EXHIBIT 10.46
▇▇▇▇▇▇ ENERGY (U.S.) CORPORATION
▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
September 19, 1996
Tipperary Oil & Gas Corporation
▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and CEO
Re: Lease Acquisition - Divide Co., North Dakota
Gentlemen:
This letter sets forth the agreement of ▇▇▇▇▇▇ Energy (U.S.) Corporation, a
Delaware corporation ("▇▇▇▇▇▇"), and Tipperary Oil & Gas Corporation, a Texas
corporation ("Tipperary"), concerning the purchase by ▇▇▇▇▇▇ from Tipperary of
an undivided twenty-five percent (25%) interest in oil and gas leases in which
Tipperary owned interests effective as of August 1, 1996 (the "Effective Date").
In consideration of the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ▇▇▇▇▇▇ and Tipperary hereby agree as follows:
1. PURCHASE OF ACREAGE. ▇▇▇▇▇▇ has purchased from Tipperary, and
Tipperary has sold and assigned to ▇▇▇▇▇▇, effective as of the Effective Date,
an undivided twenty-five percent (25%) interest in and to certain oil and gas
leases and other mineral rights (the "Leases") in Divide County, North Dakota,
and all the property and rights incident thereto (the "Interests") as more
particularly described in an Assignment of Oil and Gas Leases of even date
herewith (the "Assignment"), a copy of which is attached hereto as Exhibit A.
2. PURCHASE PRICE. The Purchase Price for the Interests is $75.00 U.S.
per net acre delivered by Tipperary as of the Effective Date. The Interests
conveyed by the Assignment comprise an undivided twenty-five percent (25%)
interest in 29,659.98 net acres, and thus the Purchase Price for the Interests
is $556,124.25. The Purchase Price shall be paid by ▇▇▇▇▇▇ in the following
manner:
Tipperary Oil & Gas Corporation
September 19, 1996
Page 2
(a) $300,000 U.S. has been paid to Tipperary upon execution of this
agreement.
(b) The remainder of the Purchase Price, $256,124.25 U.S., shall be
paid by ▇▇▇▇▇▇ by the timely payment on behalf of Tipperary of its retained
twenty-five percent (25%) working interest share of all seismic, lease
acquisition, drilling and other capital expenditures incurred on the Leases or
otherwise in the Area of Mutual Interest (as defined in the Exploration
Agreement referenced in paragraph 3) after the Effective Date; provided,
however, that if by December 31, 1996, ▇▇▇▇▇▇ has not actually paid such
remainder on Tipperary's behalf, then ▇▇▇▇▇▇ shall pay the remaining unpaid
portion of such remainder to Tipperary on or before January 10, 1997.
3. LYCO AGREEMENTS. The parties acknowledge that the Interests conveyed
to ▇▇▇▇▇▇ are subject to the terms and conditions of that certain Divide
Exploration Agreement (the "Exploration Agreement") dated as of June 27, 1996,
between Tipperary and Lyco Energy Corporation ("Lyco") and that certain Joint
Operating Agreement (the "Operating Agreement") dated as of June 27, 1996, among
Lyco Operating Company, as Operator, and Lyco and Tipperary as Non-operator.
The parties further acknowledge that pursuant to the Letter Agreement of even
date herewith among Lyco, Tipperary and ▇▇▇▇▇▇ (the "Consent Agreement") ▇▇▇▇▇▇
has been recognized as a party to each of the Exploration Agreement and the
Operating Agreement with all the rights and obligations thereunder appurtenant
to its ownership of the Interests, as such agreements are amended by the Consent
Agreement, a copy of which is attached hereto as Exhibit B.
4. ADDITIONAL AMENDMENTS. In addition to the amendments set forth in the
Consent Agreement, the parties acknowledge and agree as follows:
(a) ▇▇▇▇▇▇'▇ rights under Article VII of the Exploration Agreement
shall extend for one year from the date of this agreement (rather than from the
date of the Exploration Agreement) and that the refund amount in the last
paragraph of Article VII to be paid to ▇▇▇▇▇▇ in the event of a Title Defect
shall be $75.00 U.S. per net mineral acre rather than $45.00 U.S.
(b) In place of Tipperary's net revenue interest representations set
forth in the last paragraph of Article VI, Tipperary represents and warrants to
▇▇▇▇▇▇ that the Assignment delivered to ▇▇▇▇▇▇ conveys not less than a twenty
and one-half percent (20.5%) net revenue interest in and to the Leases. In
addition, ▇▇▇▇▇▇'▇ rights and Tipperary's warranties and indemnities set forth
in the second paragraph of Article VI of the Exploration Agreement shall
Tipperary Oil & Gas Corporation
September 19, 1996
Page 3
relate to the Effective Date set forth herein rather than the effective date set
forth in the Exploration Agreement.
5. REPRESENTATIONS AND WARRANTIES.
(a) Tipperary represents and warrants to ▇▇▇▇▇▇ as follows:
(i) AUTHORITY. Tipperary is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Texas. Tipperary has all requisite power and authority to enter into
this agreement, and to perform its obligations under this agreement.
Consummation of the transactions contemplated by this agreement will
not (i) violate, or be in conflict with, any provision of Tipperary's
articles of incorporation or other governing documents, (ii) result in
the breach of any term or condition of, or constitute a default or
cause the acceleration of any obligations under any agreement or
instrument to which Tipperary is a party or is bound, or (iii) violate
any judgment, decree, order, statute, rule or regulation applicable to
Tipperary.
(ii) AUTHORIZATION. The execution, delivery and performance of
this agreement and the transactions contemplated hereby have been duly
and validly authorized by all requisite action on the part of
Tipperary. All instruments delivered by Tipperary in connection with
this agreement have been duly authorized, executed and delivered by
Tipperary. This agreement and all documents executed by Tipperary in
connection with this agreement shall constitute legal, valid and
binding obligations of Tipperary, enforceable against Tipperary in
accordance with their terms, subject only to the effects of
bankruptcy, insolvency, reorganization, moratorium and similar laws
from time to time in effect, as well as general principles of equity.
(iii) AGREEMENTS. To the best of our knowledge, other than this
agreement and the Consent Agreement, the Exploration Agreement and the
Operating Agreement are the only existing agreements that affect or
burden the Interests, the Leases or the Area of Mutual Interest.
(b) ▇▇▇▇▇▇ represents and warrants to Tipperary as follows:
Tipperary Oil & Gas Corporation
September 19, 1996
Page 4
(i) AUTHORITY. ▇▇▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
▇▇▇▇▇▇ has all requisite power and authority to enter into this
agreement, and to perform its obligations under this agreement.
Consummation of the transactions contemplated by this agreement will
not (i) violate, or be in conflict with, any provision of ▇▇▇▇▇▇'▇
articles of incorporation or other governing documents, (ii) result in
the breach of any term or condition of, or constitute a default or
cause the acceleration of any obligations under any agreement or
instrument to which ▇▇▇▇▇▇ is a party or is bound, or (iii) violate
any judgment, decree, order, statute, rule or regulation applicable to
▇▇▇▇▇▇.
(ii) AUTHORIZATION. The execution, delivery and performance of
this agreement and the transactions contemplated hereby have been duly
and validly authorized by all requisite action on the part of ▇▇▇▇▇▇.
All instruments delivered by ▇▇▇▇▇▇ in connection with this agreement
have been duly authorized, executed and delivered by ▇▇▇▇▇▇. This
agreement and all documents executed by ▇▇▇▇▇▇ in connection with this
agreement shall constitute legal, valid and binding obligations of
▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇ in accordance with their terms,
subject only to the effects of bankruptcy, insolvency, reorganization,
moratorium and similar laws from time to time in effect, as well as
general principles of equity.
6. SURVIVAL. The agreements, covenants, representatives and warrants set
forth in this agreement shall survive the date hereof indefinitely and shall not
be merged into or extinguished by the execution of the Assignment.
7. ENTIRE AGREEMENT. This agreement constitutes the entire understanding
among the parties with respect to the subject matter hereof, superseding all
prior discussions, agreements and understandings relating to such subject
matter, including, without limitation, the letter agreement dated July 30, 1996,
between ▇▇▇▇▇▇ and Tipperary.
8. COUNTERPARTS. This agreement may be executed 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. Delivery of an
executed counterpart of this agreement by facsimile shall be equally effective
as delivery of a manually executed counterpart of this agreement, and the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability or binding effect of this agreement.
Tipperary Oil & Gas Corporation
September 19, 1996
Page 5
If the foregoing accurately sets forth our agreement, please execute this
letter in the space provided below.
Very truly yours,
▇▇▇▇▇▇ ENERGY (U.S.) CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
ACCEPTED AND AGREED TO
THIS 19th day of September 1996:
TIPPERARY OIL & GAS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and CEO
