THIRD AMENDMENT TO PURCHASE, SALE AND PARTICIPATION AGREEMENT
This Third Amendment to Purchase, Sale and Participation Agreement (this
"THIRD AMENDMENT"), is dated as of June 27, 2013, by and between 5 JAB, INC., a
corporation ("SELLER"), AND THREE FORKS, INC. a corporation ("BUYER"). Seller
and Buyer are sometimes referred to herein individually as a "PARTY" and
collectively as the "PARTIES."
RECITALS
WHEREAS, Buyer and Seller entered into that certain Purchase, Sale and
Participation Agreement, dated as of February 27, 2013, as amended by that
certain First Amendment to Purchase, Sale and Participation Agreement, dated as
of April 30, 2013, and that certain Second Amendment to Purchase, Sale and
Participation Agreement ("SECOND AMENDMENT ") dated as of May 13, 2013
(collectively, the "PURCHASE AGREEMENT"); AND
WHEREAS, Buyer and Seller desire to amend the Purchase Agreement, as
provided herein. Capitalized terms used but not otherwise defined herein shall
have the meanings attributed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein and in the Purchase Agreement, Buyer and Seller hereby agree as
follows:
AGREEMENT AND AMENDMENT
1. FIRST AND SECOND CLOSINGS. The Parties will consummate the transaction
contemplated by the Purchase Agreement ("CLOSE") in two stages:
(i) On June 27, 2013 (the "FIRST CLOSING DATE"), subject to the
satisfaction of the Parties' respective conditions to closing, the
Parties shall Close as to an undivided one- half (1/2) of the
Interests, being an undivided 37.5% interest in and to the Properties
(I.E. being an undivided 1/2 of 75% of Seller's interest in the
Properties) (the "FIRST CLOSING"). Such undivided one-half (1/2) of
the Interests is herein referred to as the "FIRST TRANCHE". The amount
payable at the First Closing for the First Tranche shall be one half
(l/2) of the unadjusted Purchase Price.
(ii) On September 1, 2013 (the "SECOND CLOSING DATE"), subject to the
satisfaction of the Parties' respective conditions to the Second
Closing as described herein below, the Parties shall Close as to an
undivided one-half (1/2) of the Interests, being an undivided 37.5%
interest in and to the Properties (I.E. being an undivided 1/2 of 75%
of Seller's interest in the Properties) (the "SECOND CLOSING). Such
undivided one-half (1/2) of the Interests is herein referred to as the
"SECOND TRANCHE". The amount payable at the Second Closing for the
Second Tranche shall be one half (1/2) of the Purchase Price, plus or
minus the net adjustments to the Purchase Price contemplated to be
made at Closing under the Purchase Agreement.
(iii)The Closing Statement will be due two (2) days prior to the Second
Closing, and Seller shall submit the Final Accounting Statement to
Buyer within ninety (90) days after the Second Closing. Adjustments to
the Purchase Price (if any) reflected in the Closing
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Statement and the Final Accounting Statement will include any such
adjustments relating to both the First and Second Tranches.
(iv) Notwithstanding the postponement of Closing as to the Second Tranche,
there shall be no extension of the deadline to submit Asserted
Defects.
2. EFFECTIVE DATE. The Effective Date as to the First Tranche shall be June
30, 2013 ("First Effective Date"). The Effective Date as to the Second Tranche
shall be September 1, 2013 ("Second Effective Date").
3. DEPOSIT. The Deposit will remain in the Deposit Account until the Second
Closing Date. If the Second Closing occurs, the Deposit shall be applied to the
portion of the Purchase Price payable with respect to the Second Tranche. If the
Second Closing does not occur, the Deposit shall be released to Seller, unless
expressly required to be released to Buyer pursuant to the Second Amendment. On
September 1, 2013, the Parties will deliver such documents as may be reasonably
required to permit the release of the Deposit to Buyer or Seller as required by
this Agreement.
4. CONDITIONS. The Parties' respective conditions to Closing set forth in
the Purchase Agreement shall remain conditions precedent to their respective
obligations as to the Second Closing, provided, however, that if the Parties'
condition to Closing relating to average daily production levels (as set forth
in Section 2.5(b), Section 13(d), or elsewhere) is met as of the First Closing
Date, such condition shall cease to be a condition to the Second Closing and
shall be deemed met for all purposes after the First Closing.
5. CONVEYANCE, TERMINATION AND UNWIND. The conveyance of the First Tranche
("First Conveyance") will be delivered in a form substantially similar to
Exhibit "B", as adjusted to convey only the First Tranche, provided however the
form of the First Conveyance will be revised to be a conditional conveyance,
under which the interests conveyed thereby shall automatically revert to Seller
if the Second Closing fails to occur for any reason on the Second Closing Date.
If the Second Closing does not occur for any reason:
(i) Buyer further agrees to execute and deliver to Seller such
reconveyances or other instruments reasonably necessary to evidence
the reversion of title to the First Tranche to Seller, should the
Second Closing fail to occur.
(ii) Seller shall refund the portion of the Purchase Price paid by Buyer
for the First Tranche (less the Deposit if Seller is to retain the
Deposit under this Agreement), net of the positive difference (if any)
between all amounts received by Buyer attributable to production from
the First Tranche for the period of time after the First Effective
Date, less any operating costs or joint interest xxxxxxxx attributable
to the First Tranche paid by Buyer to Seller for the period of time
after the First Effective Date.
6. REFERENCES. All references to the Purchase Agreement in any document,
instrument, agreement, or writing delivered pursuant to the Purchase Agreement
(as amended hereby) shall hereafter be deemed to refer to the Purchase Agreement
as amended hereby.
7. COUNTERPARTS. This Third Amendment may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all of such
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counterparts shall constitute for all purposes one agreement. Any signature
hereto delivered by a Party by facsimile or e-mail transmission shall be deemed
an original signature hereto.
8. RATIFICATION. The terms of this Third Amendment supersede any
conflicting terms in the Purchase Agreement. In all other respects, the Purchase
Agreement, as amended hereby, is hereby adopted, ratified, and confirmed by
Buyer and Seller. All references to the Purchase Agreement in any assignment or
other instrument delivered in connection with the transaction(s) contemplated
hereby shall refer to the Purchase Agreement as so amended.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have executed this Third Amendment as of
the date first written above.
SELLER:
FIVE J.A.B., INC.
By:
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Xxxxx X. Xxxxxxxx, Xx.
President
BUYER:
THREE FORKS, INC.
By:
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Xxxxxx Xxxxxxx
Chairman and Counsel
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