SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Second
Amendment") is executed as of the 9th day of March, 2007, by STATEX PETROLEUM I,
L.P., a Texas limited partnership, and XXXXXXX X. XXXXXXX LP, a Texas limited
partnership (collectively, "Seller"), and BASELINE OIL & GAS CORP., a Nevada
corporation ("Purchaser").
RECITALS
WHEREAS, Seller and Purchaser are parties to an Asset Purchase and
Sale Agreement dated as of December 20, 2006, as amended by First Amendment to
Purchase and Sale Agreement, dated as of January 25, 2007 (as so amended, the
"Amended Purchase Agreement"), pursuant to which Seller agreed to sell and
convey, and Purchaser agreed to purchase and pay for, the "Assets" described
therein (terms defined in the Amended Purchase Agreement shall have the same
meanings when used herein, unless expressly provided otherwise); and
WHEREAS, by notice given on February 7, 2007, Purchaser exercised
its right under Section 12.2 of the Amended Purchase Agreement to extend the
Closing Date for a period of thirty (30) days after the Scheduled Closing Date
of February 9, 2007, which thirty-day period, by stipulation and agreement of
the Parties, ends on March 9, 2007; and
WHEREAS, Seller and Purchaser desire further to amend the Amended
Purchase Agreement in several respects.
NOW, THEREFORE, for and in consideration of the mutual promises
contained in the Amended Purchase Agreement, the benefits to be derived by each
Party thereunder and hereunder, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:
1. Current Extension of Closing. The Amended Purchase Agreement is
amended, effective as of December 1, 2006, as follows:
(a) Section 12.2 of the Amended Purchase Agreement is amended to
authorize Purchaser to extend the date for the Closing until March 16, 2007, by
giving written notice of such desire to extend to Seller no later than the date
of this Second Amendment. By their execution of this Second Amendment, Purchaser
shall be deemed to have given such notice in a timely manner as provided in this
Paragraph 1(a), and Seller shall be deemed to have acknowledged its receipt
thereof.
(b) In consideration of Seller's agreement to the amendment provided
above in Paragraph 1(a), Section 1.3 of the Amended Purchase Agreement is
amended by deleting the phrase "December 1, 2006" appearing in the third line
thereof, and by substituting therefor the phrase "January 1, 2007."
(c) In addition, Section 3.10.2 of the Amended Purchase Agreement is
deleted in its entirety, and the following provision is substituted therefor:
3.10.2 Except for consents and other matters described in subparagraph
3.2.2 in the definition of Permitted Encumbrances, Seller shall use
its reasonable commercial efforts (which shall in no event include
any obligation to pay money to the owner of such rights or
undertake any legal obligation) to obtain all required consents to
assignment of the Assets prior to the Closing. If a lessor or other
third party holding such right to consent to the assignment of an
Asset or part thereof neglects or refuses such consent prior to the
Closing, Seller will promptly so notify Purchaser and, at
Purchaser's option, (i) Seller shall convey the affected Asset to
Purchaser at the Closing, or (ii) the affected Asset shall be
excluded from the Assets conveyed at Closing, and title thereto
shall be retained by Seller subject to the terms of this Section
3.10.2 and Section 3.10.3. In either case, the Allocated Value
applicable to the Affected Asset shall be included in the Purchase
Price paid by Purchaser at the Closing, and Seller shall protect
and indemnify Purchaser from any and all claims and Costs relating
to such failure to obtain the required consent. After the Closing,
Seller shall continue to use its reasonable commercial efforts
(which shall in no event include any obligation to pay money to the
owners of such rights or undertake any legal obligation) to obtain
all consents to assignment as promptly after the Closing as is
possible. If Seller obtains the relevant outstanding consent to
assignment, and Purchaser has elected to exclude the affected Asset
from the Assets conveyed at Closing, then within fifteen (15) days
after Seller's receipt of such consent, Seller shall convey the
affected Asset to Purchaser, subject to and in accordance with the
other terms of this Agreement.
(d) If the Closing occurs on or before March 16, 2007, there shall
be no further amendments to the Amended Purchase Agreement as the result of the
extension of the date for the Closing pursuant to Paragraph 1(a).
2. Contingent, Prospective Extension of Closing. If the Closing does not
occur on or before March 16, 2007, as the result of Purchaser's breach of or
default under any term, condition, or provision of the Amended Purchase
Agreement, Seller shall be entitled to exercise all of its rights and remedies
(including the right to terminate the Amended Purchase Agreement) under Article
14 of the Amended Purchase Agreement unless, no later than 3:00 p.m., Central
Daylight Time, on March 16, 2007 (timely performance being of the essence),
Purchaser has paid to Seller, by bank wire transfer of immediately available
U.S. funds in the percentages and to the accounts set forth in Section 2.6 of
the Amended Purchase Agreement, the sum of THREE HUNDRED THOUSAND AND NO/100
DOLLARS ($300,000.00), which shall constitute an increase in the Performance
Deposit as provided in clause (b) of this Paragraph 2 below. Upon Seller's
receipt of such payment, Purchaser shall be deemed not to be in breach of or
default under any term, condition, or provision of the Amended Purchase
Agreement solely as the result of the failure of the Closing to occur on or
before March 16, 2007, and the Amended Purchase Agreement shall thereupon be
deemed to be amended, effective as of March 16, 2007, as follows:
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(a) Section 1.3 of the Amended Purchase Agreement will be deemed to
be amended by deleting the phrase "January 1, 2007" inserted into the third line
thereof pursuant to Paragraph 1(b) hereof, and by substituting therefor the
phrase "February 1, 2007."
(b) Section 2.3 of the Amended Purchase Agreement will be deemed to
be amended by deleting the phrase "ONE MILLION DOLLARS ($1,000,000)" appearing
in the fourth line thereof, and by substituting therefor the phrase "ONE MILLION
THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,300,000.00)."
(c) Section 12.1 of the Amended Purchase Agreement will be deemed to
be amended by deleting the phrase "February 9, 2007" from the third line
thereof, and substituting therefor the phrase "April 16, 2007."
(d) Section 12.2 of the Amended Purchase Agreement will be deemed to
be deleted in its entirety, but with no resulting renumbering of any other
provision of the Amended Purchase Agreement. As the consequence of the deletion
of such provision, Seller and Purchaser agree that Purchaser shall have no
further right under the Amended Purchase Agreement to extend the date for
Closing beyond April 16, 2007.
3. Ratification. Seller and Purchaser do hereby ADOPT, RATIFY, and CONFIRM
the Amended Purchase Agreement and all of its terms and provisions, as amended
hereby, and declare the Amended Purchase Agreement, as so amended, to be in full
force and effect. Seller confirms that there are no circumstances to its
knowledge as of the date of this Second Amendment that allow Seller a
contractual excuse for the performance of its obligations under the Purchase
Agreement. Purchaser confirms that there are no circumstances to its knowledge
as of the date of this Second Amendment that allow Purchaser a contractual
excuse for the performance of its obligations under the Purchase Agreement.
4. GOVERNING LAW. THIS SECOND AMENDMENT AND THE LEGAL RELATIONS AMONG THE
PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE
STATE OF TEXAS.
5. Miscellaneous. This Second Amendment may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one instrument; provided, however, that this Second
Amendment shall be effective as to each Party upon its execution hereof, whether
all counterparts are executed by a Party or not. In making proof of this Second
Amendment, it shall not be necessary to produce or to account for all
counterparts hereof, and it shall be sufficient to produce but one (1)
counterpart original hereof, executed by the Party sought to be charged thereby.
This Second Amendment shall inure to the benefit of, and be binding on, the
Parties and their respective successors and assigns.
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IN WITNESS WHEREOF, Seller and Purchaser have executed this Second
Amendment as of the date first above written, to be effective as provided
herein.
SELLER:
STATEX PETROLEUM I, L.P.
By: Statex Operating, LLC,
its General Partner
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Manager
XXXXXXX X. XXXXXXX LP
By: Xxxxxxx X. Xxxxxxx Management, LLC,
its General Partner, appearing through
Xxxx Xxxxxx as its lawful agent and
attorney-in-fact
By: /s/ Xxxx Xxxxxx
----------------------------------
Xxxx Xxxxxx
Agent and Attorney-in-Fact
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SIGNATURE PAGE FOR BASELINE OIL & GAS CORP., TO
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT,
DATED AS OF MARCH 9, 2007, BETWEEN
STATEX PETROLEUM I, L.P., XXXXXXX X. XXXXXXX LP,
AND BASELINE OIL & GAS CORP.
PURCHASER:
BASELINE OIL & GAS CORP.
By: /s/ Xxxxxx Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx
President
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