Exhibit 10.1
PURCHASE & SALE AGREEMENT
This agreement ("Agreement") is between Blue Ridge Energy, Inc. ("BRE"),
a Nevada corporation and Lonesome Dove Petroleum, Inc. ("Lonesome Dove"), a
Montana corporation, who agree as follows:
RECITALS
Lonesome Dove is a party to that certain Exploration Agreement dated
effective February 1, 2002, along with Fortune Natural Resources Corporation
("Fortune"), PrimeEnergy Management Corporation ("Prime"), Lonesome Dove
Petroleum, Inc. ("Lonesome Dove"), Braveheart Holdings, LLC ("Braveheart") and
Southwestern Eagle, LLC ("Southwestern"). Lonesome Dove, Braveheart,
Southwestern and Cymraec Exploration, Inc. ("Cymraec") are sometimes referred to
therein (and in this Agreement) as the "Seismic Partners".
Lonesome Dove previously acquired a fifteen percent (15%) Seismic
Partner interest that had been owned by Braveheart (the "Braveheart Interest").
Lonesome Dove is interested in conveying hereunder only its rights,
duties and obligations as a Seismic Partner under the Exploration Agreement
attributable to the Braveheart Interest The Seismic Participation Percentage
being conveyed is 15% of all Seismic Partner rights and duties under the
Exploration Agreement.
Lonesome Dove desires to sell, transfer and assign said portion of its
Seismic Partner rights and duties under (i) the Exploration Agreement and (ii)
the Seismic Agreements (hereinafter defined) to BRE, and BRE desires to purchase
such rights, pursuant and subject to the terms and provisions of this Agreement.
Now, therefore the parties agree as follows:
1. Defined Terms. Capitalized terms used but not defined herein shall
have the same meaning as set out in the Exploration Agreement.
2. Assignment. Lonesome Dove hereby sells, transfers and assigns to BRE
all of Lonesome Dove's Seismic Partner rights, attributable to the Braveheart
Interest under the Seismic Agreements. The rights and duties assigned and
conveyed hereunder are intended to mirror (with the exception of the percentage
interest actually conveyed hereunder) the rights and duties held by the other
existing Seismic Partners under the Exploration Agreement (i.e., Lonesome Dove,
Braveheart and Southwestern). These rights and duties include but are not
limited to:
a. A 12.5% (until August 1, 2004, and 7.5% thereafter, assuming
Prime/Fortune elect to acquire 1/3 of Channel at that time)
ownership/membership interest in Channel Exploration LLC, a
Texas limited liability company ("Channel");
b. Lonesome Dove's rights as a Seismic Partner attributable to the
Braveheart Interest;
c. The 15% Seismic Participation Percentage out of Lonesome Dove's
interest, attributable to the Braveheart Interest;
d. Equal (proportionate) rights with all other Seismic Partners
in the reprocessed Exxon Data;
e. Lonesome Dove's right as a Seismic Partner, attributable to the
Braveheart Interest to make elections and to participate as a
working interest owner in any Prospects identified pursuant to
the Exploration Agreement;
f. Lonesome Dove's rights to certain Back-In Working Interest but
only to the extent such rights flow from Lonesome Dove's role as
a Seismic Partner, attributable to the Braveheart interest,
under the Exploration Agreement. Specifically, these rights
arise only if and when any Seismic Partner elects not to
participate in a Prospect Proposal;
g. Lonesome Dove's Seismic Partner rights, attributable to the
Braveheart Interest under any Operating Agreement for any
Prospect;
h. Lonesome Dove's Seismic Partner rights under the Exploration
Agreement with respect to Operator Rejected Prospective
Prospects; or Non-Producing Prospects as to which the Seismic
Partners have assumed operations from Fortune or Prime, insofar
as same are attributable to the Braveheart Interest; and
i. Whether specifically enumerated herein or not, all of Lonesome
Dove's other rights, titles and interests as a Seismic Partner
in or under the Seismic Agreements, and all rights, titles and
interests as a Seismic Partner in and to any Prospect, AMI
Dedicated interest or other interest acquired pursuant thereto,
attributable to the Braveheart Interest, except as set out
below.
(collectively, the "Assigned Rights").
Lonesome Dove is not conveying or assigning any of its thirty percent
(30%) interest as a Seismic Partner, and a corresponding interest in Channel,
which interests are not attributable to the Braveheart Interest. However, this
agreement is intended to and does cover all of the interest acquired by Lonesome
Dove from Braveheart pursuant to the Lonesome Dove-Braveheart Settlement
Agreement dated February 15, 2002, in and under the Exploration Agreement, and
all exhibits attached thereto, and all agreements ancillary thereto, which are
identified or referred to in Exhibit A attached hereto (collectively, the
"Seismic Agreements").
3. Consideration. BRE shall pay to Cymraec on behalf of Lonesome Dove,
at Closing, the sum of US $195,000.00. On or before April 30, 2002, BRE shall
pay to Cymraec, on behalf of Braveheart the sum of $218,400, which will satisfy
Lonesome Dove's obligation to Braveheart. In addition, BRE assumes the
obligation for the payment of Lonesome Dove's 15% Seismic Partner share,
attributable to the Braveheart Interest, of the Reprocessing Fee for all of the
remaining five (5) quarterly payments due to Xxxxxx, the next payment being due
June 11, 2002.
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4. Closing. The Closing shall occur at 2:00 p.m., on March 11,2002, at
the offices of Xxx X. Xxxx, attorney for BRE, at 0000 Xxxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000, provided, that the Closing may be postponed until not
later than March __, 2002, if necessary to satisfy any of the conditions
precedent herein set out. If the Closing does not occur on or before March __,
2002, this agreement shall terminate.
5. Representations and Warranties of Lonesome Dove. Lonesome Dove
represents and warrants to BRE that:
a. Attached hereto as Exhibit A is a true and complete copy of
Seismic Agreements and all exhibits, schedules and attachments
thereto;
b. There are no liens or encumbrances on the Assigned Rights;
c. All payments required to be made by Lonesome Dove pursuant to
Article I of the Exploration Agreement on or prior to March
11, 2002 have been made and no claim has been asserted against
the Lonesome Dove with respect to those payments;
d. No consents or waivers from any third party or parties are
required for the effectiveness of this Agreement or the sale and
transfer of the Assigned Rights to BRE;
e. This Agreement has been duly authorized, executed and delivered
by Lonesome Dove and all requisite consents, authorizations and
approvals necessary for that Lonesome Dove's performance of its
obligations and undertakings provided in this Agreement have
been obtained;
f. The Seismic Agreements are in full force and effect and neither
Lonesome Dove nor to the best of its knowledge any other party
to any of such agreements is in breach thereof as of the
Closing;
g. Lonesome Dove's execution and performance of this Agreement in
accordance with its terms will not result in the breach, default
or violation of any agreement or contract to which Lonesome Dove
or any of its officers, members, directors or owners, as
applicable, is a party or by which any of the Seismic Assets
may be bound or subject;
h. Lonesome Dove is a Montana corporation in good standing; and has
the right and power to enter into this Agreement; and
i. Lonesome Dove's performance of this Agreement will not result in
the breach of any other contract, obligation, order, judgment or
decree, to which Lonesome Dove or its property is subject; and
will not trigger any preferential rights or rights of first
refusal in any other party.
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6. Representations and Warranties of BRE. BRE represents and warrants to
Lonesome Dove that:
a. No consents or waivers from any third party or parties are
required for the effectiveness of this Agreement or the sale and
transfer of the Assigned Rights to BRE;
b. This Agreement has been duly authorized, executed and delivered
by BRE and all requisite consents, authorizations and approvals
necessary for that BRE's performance of its obligations and
undertakings provided in this Agreement have been obtained;
c. BRE's execution and performance of this Agreement in accordance
with its terms will not result in the breach, default or
violation of any agreement or contract to which BRE or any of
its officers, members, directors or owners, as applicable, is a
party or by which any of the Seismic Assets may be bound or
subject;
d. BRE is a Nevada corporation in good standing; and has the right
and power to enter into this Agreement; and
e. BRE's performance of this Agreement will not result in the
breach of any other contract, obligation, order, judgment or
decree, to which BRE or its property is subject; and will not
trigger any preferential rights or rights of first refusal in
any other party.
7. Conditions Precedent. The following are conditions precedent to the
obligations of BRE under this agreement. At or prior to closing, Lonesome Dove
shall obtain and deliver to BRE satisfactory written evidence of the
satisfaction of these conditions:
a. Lonesome Dove's representations and warranties shall be true and
correct as of the Closing Date;
b. SEI and MSLLC shall have executed and delivered an authorization
for Cymraec to contract with BRE's geologist, Xxxxxxx X.
Xxxxxxxx ("Xxxxxxxx"), subject to the confidentiality provisions
of the Seismic Agreement, and to maintain on BRE's business
premises a copy of the reprocessed Exxon Data for Xxxxxxxx to
interpret, evaluate and generate prospect proposals, in form
substantially as set out as Exhibit C hereto;
c. Cymraec shall have executed an agreement satisfactory in form
and substance to BRE conveying a 20% Seismic Participation
Percentage and ancillary rights under the Exploration Agreement
and a corresponding interest in Channel.
8. Covenants.
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a. Cymraec will continue to be the collecting and disbursing agent
for the Seismic Partners' quarterly installments of the
Reprocessing Fee and shall insure that such payments are timely
delivered to Xxxxxx pursuant to the Reprocessing Agreement.
b. Cymraec will continue to perform its prospect generation and
evaluation functions for the benefit of the Seismic Partners,
Fortune and Prime.
c. Lonesome Dove shall continue to perform all of its other duties
and obligations under the Seismic Agreements, excepting only
those which are assumed by BRE under this Agreement.
d. The parties agree to execute Exhibit B, and to use their best
efforts to secure the agreement of all other Seismic Partners to
the terms of Exhibit B on or before March 25, 2002, and to
secure the execution of the final Channel regulations not later
than April 15, 2002. If such matters are not resolved by such
times, BRE may elect to terminate its interest under this
Agreement, the Exploration Agreement and the Seismic Agreements,
to receive a return of all consideration paid hereunder, and be
relieved of all obligations and liabilities under such
Agreements.
9. Miscellaneous.
a. Force Majeure. In the event that any Party is rendered unable,
in whole or in part, to carry out its obligations hereunder by
reason of force majeure, such affected Party shall give written
notice of such fact, setting forth the details of the force
majeure, to the other Parties within a reasonable time after the
occurrence of the force majeure. The obligations of the affected
Party, insofar but only insofar, as they are affected by such
force unajeure, shall be suspended for the duration caused,
which shall be remedied as soon as reasonably possible. As used
herein, "force majeure" shall mean act of God, strike, lockout,
industrial disturbance, war, blockade, riot, terrorist activity,
lightning, fire, storm, flood, explosion, governmental
restraint, or any other cause whether of the kind enumerated
herein or otherwise, not reasonably within the control of the
affected Party. Any Party's inability to pay money or make
payments when due shall never be construed to be as the result
of force majeure.
b. Entire agreement. This Agreement, including all schedules and
exhibits hereto, constitutes the entire agreement among the
parties with respect to the subject matter of this Agreement,
and this Agreement supercedes all other agreements,
understandings, representations, and warranties, whether written
or oral, among the parties with respect to the subject matter
hereof.
c. Governinn Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without
reference to principles of conflicts of law. Venue for any
action brought hereunder shall be proper only if brought in the
courts of Xxxxxx County, Texas, and the prevailing Party in any
such action shall be entitled to recover, as an item of its
costs, its reasonable attorney's fees.
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d. Notices. All notices required hereunder shall be sufficiently
made if in writing and delivered in person or sent by U.S. mail,
first-class postage prepaid or, to the extent receipt is
confirmed, by electronic facsimile or overnight document
delivery, addressed as follows:
To Lonesome Dove:
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
With a copy to:
To BRE:
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax (000) 000-0000
With a copy to:
Xxx X. Xxxx
Xxxxxxx Xxxxx Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax:(000)000-0000
e. Attorney's Fees. The prevailing Party in any lawsuit or
litigation concerning the construction or interpretation of this
Agreement or the breach by any other Party of any provision
of this Agreement shall be entitled to such Party's reasonable
attorneys' fees and court costs.
f. Expenses. Each Party will bear and pay its own expenses
(including, attorneys' fees) of negotiating and consummating the
transactions contemplated hereby. Such expenses of Lonesome Dove
shall be borne entirely by Lonesome Dove and shall not be part
of any of its costs to be billed to or paid by Fortune and/or
Prime.
g. Invalidity. In the event any provision of this Agreement is
determined to be invalid or unenforceable, then the remainder of
this Agreement shall not be affected thereby.
h. Headings and Titles. The headings and titles in this Agreement
are for guidance and convenience of reference only and do not
limit or otherwise affect or interpret the terms or provisions
of this Agreement. All references made in this Agreement to a
Section or an Article refers to the applicable Section or
Article in this Agreement, unless the context clearly indicates
otherwise.
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1. Counterparts. This Agreement may be executed in any number of
counterparts, which taken together shall constitute one and the
same instrument and each of which shall be considered an
original for all purposes.
IN WITNESS WHEREOF, this Agreement is executed by the parties as of
March 11, 2002.
LONESOME DOVE PETROLEUM, INC. BLUE RIDGE ENERGY, INC.
By: [SIG]
--------------------------- By: [SIG]
--------------------------
CHAIRMAN/BOARD
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EXHIBIT A
Attached hereto are true, complete and correct copies of the
following, which together comprise the Seismic Agreements
referred to in the Agreement to which this Exhibit is attached:
Exploration Agreement dated effective February 1, 2002 between and among
Lonesome Dove, Fortune, Prime, Lonesome Dove, Braveheart, and
Southwestern and its attached Exhibits:
A - Operations Sharing Agreement
B - Delineation of Seismic Assets
C - Form of Operating Agreement
D - Lonesome Dove's sliding scale ORRI schedule
E- Assignment of ORRI (to be supplied later)
F - Assignment of Back-In Interest (to be supplied)
G- Settlement Agreement with Xxxxx Petroleum Corporation
H - Seismic Agreement with MSLLC and SEI
License and Reprocessing Agreement dated February 2l, 2001 between
MSLLC, SEI and Lonesome Dove and its attached Exhibits:
A - Delineation of Seismic Assets
B - Form of ORRI assignment to MSLLC
C - Reprocessing Guidelines
D - License Agreement
E - Agreement with Reprocessor (Xxxxxx)
Processing Agreement dated March 1, 2001 between Lonesome Dove and
Xxxxxx and its attached Exhibits:
A - Deliverables
B - Processing Procedures
C - Pricing
Channel's organizational documents
Agreements whereby Lonesome Dove acquired the Braveheart Interest,
to-wit:
Settlement Agreement dated February 15, 2002, between Braveheart
and Lonesome Dove
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