of this Agreement by giving notice of such change
to
the other parties pursuant to this
Section.
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Seller:
CrossPoint
Energy Holdings, LLC
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
- email
▇▇▇-▇▇▇-▇▇▇▇
- telephone
▇▇▇-▇▇▇-▇▇▇▇
- fax
And
a
required copy to:
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Attorney
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
- email
▇▇▇-▇▇▇-▇▇▇▇
- telephone
▇▇▇-▇▇▇-▇▇▇▇
- fax
Buyer:
ERG
Resources, L.L.C.
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.▇▇▇
- email
▇▇▇-▇▇▇-▇▇▇▇
- telephone
▇▇▇-▇▇▇-▇▇▇▇
- fax
And
a
required copy to:
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Attorney
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ P.C.
▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
- telephone
▇▇▇-▇▇▇-▇▇▇▇
- fax
| 15. |
Parties
in Interest.
This Agreement shall inure to the benefit of and be binding upon
Seller
and Buyer and their respective successors and assigns. However, no
assignment by any party shall relieve any party of any duties or
obligations under this Agreement.
|
| 16. |
Complete
Agreement.
This Agreement constitutes the entire agreement among the parties
hereto
with respect to the subject matter hereof, and supersedes and replaces
all
prior or contemporaneous discussions, understandings, negotiations,
letters, memoranda, term sheets or other communications, oral or
written,
with respect to the subject matter hereof, except
as are incorporated herein by reference and, in the event of such
incorporation by reference, only to the extent thereby expressly
incorporated.
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| 17. |
Transaction
Expenses.
Seller and Buyer will each bear its own expenses incurred in connection
with the preparation, execution and performance of this Agreement
and the
Transactions, including all fees and expenses of its
Representatives.
|
| 18. |
Survival.
All representations and warranties in this Agreement shall be deemed
conditions required for Closing. The representations and warranties
herein
shall survive the Closing for twelve (12) months except for the special
warranty of title, which shall survive with no limitation as to time.
|
| 19. |
Publicity.
Any public announcement or similar publicity with respect to this
Agreement or the contemplated Transaction will be issued, if at all,
only
at such time and in such manner as Seller and Buyer may agree, except
as
required by Laws. Seller and Buyer will consult with each other concerning
the means by which Seller's and Buyer's employees, customers and
suppliers
and others having dealings with Seller and Buyer will be informed
of the
contemplated Transaction.
|
| 20. |
Construction;
Other References.
Titles, captions and headings appearing at the beginning of any Sections
are for convenience only, shall not constitute part of such Sections
and
shall be disregarded in construing the language contained therein
The words "this Agreement," "herein," "hereof," "hereby,"
"hereunder," and words of similar import refer to this Agreement
as a
whole and not to any particular subdivision unless expressly so limited.
Pronouns in masculine, feminine and neuter genders shall be construed
to
include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context
otherwise requires. Derivatives and other forms of the terms defined
in this Agreement shall have meanings consistent with the definitions
herein provided. The term "including" (or "included" or "includes")
shall be deemed to be followed by the phrase "without limitation".
Unless otherwise expressly provided herein, any reference herein
to
a day shall refer to a calendar day. Monetary references are to
currency of the United States of America. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement;
in
the event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring
or
disfavoring any party by virtue of the authorship of any provisions
of
this Agreement or the relative bargaining power of the parties.
|
| 21. |
Certain
Definitions.
As used herein, the following words and phrases shall have the meanings
indicated:
|
“Assignment”
is
defined in Section 4.
Page
10
of 16
“Closing”
is
defined in Section 3.
“Committed
License Grant”
is
defined in Section 5(a).
“Defensible
Title”
means:
| (a) |
as
to each Subject Lease, subject to and except for the Permitted
Encumbrances (as hereinafter defined), (i) such Subject Lease covers
the
oil and gas rights specified in the description of such Lease on
Exhibit
A, (ii) as of the Closing such Subject Lease is either held by production
or will have a remaining primary term of not less than six (6) months
and
(iii) the title held by Seller entitles Seller to receive, after
deduction
of all royalties and other burdens payable out of production, not
less
than the Net Revenue Interest indicated on Exhibit A of the Hydrocarbons
produced, saved and marketed from, or allocated to, such Subject
Lease;
and
|
| (b) |
as
to all of the Subject Interests, the title held by Seller is free
and
clear of liens, encumbrances and encroachments, subject to and except
for
the Permitted Encumbrances.
|
“Deposit”
is
defined in Section 2.
“Effective
Date”
means
August 1, 2007.
“Exhibit”
means
an Exhibit to this Agreement unless specifically indicated
otherwise.
“Governing
Documents”
is
defined in Section 6.
“Hydrocarbons”
is
defined in Section 1.
“Inspection
Period”
is
defined in Section 9.
“Laws”
is
defined in Section 6.
“Permitted
Encumbrances”
means:
| (a) |
Royalties,
overriding royalties, production payments, reversionary interests,
convertible interests, net profits interests, division orders and
similar
burdens encumbering the Subject Interests to the extent the net cumulative
effect of such burdens do not, as of Closing, operate to reduce the
Net
Revenue Interests of a Subject Lease to less than that indicated
on
Exhibit A;
|
| (b) |
Preferential
Rights with respect to which, prior to Closing, (i) waivers or consents
are obtained from the appropriate parties, or (ii) the appropriate
time
period for asserting such rights have expired without an exercise
of such
rights;
|
Page
11
of 16
| (c) |
All
rights to consent by, required notices to, filings with, or other
actions
by governmental entities in connection with the sale or conveyance
of the
Subject Interests, if the same are customarily obtained subsequent
to the
transfer of title;
|
| (d) |
Rights
reserved to or vested in any governmental entity having appropriate
jurisdiction to control or regulate the Subject Interests in any
manner
whatsoever, and all Laws of any such governmental entity or tribal
authority;
|
| (e) |
Easements,
rights-of-way, servitudes, surface leases, sub-surface leases, grazing
rights, logging rights, canals, ditches, reservoirs, pipelines, utility
lines, telephone lines, power lines, railways, streets, roads, alleys,
highways and structures on, over and through the Subject Lands, to
the
extent such rights, interests or structures do not materially interfere
with the operation of the Subject
Interests;
|
| (f) |
Operating
agreements, unit agreements, unitization and pooling designations
and
declarations, gathering and transportation agreements, processing
agreements, gas, oil and liquids purchase and sale and exchange
agreements, provided (i) they contain terms and conditions customary
in
the oil and gas industry, (ii) they do not adversely affect or burden
the
ownership or operation of the Subject Interests affected thereby,
(iii)
all amounts due and payable by Seller thereunder have been paid,
(iv)
Seller is not in default thereunder and (v) they do not reduce the
net
revenue interest of a Lease to less than that
indicated on Exhibit
A;
|
| (g) |
All
rights, reservations, exceptions, obligations, liabilities and
encumbrances created by or arising as a result of the contracts,
agreements and documents described or referred to on Exhibit C, copies
of
all of which have been made available to Buyer for
review.
|
| (h) |
Liens
for taxes or assessments not yet due or not yet delinquent or which
are
being contested in good faith by appropriate
procedures;
|
| (i) |
Liens
of operators relating to obligations not yet due or not yet delinquent
or
if delinquent, that are being contested by Seller in good faith in
the
normal course of business; and
|
|
(j)
|
Such
defects or irregularities in the title to the Subject Interests that
do
not materially interfere with the operation, value or use of the
Subject
Interests affected thereby and that would be considered not material
when
applying general industry
standards.
|
“Preferential
Rights”
means
any and all rights or agreements that enable or may enable any person or entity
to purchase or acquire all or any part of the Subject Interests as a result
of
or in connection with the execution, delivery or performance of this
Agreement.
“Purchase
Price”
is
defined in Section 2.
Page
12
of 16
“Retained
Assets”
means
|
(a)
|
Seller’s
portion (estimated to be $520,000) of the proceeds from the grant
of a 3-D
Seismic License covering the ▇▇▇▇▇▇▇ Mound Field Area referred to
in the
July 5, 2007 letter from Chevron U.S.A. Inc. to Crosspoint Energy
Company,
an affiliate of Seller;
|
|
(b)
|
All
trade credits and all accounts, instruments and general intangibles
(as
such terms are defined in the Texas Uniform Commercial Code) attributable
to the Subject Interests with respect to any period of time prior
to the
Effective Date;
|
|
(c)
|
All
claims and causes of action of Seller (i) arising from acts, omissions
or
events, or damage to or destruction of property, occurring prior
to the
Effective Date, or (ii) with respect to any of the Retained
Assets;
|
|
(d)
|
All
rights and interests of Seller (i) under any policy or agreement
of
insurance or indemnity; (ii) under any bond, or (iii) to any insurance
or
condemnation proceeds or awards arising, in each case, from acts,
omissions or events, or damage to or destruction of property, occurring
prior to the Effective Date;
|
|
(e)
|
All
from the Subject Interests with respect to all periods prior to the
Effective Date;
|
|
(f)
|
All
claims of Seller for refunds of or any loss carry forwards with respect
to
(i) production or any other taxes attributable to any period prior
to the
Effective Date, (ii) income or franchise taxes, or (iii) any taxes
attributable to the Retained
Assets;
|
|
(g)
|
All
amounts due or payable to Seller as adjustments to insurance premiums
related to Subject Interests with respect to any period prior to
the
Effective Date;
|
|
(h)
|
All
proceeds, income or revenues (and any security or other deposits
made)
attributable to (i) all Subject Interests for any period prior to
the
Effective Date, or (ii) any Retained
Assets;
|
|
(i)
|
All
data which cannot be disclosed or assigned to Buyer as a result of
confidentiality arrangements under agreements with persons unaffiliated
with Seller; and
|
|
(j)
|
All
benefits and liabilities of audits of revenues, expenses or ▇▇▇▇▇▇▇▇
with
respect to matters occurring prior to the Effective Date and any
adjustments whether to prices or volumes with respect to production
occurring prior to the Effective Date and whether arising out of
litigation, voluntary adjustment or in any other
manner.
|
“Scheduled
Closing Date”
is
defined in Section 3.
Page
13
of 16
“Section”
means
a
Section of this Agreement unless specifically indicated otherwise.
“Seismic
Data”
means
all of Seller’s present ownership (65%) in and to 3D seismic surveys totaling
approximately 101 gross square miles in Brazoria County, including all processed
tapes, field tapes, other tapes and support data, files, films, microfilms,
mylar, black liner, sections, shot point base maps, x-y coordinates and
derivatives related to such surveys, subject to licenses and rights previously
granted to others.
“Seitel”
means
Seitel Data, Ltd., or one of its affiliates.
“Subject
Interests,”
“Subject
Lands”
and
“Subject
Leases”
are
defined in Section 1.
“Taxes”
is
defined in Section 5.
“TEPI
Agreement”
means
that certain Exploration Agreement between Texaco Exploration and Production
Inc. and Palaura Exploration Company dated effective December 1, 1996, described
on Exhibit C, covering the ▇▇▇▇▇▇▇ Mound Field Area in Brazoria County, Texas,
as amended by the amendments and supplemented by the other documents and
agreements described on Exhibit C.
“Title
Defect”
means
any condition, lien, encumbrance, encroachment or defect associated with
Seller’s title to the Subject Interests that would cause Seller not to have
Defensible Title. In
evaluating whether an encumbrance, encroachment, irregularity, defect in or
objection to title is material, due consideration shall be given to the length
of time that the Subject Leases have been producing hydrocarbon substances
and
whether such defect is of the type expected to be encountered in the area
involved and is customarily acceptable to prudent operators and working interest
owners. Such usual and customary defects may include, without limitation,
defects that may be deemed to have been cured by possession under applicable
statutes of limitation, defects in the early chain of title such as failure
to
recite marital status in documents, omission of heirship or succession
proceedings, lack of survey and failure to record releases of liens, production
payments or mortgages that have expired of their own terms. Materialmen's,
mechanic's, repairmen's, employee's, contractor's, operator's or other similar
liens or charges arising in the ordinary course of business incidental to
construction, maintenance or operation of the Subject Interests shall not
constitute a Title Defect if they have not been filed, or if they have not
yet
become due and payable.
“Transaction”
is
defined in Section 2.
| 22. |
Committed
License Grant.
If the Committed License Grant is not consummated at or before the
Closing, Buyer agrees to execute such documents as may be necessary
to
grant the license contemplated by the Committed License Grant and
to remit
to Seller any and all proceeds received with respect
thereto.
|
Page
14
of 16
| 23. |
Sale
or License of Seismic Data to Seitel.
Seller has disclosed to Buyer that Seitel has expressed an interest
in
purchasing the Seismic Data. In the event of a partial or complete
sale or
license of the Seismic Data to Seitel, (a) prior to the Closing,
then, at
Closing, (i) Seller will credit seventy seven percent (77%) of the
net proceeds from such sale or license to Buyer, and (ii) Seller
will
assign to Buyer a seismic licensing agreement (the “Seitel
License”)
obtained by Seller from Seitel at the time of the sale of the Seismic
Data
to Seitel to permit ERG to use the Seismic Data for its own exploration
and development of the Subject Interests and to make a one-time-only
transfer of the Seitel License to a successor of the Subject Interests
but
not to license or sublicense others to use the Seismic Data, or
(b), after the Closing and on or before the first anniversary of the
Closing, Buyer will pay to Seller twenty three percent (23%) of the
net
proceeds from such sale or license.
|
| 24. |
Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall
constitute one and the same instrument. This Agreement shall be binding
when one or more counterparts hereof, individually or taken together,
shall bear the signatures of Buyer and
Seller. Copies of the execution copy of this Agreement sent by facsimile
transmission will be fully enforceable without a manually executed
original.
|
[SIGNATURES
APPEAR ON NEXT PAGE]
Page
15
of 16
EXECUTED
by Buyer and Seller as of the date first herein stated.
|
SELLER:
|
BUYER: | ||
| CROSSPOINT ENERGY HOLDINGS, LLC | ERG RESOURCES, L.L.C. | ||
|
By: /s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ | ||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, President
|
▇▇▇▇▇
▇. ▇▇▇▇, Manager
|
Page
16
of 16
EXHIBIT
A TO PURCHASE AND SALE AGREEMENT
Between
CrossPoint Energy Holdings, LLC, Seller, and ERG Resources, L.L.C.,
Buyer
SUBJECT
LEASES, NET REVENUE INTERESTS AND WORKING INTERESTS
| 1. |
The
Subject Interests include all rights, titles and interests of Seller,
and
is subject to all burdens, reservations and obligations, under the
TEPI
Agreement, including all leases and assignments earned pursuant to
the
TEPI Agreement.
|
| 2. |
The
Subject Interests include all rights, titles and interests of Seller,
and
is subject to all burdens, reservations and obligations, under the
following two leases included in the Purchase and Sale Agreement
dated as
of December 7, 2005, effective as of December 1, 2005 between Palaura
Exploration Company, TMR Exploration, Inc., ▇▇▇▇▇▇ Petroleum Corporation
and BMW Holdings, Inc., as Sellers, and Crosspoint Energy Holdings,
LLC,
as Buyer:
|
Oil,
Gas
and Sulphur Lease dated May 22, 1915, between Mound Company, Lessor, and
Producers Oil Company, Lessee, recorded at Volume 125, Page 540, Deed Records,
Brazoria County, Texas, ratified by Texas Coast Development Company by
instrument dated May 22, 1915, recorded at Volume 125, Page 513, of said Deed
Records.
Lease
from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Foundation to Texaco, Inc., dated January 1, 1968, recorded
at Volume 994, Page 18, Deed Records, Brazoria County, Texas.
| 3. |
The
Net Revenue Interests and Working Interests of Seller are reflected
on
Exhibit A-1.
|
Page
A-1
EXHIBIT
B TO PURCHASE AND SALE AGREEMENT
Between
CrossPoint Energy Holdings, LLC, Seller, and ERG Resources, L.L.C.,
Buyer
ASSIGNMENT,
▇▇▇▇ OF SALE AND ASSUMPTION AGREEMENT
THIS
ASSIGNMENT, ▇▇▇▇ OF SALE AND ASSUMPTION AGREEMENT (this "Assignment"), dated
effective as of August 1, 2007 at 7:00 a.m. Central Daylight Time (the
"Effective Date"), is from CROSSPOINT ENERGY HOLDINGS, LLC., a Texas limited
liability company ("Assignor"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, to ERG Resources, L.L.C., a Texas limited
liability company (“Assignee”), whose address is ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
FOR
VALUED RECEIVED, Assignor hereby transfers, grants, sells, conveys and assigns
to Assignee , all of the following, which are collectively referred to in this
Assignment as the "Subject
Interests":
| a. |
All
of Assignor's right, title and interest (of whatever kind or character,
whether legal or equitable, and whether vested or contingent) in
and to
all Hydrocarbons, oil, gas and other minerals (collectively and
individually, "Hydrocarbons")
in and under and that may be produced from the lands (the "Subject
Lands")
described in Exhibit A, including, without limitation, interests
in any
and all Hydrocarbon leases covering any part of the Subject Lands
(the
"Subject
Leases"),
overriding royalty interests, production payments and net profits
interests in any part of the Subject Lands or Subject Leases, fee
royalty
interests, fee mineral interests and other interests in Hydrocarbons
in
any part of the Subject Lands (all of the foregoing, together with
all of
the rights, titles and interests described or referred to Sections
1.b.,
1.c. and 1.d., being herein called the "Subject
Interests"),
whether the Subject Lands are described in any of the descriptions
set out
in Exhibit A or by reference to another instrument for
description;
|
| b. |
All
right, title and interest of Assignor in and to all presently existing
and
valid Hydrocarbon unitization, pooling and/or communitization agreements,
declarations and/or orders and the properties covered or included
in the
units (including, without limitation, units formed under orders,
rules,
regulations, or other official acts of any federal, state or other
authority having jurisdiction, voluntary unitization agreements,
designations and/or declarations and any "working interest units"
(created
under operating agreements or otherwise) which relate to any of the
Subject Interests;
|
Page
B-1
| c. |
All
right, title and interest of Assignor in all presently existing and
valid
production sales (and sales related) contracts, operating agreements
and
other agreements and contracts which relate to any of the Subject
Interests, or which relate to the exploration, development, operation,
or
maintenance of the Subject Interests or the treatment, storage,
transportation, or marketing of production from or allocated to the
Subject Interests; and
|
| d. |
All
right, title and interest of Assignor in and to (a) all materials,
supplies, machinery, equipment, improvements and other personal property
and fixtures (including, but not limited to all ▇▇▇▇▇, wellhead equipment,
pumping units, flow lines, tanks, buildings, injection facilities,
salt
water disposal facilities, compression facilities, gathering systems
and
other equipment), (b) all easements, rights-of-way, surface leases
and
other surface rights, (c) all permits and licenses and (d) all other
appurtenances, used or held for use in connection with or related
to the
exploration, development, operation, or maintenance of any of the
Subject
Interests, or the treatment, storage, transportation, or marketing
of
production from or allocated to the Subject Land, Subject Leases
or other
Subject Interests; but
|
Provided
however that
the
Subject Interests do not include the Retained Assets, and Assignor shall retain
the right to receive and retain proceeds from the collection, sale or licensing
of any of the Retained Assets.
TO
HAVE
AND TO HOLD the Subject Interests unto Assignee and its successors and assigns
forever; provided, however, that (1) THIS ASSIGNMENT IS MADE WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND, except as expressly set forth herein
and
(2) Assignor warrants and agrees that the Subject Interests, except for
Permitted Encumbrances, are free and clear of all liens, encumbrances, burdens,
claims and defects of title arising by, through and under Assignor, but not
otherwise.
Assignor's
liability under this special limited warranty for title defects or other defects
to title is limited to the purchase price paid under the Agreement and the
aggregate of all such claims hereunder shall not exceed the purchase price
under
that certain Purchase and Sale Agreement dated August ___, 2007 between Assignor
and Assignee (the "Agreement"). This Assignment is expressly made and accepted
subject to those terms and conditions of the Agreement.
The
references in the Agreement, herein and in Exhibit A to encumbrances, burdens,
claims, defects and other matters are for the purpose of defining the nature
and
extent of Assignor's warranty and shall not be deemed to ratify or create any
rights in favor of third parties. The calculations of Working Interest and
Net
Revenue Interest of the Subject Interests in Exhibit A shall not be deemed
to
ratify or create any rights in favor of third parties.
Page
B-2
As
used
herein, “Permitted Encumbrances” means:
| (a) |
Royalties,
overriding royalties, production payments, reversionary interests,
convertible interests, net profits interests, division orders and
similar
burdens encumbering the Subject Interests to the extent the net cumulative
effect of such burdens do not, as of Closing, operate to reduce the
Net
Revenue Interests of a Subject Lease to less than that indicated
on
Exhibit A;
|
| (b) |
Preferential
Rights (as defined in the Agreement) with respect to which, prior
to
Closing, (i) waivers or consents are obtained from the appropriate
parties, or (ii) the appropriate time period for asserting such rights
have expired without an exercise of such
rights;
|
| (c) |
All
rights to consent by, required notices to, filings with, or other
actions
by governmental entities in connection with the sale or conveyance
of the
Subject Interests, if the same are customarily obtained subsequent
to the
transfer of title;
|
| (d) |
Rights
reserved to or vested in any governmental entity having appropriate
jurisdiction to control or regulate the Subject Interests in any
manner
whatsoever, and all Laws of any such governmental entity or tribal
authority;
|
| (e) |
Easements,
rights-of-way, servitudes, surface leases, sub-surface leases, grazing
rights, logging rights, canals, ditches, reservoirs, pipelines, utility
lines, telephone lines, power lines, railways, streets, roads, alleys,
highways and structures on, over and through the Subject Lands, to
the
extent such rights, interests or structures do not materially interfere
with the operation of the Subject
Interests;
|
| (f) |
Operating
agreements, unit agreements, unitization and pooling designations
and
declarations, gathering and transportation agreements, processing
agreements, gas, oil and liquids purchase, sale and exchange agreements
and the other contracts set forth on Exhibit C to the Agreement,
provided
(i) they contain terms and conditions customary in the oil and gas
industry, (ii) they do not adversely affect or burden the ownership
or
operation of the Subject Interests affected thereby, (iii) all amounts
due
and payable by Assignor thereunder have been paid, (iv) the Assignor
is
not in default thereunder and (v) they do not reduce the net revenue
interest of a Lease to less than that indicated on Exhibit
A;
|
| (g) |
All
rights, reservations, exceptions, obligations, liabilities and
encumbrances created by or arising as a result of the contracts,
agreements and documents described or referred to on Exhibit C, copies
of
all of which have been made available to Buyer for
review.
|
| (h) |
Liens
for taxes or assessments not yet due or not yet delinquent or which
are
being contested in good faith by appropriate
procedures;
|
| (i) |
Liens
of operators relating to obligations not yet due or not yet delinquent
or
if delinquent, that are being contested by Assignor in good faith
in the
normal course of business; and
|
Page
B-3
| (j) |
Such
defects or irregularities in the title to the Subject Interests that
do
not materially interfere with the operation, value or use of the
Subject
Interests affected thereby and that would be considered not material
when
applying general industry
standards.
|
Assignor
also hereby grants and transfers to Assignee its successors and assigns, to
the
extent so transferable, the benefit of and the right to enforce the covenants
and warranties, if any, which Assignor is entitled to enforce with respect
to
the Subject Interests against Assignor's predecessors in title to the Subject
Interests.
The
parties agree that, to the extent required by applicable law to be operative,
the disclaimers of warranties contained in this paragraph are "conspicuous"
disclaimers for the purposes of any applicable Law (as defined in the
Agreement). Except for the special limited warranty of title set forth above
and
those warranties, covenants and agreements of Assignor contained in the
Agreement that survive the Closing, the Subject Interests are being sold by
Assignor to Assignee without recourse, covenant or warranty of any kind,
expressed, implied or statutory. THE
EXPRESS REPRESENTATIONS AND WARRANTIES OF ASSIGNOR CONTAINED IN THIS ASSIGNMENT
AND THE AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS
AND
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY, NATURE,
CLASSIFICATION, VALUE OR VOLUME OF THE RESERVES, IF ANY, OF HYDROCARBONS IN
OR
UNDER THE SUBJECT LEASES, OR THE ENVIRONMENTAL CONDITION OF THE SUBJECT
INTERESTS. THE ITEMS OF PERSONAL PROPERTY, EQUIPMENT, IMPROVEMENTS, FIXTURES
AND
APPURTENANCES CONVEYED AS PART OF THE ASSETS ARE SOLD HEREUNDER “AS IS, WHERE
IS,” AND NO WARRANTIES OR REPRESENTATIONS WHATSOEVER OF ANY KIND OR CHARACTER,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF CONDITION, QUALITY, QUANTITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE GIVEN BY OR ON BEHALF
OF ASSIGNOR.
Assignor
reserves and excepts from this assignment the following (herein each
individually and collectively, the" Retained Assets"):
|
(a)
|
All
trade credits and all accounts, instruments and general intangibles
(as
such terms are defined in the Texas Uniform Commercial Code) attributable
to the Subject Interests with respect to any period of time prior
to the
Effective Date;
|
|
(b)
|
All
claims and causes of action of Assignor (i) arising from acts, omissions
or events, or damage to or destruction of property, occurring prior
to the
Effective Date, or (ii) with respect to any of the Retained
Assets;
|
Page
B-4
|
(c)
|
All
rights and interests of Assignor (i) under any policy or agreement
of
insurance or indemnity; (ii) under any bond, or (iii) to any insurance
or
condemnation proceeds or awards arising, in each case, from acts,
omissions or events, or damage to or destruction of property, occurring
prior to the Effective Date;
|
|
(d)
|
All
proceeds from substances sold from the Subject Interests with respect
to
all periods prior to the Effective
Date;
|
|
(e)
|
All
claims of Assignor for refunds of or any loss carry forwards with
respect
to (i) production or any other taxes attributable to any period prior
to
the Effective Date, (ii) income or franchise taxes, or (iii) any
taxes
attributable to the Retained
Assets;
|
|
(f)
|
All
amounts due or payable to Assignor as adjustments to insurance premiums
related to Subject Interests with respect to any period prior to
the
Effective Date;
|
|
(g)
|
All
proceeds, income or revenues (and any security or other deposits
made)
attributable to (i) all Subject Interests for any period prior to
the
Effective Date, excluding oil inventory, or (ii) any Retained
Assets;
|
|
(h)
|
All
data which cannot be disclosed or assigned to Assignee as a result
of
confidentiality arrangements under agreements with persons unaffiliated
with Assignor; and
|
|
(i)
|
All
benefits and liabilities of audits of revenues, expenses or ▇▇▇▇▇▇▇▇
with
respect to matters occurring prior to the Effective Date and any
adjustments whether to prices or volumes with respect to production
occurring prior to the Effective Date and whether arising out of
litigation, voluntary adjustment or in any other
manner.
|
At
Closing, Assignee shall assume the obligations of Assignor pertaining to all
costs, obligations and liabilities arising out of or attributable to the Subject
Interests which arise from or relate to events occurring or conditions existing
on or after the Effective Date or accruing after the Effective Date;
provided
that
(i) Assignor shall remain responsible for any obligations of Assignor
pertaining to all costs, obligations and liabilities arising out of or
attributable to the Subject Interests which arise from or relate to events
occurring or conditions existing before the Effective Date or accruing before
the Effective Date which arise from contractual obligations or negligent acts
of
Assignor; and (ii) Assignor's liability for breaches of the representations
and
warranties herein and for obligations or claims under this paragraph shall
expire at the end of twelve (12) months after the Effective Date.
Page
B-5
This
Assignment may be executed simultaneously in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Assignment shall be binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of Assignor and Assignee. Copies of the execution copy of this Assignment sent
by facsimile transmission will be fully enforceable without a manually executed
original.
This
Assignment shall inure to the benefit of and be binding upon Assignor and
Assignee and their respective successors and assigns. However, no assignment
by
any party shall relieve any party of any duties or obligations under this
Assignment.
EXECUTED
on the dates set forth in the acknowledgements hereto, to be effective for
all
purposes as of the Effective Date.
| ASSIGNOR: | ASSIGNEE: | ||
| CROSSPOINT ENERGY HOLDINGS, LLC | ERG RESOURCES, L.L.C. | ||
| By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇
|
||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, President
|
▇▇▇▇▇
▇. ▇▇▇▇, Manager
|
Page
▇-▇
▇▇▇▇▇
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇
The
foregoing instrument was acknowledged before me on August _____, 2007, by ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, President of Crosspoint Energy Holdings, LLC, on behalf of said
company.
|
Notary
Public, State of Texas
Name:
Date
of Expiration of Notary Commission:
|
STATE
OF
TEXAS
COUNTY
OF
_______
The
foregoing instrument was acknowledged before me on August _____, 2007, by
___________, _________President of ERG Resources, L.L.C., on behalf of said
company.
|
Notary
Public, State of Texas
Name:
Date
of Expiration of Notary
Commission:
|
Page
B-7
EXHIBIT
A
TO
ASSIGNMENT,
▇▇▇▇ OF SALE AND ASSUMPTION AGREEMENT
from
Crosspoint
Energy Holdings, LLC, Assignor to ERG Resources, L.L.C.,
Assignee.
Description
of Subject Leases - Net Revenue Interests - Working Interests
Page
B-8
EXHIBIT
C TO PURCHASE AND SALE AGREEMENT
Between
CrossPoint Energy Holdings, LLC, Seller, and ERG Resources, L.L.C.,
Buyer
TEPI
Agreement, Amendments, Related Agreements
| 1. |
Exploration
Agreement dated effective December 1, 1996 between Texaco Exploration
and
Production, Inc. and Palaura Exploration
Company.
|
| 2. |
Joint
Operating Agreement dated effective December 1, 1996 between Palaura
Exploration Company (Operator) and Texaco Exploration and Production,
Inc.
(Non-Operator) with Exhibits A thru
H.
|
| 3. |
Amendment
to Exploration Agreement dated May 7, 1997, effective December 2,
1996
between Texaco Exploration and Production, Inc. and Palaura Exploration
Company
|
| 4. |
Second
Amendment to Exploration Agreement dated November 21, 1997, effective
December 1, 1996 between Texaco Exploration and Production, Inc.
and
Palaura Exploration Company (3
pages).
|
| 5. |
▇▇▇▇▇▇▇
Mound Agreement dated September 18, 1997, effective August 1, 1997
between
Palaura Exploration Company and Ranger Oil Company (23
pages)
|
| 6. |
Memorandum
of Agreement dated September 29, 1997 between Palaura Exploration
Company
and Ranger Oil Company
|
| 7. |
Letter
Agreement dated June 3, 1998 between Palaura Exploration Company
and
Ranger Oil Company
|
| 8. |
Third
Amendment to ▇▇▇▇▇▇▇ Mound Agreement dated April 6, 1999 between
Palaura
Exploration Company and Ranger Oil Company (2
pages)
|
| 9. |
Amendment
to Exploration Agreement dated September 7, 2000 between Texaco
Exploration and Production, Inc. and Ranger Oil
Company
|
| 10. |
Letter
Agreement dated August 11, 1998 between Texaco Exploration and Production,
Inc., Ranger Oil Company and Palaura Exploration Company (counterparts
3
pages).
|
| 11. |
Agreement
dated October 17, 1997 between Palaura Exploration Company, ▇▇▇▇▇▇
Petroleum Corporation and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
| 12. |
Letter
Agreement dated November 25, 1998 between Texaco Exploration and
Production, Inc. and Ranger Oil Company regarding
3D.
|
| 13. |
Letter
Agreement dated February 27, 1998 between Palaura Exploration Company
and
Ranger Oil Company (2 pages).
|
| 14. |
Letter
Agreement dated March 1, 1999 between Texaco Exploration and Production,
Inc. and Ranger Oil Company
|
| 15. |
Letter
Agreement dated April 30, 1999 between Ranger Oil Company and The
▇▇▇▇▇
Foundation
|
Page
C-1
| 16. |
Letter
Agreement dated July17, 1999 between Texaco Exploration and Production,
Inc., Ranger Oil Company and Palaura Exploration
Company
|
| 17. |
Letter
Agreement dated October 7, 1999 between Texaco Exploration and Production,
Inc. and Ranger Oil Company
|
| 18. |
Letter
Agreement dated October 12, 1999 between Texaco Exploration and
Production, Inc. and Ranger Oil
Company
|
| 19. |
Letter
Agreement dated February 29, 2000 between Texaco Exploration and
Production, Inc. and Ranger Oil
Company
|
| 20. |
Letter
Agreement dated May 15, 2000 between Texaco Exploration and Production,
Inc. and Ranger Oil Company
|
| 21. |
Letter
Agreement dated June 13, 2000 between Texaco Exploration and Production,
Inc. and Ranger Oil Company
|
| 22. |
Letter
Agreement dated August 30, 2000 between Texaco Exploration and Production,
Inc. and Ranger Oil Company
|
| 23. |
Assignment
executed September 20, 2001 but effective June 12, 1999 by Texaco
Exploration and Production, Inc. ("Texaco") to Ranger Oil Company
and
Palaura Exploration Company, covering the two (2) 40 acre units earned
under the terms of the Exploration Agreement dated effective December
1,
1996, as amended.
|
| 24. |
Assignment
executed October 19, 2001 but effective July 1,2001 by Ranger Oil
Company
to Palaura Exploration Company covering all Ranger's interest in
the two
(2) 40 acre units earned under the terms of the Exploration Agreement
dated effective December 1, 1996, as
amended
|
| 25. |
Agreement
of Sale and Purchase executed October 19, 2001 but effective July
1, 2001
between Ranger Oil Company and Palaura Exploration Company covering
all
rights under the terms of the Exploration Agreement dated effective
December 1, 1996, as amended
|
| 26. |
Letter
dated November 21, 1997 to Palaura Exploration Company from Texaco
Exploration and Production, Inc.
|
| 27. |
Waiver
of Preferential Rights dated November 21, 1997 between Ranger Oil
Company,
Palaura Exploration Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
Petroleum
|
| 28. |
Letter
dated June 25, 1998 from Texaco North American Production to ▇▇▇▇▇
▇▇▇▇▇▇
at Ranger Oil Company and ▇▇▇▇ ▇▇▇▇▇▇ at Palaura Exploration
Company
|
| 29. |
Letter
dated February 22, 1999 from Texaco Exploration Company to ▇▇▇▇ ▇▇▇▇▇▇
at
Palaura Exploration Company and ▇▇▇▇▇ ▇▇▇▇▇▇ at Ranger Oil
Company
|
| 30. |
Letter
dated April 23, 1999 from Texaco North America Production to ▇▇▇▇
▇▇▇▇▇▇
at Palaura Exploration Company and ▇▇▇▇▇ ▇▇▇▇▇▇ at Ranger Oil Company
with
Exhibit "F-1," TEPI Well Data,
attached.
|
Page
C-2
| 31. |
Letter
dated April 27, 1999 from Ranger Oil Company to Texaco Exploration
and
Production, Inc and Palaura Exploration
Company
|
| 32. |
Letter
dated July 12, 1999 from Texaco North America Production to ▇▇▇▇▇
▇▇▇▇▇▇
at Ranger Oil Company and ▇▇▇▇ ▇▇▇▇▇▇ at Palaura Exploration
Company
|
| 33. |
Contract
Pumper and Saltwater Handling Agreement dated October 26, 1999 between
Texaco Exploration and Production, Inc, Ranger Oil Exploration Company
and
Palaura Exploration Company
|
| 34. |
Letter
dated September 20, 2000 from Texaco Gulf Coast Business Unit to
▇▇▇▇
▇▇▇▇▇▇ at Palaura Exploration
Company
|
| 35. |
Letter
dated December 7, 2000 from Ranger Oil Company to ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇,
Onshore ▇▇▇▇▇▇▇ at Texaco Exploration and Production,
Inc.
|
| 36. |
Participation
Agreement ▇▇▇▇▇▇▇ Mound Prospect, Brazoria County Texas dated October
16,
2001 between Palaura Exploration Company and JMI Energy,
Inc.
|
| 37. |
Letter
dated October 22, 2001 from JMI Energy, Inc. to ▇▇▇▇ ▇▇▇▇▇▇ at Palaura.
Exploration Company
|
| 38. |
Letter
dated October 30, 2001 from Palaura Exploration Company to ▇▇▇▇▇
▇▇▇▇▇ at
Texaco Exploration & Production,
Inc.
|
| 39. |
Letter
dated November 16, 2001 from Texaco to ▇▇▇▇ ▇▇▇▇▇▇ at Palaura Exploration
Company
|
| 40. |
Letter
dated February 8, 2002 from ChevronTexaco to Palaura Exploration
Company
|
| 41. |
Letter
dated August 26, 2002 from Palaura Exploration Company to Chevron
U.S.A.,
Inc. and JMI Energy, Inc.
|
| 42. |
Letter
dated October 2, 2003 from ChevronTexaco to ▇▇▇▇ ▇▇▇▇▇▇ at Palaura
Exploration Company
|
| 43. |
Letter
dated April 18, 2005 from ChevronTexaco MidContinent Business Unit
North
America Upstream to ▇▇▇▇ ▇▇▇▇▇▇ at Palaura Exploration
Company.
|
| 44. |
Letter
agreement dated January 19, 2006 between Seller and
ChevronTexaco.
|
Page
C-3
EXHIBIT
D TO PURCHASE AND SALE AGREEMENT
Between
CrossPoint Energy Holdings, LLC, Seller, and ERG Resources, L.L.C.,
Buyer
PENDING
LITIGATION
Page
D-1