January 19, 2010
January
19, 2010
Mr. H.
Xxxx Xxxxxxx
Executive
Vice President
Reef Oil
& Gas Partners, L.P.
Reef
Exploration, L.P.
0000
Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxx 00000
Re: Third
Party Consents
Dear
Xxxx:
Reference
is made to that certain Purchase and Sale Agreement dated December 18, 2009 and
effective as of December 1, 2009 by and between RCWI, L.P. (“Buyer”) and Azalea
Properties, Ltd. (“Seller”) providing
for the purchase by Buyer of certain assets of Seller (the “PSA”). All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Purchase Agreement.
Pursuant
to Section 3.01(f) of the PSA, Seller is required to list on the Schedules to
the PSA all Material Contracts affecting the Interests. However, as of the
Closing Date, Seller was only able to obtain information sufficient to list a
subset of the Material Contracts, as set forth on Schedule 3.01(f). By
their execution hereof, Seller and Buyer hereby acknowledge and agree that
Seller’s failure to list all of the Material Contracts on Schedule 3.01(f)
shall not constitute a breach of the PSA by Seller, and Seller shall have no
further obligations with respect thereto.
Additionally,
pursuant to the PSA, Seller is required to obtain third party consents necessary
to assign certain of the Interests to Buyer at Closing as set forth on Schedule 3.01(f) (the
“Required
Consents”). By their execution hereof, Buyer and Seller hereby
acknowledge and agree that Seller was unable to obtain and deliver the Required
Consents at Closing.
Buyer and
Seller further agree that if, during the six (6) month period following Closing
(the “Post Closing
Period”), any Required Consent is denied, resulting in Buyer not
obtaining Marketable Title to the affected Interest, Buyer shall notify Seller
within five (5) business days following receipt of such third party’s refusal to
grant consent to assign the Interest (a “Nonconsent Lease”).
In such event, Seller shall refund to Buyer (“Rescission Right”) an
amount equal to the proportionate share of the Adjusted Final Value (set forth
on Exhibit B to
the PSA) affected by the Nonconsent Lease, and Buyer shall execute and deliver
to Seller an executed Assignment, Conveyance and Xxxx of Sale, in the same form
Seller delivered to Buyer at Closing, conveying the Interests back to
Seller, free and clear of all liens, mortgages, security
interests, encumbrances, burdens and claims of any kind. Notwithstanding
anything contained herein to the contrary, Buyer shall not have a Rescission
Right if the Adjusted Final Value of the affected Interests is less than
$100,000.
Buyer and
Seller agree to use commercially reasonable efforts to obtain the Required
Consents and to act in good faith in the pursuit thereof. Buyer and Seller
further agree that if any Required Consent is not obtained, but not
affirmatively denied, it shall not be deemed to be denied and Buyer shall not
have a Rescission Right respect to that Interest.
If,
within five (5) days following the expiration of the Post Closing Period, Buyer
has not notified Seller of any Nonconsent Lease, Buyer shall be deemed to have
waived its Rescission Rights.
SIGNATURE
PAGE FOLLOWS
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Please
indicate your acceptance of the terms hereof by executing this Letter
below.
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Very
truly yours,
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Azalea
Properties, Ltd.
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By:
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Maple
Ridge Property Company
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Its
sole general partner
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By:
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/s/
Xxxxxxx
Xxxxxxxx Xxxxxx
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Xxxxxxx
Xxxxxxxx Xxxxxx
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President
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Accepted
and Agreed to
this
19 day
of January 2010:
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RCWI,
L.P.
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By:
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RCWI,
GP, LLC
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Its
general partner
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx,
Manager
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