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EXHIBIT 2.1
ACQUISITION AGREEMENT
This Agreement, dated December 6, 1995, is entered into by and between
Xxxxxx X. Xxxxxx, an individual ("Xxxxxx"); Pendragon Resources, L.L.C., a
Texas limited liability company wholly owned by Xxxxxx; Northport Production
Company ("Northport"); and Fortune Petroleum Corporation, a Delaware
corporation ("Fortune") with its principal securities publicly traded on the
American Stock Exchange. This Agreement shall supersede any previous agreement
between the Parties with respect to the subject matter hereof.
WHEREAS, Pendragon has purchased an option to acquire an undivided
16-2/3% working interest and 12-1/2% net revenue interest in and to certain
oil, gas and mineral rights currently owned by PetroFina (the "PetroFina
Interest") in Xxxxx Xxxxxxxxx Xxxxx 00, xxxxxxxx Xxxxxxxxx ("Xxxxx 76")
consisting of a producing well, a platform, a transmission line and
approximately 5,000 acres (the "Acquisition") from Northport, which has entered
into a purchase and sale agreement with PetroFina to acquire the PetroFina
Interest; and
WHEREAS, Pendragon desires to assign its right to complete the
Acquisition to Fortune, whereupon Fortune will acquire the PetroFina Interest
from Northport on terms identical to those contained in the purchase and sale
agreement between PetroFina and Northport, including the conveyance to Fortune
of the representations and warranties received by Northport from PetroFina; and
WHEREAS, Xxxxxx, on behalf of Pendragon, made a non-refundable option
payment of $150,000 to PetroFina to extend the Northport - PetroFina purchase
and sale agreement expiration date, which may be credited to the purchase price
of Block 76 or which shall be forfeited to PetroFina if the Acquisition is not
completed; and
WHEREAS, Fortune has made an additional non-refundable deposit of
$100,000 to PetroFina to further extend the Northport - PetroFina purchase and
sale agreement expiration date through December 11, 1995, which may be credited
to the purchase price of Block 76 or which shall be forfeited to PetroFina if
the Acquisition is not completed; and
WHEREAS, Fortune's purchase price of the PetroFina Interest from
Northport is $2,900,000 with an effective purchase date of July 1, 1995; and
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WHEREAS, Fortune has agreed to pay Pendragon $100,000 for its services
herein and has further agreed with Pendragon that Pendragon shall be
responsible for paying any compensation to finders or other third parties
involved in the Acquisition; and
WHEREAS, Pendragon desires to acquire an option to purchase from
Fortune, within 90 days from the closing date of the Acquisition, 25% of the
16-2/3% PetroFina Interest in Block 76 (representing a 4-1/6% working interest
and a 3-1/8% net revenue interest, hereinafter referred to as the "Xxxxxx
Interest") for $790,000; and
WHEREAS, Fortune requires and has received an approval from
Consolidated Natural Gas as operator of Block 76 of the assignment of its
working interest from PetroFina and Northport; and
WHEREAS, Fortune intends to privately issue 1,250,000 shares of common
stock (the "Shares") under the provisions of Regulation S of the Securities Act
of 1933 in order to fund the Acquisition.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
and dependent covenants hereinafter set forth, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Parties hereto agree as follows:
1. Fortune shall be assigned, from Northport, the entire PetroFina
Interest (16-2/3% working interest and 12-1/2% net revenue interest) in Block 76
to be obtained by Northport from PetroFina, effective July 1, 1995, subject to
the rights of Xxxxxx and Pendragon to exercise their option to acquire the
Xxxxxx Interest as hereinafter provided. In the event the full option exercise
price is not received by Fortune within the term of the option, then any
portion of the Xxxxxx Interest not yet assigned to Pendragon under the
provisions of paragraph 3, below, shall be retained by Fortune and no further
assignment of such interest shall be required to Pendragon.
2. Fortune hereby grants to Xxxxxx and Pendragon an option to
acquire the Xxxxxx Interest at any time within ninety (90) days of the closing
date of the Acquisition upon the payment to Fortune by Xxxxxx and Pendragon of
the sum of $790,000. Upon such payment, Fortune shall assign the Xxxxxx
Interest to Pendragon, effective January 1, 1996. In the event the option
payment is not received by Fortune within the 90-day term of
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the option, the option shall terminate and the entire PetroFina Interest shall
be the sole property of Fortune.
3. At any time prior to the expiration of the option to acquire
the Xxxxxx Interest, Xxxxxx or Pendragon may make partial option payments to
Fortune, and Fortune shall make an assignment to Pendragon of its pro-rata
share of the Xxxxxx Interest in relation to the percentage of the option
payment which is remitted.
4. In the event that no portion of the option to acquire the
Xxxxxx Interest is exercised, Fortune shall remit to Xxxxxx his $150,000
non-refundable deposit to PetroFina which was used as part of the purchase
price paid by Fortune for the Acquisition. In the event any partial option
payments were made by Xxxxxx or Pendragon prior to the expiration of the option
but the entire option amount was not exercised, then Fortune shall retain a
proportional amount of Xxxxxx'x $150,000 deposit to PetroFina and shall remit
the balance to Xxxxxx.
5. Upon closing of the Acquisition, Fortune agrees to issue Xxxxxx
50,000 private common stock purchase warrants exercisable at the market price
of Fortune's stock on the date of closing the Acquisition and an additional
100,000 private common stock purchase warrants exercisable at $6.00 per share.
6. The obligation of Fortune to proceed with the transaction
contemplated hereby is conditioned upon and subject to the sale by Fortune of
its common stock in a private placement under the provisions of Regulation S of
the Securities Act of 1933, in an amount and manner acceptable to Fortune in
its sole discretion. This Agreement is also contingent upon executing any
appropriate modifications which are required to the escrow held by Xxxx &
Turet.
7. Time is of the essence of this Agreement and each and every
provision hereof.
8. This Agreement contains the entire agreement between the
Parties pertaining to the Acquisition and supersedes any and all prior
agreements, representations and understandings of the Parties, written or oral.
9. This Agreement and the obligations of the Parties hereunder
shall be interpreted, construed and enforced in accordance with the laws of the
State of California.
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The Parties hereby consent to jurisdiction in the state and federal courts in
the State of California and to venue in the courts in Los Angeles, California.
10. No consent or waiver, express or implied, by any party to, or
of any breach or default by any other party in, the performance of its
obligations hereunder shall be deemed or construed to be a consent to or waiver
of any other breach or default in the performance by such other party of the
same or any other obligations hereunder. Failure on the part of a party to
complain of any act of the other party to declare a party in default,
irrespective of how long such failure continues, shall not constitute a waiver
of such party of its rights hereunder.
11. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and assigns. This Agreement, or any right
or interest hereunder, shall not be assignable by any party hereto without the
written consent of any other party hereto.
12. This Agreement may be executed in one or more counterparts, any
one of which, if originally executed, shall be binding upon each of the parties
signing thereon, and all of which taken together shall constitute one and the
same instrument.
13. Each party agrees and covenants that it will at any time and
from time to time, upon the request of the other, execute, acknowledge, deliver
or perform all such further acts, deeds, assignments, transfers, conveyances
and assurances as may be required to carry out the terms and provisions of
this Agreement.
14. No person shall have any rights whatsoever under this Agreement
unless such person is a party to this Agreement, and only in such capacities as
such person is a party hereto.
15. Each party represents and warrants that in executing this
Agreement: (i) such party has had the opportunity to obtain independent
accounting, financial, investment, legal, tax, and other appropriate advice;
(ii) the terms of the Agreement have been carefully read by such party and its
consequences explained to such party by his or its independent advisors; (iii)
such party fully understands the terms and consequences of this Agreement; (iv)
such party has not relied on any inducements, promises or representations made
by the other party (except those expressly set forth herein) or the
accountants, attorneys or other
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agents representing or serving any other party; and (v) its execution of this
Agreement is free and voluntary.
16. In the event of any dispute between parties to this Agreement,
the prevailing party shall be entitled to immediate payment of all costs
incurred by such party in such dispute, including, but not limited to, court
costs and reasonable attorneys' fees.
17. No provisions of this Agreement or any of the documents
referred to herein may be amended, modified, supplemented, changed, waived,
discharged, or terminated, except by a writing signed by or on behalf of each
party hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
PENDRAGON RESOURCES, L.L.C.
By: /s/ XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
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XXXXXX X. XXXXXX, Owner XXXXXX X. XXXXXX, an individual
FORTUNE PETROLEUM CORPORATION
By:
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XXXXXX X. XXXXXXXXX,
President and CEO
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