PURCHASE AND SALE AGREEMENT
EXHIBIT
10.1
This PURCHASE AND SALE AGREEMENT
("Agreement"),
dated this 12th
day of October, 2018
("Execution
Date"), is entered into by and
between Xxxxx Petroleum LLC, and Xxxxx Permian, LLC, whose address
is 00 Xxxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (collectively
"Seller") and Amazing Energy, LLC, whose address is 0000 X. Xxxxx,
Xxxxx 0000, Xxxxx, XX 00000 ("Buyer"). Seller and Buyer may be
referred to individually as a "Party"
or collectively as the
"Parties."
In consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Sellers
agree as follows:
Article I
PURCHASE AND SALE
1.1
Agreement
to Sell and Buy. Subject to
assignments and conveyances of record in Pecos
County, TX, each Seller agrees to sell and assign to Buyer, and
Buyer agrees to purchase, pay for and receive from Sellers, the
Assets as defined below.
1.2
Assets. The
"Assets"
are all of each Seller's right, title,
and interest in and to the following:
(a) The
estates and mineral rights created by the oil and gas leases,
leaseholds and mineral estates (the "Leases"), described in Exhibit
"A", and all oil, gas, water disposal and other xxxxx located on
the Leases or on lands pooled therewith (the "Xxxxx"), including,
but not limited to, the xxxxx set forth in Exhibit "A-1",
together with all of Seller's interest
in the rights and appurtenances incident
thereto.
(b) All
of Seller's rights in, to, and under, and all obligations arising
from, all agreements relating to the Leases or Xxxxx, including,
but not limited to, joint operating agreements, unitization
agreements, pooling agreements, farmout agreements,
drillingagreements, exploration agreements, oil or gas product
purchase and sale contracts, gas processing or transportation
agreements, leases, permits, rights-of-way, easements, licenses,
options, orders and decisions of state and federal regulatory
authorities establishing units which appear of record or in the
records which have otherwise been disclosed to Buyer.
(c) All
of Seller's interest the oil and gas xxxxx, including well bores,
pump jacks and motors, surface facilities, such as tanks and pumps,
salt water disposal, fixtures, personal property, facilities and
equipment, used or held for use or charged to the Leases or Xxxxx
for production, treatment, transportation, sale or disposal of
hydrocarbons or water produced therefrom or attributable thereto
and further described on the attached spread sheet and photographs
collectively marked as Exhibits "Bl" and "B2"
(the "Xxxxx"), and all equipment
associated with the Xxxxx as of the Closing
Date.
-1-
(d) The
rights, to the extent transferable, in and to all existing and
effective unitization, pooling agreements, declarations and orders,
if any, to the extent that they relate to or affect any of the
interests described in Exhibit
"A" or the post-Effective Time production of Hydrocarbons,
if any, from the Leases and Lands.
(e) The
rights, to the extent transferable, in and to the electronic and
hard copy well files, accounting files, third party subscriptions,
agreements, and instruments described in Exhibit "C" and subrogation of all legal claims of Seller
therein. Sellers shall provide Buyer with all electronic and hard
copy Title Opinions, land files, agreements, geologic files, well
files, seismic files and materials, all facilities and equipment
owned by Seller and located on the Exhibit "A" lands.
(f) The
files, records, Division Orders, data and information relating to
the items described in Exhibits "A" and "A-1"
maintained by each Seller (the
"Records").
(g) All
asset, leasehold, and real property owned by Seller in Pecos
County, Texas.
1.3
Effective
Time. The purchase and sale of
the Assets shall be effective as of October 12, 2018 at 10:00 a.m. local time at the
site of the Assets (the "Effective
Time").
1.4
Purchase
Price. Subject to the terms and
conditions of this Agreement, the purchase price for the Assets is Five Hundred
Thousand U.S. Dollars ($500,000.00) (the "Purchase Price").
The Purchase Price is payable in good
funds at closing in the amount of Five Hundred Thousand U.S.
Dollars ($500,000.00).
1.5
Broker:
broker
in this transaction.
Article II
Buyer's Inspection; Disclaimers
2.1
Records.
(a)
Access to
Records. Within five (5) days
of the Execution Date, Seller will provide
to Buyer electronic copies of the Records, or to the extent that
electronic copies are not available and not feasible to obtain,
Seller shall make available to Buyer and its representatives, at
Seller's offices, such Records for inspection and review during
normal business hours to allow Buyer and its representatives to
perform Buyer's due diligence review.
Article III
Title And Disclaimers
-2-
3.1 SELLER MAKES NO WARRANTY OR
REPRESENTATION OF TITLE, EXPRESS, IMPLIED OR STATUTORY AS TO THE
CONDITION, QUANTITY, QUALITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR ANY PURPOSE, SAFETY, FREEDOM FROM DEFECTS OR
COMPLIANCE WITH REGULATORY AND ENVIRONMENTAL REQUIREMENTS OF ANY OF
THE LANDS, XXXXX, FACILITIES, PIPELINES, FLOWLINES OREQUIPMENT.
FURTHERMORE, BUYER ACCEPTS THE XXXXX, FACILITIES, PIPELINES,
FLOWLINES AND EQUIPMENT "AS IS", "WHERE IS", AND "WITH ALL FAULTS"
AND BUYER HEREBY RELEASES SELLER FROM ANY AND ALL LIABILITY FOR
LOSS ARISING FROM USE OF THE LANDS, XXXXX, FACILITIES, PIPELINES,
FLOWLINES OR EQUIPMENT PERTAINING TO THE ASSETS BE ASSIGNED. SELLER
AND BUYER DO NOT IN ANY WAY REPRESENT OR WARRANT THE ACCURACY OR
COMPLETENESS OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN
OR ORAL) FURNISHED TO THE OTHER BY OR ON BEHALF OF SELLER OR BUYER.
THE PARTIES AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO
BE EFFECTIVE, THE DISCLAIMERS OF WARRANTIES CONTAINED IN THIS
SECTION ARE "CONSPICUOUS" DISCLAIMERS. BUYER ACKNOWLEDGES THAT IT
IS FAMILIAR WITH THE TITLES IN THE AREA.
3.2
SELLER
EXPRESSLY DISCLAIMS ANY WARRANTY AS TO THE CONDITION OF ANY
PERSONAL PROPERTY, FIXTURES AND ITEMS OF MOVABLE PROPERTY
COMPRISING ANY PART OF THE ASSETS INCLUDING (A)
ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (B) ANY IMPLIED
OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (C) ANY
IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS, (D) ANY RIGHTS OF BUYER UNDER THE APPLICABLE STATUTES TO
CLAIM DIMINUTION OF CONSIDERATION, AND (E) ANY CLAIM BY BUYER FOR
DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, IT BEING
EXPRESSLY UNDERSTOOD BY BUYER THAT THE PERSONAL PROPERTY, FIXTURES
AND ITEMS ARE BEING ASSIGNED TO BUYER AS IS, WHERE IS, WITH ALL
FAULTS, AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND THAT
BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS
APPROPRIATE.
Article IV
Sellers' Representations
4.1
Seller, represents and warrants to Buyer the following and not
otherwise:
(a)
Power and
Authority. Such Seller has the
requisite power and authority to execute
and deliver this Agreement and perform its obligations under this
Agreement and the person executing all documents for Seller is duly
authorized to execute such documents.
4.2
Seller is aware of
litigation by a mineral owner versus various lessees in Pecos
County, TX, being Cause No. P-7600-83-CV, Xxxxxxxxx Xxxxxxxx Xxxxx,
Xx. et al vs. Xxxxxxx & Trees, LLC, Amazing Energy, LLC et al.
currently pending in Pecos County, TX. Seller is not a
party.
-3-
Article V
Buyer's Representations
5.1
Buyer represents and warrants to Sellers the
following:
(a) Existence.
Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada, and is duly qualified to do business as a foreign
corporation in the state(s) where the Assets are located, except
where the failure to so qualify would not have a material adverse
effect on Buyer or its properties.
(b) Power.
Buyer has the corporate power to enter
into and perform this Agreement and the transactions contemplated
by this Agreement. Subject to preferential purchase rights and
restrictions on assignment of the type generally found in the oil
and gas industry, and to rights to consent by, required notices to,
and filings with or other actions by governmental entities where
the same are customarily obtained subsequent to the assignment of
oil and gas interests, the execution, delivery and performance of
this Agreement by Buyer, and the transactions contemplated by this
Agreement , will not violate (a} any provision of the certificate
of incorporation or bylaws of Buyer, (b) any material agreement or
instrument to which Buyer is a party or by which Buyer or any of
the Assets arc bound, (c} any judgment , order, ruling, or decree
applicable to Buyer as a party in interest, or (d) any law, rule or
regulation applicable to Buyer relating to the Assets other than a
violation which would not have a material adverse effect on
Buyer.
(c) Authorization and
Enforceability. The execution,
delivery and performance of this Agreement, and the transaction
contemplated hereby, have been duly and validly authorized by all
necessary action on the part of Buyer. This Agreement constitutes
the valid and binding obligation of Buyer, enforceable in
accordance with its terms except as such enforceability may be
limited by applicable bankruptcy or other similar laws affecting
the rights and remedies of creditors generally as well as to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(d) Liability for Broker's
Fees. Seller shall not directly
or indirectly incur any liability or expense, as a result of
undertakings or agreements of Buyer, for brokerage fees, finder's
fees, agent's commissions or other similar forms of compensation in
connection with this Agreement or any agreement or transaction
contemplated hereby.
(e) Distribution.
Buyer is an experienced and
knowledgeable investor in the oil, gas and mineral resources
industry that has previously expended substantial amounts in the
acquisition and development of oil and gas properties. Prior to
entering into this Agreement, Buyer has been advised by its counsel
and such other persons as it has deemed appropriate concerning this
Agreement. The Assets to be acquired by Buyer pursuant to this
Agreement are being acquired by Buyer for its own account, for
investment and not with a view to distribution or resale within the
meaning of the Securities Act of 1933, as amended, or any other
applicable securities law, rule, regulation or
order.
-4-
(f) Claims and
Litigation. To the actual
knowledge of Buyer, there are no claims,
actions, suits, or proceedings pending or threatened against Buyer
which, if determined adversely to Buyer, would materially and
adversely affect Buyer's ability to perform its obligations under
this Agreement.
Article VI
Closing
6.1
Date
of Closing. The
"Closing"
of this transaction shall, unless
otherwise agree to in writing by the Buyer and Sellers, be held in
Seller's office in Houston, Xxxxxx County, Texas on October 12,
2018 ("Closing
Date").
6.2
Execution
Date Obligation: The Parties
shall execute this agreement and any other
documents necessary for the Parties to be bound to the obligations
set forth herein.
6.3
Closing
Obligations. At Closing, the
following events shall occur, each being a
condition
precedent to the others and each being deemed to have occurred
simultaneously with the others:
(a) Seller
shall execute, acknowledge and deliver to Buyer, (i) an Assignment,
and Xxxx of Sale in the form attached as Exhibit E, and (ii) any applicable forms of any federal,
state and local governmental authorities, assigning the Assets
being sold by Seller to Buyer, if any, as of the Effective Time,
with no warranty of title.
(b) Buyer
shall deliver the Purchase Price to the account at a bank
designated by each Seller by check in immediately available funds,
or by such other method as agreed to by the Parties.
(c) Seller
and Buyer shall take such other actions and deliver such other
documents as are contemplated by this Agreement.
Article VII
Post-Closing Obligations
7.1
Records.
Seller agrees to make the Records
available to Buyer as soon as is reasonably
practical, but in any event on or before the latter of 10 Business
Days after the Closing.
7.2
Further
Assurances. From time to time
after Closing, each Seller and Buyer shall
each
execute, acknowledge and deliver to the other such further
instruments and take such other action as may be reasonably
requested in order to accomplish more effectively the purposes of
this transaction.
Article VIII
-5-
8.1
Assumption of Assets Upon Closing. Upon Closing, Buyer shall assume
and pay, perform,
fulfill and discharge all claims, costs, expenses, liabilities and
obligations relating to the possession, ownership or operation of the Assets
from and after the Effective Time, including but not limited to all
plugging and abandonment obligations and surface restoration
obligations (collectively, the "Assumed
Liabilities"). This indemnity
obligation shall survive Closing indefinitely. Additionally, Buyer
agrees to assume and pay all property, and any ad valorem taxes for
the year 2018, and no proration for such year shall be applicable.
All asset, leasehold, and real property owned by Seller in Pecos
County, Texas.
8.2
Indemnity.
BUYER EXPRESSLY AGREES TO ASSUME ANY
AND ALL LIABILITY AND RESPONSIBILITIES
FOR ALL PLUGGING OBLIGATIONS REGARDING THE XXXXX. SELLER KNOWS OF
NO EXISTING OR ASSERTED REGULATORY ACTIONS OR CLAIMS RELATING TO
ANY ENVIRONMENTAL VIOLATION OR UNCORRECTED RELEASES, THEREFORE
BUYER SHALL ASSUME ALL RESPONSIBILITY AND LIABILITIES FOR ANY
ENVIRONMENTAL CLAIMS OR REMEDIATION REQUIREMENTS ARISING FROM THE
OPERATIONS OF THE ASSIGNED ASSETS FROM AND AFTER THE CLOSING
DATE. Buyer, therefore agrees
to indemnify and hold Seller harmless for any and all plugging
liabilities, claims, including environmental, causes of action,
suits and judgments for injury to persons, including death,
property damages and ad valorem taxes arising out of or resulting
from Buyer's possession, use and operations of the Assets from and
after the Effective Date.
Article IX
Miscellaneous
9.1
Expenses.
Except as otherwise specifically
provided, all fees, costs and expenses incurred
by Buyer or Sellers in negotiating this Agreement or in
consummating the transactions contemplated by this Agreement shall
be paid by the Party incurring the same.
9.2
Notices.
All notices under this Agreement shall
be by either e-mail or in writing and
addressed as set forth below:
If to Buyer:
Amazing
Energy, LLC
0000
X. Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxx,
XX 00000
Attn:
Xxxxxxx X. XxXxxxxx III
Telephone:
Cell: (000) 000-0000 / Office: (000) 000-0000
e-mail:
Xxxx@xxxxxxxxxxxxx.xxx
If to Xxxxx:
Xxxxx Petroleum, LLC
00 Xxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: X. X. Xxxxx
Telephone: (000) 000-0000
e-mail: xxxxxxxxxxxxx.xxx
-6-
With
a Copy to:
Xxx
X. Xxxxxx
00
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Telephone:
(000) 000-0000
e-mail:
xxx.xxxxxx@xxxxxx.xxx
Any Party may, by e-mail or written notice so delivered to the
other Parties, change the address or individual to which delivery
shall thereafter be made.
9.3
Amendments.
This Agreement may not be amended nor
any rights hereunder waived
except by an instrument in writing signed by all
Parties.
9.4
Governing
Law. This Agreement and the
transactions contemplated hereby and any
arbitration or dispute resolution conducted pursuant hereto shall
be construed in accordance with, and governed by, the laws of the
State of Texas.
9.5
Entire
Agreement. This Agreement
represents the entire understanding and
agreement between the parties with respect to the subject matter
addressed herein and entirely and completely supersedes, voids and
replaces all agreements, negotiations, understandings and
representations (whether written or oral) in existence between the
parties as of the Effective Date and relating to the same subject
matter.
9.6
Binding
Effect. This Agreement shall
inure to the benefit of, the Parties hereto,
and
their respective successors and assigns.
9.7
Disclaimer
of Representations and Warranties. The Parties hereto each disclaim
all liability and responsibility for any other
representation, warranty, statements or communications (orally or
in writing) to any other Party wherever and however made,
including, but not limited to, those made during any negotiations.
Without limiting the generality of the foregoing, none of the
Parties makes any representation or warranty as to (a) the amount,
value, quality or deliverability of petroleum, natural gas or other
reserves attributable to the Assets or (b) any geological,
engineering or other interpretations of economic valuation. The
Assets are sold without any warranty, express, implied or
statutory. All tangible personal property
included in the Assets is sold "AS IS, WHERE IS," and "WITH ALL
FAULTS" and each Seller MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS, STATUTORY OR IMPLIED, AND DISCLAIMS ANY REPRESENTATION OR
WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW,
STATUTE, OR OTHERWISE, AS TO (i) MERCHANTABILITY, (ii) FITNESS FOR
ANY PARTICULAR PURPOSE,
(iii) CONFORMITY
TO MODELS OR SAMPLES OF MATERIALS AND
(iv) CONDITION,
(v) THE PRESENCE, QUALITY, QUANTITY AND RECOVERABILITY OF
HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE ASSETS ASSIGNED,
(vi) THE ABILITY OF THE TRANSFERRED ASSETS TO PRODUCE HYDROCARBONS,
INCLUDING WITHOUT LIMITATION PRODUCTION
RATES, DECLINE RATES AND RECOMPLETION OPPORTUNITIES, (vii) GEOLOGIC
OR GEOPHYSICAL CHARACTERISTICS OR INTERPRETATIONS, (viii) THE
PRESENT OR FUTURE VALUE OF HE ANTICIPATED INCOME, COSTS OR PROFITS,
IF ANY TO BE DERIVED FROM THE TRANSFERRED ASSETS, (ix) THE
COMPLETENESS OR ACCURACY OF THE INFORMATION CONTAINED IN THE FILES,
DATA OR RECORDS OF SELLER. ANY DATA, INFORMATION OR OTHER RECORDS
FURNISHED BY SELLER OR ANY REPRESENTATIVE OF SELLER ARE PROVIDED TO
BUYER AS A CONVENIENCE AND BUYER'S RELIANCE ON OR USE OF THE SAME
IS AT BUYER'S SOLE RISK. THE PARTIES AGREE THAT THE PRECEDING
DISCLAIMERS OF WARRANTY ARE "CONSPICUOUS" DISCLAIMERS FOR PURPOSES
OF ANY APPLICABLE LAW, RULE OR ORDER.
-7-
9.8
Seller's
Retained Obligation:Seller
shall cause the Xxxxxx 68-1 well to be plugged
and abandoned at Seller's costs as soon as practically
possible.
9.9
Any amounts and/or debts which are due and owing to Seller/Assignor
(Xxxxx Petroleum,
LLC and/or Xxxxx Permian, LLC) prior to the effective date of this
Agreement, whether now known or unknown, by co-working interest
owners, joint operators, non-participating working interest owners,
or any party who owes monies or debt to Seller/Assignor withrespect
to any of the properties and/or operations of the properties
assigned under this Agreement, whether known or not known on the
Effective Date, shall remain owed to Seller and are not assigned by
this Agreement. Additionally, any rights or causes of action that
are held by Seller with respect to any of the properties and/or
operations of the properties conveyed under this Agreement, whether
now known or unknown, remain with Seller and are not intended to be
assigned by this Agreement.
9.10
THIS AGREEMENT REPRESENTS THE ENTIRE UNDERSTANDING AND AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER ADDRESSED
HEREIN AND ENTIRELY AND COMPLETELY SUPERSEDES, VOIDS AND REPLACES
ALL AGREEMENTS, NEGOTIATIONS, UNDERSTANDINGS AND REPRESENTATIONS
(WHETHER WRITTEN OR ORAL) IN EXISTENCE BETWEEN THE PARTIES AS OF
THE EFFECTIVE DATE AND RELATING TO THE SAME SUBJECT
MATTER
[SIGNATURE PAGE FOLLOWS]
-8-
