SUPPLEMENTAL AGREEMENT
EXHIBIT
10.3
This
Supplemental Agreement (“Supplemental Agreement”) is dated and effective as of
June 21, 2006 and is between TARH E&P Holdings, L.P. (“TARH”) and Foothills
Texas, Inc. (“Foothills”). TARH and Foothills may hereinafter be referred to as
“Party” or collectively as “Parties.”
This
Supplemental Agreement relates to (i) that certain Purchase and Sale Agreement
dated as of June 21, 2006 relating to Foothills’ purchase of all of TARH’s
right, title and interest in and to certain crude oil and natural gas
properties, and associated assets, located in Goose Creek Field and East Goose
Creek Field, Xxxxxx County, Texas (the “Xxxxxx County Assets”), which agreement
shall hereinafter be referred to as the “Xxxxxx County Agreement”; and (ii) that
certain Purchase and Sale Agreement dated as of June 21, 2006 relating to
Foothills’ purchase of all of TARH’s right, title and interest in and to certain
crude oil and natural gas properties, and associated assets, located in
Cleveland Field, Liberty County, Texas and in Saratoga Field, Xxxxxx County,
Texas, (the “Cleveland and Saratoga Assets”), which agreement shall hereinafter
be referred to as the “Cleveland and Saratoga Agreement.”
The
Xxxxxx County Assets and the Cleveland and Saratoga Assets are sometimes
hereinafter collectively referred to as the “Assets.” The Xxxxxx County
Agreement and the Cleveland and Saratoga Agreement are sometimes hereinafter
collectively referred to as the “Purchase Agreements.”
Terms
not
otherwise defined herein shall have the meanings set forth in the Purchase
Agreements.
In
consideration of the mutual covenants and agreements contained herein and in
the
Purchase Agreements, the Parties hereby agree as follows:
1.
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The
transactions contemplated by each of the Purchase Agreements shall
close
simultaneously and it shall be a condition to closing under each
Purchase
Agreement that the Closing contemplated by such Purchase Agreement
shall
not occur unless it occurs simultaneously with the transaction
contemplated by the other Purchase Agreement.
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2.
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Any
occurrence of a default under the terms of Article 17 of either Purchase
Agreement shall constitute an event of default under Article 17 of
both
Purchase Agreements and shall entitle the non-defaulting Party to
the
remedies set forth in Article 17 of both Purchase Agreements.
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3.
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For
purposes of Article 8 of each Purchase Agreement, the Aggregate Title
Defect Value shall be determined by including all Title Defects relating
to both the Xxxxxx County Assets and the Cleveland and Saratoga Assets,
subject to exclusion of all Minimal Title Defects relating to any
of the
Assets. For purposes of Article 8 of each Purchase Agreement, the
determination whether or not the Aggregate Title Defect Value exceeds
5%
of the Purchase Price shall be determined by reference to the combined
Purchase Price for the Assets under the terms of both Purchase
Agreements.
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4.
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For
purposes of Article 10 of each Purchase Agreement, the Aggregate
Environmental Defect Value shall be determined by including all
Environmental Defects relating to both the Xxxxxx County Assets and
the
Cleveland and Saratoga Assets, subject to the exclusion of all Minimal
Environmental Defects relating to any of the Assets. For purposes
of
Article 10 of each Purchase Agreement, the determination whether
or not
the Aggregate Environmental Defect Value exceeds 5% of the Purchase
Price
shall be determined by reference to the combined Purchase Price for
the
Assets under the terms of both Purchase Agreements.
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5.
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For
purposes of Article 16 of each Purchase Agreement, the determination
of
whether or not any Casualty Loss, as defined in the Purchase Agreements,
exceeds 5% of the Purchase Price shall be determined by reference
to the
combined Purchase Price paid for the Assets under the terms of both
Purchase Agreements.
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6.
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For
purposes of Article 3.3 of each Purchase Agreement, any adjustments
to the
Purchase Price shall be made to the stock portion of the combined
Purchase
Price paid for the Assets under the terms of both Purchase Agreements,
and
no adjustments shall be made to the cash portion of the combined
Purchase
Price paid for the Assets under the terms of both Purchase
Agreements.
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IN
WITNESS WHEREOF, the Parties have executed this Supplemental Agreement as of
the
date first written above, but effective the Effective Time.
TARH
E&P Holdings, L.P.
By:
/s/
Xxxx Gieselman_______________
Xxxx
Xxxxxxxxx
Secretary
FOOTHILLS
TEXAS, INC.
By:
/s/
Xxxxxx X. Tower_______________
Xxxxxx
X.
Tower
Chief
Executive Officer
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