AGREEMENT
THIS
AGREEMENT
is dated
November 8, 2006 but made effective for all purposes as of first date of sales
from Producing Properties described in attached Exhibit “B”, (the “Effective
Date”) by and between Delta Oil and Gas, Inc., hereinafter referred to as
“Assignor”, and Production Specialties Company, hereinafter referred to as
“Assignee”, and together with Assignor, the “Parties.”
RECITALS
Assignor
represents that it desires to sell to Assignee all of its interest in the
Subject Leases, Agreements, Xxxxx, Well Connections, all associated surface
facilities and Pipelines (the Subject Leases, Agreements and Xxxxx collectively
hereinafter referred to as the “Producing Properties”).
Assignor
represents it owns 12.50% (twelve and one half percent) working interest and
8.5% (eight and one half percent) net revenue interest in these “Producing
Properties” described herein. It is Assignee’s express intent to acquire 100%
(one hundred percent) of Assignor’s working interest and 100% of Assignor’s net
revenue interest in these “Producing Properties”.
Reference
is made to that certain Assignment and Xxxx of Sale dated November 10, 2006,
a
copy of which is attached as Exhibit “C” by and between Delta Oil and Gas, Inc.,
Assignor and Production Specialties Company, Assignee.
THEREFORE,
in
consideration of the above recitals and of the covenants and agreements herein
contained, Assignor and Assignee agree as follows:
1.Purchase
and Assignment.
Subject
to and upon all of the terms and conditions hereinafter set forth, Assignor
shall sell, transfer, assign, convey and deliver unto Assignee, as of the
Effective Date, all of Assignor’s right, title and interest in and to the
Producing Properties as described in Exhibit “B”, and Assignee shall purchase,
receive, pay for and accept all of the interest of Assignor in the Producing
Properties as described in Exhibit “B” from Assignor, as of the Effective Date.
Assignor makes this sale without representative covenants or warranties as
to
title or quantum of interest conveyed, either express or implied.
2.
Purchase
Price. The
sale
price for the Producing Properties shall be One Million Five Hundred Thousand
Dollars ($1,500,000.00) and shall be payable by wire transfer to the account
of
Assignor.
3.
Conditions
Precedent to Obligation of Each Party to Close.
The
Parties shall consummate the sale and purchase of the Producing Properties
contemplated by this Agreement at Closing, provided the following conditions
have been satisfied or waived by both Parties:
(a)
No
suits, actions or other proceedings are pending before any court or governmental
entity in which a third party is seeking to restrain, enjoin or otherwise
prohibit the consummation of or obtain material damages associated with the
transactions contemplated by this Agreement (or the sale of any one or more
of
the Producing Properties), nor are there (to the best of the Parties’ knowledge
and belief) any such actions pending that may result in any suit, action or
other proceedings seeking to restrain, enjoin or otherwise prohibit the
consummation of the transaction
contemplated
by this Agreement (or the sale of any one or more of the Producing Properties).
If on Closing a suit, action or other proceeding applicable to some (but not
all) of the Producing Properties is pending, Closing with respect to the
unaffected Producing Properties will not be delayed and the Parties will
undertake a second closing when the above referenced condition to Closing is
removed. If the above referenced condition to Closing is not removed as to
the
affected Producing Properties within sixty (60) days after the Closing, the
affected Producing Properties will be removed from this Agreement and the
Parties will have no further obligations to each other with respect to the
same.
4.
Closing.
The
Closing shall be held on or before November 22, 2006 or such earlier date
mutually agreed to by the Parties. At Closing the following will
occur:
(a)
Assignor and Assignee shall execute, acknowledge and deliver a copy of this
Agreement.
(b)
Assignee shall deliver to Assignor by wire transfer the Purchase Price as
specified in Section 2, hereinabove.
(c)
Assignor and Assignee shall execute any necessary forms required by governmental
or local agencies for the transfer of the Producing Properties and Assignee
shall file same immediately following Closing.
(d)
Assignor shall (subject to the terms of any applicable agreements and to the
other provisions hereof) deliver to Assignee exclusive possession of the
Producing Properties, effective as of the Effective Date.
5.
Reservations
and Exceptions.
The
assignment and purchase of the Producing Properties is made subject to all
reservations, exceptions, limitations, contracts and other burdens or
instruments that are of record or of which Assignee has actual or constructive
notice. The burdens are to be limited to those described in those certain letter
agreements described in Exhibit “A” attached hereto and made a part of this
Agreement.
6.
Assumption
of Liabilities and Indemnities:
As used
in this Paragraph 6, "claims" shall include claims, demands, causes of action,
liabilities, damages, penalties, fines, assessments, and judgments of any kind
or character and all costs and fees in connection therewith. Assignee shall,
(i)
at the Effective Date assume, and be solely responsible for and comply with
all
duties and obligations of Assignor, express or implied, with respect to the
Interests, including, without limitation, those arising under or by virtue
of
any lease, contract, operating agreement, other agreement, document, permit,
applicable statute or rule, regulation or order of any governmental authority
(specifically including, without limitation, any governmental request or
requirement to plug, re-plug, and/or abandon any well of whatsoever type, status
or classification, or take any clean-up or other action with respect to the
property or premises), and (ii) defend, indemnify and hold Assignor free and
harmless from any and all claims in connection therewith.
7.
Adjustments.
All
Oil, gas and other production from or attributable to the Producing Properties
which was produced after the Effective Date shall belong to Assignee. It is
agreed and understood that it shall be Assignor’s responsibility to pay for any
costs and joint interest xxxxxxxx attributable to the Properties previously
received and received after the Effective Date, but only for costs related
to
drilling, completing, and tie-in of said xxxxx described in Exhibit
B
attached to and made a part of this Purchase and Sale Agreement. Within sixty
(60) days after closing, Assignor and Assignee will effect a cash adjustment
to
account for any costs and expenses for incurred by
2
Assignor
prior and after the Effective Date attributable to the Producing Properties
prior to sales point which have not been paid by Assignor as of the Closing
Date
and (c) such other adjustments as may be agreed upon by the
parties.
8.
Taxes.
Ad
valorem taxes, real property taxes and similar obligations (“Property Taxes”)
shall be prorated as of the Effective Date and settlement shall be made within
sixty (60) days after Closing. If any such Property Taxes are not due at
Closing, Assignee will thereafter be responsible for payment of same and will
invoice Assignor for its pro rata share, providing supporting documentation
therefore, and such pro rata share shall be due upon receipt of such
billing.
9.
Post-Closing
Adjustments.
After
Closing, Assignee shall prepare, in accordance with this Agreement and with
generally accepted accounting principles consistently applied, a statement
(“Final Settlement Statement”), a copy of which shall be delivered by Assignee
to Assignor no later than sixty (60) days after the Closing, setting forth
each
adjustment to the Purchase Price necessary to determine the Final Purchase
Price
and showing the calculation of such adjustments. Assignor shall have ten (10)
days after receipt of the Final Settlement Statement to review such statement
and to provide written notice to Assignee of Assignor’s objection to any item on
the statement. If Assignor does not provide written objection(s) within the
ten
(10) day period, the Final Settlement Statement shall be deemed correct. If
Assignor provides written objection(s), then the Final Settlement Statement
shall be deemed correct with respect to items not objected to by Assignor.
Assignor and Assignee shall immediately meet to resolve and negotiate the
objections.
10.
Notices.
All
communications required or permitted under this Agreement shall be in writing
and any communication or delivery hereunder shall be deemed to have been fully
made if actually delivered, or if mailed by registered or certified mail,
postage prepaid, to the address as set forth below.
Assignor
Delta
Oil
and Gas, Inc.
#000-0000
Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
X.X. X0X 0X0
XXXXXX
Assignee
Production
Specialties Company
X.X.
Xxx
00000
Xxxxxxxxxxx,
XX. 00000-0000
11.
Further
Assurances.
After
Closing 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. However, Assignee shall assume
all responsibility for notifying the purchasers of production from the Producing
Properties, and such other designated persons who may be responsible for
disbursing payments for the purchase of such production, of the change of
ownership of the Producing Properties. Assignee shall take all actions necessary
to effectuate the transfer of such payments to Assignee as of the Effective
3
Date.
Assignor shall have no responsibility or liability for the proper distribution
of proceeds from and after the Effective Date.
12.
Entire
Agreement.
This
instrument states the entire agreement between the Parties and may be
supplemented, altered, amended, modified or revoked by writing only, signed
by
all parties.
13.
Survival.
The
representations, warranties and agreements contained in this Agreement and
in
any assignment or certificate or other instrument delivered by or on behalf
of
either party pursuant to this Agreement shall survive the Closing and shall
be
unaffected by any investigation made by the other party.
14.
Headings.
The
headings and captions used in this Agreement are for the convenience of the
parties only and shall have no significance in the interpretation of this
Agreement.
15.
Governing
Law.
This
Agreement and the rights and obligations of the parties hereto shall be
governed, construed and enforced in accordance with the laws of the State of
California. The parties agree that any litigation relating directly or
indirectly to this Agreement must be brought before and determined by a court
of
competent jurisdiction within the State of California.
16.
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
IN
WITNESS WHEREOF, this agreement is executed effective the 10th day of November,
2006.
ASSIGNOR
Delta
Oil
and Gas, Inc.
By:
/s/ Xxxx Xxxxx
Xxxx
Xxxxx
President
ASSIGNEE
Production
Specialties Company
By:
/s/ Xxxx Xxxxxx
Dero
X.
Xxxxxx Xx.
President
4
EXHIBIT
“A”
Attached
to and made part of that certain Purchase and Sale Agreement dated effective
from first date of sales from Producing Properties described on Exhibit “B”
between Production Specialties Company and Lario Oil & Gas
Company
AGREEMENTS
NA
SUBJECT
LEASES
Lease: 05037
Lessor:
C&C
Minerals LTD
Lessee:
NNG
Legal: T-4-N
R-3-E
Sec 7: XX, X0XX, XXXX, XXXX, X0XX
Containing
400
acres
Sec
6: SW, NWSE Pt
Containing
80
acres
Sec
18: NE
Containing
160
acres
Sec
17: W2NW Pt
Containing
185
acres
All
in Xxxxxx County,
California
5
EXHIBIT
B
ATTACHED
TO AND MADE A PART OF AGREEMENT DATE
EFFECTIVE
FROM FIRST DATE OF SALES FROM XXXXX LISTED BELOW , BY AND
BETWEEN
PRODUCTION
SPECIALTIES COMPANY AND LARIO OIL & GAS COMPANY
XXXXX,
pipelines and all associated equipment:
All
located in Xxxxxx County, California
C&C
Minerals XXX #0-0
X-0-X
R-3-E Section 7
C&C
Minerals NNG #7-2
1500’
North & 420’ West from the S.E. corner of Xxxxxxx 0, Xxxxxxxx 0 Xxxxx, Xxxxx
0 Xxxx, X.X.X.&X.