Exhibit 10.17
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into effective the 30th day of July,
2004, by and between AQUATIC CELLULOSE INTERNATIONAL CORPORATION, a Nevada
corporation, with offices at 0000-00xx Xxxxxx Xxxxx 0, Xxxxxx, X.X. Xxxxxx, X0X
0X0, herein referred to as "Aquatic" and TITAN CONSOLIDATED INC. a Nevada
corporation, maintaining offices at Xxx Xxxxxxxxx Xxxxxx, Xxxxx X-000, 000 XX
Xxxx 000, Xxx Xxxxxxx, XX 00000, XXX, herein referred to as "Titan" and,
WHEREAS, Aquatic is the owner of certain Oil and Gas Leases, referred to as the
"Subject Property", which is more particularly described on Exhibits "A"
attached hereto, which are located in Xxx Xxxx County, Texas; and
WHEREAS, Titan desires to option a certain portion of Aquatic's rights, titles
and interest in and to the said Oil and Gas Lease, subject to the terms,
conditions, reservations and limitations provided hereafter,
NOW, THEREFORE, for and in consideration of the premises and of the mutual
covenants and Agreements herein contained, during the initial term of this
Agreement and during any renewal or extension of the term of this Agreement, it
is hereby agreed by and between the parties hereto as follows:
THE XXXXX FIELD LEASE. Subject to and in accordance with the terms and
conditions of this Agreement, Aquatic agrees to sell, convey, assign, transfer
and deliver to Titan and Titan agrees to purchase from Aquatic as of the
Effective Date of October 1, 2004, forty percent (40%) working interest and
twenty percent (20%) net revenue interest of Aquatic's right, title and
interest, in and to the following (the "Xxxxx Field lease"):
A. Within fifteen (15) days after the receipt from Titan of the
timely cash payment provided for below, Aquatic shall execute
and deliver to Titan an assignment for its forty percent (40%)
ownership percentage, in and to the Oil and Gas lease.
B. Said assignment shall be effective as of the "Effective Date"
and shall be subject to the following terms, conditions,
reservations and limitations:
1. The above mentioned assignment shall be made without
warranty of any kind, express or implied, except that
Aquatic shall warrant title to the oil and gas leases
by, through and under itself, but not otherwise.
2. Said assignment shall be made subject to the terms,
covenants and conditions of the following:
a. The oil and gas leases; and
b. This Agreement; and
c. That certain unrecorded Operating Agreement, to
be executed by and between the parties, (copy
attached hereto as Exhibit "B"), when this
Agreement is executed.
d. The interest assigned shall be subject to its
proportionate share of all royalties, overriding
royalties, production payments and other
leasehold burdens created, reserved, excepted or
assigned in any of the instruments referred to
in paragraph 2 hereinabove.
C. CASH PAYMENT. As full consideration hereunder, Titan shall pay
unto Aquatic the total amount of $500,000 due and payable upon
signing of this agreement.
D. PAYMENT OF CASH CONSIDERATION. Payable by Titan to Aquatic as
follows:
a. Ten Thousand Dollars ($10,000.00) in the form of a wire
transfer was paid to Aquatic as a partial xxxxxxx money
deposit. Receipt of this partial deposit is acknowledged
by:
Aquatic: /S/ SW
--------------
Titan: /S/KJ
---------------
b. Forty Thousand Dollars ($40,000.00) in the form of a
wire transfer shall be paid to Aquatic as the balance of
an xxxxxxx money deposit no later than September 15th
2004. Receipt of this partial deposit is acknowledged
by:
Aquatic:
--------------
Titan:
---------------
c. The balance of the purchase price of Four Hundred Fifty
Thousand Dollars ($450,000.00) is due upon signing of
this agreement and payable from Titan to Aquatic in the
form of a bank cashier's check or wire transfer no later
than the "Closing Date" of November 15th 2004.
E. CLOSING. The sale and purchase of the Property pursuant to this
Agreement (the "Closing") shall be consummated and take place at
the offices of Aquatic after on or before November 15th, 2004
(the "Closing Date"), or at such place and time as may be
mutually agreed upon in writing by the Parties.
(a) Titan shall deliver to Aquatic at or before the Closing
the remaining amount of the Purchase Price in certified
funds or by wire transfer pursuant to Aquatic's written
instructions in accordance with C. AND D. above; and
such other instruments or documents as Buyer may
reasonably request of Seller to consummate the
transaction contemplated herein.
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(b) Seller shall deliver to Buyer at the Closing an original
executed Assignment, in the form requested by Buyer and
such other instruments or documents as Seller may
reasonably request of Buyer to consummate the
transaction contemplated herein.
(c) EFFECTIVE DATE. The conveyance from Aquatic shall be
effective as of November 15, 2004, at 7:00 a.m. Pacific
Standard Time ("Effective Date").
F. EFFECT OF FAILURE TO PERFORM BY TITAN:
Should Titan fail to comply with the above specified commitment to make the
required cash payment to Aquatic within the time guidelines noted above, then
Titan shall be deemed to be in default under this Agreement, and any of Titan's
rights (earned or to be earned) hereunder and under the Operating Agreement
shall ipso facto terminate. Upon the occurrence of such non-performance, there
shall be an automatic reversion to Aquatic of any rights, titles and interests
that were scheduled to be conveyed to Titan. In such event, the cash deposit of
$50,000.00, in whole or in part, paid by Titan pursuant to this Agreement shall
be retained by Aquatic, not as a penalty, but as the good-faith agreement of the
parties hereto to liquidate their damages in the event Titan fails to perform
pursuant to this Agreement.
G. OPERATOR.
Century Resources Inc. of Houston Texas shall be designated as the Operator of
the Oil and Gas leases and xxxxx drilled pursuant to this Agreement and shall
have full control over drilling and other operations at all times.
H. OPERATING AGREEMENT:
It is agreed that with the execution of this Agreement by the parties, each
shall execute the Operating Agreement (copy attached hereto as Exhibit "B"), and
the Operating Agreement shall become effect as of that date as to all operations
and other activities conducted on the "Contract Area" described therein.
Notwithstanding anything to the contrary contained herein or in the Operating
Agreement, in the event of conflict or inconsistency between the terms and
provisions of this Agreement and those of the Operating Agreement, it is
stipulated that the terms and provisions of this Agreement shall prevail.
I. GENERAL PROVISIONS.
1. RIGHT TO JOIN IN SALE OF INTERESTS TO THIRD PARTIES.
Titan and Aquatic agree that if either party should offer any of their interests
hereunder for sale to any third parties, they will grant the other party the
option of including their interests free of cost in such sales.
2. PREFERENTIAL RIGHT TO PURCHASE. Subject to the terms of
this Agreement, Titan and Aquatic shall each have a recurring preferential right
to purchase the other parties interest in
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proposed sale of any interest acquired under this Agreement. Before entering
into a sales contract with a purchaser, Aquatic or Titan will promptly give
written notice of the proposed sale, describing all relevant details, including
a draft of the proposed contract. Each party shall have fifteen (15) days after
receipt of the notice within which to elect to contract to purchase or designate
an alternate purchaser, on the same terms contained in the notice, or on terms
more favorable. If any party fails to notify the selling party of its election
within the fifteen (15) day period, or elects not to purchase, the selling party
may enter into the proposed contract on the same terms contained in the notice
to the other party. If, for any reason, either party does not enter into the
proposed contract on the terms contained in the notice and permitted by this
Agreement, or if the proposed contract executed terminates, expires or is
renegotiated, in whole or in part, the preferential right shall apply again and
in accordance with this Agreement and the Operating Agreement. Titan's continued
compliance with all terms of this Agreement and the Operating Agreement is a
condition to Titan preserving this preferential right to purchase Aquatic's
interest offered to a third party.
3. NO PARTNERSHIP. This Agreement shall not be construed as
creating a partnership between the parties hereto or rendering them liable as
co-partners or as authorizing any of the parties to act as the agent, servant or
employee of the other party hereto for any purpose whatsoever, except to the
extent Century Resources Inc. as Operator is authorized to do so under the terms
of the Operating Agreement attached as Exhibit"B". The parties liabilities shall
be several, not joint or collective.
4. TIME IS OF THE ESSENCE OF THIS AGREEMENT.
5. REPRESENTATIONS BY AQUATIC. Aquatic represents and
warrants that the following statements are true and correct at the date hereof
and at the Closing Date in all material respects, Aquatic shall perform and
comply in all material respects with all covenants and conditions herein
required:
a. ORGANIZATION AND AUTHORITY. Aquatic Cellulose
International Corporation a Nevada corporation is duly organized, in good
standing, and qualified to own mineral interests in the state where the Property
is located and has the power and authority to carry on its business as presently
conducted, to own and hold the Property, to sell the Property and to perform all
obligations required by this Agreement.
6. REPRESENTATIONS BY TITAN. Titan represents to Aquatic
that the following statements are true and correct and shall be true at and as
of the Closing Date in all material respects, Buyer shall perform and comply in
all material respects with all covenants and conditions herein required.
a. ORGANIZATION AND AUTHORITY. Titan is a Nevada
corporation, in good standing, and qualified to carry on its business in the
state where located and has the power and
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authority to carry on its business as presently conducted, to own, purchase and
hold the Property, and to perform all obligations required by this Agreement.
b. TITAN'S INVESTIGATIONS. Subject to any required
consent of third parties, Seller agrees to allow Buyer and its authorized
representatives to conduct inspections or investigations on or with respect to
the Property without limitation. Buyer agrees that it will hold in trust, keep
confidential, and not disclose to any third party or make any use of any
confidential information obtained from Seller except to the extent necessary to
complete its investigations described herein unless the purchase and sale
contemplated herein is accomplished and the Property is transferred to Buyer.
TITAN STIPULATES THAT IT HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THAT THE PARTIES ARE NOT IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION.
7. TITLE. Seller warrants title to the interest being
conveyed to Buyer against all persons lawfully claiming, or to claim, all or any
portion of the ownership of Aquatic Cellulose International Corp., or the oil
and gas leases. Seller will convey to Buyer, to the full extent transferable,
the benefit of and the right to enforce title warranties, which Seller is
entitled to enforce.
8. NOTICES. All notices and communications required or
permitted under this Agreement shall be in writing, delivered to or sent by U.S.
Mail or Express Delivery or Federal Express, postage prepaid, or by prepaid
telegram or acknowledged facsimile, addressed as follows:
Xxxx Xxxxxxxx
Titan Consolidated Inc.
0000 Xxxxxxxx Xxx
Xxxxx Xxxxxxxxx
XX X0X 0X0 Xxxxxx 000 000-0000
Sheridan Westgarde
Aquatics Cellulose International Corporation
0000- 00xx Xxxxxx, Xxxxx 0
Xxxxxx, X.X.
Xxxxxx, X0X 0X0 000-000-0000
9. PARTIES IN INTEREST. This Agreement shall inure to the
benefit of and be binding upon Seller and Buyer and their respective heirs,
successors and assigns. However, no assignment by any party shall relieve any
party of any duties or obligations under this Agreement. Specifically, to the
extent Titan assigns or transfers any or all of its interest in this Agreement,
Titan shall remain liable for all obligations arising under this Agreement to
the same extent that it was liable before said assignment or transfer.
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Titan may not assign it interest in this agreement to any party without the
express written consent of Aquatic, which consent may be withheld at Aquatic's
sole discretion.
10. HEADINGS FOR CONVENIENCE. The paragraph headings used in
this Agreement are inserted for convenience only and shall be disregarded in
construing this Agreement.
11. ENTIRE AGREEMENT. This Agreement and all exhibits
hereto, shall constitute the entire contract and agreement of Aquatic and Titan
and shall supersede and override any and all prior discussions, correspondence,
and agreements between them as to, and only as to, the contemplated operations,
promises, and agreements as specifically provided for herein.. Aquatic and Titan
agree that as to the matters contemplated and provided for herein, there are no
undertakings, obligations, promises, assurances, agreements or conditions,
whether precedent or otherwise, except those specifically set forth in this
Agreement and in the exhibits attached hereto. Other than as prescribed herein,
no amendment, modification, termination or cancellation of this Agreement shall
be effective unless in writing and signed by the Parties.
12. DISPUTES AND APPLICABLE LAWS. Should any party to this
Agreement bring an action, including a lawsuit, against any other party to this
Agreement (or any of its directors, officers, employees and agents) to enforce
or interpret any term or condition of this Agreement, then the prevailing or
substantially prevailing party in such action shall be entitled to recover an
amount for reasonable attorneys fees in addition to any costs awarded by
judgment. This Agreement shall be governed exclusively by, and construed
according to, the laws of the State of Nevada.
13. NO WAIVER. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions,
whether similar or not, nor shall a waiver constitute a continuing waiver or a
precedent to make similar waivers in the future. No waiver shall be binding
unless executed in writing by the party making the waiver.
14. SURVIVORSHIP OF PROVISIONS. If, for any reason, any
provision or part of this Agreement is determined to be invalid or contrary to,
or in conflict with, any existing or future law or regulation as determined
finally by a court or agency having competent jurisdiction, then the Parties
agree that such provision or part thereof shall be amended and/or modified to
the minimum extent necessary to make such provision or part thereof valid or
enforceable, unless to do so would alter materially the rights, duties and/or
obligations of the Parties hereto. Any such amendment or modification shall not
impair the operation or affect the remaining provisions of this Agreement and
such remaining provisions will continue to be given full force and effect and
bind each party unless the necessary amendment or modification would alter
materially the rights, duties and/or obligations of the Parties hereto in which
case this Agreement shall terminate unless otherwise agreed by the Parties
hereto.
15. FURTHER ASSURANCES. After Closing, Seller and Buyer
agree to take such further actions and to execute, acknowledge and deliver all
such further documents that are necessary or useful in carrying out the purposes
of this Agreement or of any document delivered pursuant hereto.
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16. THIRD PARTY BENEFICIARIES. There are no third parties
who are intended to be beneficiaries of this Agreement.
17. CONFIDENTIALITY. Due to the confidentiality of certain
\aspects of Aquatic's business, and proprietary nature of certain non public
information and data, which is acknowledged by all parties hereto, Titan and its
agents will not disclose to any person, without the prior written consent of
Aquatic, any confidential information and any information about the proposed
transaction, or the terms or conditions or any other facts relating thereto
except as directly required in connection with any financing agency. Titan shall
keep confidential all information regarding this agreement, contracts,
financial, geological, engineering and related information.
IN WITNESS WHEREOF, THIS AGREEMENT SHALL BE EFFECTIVE AS OF JULY 30, 2004.
EXECUTED THIS __30_ DAY OF JULY, 2004.
AQUATIC CELLULOSE TITAN CONSOLIDATED INC.
INTERNATIONAL CORP.
/s/ Sheridan B. Westgarde /s/Xxxx Xxxxxxxx
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Sheridan B. Westgarde, CEO Xxxx Xxxxxxxx, President
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EXHIBIT "A"
Attached to and made a part of that certain Purchase and Sale Agreement between
Aquatic Cellulose International Corporation, and Titan Consolidated Inc. as
dated July 30, 2004. Leases owned by Aquatic and subject to this agreement:
1. LEASES: XXXXX FIELD XXX XXXX COUNTY, TEXAS:
LESSOR LESSEE
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OIL AND GAS PROPERTY INTERESTS
OIL, GAS AND MINERAL LEASE:
DATE:
LESSOR:
LESSEE:
Land: 1,365. Acres, more or less,
Recorded: Volume XXX, Page XXX, XX
Amended: Volume XXX, Page X
SUBSURFACE EASEMENTS
1. Date:
Grantor:
Grantee:
Land: Lots
Recorded: Volume xxx, Page xxx, DR
A-1
EXHIBIT "B"
(COPY OF OPERATING AGREEMENT)
B-1
