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EXHIBIT 10.14
AGREEMENT OF SALE AND PURCHASE
This agreement of sale and purchase ("Agreement") dated April 19, 1995,
between ENERTEX, INC., a Texas corporation ("Seller"), and TITAN RESOURCES,
L.P., a Texas limited partnership ("Purchaser"), evidences that Seller desires
to sell to Purchaser and Purchaser desires to purchase from Seller all right,
title and interest of Seller in certain non-producing oil and gas properties in
Xxxx County, North Dakota and Loving, Xxxxxxx, Xxxx and Xxxxxxx Counties, Texas
on the terms and conditions hereinafter specified, and that, therefore, in
consideration of the premises and of the mutual covenants and obligations
specified herein, Seller and Purchaser agree as follows:
1. Purchase of Properties. At the Closing (as hereinafter defined),
in accordance with and subject to the other terms and conditions hereof, Seller
shall sell, assign, transfer and deliver to Purchaser, and Purchaser shall
purchase, acquire and accept from Seller, the following (collectively the
"Properties"):
(a) Xxx Creek Prospect. All of Seller's right, title and
interest in and to the letter agreements identified and described on
Exhibit A attached hereto, including, without limitation, the oil, gas
and mineral leases identified and described on Exhibit A;
(b) Xxxxxx Prospect. All of Seller's right, title and
interest in and to the oil, gas and mineral leases identified and
described on Exhibit B attached hereto, subject to the operating
agreement identified and described on Exhibit B;
(c) Xxxxxxxxxx Prospect. All of Seller's right, title and
interest in and to the oil, gas and mineral leases identified and
described on Exhibit C attached hereto, insofar as said leases cover the
land identified and described on Exhibit C, subject to the assignment
and operating agreement identified and described on Exhibit C; and
(d) Barstow Prospect. All of Seller's right, title and
interest in and to the oil, gas and mineral leases identified and
described on Exhibit D attached hereto, insofar as said leases cover to
the stated depth the land identified and described on Exhibit D, subject
to the farmout agreement and term assignments identified and described
on Exhibit D.
The letter agreements, operating agreements, assignment, farmout agreement and
term assignments identified and described on Exhibits A, B, C and D are
hereinafter individually called a "Contract" and
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collectively called the "Contracts." The oil, gas and mineral leases identified
and described on Exhibits A, B, C and D are hereinafter individually called a
"Lease" and collectively called the "Leases."
2. Assumption of Obligations. At the Closing, Purchaser shall
assume and agree to pay, perform and discharge promptly and completely as the
same may be or become due all of the obligations and liabilities of Seller
under the Contracts and Leases which accrue from and after the Closing (the
"Assumed Obligations").
3. Purchase Price and Payment. In addition to the assumption of the
Assumed Obligations, Purchaser will pay to Seller for the Properties a price
equal to the sum of (a) the price paid by Seller for the Properties, including
lease bonuses, advance rentals and other acquisition costs and delay rentals,
plus (b) title examination costs, brokers' commissions, attorneys' fees, filing
fees, recording costs and transfer and sales taxes, if any, and other similar
costs paid by Seller with respect to the acquisition of the Properties
(collectively the "Acquisition Costs"). At the Closing, Purchaser will deliver
or cause to be delivered to Seller, against delivery of the assignments
conveying the Properties to Purchaser, immediately available funds ("Funds") in
the amount of $1,065,623, being the estimated amount of the Acquisition Costs.
As soon as practicable after the Closing, Seller shall calculate the
difference, if any, between the estimated amount of the Acquisition Costs and
the actual amount of the Acquisition Costs. If the estimated amount is less
than the actual amount, Purchaser shall owe to Seller the difference thereof,
but if the estimated amount is greater than the actual amount, Seller shall owe
to Purchaser the difference thereof. Seller shall prepare a certificate (the
"Post-Closing Certificate") certifying the actual amount of the Acquisition
Costs and the net amount due to or owing by Seller (the "Post-Closing
Adjustment"). Seller shall allow one or more designated representatives of
Purchaser to observe the calculation of the Post-Closing Adjustment and to
review all accounting records and other information used by Seller with respect
thereto. As soon as practicable and in no event later than May 31, 1995, Seller
shall deliver the Post-Closing Certificate to Purchaser.
4. Additional Leases and Interests. Before the Closing, Seller may
acquire additional oil, gas and mineral leases under the Contracts identified
and described on Exhibit A and additional interests in the Leases identified
and described on Exhibit D. If Seller acquires any such leases or interests,
such leases shall be deemed Leases (and thus a part of the Properties) and such
interests shall be deemed a part of the Properties for all purposes hereof, the
Acquisition Costs actually paid by Seller with respect to such leases and
interests shall be added to the actual amount of the Acquisition Costs for
purposes of calculating the Post-Closing
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Adjustment and at the Closing Seller shall convey such leases and interests to
Purchaser as a part of the Properties.
5. Representations and Warranties by Seller. In order to induce
Purchaser to enter into this Agreement and each transaction contemplated
hereby, Seller represents and warrants to Purchaser as follows:
(a) Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Texas.
(b) Authority. Seller has full power necessary, and has taken
or by the Closing will have taken all action necessary, to authorize the
execution, delivery and performance hereof by Seller. The execution,
delivery and performance hereof by Seller will not conflict with nor
result in a violation or breach of the terms or provisions of (i) the
articles of incorporation or bylaws of Seller, (ii) any agreement to
which Seller is a party or by which Seller or any of its properties or
assets are bound, or (iii) any Judgment, statute, rule or governmental
regulation applicable to Seller.
(c) Validity and Enforceability. When this Agreement is
signed by all parties hereto, it will be a valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms.
(d) Title. Seller has good and marketable title to the
Properties free and clear of all liens, security interests, mortgages,
pledges, preferential purchase rights or other encumbrances or claims
other than (i) contractual obligations arising under the Contracts and
the Leases, (ii) tax liens arising in the ordinary course of business
with respect to obligations not yet due and (iii) imperfections of title
and encumbrances which are not material in character, amount or extent
and do not detract from the value nor interfere with the use of the
Properties subject thereto or affected thereby or otherwise impair the
operations to be conducted thereon.
(e) Contracts and Leases. To the knowledge of Seller, the
Contracts and the Leases are in full force and effect. Seller has not
been advised by any other party of any default under any Contract or
Lease. Seller has not taken any action or failed to take any action
which would cause any Contract or Lease to fail to be in full force and
effect or allow any other party to terminate any Contract or Lease.
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(f) Taxes. All ad valorem and other taxes due and payable
with respect to the Properties have been fully paid.
(g) Consents. Other than as required under the Contracts, no
consents, approvals, authorizations or other requirements prescribed by
any agreement or any law, regulation or order must be obtained or
satisfied by Seller for the execution, delivery and performance by
Seller of this Agreement or any of the instruments to be executed and
delivered by Seller in connection herewith.
(h) No Litigation. No litigation, proceeding or governmental
investigation is pending or, to Seller's knowledge, threatened affecting
the Properties.
(i) No Broker or Finder. Seller has not agreed to pay any
party a commission, finder's fee or similar payment in regard to this
Agreement or any matter related hereto nor taken any action on which a
claim for any such payment could be based.
6. Representations and Warranties by Purchaser. In order to induce
Seller to enter into this Agreement and each transaction contemplated hereby,
Purchaser represents and warrants to Seller as follows:
(a) Organization. Purchaser is a limited partnership duly
formed under the Texas Revised Limited Partnership Act. The general
partner of Purchaser (the "General Partner") is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Texas.
(b) Authority. Purchaser has full power necessary, and has
taken or by the Closing will have taken all action necessary, to
authorize the execution, delivery and performance hereof by Purchaser.
The General Partner has full power necessary, and has taken or by the
Closing will have taken all action necessary, to authorize the
execution, delivery and performance hereof by the General Partner on
behalf of the Purchaser. The execution, delivery and performance hereof
by Purchaser will not conflict with nor result in a violation or breach
of the terms or provisions of (i) the partnership agreement governing
Purchaser, (ii) any agreement to which Purchaser is a party or by which
Purchaser or any of its properties or assets are bound or (iii) any
judgment, statute, rule or governmental regulation applicable to
Purchaser. The execution, delivery and performance hereof by the General
Partner on behalf of Purchaser will not conflict with nor result in a
violation or breach of the
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terms or provisions of (i) the articles of incorporation or bylaws of
the General Partner, (ii) any agreement to which the General Partner is
a party or by which the General Partner or any of its properties or
assets are bound or (iii) any judgment, statute, rule or governmental
regulation applicable to the General Partner.
(c) Validity and Enforceability. When this Agreement is
signed by all parties hereto, it will be a valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its
terms.
(d) Consents. No consents, approval, authorizations or
requirements prescribed by any agreement or any law, regulation or order
must be obtained or satisfied by Purchaser for the execution, delivery
and performance by Purchaser of this Agreement or any of the instruments
to be executed and delivered by Purchaser in connection herewith.
(e) No Broker or Finder. Purchaser has not agreed to pay any
party a commission, finder's fee or similar payment in regard to this
Agreement or any matter related hereto nor taken any action on which a
claim for any such payment could be based.
7. Actions before the Closing. Seller and Purchaser covenant that
before the Closing:
(a) Availability of Data and Files. Seller shall make
available to Purchaser's representatives all land files, lease files,
abstracts, title opinions, seismic data or files and any interpretations
of such data or files in the possession of Seller or its counsel and
relating exclusively to the Properties.
(b) Examination of Title. Purchaser shall make such
examination of title to the Properties as it deems necessary or
desirable. At or before 5:00 p.m., central standard time, on April 21,
1995, Purchaser shall furnish written notice to Seller stating whether
or not Purchaser has found Seller's title to the Properties to be as
represented in Section 5 hereof. If Seller's title is not found to be
so, said written notice shall specify the objections to Seller's title
to the Properties. Thereafter, Seller shall use its best efforts to
satisfy any such objections. If Purchaser does not furnish said written
notice at or before 5:00 p.m., central standard time, on April 21, 1995,
Purchaser shall be deemed to have no objection to Seller's title to the
Properties.
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(c) Waivers and Consents. Seller shall use reasonable efforts
to obtain all waivers of preferential purchase rights and consents to
assignment required by the Contracts in connection with the consummation
of the sale and purchase contemplated hereby. Purchaser acknowledges
that Seller will be unable to obtain such waivers and consents before
the Closing. If Seller is unable to obtain any such waiver or consent
within sixty (60) days after the Closing, Purchaser shall have the right
to negotiate, at its expense, with the appropriate party to obtain such
waiver or consent.
(d) Preserve Accuracy of Representations and Warranties.
Seller and Purchaser each shall use its best efforts to refrain from
taking any action which would render any representation or warranty
contained in Section 5 or 6 hereof inaccurate as of the Closing. Seller
promptly will notify Purchaser of any litigation, proceeding or
governmental investigation that may be threatened or commenced against
Seller involving in any way (i) this Agreement or the transactions
contemplated hereby or (ii) any of the Properties.
(e) Approvals. Seller and Purchaser each have taken or by the
Closing will have taken all action necessary under applicable law to
approve this Agreement and the transactions contemplated hereby.
8. Closing and Post-Closing. The closing ("Closing") of the sale
and purchase contemplated hereby will take place either (a) at the offices of
Purchaser, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, at 10:00 a.m. on
April 24, 1995, or (b) at any other place, date and time agreed upon by Seller
and Purchaser. At Closing:
(a) Deliveries by Seller. Seller will deliver or cause to be
delivered to Purchaser:
(i) Assignments, in such forms as Seller and
Buyer may agree but containing a special warranty of
title, conveying the Properties to Purchaser; and
(ii) The certificate contemplated by Section
9(c).
(b) Deliveries by Purchaser. Purchaser will deliver or cause
to be delivered to Seller:
(i) The Funds; and
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(ii) The certificate contemplated by Section
10(c).
The closing at which the Post-Closing Adjustment shall be paid (the
"Post-Closing") shall take place on the first business day after the expiration
of ten (10) days after the Post-Closing Certificate is delivered by Seller to
Purchaser, at 10:00 a.m. at the same location as the Closing. At the
Post-Closing, the appropriate party shall pay the other party hereto an amount
equal to the Post-Closing Adjustment.
9. Conditions Precedent to Obligation of Purchaser. The obligation
of Purchaser to proceed with the Closing is subject to the following
conditions:
(a) Representations. All representations and warranties of
Seller herein will be true in all material respects at the time of the
Closing;
(b) Covenants. All covenants and agreements required hereby
to be performed by Seller before the Closing will have been performed in
all material respects; and
(c) Certificate. Seller will have delivered to Purchaser an
appropriate certificate as to the foregoing.
10. Conditions Precedent to Obligation of Seller. The obligation of
Seller to proceed with the Closing is subject to the following conditions:
(a) Representations. All representations and warranties of
Purchaser herein will be true in all material respects at the time of
the Closing;
(b) Covenants. All covenants and agreements required hereby
to be performed by Purchaser before the Closing will have been performed
in all material respects; and
(c) Certificate. Purchaser will have delivered to Seller an
appropriate certificate as to the foregoing.
11. Termination. This Agreement may be terminated:
(a) By Purchaser. By Purchaser if any condition provided in
Section 9 hereof has not been satisfied or waived before the Closing;
(b) By Seller. By Seller if any condition provided in Section
10 hereof has not been satisfied or waived before the Closing; or
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(c) By Either Party. By Seller or Purchaser if the Closing
has not occurred on or before April 30, 1995.
12. Taxes.
(a) Apportionment of Ad Valorem and Real Property Taxes. All
ad valorem taxes, real property taxes, personal property taxes and
similar tax obligations with respect to the Properties for the calendar
year 1995 shall be apportioned as of the Closing. Purchaser shall file
or cause to be filed all required reports and returns incident to such
taxes and shall pay or cause to be paid to the taxing authorities all
such taxes relating to the calendar year 1995, and Purchaser shall
invoice Seller (with copies of applicable tax bills and assessments to
confirm same) for Seller's apportioned share of such taxes, and Seller
shall pay the same within thirty (30) days of receipt.
(b) Sales Taxes. The Price is net of any sales taxes or other
transfer taxes in connection with the sale of the Properties. Purchaser
shall be liable for any sales tax or other transfer tax, as well as any
applicable conveyance, transfer and recording fees, and transfer stamps
or taxes imposed on the transfer of the Properties pursuant to this
Agreement.
13. Miscellaneous.
(a) Further Assurances. Seller will, at any time and from
time to time after the Closing, upon Purchaser's request, execute,
acknowledge and deliver or cause to be executed, acknowledged and
delivered, all further documents or instruments required in connection
with the assignment and conveyance of the Properties to Purchaser.
(b) Assignment. Between the time of execution hereof and the
Closing, neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof may be assigned by any
party without the consent of the other party hereto. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
assigns.
(c) Expenses. Whether or not the transactions herein
contemplated shall be consummated, Seller and Purchaser each shall pay
its own expenses incident hereto and to preparing to consummate the
transactions provided for herein.
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(d) Texas Law to Govern. THIS AGREEMENT IS BEING SIGNED AND
DELIVERED AND IS INTENDED TO BE PERFORMED IN TEXAS AND IS TO BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF TEXAS.
(e) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, and it shall not be necessary that the
signatures of all parties hereto be contained on any one counterpart
hereof. Each counterpart shall will be deemed an original, but all
counterparts together shall constitute one and the same instrument.
(f) Survival. The representations and warranties contained in
Section 5 (d) shall expire at the Closing. Such expiration shall not
affect the special warranty of title of Seller in the assignments
delivered to Purchaser pursuant to Section 8(a)(i). The representations,
warranties, covenants and agreements set forth elsewhere herein shall
survive the execution and delivery hereof and the consummation of the
transactions contemplated hereby and shall expire in accordance with the
applicable statute of limitations.
(g) Integration. THIS AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN XXXX XXX NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES OR BY
EVIDENCE OF PRIOR OR WRITTEN CONTEMPORANEOUS AGREEMENTS OF THE PARTIES.
(h) Amendment Waiver and Cooperation. This Agreement may be
amended only by a written instrument signed by Seller and Purchaser.
Seller or Purchaser may waive any condition to its own obligations
hereunder. Seller and Purchaser each will use its best efforts and good
faith in satisfying all conditions to its obligations.
(i) Notice. All notices hereunder shall be in writing and
shall be mailed first class or express mail, postage prepaid, or sent by
telegram, telecopy or other similar form of rapid transmission confirmed
by mailing (by first class or express mail, postage prepaid) written
confirmation at substantially the same time as such rapid transmission,
or personally delivered to any individual designated of the receiving
party. All such notices shall be mailed, sent or delivered as follows:
If to Seller: Enertex, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
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Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy Number: (000) 000-0000
If to Purchaser: Titan Resources, L.P.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
Any notice so addressed and mailed shall be deemed to be given three (3)
days after the date so mailed. Any notice so sent by rapid transmission
shall be deemed to be given when receipt of such transmission is
acknowledged. Any communication so delivered in person shall be deemed
to be given when receipted for by, or actually received by, such person.
Seller or Purchaser may, by proper written notice hereunder to the other
party, change the address, individual or telecopy number to which notice
shall thereafter be sent to such party.
In order to evidence the foregoing, Seller and Purchaser have duly
executed this Agreement the date first above written.
SELLER:
ENERTEX, INC.
By:/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx,
President
PURCHASER:
TITAN RESOURCES, L.P.
By: Titan Resources I, Inc.,
General Partner
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx,
Vice President
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