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EXHIBIT 10.30
PURCHASE AND SALE AGREEMENT
This Agreement (the "Agreement") for the sale and purchase of MV VENTURES,
G.P., (herein called the "Partnership"), which owns the properties listed on
Exhibit "A," attached hereto, together with all ▇▇▇▇▇, fixtures, facilities
and/or other improvements (other than any compressor, pipeline or gathering
system) located thereon (herein collectively called the "Properties") is
entered into on October 8, 1996 (herein called the "Contract Date") by and
between ▇▇▇▇▇▇ Ventures, Inc. and Rockbridge Oil & Gas, Inc., as sole partners
in the Partnership, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ (herein called "Seller") and SABA ENERGY OF TEXAS, INCORPORATED, ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ENERGY ASSET MANAGEMENT
CORPORATION, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (herein collectively
called "Purchaser"). Pursuant to the following terms and conditions, Seller
shall convey to Purchaser all of Seller's right, title and interest in and to
the Partnership for the purchase price of Four Million Dollars ($4,000,000 US)
(the "Purchase Price").
1. EFFECTIVE DATE AND TIME OF SALE AND PURCHASE AGREEMENT. Unless
otherwise agreed to in writing by Seller and Purchaser, the effective
date and time ("Effective Date") of this sale and purchase of the
Properties ("Sale/Purchase") is October 1, 1996 at 7:00 am C.S.T.
2. PERFORMANCE DEPOSIT/DOWN PAYMENT. As evidence of good faith,
Purchaser has deposited or will deposit with Seller a performance
deposit of One-Hundred-Fifty-Thousand ($150,000 US), applicable to the
above unadjusted Purchase Price, which deposit is non-refundable,
except as provided subsequently herein. On the closing date,
Purchaser shall pay and deliver to Seller the remaining unpaid portion
of the Purchase Price, adjusted as provided for herein.
3. ACCESS TO PROPERTIES AND DATA. Notwithstanding Purchaser's prior
opportunity to inspect and inventory, promptly after execution of this
Agreement by both parties and upon request of Purchaser, Seller shall
endeavor to provide Purchaser and Purchaser's authorized
representatives, at any reasonable time(s) before the closing date as
set forth below, (i) physical access to the ▇▇▇▇▇, equipment, and
facilities included in whole or in part in the Properties that are
Seller-operated and to the Property and associated facilities, at
Purchaser's sole risk, cost and expense for the purpose of inspecting
the same, and (ii) access, with copying privileges, at Purchaser's
sole cost, to all raw geological, production, engineering, and other
technical data and records, and to all contract, land, lease, and
permit records, to the extent such data and records are in Seller's
possession and relate to the Properties; provided, however, Seller
shall have no obligation to provide Purchaser access to any
interpretative or predictive data or information which Seller
considers confidential or proprietary to it or which access Seller
cannot lawfully provide Purchaser because of third-party restrictions
on Seller.
4. CLOSING. Upon satisfaction of all the terms and conditions contained
herein, Seller and Purchaser shall close this Sale/Purchase on or
before November 1, 1996 (the "Closing Date") unless otherwise agreed
to by both parties in writing. Closing shall take place at Seller's
office. A one time extension to the closing date of no more than 60
days shall not be unreasonably withheld, if requested in writing. At
closing, the following shall occur:
a. Seller shall deliver to Purchaser a copy of the Partnership
agreement, resolutions, certificates of good standing, and
other documents as reasonably requested by Purchaser to show
Seller's authority and good standing to make this sale.
b. Seller shall deliver possession of the Partnership (subject to
the terms of applicable operating agreements, if any, and the
other provisions hereof), including all of Seller's rights,
title and interest in and to all inventories of oil in stock
tanks situated on said Properties, at the time of closing.
c. Seller shall transfer custody of all information and original
documents (or copies thereof) in Seller's possession or within
Seller's control pertaining to the Properties and Partnership,
together with all operating bank accounts, including the River
Oaks Escrow Account.
d. Purchaser shall pay the Purchase Price as provided below in
Section 6.
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5. PURCHASE PRICE. This is a cash sale with the Purchase Price, adjusted
if necessary as provided hereinbelow, to be paid by wire transfer at
closing.
a. Adjustments, if any, due to title failure or problems with
leases or other agreements, casualty losses, discrepancies in
Seller's cash flow representations, and/or environmental
problems affecting the Properties as described in Sections 6
and 16 hereinbelow, shall be handled as provided herein.
b. All revenues received from gas or oil produced after the
Effective Date, but prior to the Closing Date, will be
subtracted from the Purchase Price. Revenues received from
oil and gas produced prior to the Effective Date shall remain
the property of Seller.
c. The unpaid balance owed by Seller and secured by liens
affecting Properties shall be subtracted from the Purchase
Price unless Seller has obtained a release of any such lien
prior to closing.
d. Estimated ad valorem taxes for the period of time from the
January 1, 1996 through the Effective Date shall be subtracted
from the Purchase Price in accordance with Section 13 herein.
e. Funds received as a performance deposit ("Performance
Deposit") pursuant to the terms of this Agreement shall be
subtracted from the Purchase Price.
f. A One-Hundred-Fifty-Thousand ($150,000 US) sum will be
subtracted from the Purchase Price in the event Seller is
unable to obtain written authorization by November 1, 1996,
from the state of Louisiana for a one year extension to the
January 1, 1997 deadline to treat and dispose produced water
pursuant to Section 7b described hereinbelow.
g. The value of salable oil in the tanks located on said
Properties as of the Effective Date shall be added to the
Purchase Price. The value shall be calculated using the net
volume of oil in the tanks on the Effective Date and the
market price prevailing on the Effective Date for the
Properties.
h. All reasonable and necessary direct operating expenditures,
bond and insurance premiums which shall have actually been
incurred for the Properties and for which bills have been
received and paid by Seller, together with those charges as
set forth in Section 10 for operations after the Effective
Date but prior to closing, shall be added to the Purchase
Price.
i. The balance of the River Oaks escrow account at the time of
closing shall be added to the Purchase Price.
THERE SHALL BE NO POST-CLOSING SETTLEMENT. All revenues attributable to
production from the Properties after the Effective Date and received by Seller
after closing shall be remitted to Purchaser within ten (10) days of receipt.
Any operating expenses that were incurred from the Properties after the
effective date, but for which invoices were not received until on or after
closing shall be forwarded to Purchaser within five (5) days after receipt of
such information. Purchaser shall have, at its election and expense, at any
time within one (1) year from the date of closing, the right to audit the books
and records of Seller to verify the accuracy of revenues and expenses which are
allocated at closing and/or remitted post-closing. During this period, Seller
agrees to furnish copies of appropriate documentation of such revenues and
expenses or, at Seller's election, to make originals of the books and records
available at Seller's place of business. If any errors in the revenues and
expenses allocated are determined, then such errors shall be promptly rectified
by Purchaser or Seller, whichever is the applicable party.
6. WARRANTIES, TITLES AND EXAMINATIONS OF DOCUMENTS. Seller does
not warrant title to Properties, including both possessory and
non-possessory. The sale shall be for all of Seller's rights, titles
and interests in the Properties. The indication of particular
fractions of working interests and/or net revenue interests in Exhibit
"A", hereto, in no way implies or creates a general warranty, covenant
or other undertaking regarding any quantity of interest. Seller
confirms that there are no reserves of the Properties for which
payment has been received for production which has not been delivered.
If assignment of any of Seller's interest in the Properties is subject
to consent by any third party, then Seller shall obtain and produce
documentation of such necessary consent on or before closing.
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THIS SALE/PURCHASE SHALL BE WITHOUT ANY WARRANTY OF FITNESS OR
CONDITION OR MERCHANTABILITY OF THE MATERIAL, EQUIPMENT OR FACILITIES
CONVEYED. ALL SUCH PROPERTY WILL BE CONVEYED ON AN "AS IS" AND "WHERE
IS" BASIS.
Purchaser shall have no less than 15 days from the Contract Date to
examine title, confirm represented revenue and expense information,
review all contracts affecting the Properties and to notify Seller of
any significant title defects and/or contracts that materially or
adversely affect the value or use of the Properties, or discrepancies
in cash flow representations. Notwithstanding anything to the
contrary contained herein, unless the value of title defects, adverse
contracts and/or cash flow discrepancies affecting any property is in
excess of 5% of the allocated value set forth in Exhibit "B", it will
not be considered by Seller and Purchaser that there are significant
title defects, cash flow discrepancies, and/or contracts that
materially or adversely affect the value of the Properties and no
adjustment shall be made to the Purchase Price as set forth in Section
6.a. hereof. Seller shall have an additional ten (10) days to correct
any such significant title defect or terminate contracts to the
satisfaction of Purchaser. Purchaser's approval of corrections of
title defects shall not be unreasonably withheld. If, after the total
of twenty-five (25) days of the two periods specified above have
elapsed, the significant title defects have not been cured to
Purchaser's reasonable satisfaction, or contracts have not been
terminated, then Purchaser shall have, at its option, the right to
either (i) withdraw its offer with no further obligation to consummate
the Purchase with no liability to seller; or (ii) reasonably negotiate
in good faith, the value defect of the Properties with Seller. If
Purchaser withdraws its offer pursuant to this provision, seller shall
refund to Purchaser the total Performance Deposit. Seller and
Purchaser have all licenses, permits, certificates, approvals and
other authorizations necessary in order to enable them to own and
operate the Properties for their respective periods of operatorship.
7. SELLER'S REPRESENTATIONS. Seller hereby represents and warrants to
Purchaser as follows:
a. SELLER'S ORGANIZATION AND AUTHORITY RELATIVE TO THIS
AGREEMENT. Seller is a partnership duly organized, validly
existing and in good standing as a domestic partnership under
the laws of the State of Texas and has full power and
authority to enter into, deliver and perform this Agreement
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby
have been duly authorized by all requisite action, and no
other corporate proceedings on the part of Seller are
necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly executed
and delivered by Seller and constitutes a legally valid and
binding obligation of Seller, enforceable in accordance with
its terms.
b. LEGAL AND REGULATORY PROCEEDINGS. With the exception of the
actions listed below, there is no suit, action, proceeding or
investigation pending or, to the knowledge of Seller,
threatened, against or affecting Seller, its respective
businesses or any of the Properties, in any court or before or
by any governmental or regulatory authority or agency,
domestic or foreign, or any arbitrator, which if adversely
determined could materially and adversely affect the
Properties or Purchaser's use of the same or the ability of
Seller to perform its obligations under this Agreement or any
instrument to be delivered pursuant hereto.
I) Declaratory Judgment Action filed by two minority interest
owners contesting the election of MV Ventures, GP as operator.
II) MV is currently pursuing an extension of the January 1, 1997
deadline to treat produced water and not discharge same into the
Manilla Village field bayou.
Notwithstanding the foregoing and based on legal opinion of outside
counsel, Seller represents that if there are any suits currently
pending that involve Seller and its operations of, or interests in
the Properties, any judgment in these existing suits, except for the
stare decisis effect of such decision, will not adversely affect
Purchaser.
IN THE EVENT THE STATE OF LOUISIANA DOES NOT ISSUE WRITTEN
AUTHORIZATION ON OR BEFORE NOVEMBER 1, 1996 GRANTING AN EXTENSION TO
THE JANUARY 1, 1997 DEADLINE TO TREAT AND DISPOSE PRODUCED WATER, THE
PURCHASE PRICE SHALL BE REDUCED BY A SUM OF ONE-HUNDRED-FIFTY-
THOUSAND DOLLARS ($150,000 US).
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8. PURCHASER'S REPRESENTATIONS. Purchaser hereby represents and warrants
to seller as follows:
a. PURCHASER'S ORGANIZATION AND AUTHORITY RELATIVE TO THIS
AGREEMENT. Purchaser is a corporation, is duly organized,
validly existing and in good standing as a corporation under
the laws of the State of Texas and has full corporate power
and authority to enter into, deliver and perform this
Agreement and to consummate the transactions contemplated
hereby; the execution and delivery of this Agreement by
Purchaser and the consummation by Purchaser of the
transactions contemplated hereby have been duly authorized by
all requisite action and no other corporate proceedings on the
part of Purchaser are necessary to authorize this Agreement
and the transactions contemplated hereby. This agreement has
been duly executed and delivered by Purchaser and constitutes
a legally valid and binding obligation of Purchaser,
enforceable in accordance with its terms.
b. EVALUATION. Purchaser represents that by reason of
Purchaser's knowledge and experience in the evaluation,
acquisition, and operation of oil and gas properties,
Purchaser has evaluated the merits and risks of purchasing the
Properties from seller and has formed an opinion based upon
Purchaser's knowledge and experience and upon historical
production and accounting data provided by Seller.
9. GAS IMBALANCES. Not Applicable.
10. PRIOR TO CLOSING. Seller shall, prior to closing, timely disburse
proceeds, pay all royalties and other leases obligations, and pay
expenses relating to the Properties and shall operate the Properties
as a reasonably prudent operator and in a good and workmanlike manner
for a fee equal to the ▇▇▇▇▇ overhead charge charged to the joint
account for the Properties. Seller shall not abandon any part of the
Properties. Seller further agrees not to convey, dispose or encumber
any part of the Properties. During this period, Seller shall not
remove any facilities except to replace defective components or to
repair and return them. Seller shall not make any major capital
expenditures in excess of Twenty-Five Thousand Dollars ($25,000.00)
after the Effective Date but prior to closing, without Purchaser's
prior written consent. In no event shall Seller have any obligation
or duty to perform any re-completion, workover or other remedial work
on the Properties after the Effective Date.
11. If prior to the closing, all or any substantial part of the Properties
shall be destroyed by fire or other casualty, or if any substantial
part of the Properties shall be destroyed by fire or other casualty,
or if any substantial part of the Properties shall be taken in
condemnation or under the right of eminent domain, or if proceedings
for such purposes shall be pending or threatened, or if any other
event shall occur that materially impairs the value of the Properties
(any of the foregoing being hereinafter referred to as a "Casualty
Loss") ("Casualty Loss" shall be defined to mean a loss in value of
the Properties in excess of Fifty-Thousand and No/100 Dollars
($50,000.00), there shall be no adjustment to the Purchase Price,
Purchaser or Seller may elect to terminate this Agreement. If this
Agreement is not so terminated, then this Agreement shall remain in
full force and effect and the Purchase Price shall be negotiated
downward in an amount equal to the loss resulting from the Casualty
Loss; provided, however, if no adjustment in Price can be agreed to by
Seller and Purchaser, this Agreement shall terminate. Seller shall
not voluntarily compromise, settle or adjust any amounts payable by
reason of a Casualty Loss without first obtaining the written consent
of Purchaser. If this Agreement is terminated due to Casualty Loss,
Seller shall refund the total Performance Deposit.
12. OTHER DOCUMENTS AND CONTRACTS. The ▇▇▇▇ of sale and assignment will
be made subject to any and all existing operating agreements, unit
agreements, gas purchase or sale contracts, as well as any and all
other agreements to which the Properties are subject, including, but
not limited to, any applicable farmin agreement. Purchaser shall
assume and be responsible for all obligations accruing under such
agreements as of the Effective Date. Seller shall make all contract
files available to Purchaser prior to closing. Purchaser shall be
liable for compliance with the terms of contracts which were provided
or are of record.
13. PRORATION OF TAXES. All applicable taxes on the Properties shall be
prorated between Seller and Purchaser as of the Effective Date. If
actual taxes or tax liabilities are not known at closing, tax
liabilities shall be estimated (and the Purchase Price adjusted
therewith), and reimbursements by Seller or refunds by Purchaser, as
appropriate, shall be made at such date(s) as actual taxes are levied.
Seller agrees to pay when due any severance, ad valorem, or other
taxes or fees payable after the effective date hereof where the basis
or valuation for such taxes is production which actually occurred
during the time in which Seller owned the Properties and/or received
proceeds from the production attributable thereto.
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All documentary, stamp and transfer taxes of any kind arising out of
or in connection with the sale of the Properties hereunder shall be
paid by Purchaser, and all charges for or in connection with the
recording of any document or instrument herein provided shall be paid
by Purchaser. All other federal, state and local taxes arising out of
or in connection with the sale of the Properties hereunder shall be
paid by Purchaser.
14. INDEMNITIES. If the Sale/Purchase is consummated, Purchaser agrees to
defend and indemnify Seller against any claims, suits, and other
liabilities to third parties under the leases and other agreements
related to the Properties and/or resulting from operations thereon or
activities or events related thereto after the Effective Date
(including, but not limited to, any liability resulting from any
failure to properly plug and abandon any ▇▇▇▇▇ located on the
Properties), except to the extent such liabilities result from the
negligence or willful misconduct of Seller.
If any claim is made by a party that would give rise to a right of
indemnification under this Agreement, the party entitled to
indemnification (the "Indemnified Party") will promptly give notice
thereof to the party required to provide indemnification (the
"Indemnifying Party"). The Indemnified Party will permit the
Indemnifying Party to assume the defense of any such claim or
litigation resulting therefrom. Counsel for the Indemnifying Party,
which will conduct the defense of such claim or litigation, must be
approved by the Indemnified Party, whose approval will not be
unreasonably withheld. The Indemnified Party may participate in such
defense at the Indemnified Party's expense. Neither party will
consent to the entry of any judgment or enter into any settlement
without the written consent of the other party, which consent will not
be unreasonably withheld. The Indemnified Party will cooperate fully
with the Indemnifying Party and make available to the Indemnifying
Party all pertinent information under its control.
15. PLUGGING AND ABANDONMENT OF ▇▇▇▇▇; REMOVAL OF FACILITIES. After the
Effective Date, Purchaser recognizes and specifically assumes the
obligation to properly plug and abandon any and all ▇▇▇▇▇; remove all
equipment and facilities, including, but not limited to, pipelines;
close all pits, and restore the surface associated with the Properties
when appropriate and in accordance with the rules, regulations, and
requirements of any governmental authority having jurisdiction
thereof, whether or not any such obligations arise prior to the
Effective Date. Purchaser agrees to pay all costs and expenses
associated with any such plugging and abandoning, removal, closing, or
restoration.
16. ENVIRONMENTAL CONDITIONS.
a. PHYSICAL CONDITION OF THE PROPERTIES. The properties have
been used for oil and gas drilling and production operations,
related oil field operations and possibly for the storage and
disposal of waste materials or hazardous substances. Physical
changes in or under the Properties or adjacent lands may have
occurred as a result of such uses. The Properties also may
contain buried pipelines and other equipment, whether or not
of a similar nature, the locations of which may not now be
known by Seller or be readily apparent by a physical
inspection of the Properties. Purchaser understands that
Seller foes not have the requisite information with which to
determine the exact nature or condition of the Properties nor
the effect any such use has had on the physical condition of
the Properties. Pursuant to the Safe Water Drinking and Toxic
Enforcement Act of 1986, Purchaser is hereby notified and
assumes the risk that detectable amounts of chemicals known to
cause cancer, birth defects and other reproductive harm may be
found in, on or around the Properties. As of the Closing
Date, Purchaser shall assume the risk that the Properties may
contain waste or contaminants and that adverse physical
conditions, including the presence of waste or contaminants,
may not have been revealed by Purchaser's investigation. As
of the Closing Date, all responsibility and liability related
to disposal, spills, waste or contamination on or below the
Properties shall be transferred from Seller to Purchaser, only
to the extent that such occurrences occurred after the period
of Seller's ownership of the Properties.
In addition, Purchaser acknowledges that some oil field
production equipment located on the Properties may contain
asbestos and/or naturally-occurring radioactive material
(NORM). In this regard, Purchaser expressly understands that
NORM may affix or attach itself to inside of ▇▇▇▇▇, materials
and equipment as scale or in other forms, and that ▇▇▇▇▇,
materials and equipment located on the Properties described
herein may contain NORM and that NORM-containing materials may
be buried or have been otherwise disposed of on the
Properties.
b. ENVIRONMENTAL ASSESSMENT AND INDEMNIFICATION. Purchaser shall
have the right to make any environmental assessment of the
Properties during the title examination period set forth in
Section 6., hereof, or not less than fifteen (15) days prior
to closing, whichever is greater. Purchaser and its agents
shall have the right to enter
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upon and inspect the Properties and all buildings and other
improvements thereon, conduct soil and water tests and
borings, and generally conduct such tests, examinations,
investigations and studies as may be necessary or appropriate
for the preparation of appropriate engineering and other
reports and judgment relating to the Properties, their
condition, and the presence of waste or contaminants. Purchaser
agrees to immediately provide to Seller a copy of such
environmental assessment, including any reports, data and
conclusions. Purchaser shall keep any data or information
acquired by all such examinations and the results of all
analyses of such data and information strictly confidential and
not disclose same to any person or agency without the prior
written approval of Seller. If Purchaser, in its sole
discretion, determines that hazardous waste materials located
on any Property substantially violates an existing law, rule or
regulation of any federal, state or local governmental body for
purposes of this Agreement, a substantial violation is any
violation which would require Purchaser to expend more than 5%
of the allocated value to rectify the violation then, by so
notifying Seller within fifteen (15) days of closing, Seller
may elect to remediate any such violation or adjust the
Purchase Price in an amount equal to the cost of the
remediation. Should Seller not elect to adjust the Purchase
Price or remediate, Purchaser may remove the property from this
Agreement or terminate this Agreement and it shall be null and
void, and Purchaser and Seller shall have no further obligation
or liability of any kind hereunder or with respect hereto, and
the cash Performance Deposit shall be returned to Purchaser.
Purchaser is hereby granted access to the Properties to
conduct its environmental assessment upon the following
conditions: Purchaser waives and releases all claims against
Seller, its directors, officers, employees and agents and
parent or subsidiary companies, for injury to or death of
persons, or damage to property, arising in any way from the
exercise of rights, granted to Purchaser hereby or the
activities of Purchaser or its employees, agents or
contractors on the Properties. Purchaser shall indemnify
Seller, its directors, officers, employees, and agents against
and hold each and all of said indemnitees harmless from any
and all loss, cost, damage, expense or liability, including
attorney's fees, whatsoever arising out of (i) any and all
statutory or common law liens or other encumbrances for labor
or materials furnished in connection with such tests,
samplings, studies or surveys as Purchaser may conduct with
respect to the Properties; and (ii) any injury to or death of
persons or damage to property occurring in, on or about the
Properties as a result of such exercise or activities (except
for any such injuries or damages caused solely by the active
negligence or willful misconduct of any said indemnitees).
The foregoing obligation of indemnity shall survive closing.
c. INDEMNIFICATION AND ASSUMPTION OF ENVIRONMENTAL RISK.
Notwithstanding anything contained herein to the contrary,
Purchaser assumes full responsibility for, and agrees to
indemnify, hold harmless and defend Seller from and against
all loss, liability, claims, fines, expenses, costs (including
attorney's fees and expenses) and causes of action caused by
or arising out of any federal, state or local laws, rules,
orders and regulations applicable to any waste material or
hazardous substances on or included with the Properties or the
presence, disposal, releases or threatened release of all
waste material or hazardous substance from the Properties,
into the atmosphere or into or upon land or any water course
or body of water, including ground water, attributable to
Purchaser's activities or the activities of third parties
after the period of Seller's ownership of the Properties.
17. CONTINUING OBLIGATIONS. If the Sale/Purchase is consummated, with the
exception of Sections 6, 14, 15 and 16c, which will survive and
continue, the terms and conditions contained herein shall survive
closing to the extent of two (2) years from the Contract Date and
shall apply to and bind the successors and assigns of Seller and
Purchaser.
18. NOTICES. All communications required or permitted under this
Agreement shall be in writing. Any communication or delivery
hereunder shall be deemed to have been fully made if actually
delivered, sent by facsimile machine, or if mailed by registered or
certified mail, postage prepaid, to the applicable address as set
forth below:
Seller: Purchaser:
MV VENTURES, ▇.▇. ▇▇▇▇ ENERGY OF TEXAS, INCORPORATED
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ 1603 S.E. 19th Street, Suite 202
Houston, TX 77002 ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇.▇. ▇▇▇▇▇▇ ATTN: ▇▇▇▇ ▇▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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19. FURTHER ASSURANCES. Each of the parties shall execute acknowledge and
deliver to the other such further instruments, and take such other
actions as may be reasonably necessary to carry out the provisions of
this Agreement.
20. CONDITIONS TO PURCHASER'S OBLIGATIONS. Each and every obligation of
Purchaser under this Agreement to be performed on or before the closing
shall be subject to the satisfaction, on or before the Closing Date, of
the following conditions:
a. The representations and warranties of Purchaser contained in
this Agreement shall be in all material respects true and
accurate as of the date when made and at and as of the Closing
Date.
b. Purchaser shall have performed and complied in all material
respects with each and every covenant, agreement and condition
required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
c. Except as provided in Section 7b, no order of any court or
administrative agency shall be in effect which restrains or
prohibits the transactions contemplated hereby. No suit,
action, investigation, inquiry or proceeding by any
governmental body or other person, or legal or administrative
proceeding shall have been instituted or threatened that
questions the validity or legality of the transactions
contemplated hereby or seeks to impose any liability on
Purchaser as a result of the transactions contemplated hereby.
d. All approvals of any private person, and all approvals or the
absence of disapprovals within applicable time periods, from
public authorities, federal, state, foreign or local (or
exemptions from the requirements therefor), the granting or
absence of which is necessary for the consummation of the
transactions contemplated by this Agreement, shall have been
obtained.
e. On the Closing Date, there shall be no effective injunction,
writ or temporary restraining order or any order of any nature
issued by a court or governmental agency or competent
jurisdiction directing the transactions provided for herein
not be consummated as herein provided.
21. PURCHASER'S DEFAULT. If Purchaser defaults on or prior to Closing in
a material way on Purchaser's obligations, including but not limited
to Purchaser's absence at the designated time and place for Closing,
Seller shall retain the performance deposit under Section 2. hereof as
liquidated damages. Further, Seller shall be free immediately to sell
the Properties to any third party without any restriction under or by
reason of this Agreement.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the parties and it may not be amended nor any rights hereunder
waived except by an instrument in writing signed by the party to be
charged with such amendment or waiver and delivered by such party to
the party claiming the benefit of such amendment or waiver.
If any provision of this Agreement, or the application thereof to any
person or circumstances, shall, to any extent, be held in any
proceeding to be invalid or unenforceable, the remainder of this
Agreement, and the application of such provisions to persons or
circumstances other than those to which it is held to be invalid or
unenforceable, shall not be affected thereby, and shall be valid and
enforceable to the fullest extend permitted by law, but only if and to
the extend such enforcement would not materially and adversely
frustrate the parties' essential objectives as expressed herein.
No party to this Agreement may assign its rights or obligations
hereunder without the written consent of all parties hereto; provided,
however, that Purchaser may assign its rights to any one of its
wholly-owned affiliates, partnerships, joint venture partners,
partners, etc., for the purpose of raising capital funding. Subject
to the foregoing, this Agreement shall be binding upon the parties
hereto, their respective successors and assigns, and nothing contained
in this Agreement, express or implied, is intended to confer upon any
other person or entity any benefits, rights, or remedies.
23. CHOICE OF LAW. THIS AGREEMENT AND ITS PERFORMANCE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
TEXAS.
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24. COUNTERPARTS. This Agreement may be executed by Purchaser and Seller
in any number of counterparts, each of which shall be deemed an
original instrument, but all of which together shall constitute but
one and the same instrument.
25. COSTS. Except as otherwise agreed upon, each party shall pay its own
costs, including fees and expenses of its own counsel and accountants,
in connection with the purchase and sale of the Properties.
AGREED AND ACCEPTED
SELLER:
▇▇▇▇▇▇ VENTURES, INC. ROCKBRIDGE OIL & GAS, INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇
------------------- -------------
Name: ▇.▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇
Title: General Partner Title: President
PURCHASER:
SABA ENERGY OF TEXAS, INCORPORATED ENERGY ASSET MANAGEMENT
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. KATSUNG By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------- ------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President Title: Vice President
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EXHIBIT "A"
Attached to and made a part of that certain Letter of Understanding dated
September 18, 1996, executed by and between MV VENTURES, G.P., as SELLER and
SABA PETROLEUM COMPANY/ENERGY ASSET MANAGEMENT CORP., as BUYER, covering and
pertaining to the Manila Village Field, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana.
I. Oil, Gas and Mineral Leases that are the subject of the Letter of
Understanding to which this exhibit "A" is attached:
A) That certain Lease for Oil, Gas and Other Liquid or Gaseous
Minerals dated August 16, 1982, by and between the State
Mineral Board or the State of Louisiana (State Lease No.
10394), as Lessor, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., as Lessee, filed
for record in Entry No. 1027740 Mineral Book 38, Folio 436 of
the records of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana; and as amended by
that certain Correction of State Mineral Lease No. 10394 dated
March 17, 1983, filed for record in Entry No. 83-22790 of the
records of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana.
B) That certain Oil and Gas Lease dated May 1, 1982 by and
between The Louisiana Land and Exploration Company, as Lessor,
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., as Lessee, to which a recording
memorandum entitled Declaration has been filed for record in
Entry No. 1015347, Mineral Book 38, Folio 255 of the records
of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana.
C) That certain Leases for Oil, Gas and Other Liquid or Gaseous
Minerals dated June 13, 1983, by and between the State Mineral
Board of the State of Louisiana (State Lease No.10808), as
Lessor, and Primary Fuels, Inc., as Lessee, filed for record
in Mineral Book 39, Folio 576 of the records of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Louisiana and in CO5 Book 571, Folio 664 of the
records of Plaquemines Parish, Louisiana.
D) That certain Oil and Gas Lease dated April 15, 1983, by and
between The Louisiana Land and Exploration Company, as Lessor,
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., as Lessee, to which a recording
memorandum entitled Declaration has been filed for record in
Entry No.8318074, Mineral Book 39, Folio 146 of the records of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana and in CO5 Book 565, Folio 941 of
the records of Plaquemines Parish, Louisiana.
E) That certain Oil, Gas and Other Hydrocarbon Standard
Development Lease dated November 7, 1991, by and between
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, et al., as Lessor, and Wm. ▇▇▇▇▇▇,
Inc., as Lessee, filed for record in Entry No. 9104193, CO5
Book 2930, Folio 213 of the records of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Louisiana, as amended by that certain Lease Amendment and
extension Agreement dated August 11, 1994 filed for record in
Entry No. 09449744, CO5 Book 2902, Folio 396 of records of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana.
F) That certain Oil and Gas Lease dated July 1, 1991, by and
between The Louisiana Land and Exploration Company, as Lessor,
and Corpus Christi Hydrocarbons Company, as Lessee, to which a
recording memorandum entitled Declaration has been filed for
record in Entry No. 9138700, Mineral Book 119, Folio 323 of
the records of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Louisiana.
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EXHIBIT "A"
II. ▇▇▇▇▇ covered by this Agreement, all of which are located in ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Louisiana:
Lease or Unit Name
Serial Well Name ------------------ Well
Number Code No. Active ▇▇▇▇▇ Number API Number
------ ----------- ------------------ ------- ----------
192432 047228 9800' RA VUB*:LL&E 10 1705120694
184580 040556 9400' RA SUD: LL&E 1 1705120641
185662 040558 9400' RA SUC: LL&E 3 1705120650
198096 039522 9800' RA VUB*:LL&E 9 1705120689
191924 047248 8900' RA VUA: LL&E 12 1705120691
214271 039522 LL&E 14 ▇▇▇▇▇▇▇▇▇▇
214451 039522 9800' RA VUC*:LL&E 14D ▇▇▇▇▇▇▇▇▇▇
215844 039522 11,100' RA VUB*:LL&E 16D 1705120845
215573 11,000' RA SUB*: LL&E 16 1705120845
Inactive ▇▇▇▇▇ - Temporarily Abandoned or Shut-in
185661 040557 9400' RA ▇▇▇: LL&E 2 1705120649
187188 040559 9400' RA ▇▇▇: LL&E 4 1705120656
198822 039522 LL&E 9D 1705120689
188743 039522 LL&E 7 1705120667
187189 042799 LL&E 5 1705120657
194423 042801 LL&E 12D 1705120691
III. Interests of SELLER on a Lease or Unit basis:
Serial Well Name Well CCHC CCHC
Number Code No. Lease or Unit Name Number WI NRI
------ ----------- ------------------ ------ --------- --------
192432 047228 9800' RA VUB*:LL&E 10 50.678350% 35.474846%
184580 040556 9400' RA SUD:LL&E 1 50.678350% 34.548310%
185662 040558 9400'RA SUC: LL&E 3 50.678350% 34.802970%
198096 039522 9800' RA VUB*:LL&E 9 50.678350% 35.474846%
191924 047248 8900' RA VUA:LL&E 12 50.678350% 35.130910%
214271 039522 LL&E 14 50.678350% 35.474846%
214451 039522 9800' RA VUC*:LL&E 14D 50.678350% 35.474846%
215844 039522 11,100' RA VUB*:LL&E 16D 50.678350% 34.331602%
215573 11,000' RA SUB*:LL&E 16 50.678350% 35.474846%
* Voluntary Unit currently being formed. WI and NRI for these units
only are approximations pending actual unit surveys and units becoming
effective.
** Currently in process of having LL&E #16 well recognized as the unit
well for the 11,000' RA SUB.
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