January 19, 2010
January
19, 2010
Mr. H.
Xxxx Xxxxxxx
Executive
Vice President
Reef Oil
& Gas Partners, L.P.
Reef
Exploration, L.P.
0000
Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxx 00000
|
|
Re:
|
Post
Closing Properties/Title Defect
Notice
|
Dear
Xxxx:
Reference
is made to that certain Purchase and Sale Agreement dated December 18, 2009 and
effective as of December 1, 2009 by and between RCWI, L.P. (“Buyer”) and Azalea
Properties, Ltd. (“Seller”) providing
for the purchase by Buyer of certain assets of Seller (the “PSA”). All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the PSA.
This
Letter Agreement (“Letter”) shall set
forth the understanding of Buyer and Seller with regard to the purchase and sale
of those properties set forth on Exhibit A hereto
(individually a “Post Closing Property” and collectively the “Post Closing
Properties”)
By their
execution hereof, Buyer and Seller agree as follows:
1. The
definition of “Interests” in the PSA being purchased by Buyer at Closing shall
be amended to exclude the Post Closing Properties and the Purchase Price to be
paid by Buyer to Seller at Closing shall be adjusted downward by the amount of
$1,414,826.00, representing the allocated value attributable to the Post Closing
Properties.
2. Commencing
on the Closing Date and ending one hundred eighty (180) days thereafter (the
“Cure Period”),
Seller shall not, directly or indirectly solicit, enter into or conduct
discussions relating to, initiate or knowingly encourage any offer or proposal
for, or any indication of interest in the Post Closing Properties, to any third
party.
3. During
the Cure Period Seller shall use commercially reasonable efforts to cure the
title defects existing on the Post Closing Properties as specifically set forth
on Exhibit B
attached hereto (the “Title Defects”).
Within five (5) days following receipt by Buyer of evidence reasonably
acceptable to Buyer that a Title Defect has been cured,
together
with such other evidence as Buyer may request in its reasonable discretion,
Buyer shall purchase and Seller shall sell the Post Closing Property for which
all Title Defects have been cured for a purchase price which equals the
allocated value of said Post Closing Property set forth on Exhibit A. In the
event that some, but not all of the Title Defects have been cured by the
expiration of the Cure Period, Buyer may (a) purchase the remaining Post Closing
Properties (which have not previously been purchased during the Cure Period) for
which the Title Defects have been cured at their allocated value set forth on
Exhibit A, or
(b) elect to purchase all of the remaining Post Closing Properties, pay the
allocated value of the Post Closing Properties for which Title Defects have been
cured and enter into negotiations with Seller to adjust the purchase price of
the Post Closing Properties for which Title Defects have not been cured. If the
options set forth in (a) or (b) are not exercised by the Parties, or Buyer and
Seller cannot in good faith agree on a purchase price adjustment pursuant to
Buyer’s option in (b) immediately above, either Buyer or Seller may elect to
terminate this Letter and the Parties shall have no further obligations
hereunder.
4. In
the event Buyer purchases the Post Closing Properties, Buyer and Seller shall
execute Assignments in same the form executed by Buyer and Seller at
Closing.
5. In
the event Buyer purchases the Post Closing Properties pursuant to this Letter,
the Effective Date of the purchase shall be as set forth in the PSA and all
other terms set forth in the PSA shall apply to the purchase and sale of the
Post Closing Properties.
SIGNATURE
PAGE FOLLOWS
|
Very
truly yours,
|
||
|
Azalea
Properties, Ltd.
|
||
|
By:
|
Maple
Ridge Property Company
|
|
|
Its
sole general partner
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxxxx Xxxxxx
|
|
|
Xxxxxxx
Xxxxxxxx Xxxxxx
|
||
|
President
|
||
|
Accepted
and Agreed to
this
19 day of January 2010:
|
||
|
RCWI,
L.P.
|
||
|
By:
|
RCWI,
GP, LLC
Its
general partner
|
|
|
By:
|
/s/ Xxxxxxx X. Xxxxxxx
|
|
|
Xxxxxxx
X. Xxxxxxx, Manager
|
||
EXHIBIT
A
POST CLOSING
PROPERTIES
|
Xxxxxxx
Xxxx 00-00 #1
|
$ | 344,467.00 | ||
|
Xxxxx
Xxxx 00-00 #1
|
$ | 57,332.00 | ||
|
Xxxxx
Xxxx 00-00
|
$ | 8,835.00 | ||
|
Xxxxx
Xxxx 00-00
|
$ | 7,669.00 | ||
|
Turkey
Creek Unit 1-1
|
$ | 4,655.00 | ||
|
Xxxxxxxxxxxxx
#1 TJ Unit
|
$ | 166,805.00 | ||
|
Xxxxx
Xxxxxx X0-00-X0-0
|
$ | 59,397.00 | ||
|
Xxxxxx
Link Co. #1
|
$ | 103,590.00 | ||
|
Xxxxxxxxx,
XX
|
$ | 71,660.00 | ||
|
Xxxxxxx
East Upper CV Unit
|
$ | 155,932.00 | ||
|
Coot
Xxxxx 1
|
$ | 131,074.00 | ||
|
Xxxxxx-Xxxx
Xxxx #0-0
|
$ | 64,757.00 | ||
|
Board
of Supervisors 16-14 #1-1
|
$ | 11,994.00 | ||
|
Xxxxxxx
#1-1
|
$ | 4,565.00 | ||
|
Xxxxxx-Xxxx
Xxxx #0-0
|
$ | 1,852.00 | ||
|
Xxxxxx
1-34
|
$ | 125,478.00 | ||
|
Xxxxxxx
#1-4
|
$ | 587.00 |
EXHIBIT
B
Title
Defects
 |
H.
XXXX XXXXXXX
Executive Vice President
Land
Manager
|
Thursday,
January 14, 2010
Xxxxxxx
Xxxxxxxx Xxxxxx
Azalea
Properties, Ltd.
c/o Xxxxx
Xxxx
Lantana
Oil & Gas Partners
0000
Xxxxxxxxx Xxxx
Xxxxx
000
Xxxxxxx,
Xxxxx 00000
Dear
Madam and Sirs:
Under the
terms of the Purchase and Sale Agreement, dated December 18, 2009 (“PSA”),
executed by RCWI, L.P. (“RCWI”) and Azalea Properties, Ltd. (“Azalea”), RCWI and
Azalea agreed that RCWI would notify Azalea of certain matters affecting the
value of the Interests as that term is defined in the PSA. This letter shall
serve as your formal notification under Article V of the PSA. (All capitalized
terms, not defined in this notification, shall have the meaning ascribed to them
in the PSA.)
1. Article
5.05: The following are the Title Defects which render the title to an Interest
as less than Marketable Title.
a. There
is a break in Azalea’s chain of title to the Wiley Glennburn Unit caused by the
absence of a deed between Great Plains Royalty Corp. to Xxxx Xxxxxxxx Company,
two of the predecessors in title to Azalea. The Title Defect Amount attributable
to this Title Defect is $98,130.
b. There
is no conveyance to Azalea from Xxxxxxx Oil & Gas, L.P. of the following
properties:
|
Property:
|
Title Defect Amount:
|
|||
|
Xxxxxxx
Xxxx 00-00 #0, Xxxxxxx Xxxxxx, Xxxxxxx
|
$ | 344,467 | ||
|
Xxxxx
Unit 29-05#l, Choctaw County, Alabama
|
$ | 57,332 | ||
|
Xxxxx
Xxxx 00-00, Xxxxxxx Xxxxxx, Xxxxxxx
|
$ | 8,835 | ||
|
Xxxxx
Xxxx 00-00, Xxxxxxx Xxxxxx, Xxxxxxx
|
$ | 7,669 | ||
|
Xxxxxx
Xxxxx Xxxx 0-0, Xxxxxxx Xxxxxx, Xxxxxxx
|
$ | 4,655 | ||
REEF
OIL & GAS PARTNERS, L.P.
REEF
EXPLORATION, L.P.
0000
X Xxxxxxx Xxxx, Xxx 000 • Xxxxxxxxxx, XX 00000
(000)
000-0000 • Fax: (000) 000-0000
Toll Free: (000)
000-0000 •
xxx.xxxxxxx.xxx
c. There
is no conveyance to Azalea from
Modano Oil & Gas, L.P. of the following properties:
|
Property:
|
Title
Defect Amount:
|
|||
|
Xxxxxxxxxxxxx
#1-TJ Unit -001T, Desoto Parish, Louisiana
|
$ | 166,805 | ||
|
Grand
Canyon B1-32-A2-5 Otsego County, Michigan
|
$ | 59,397 | ||
|
Xxxxxx
Xxxx Xx. #0, Xxxxx, Xxxxxxx Xxxxxx, Xxxxx
|
$ | 000,000 | ||
|
Xxxxxxxxx,
XX, Xxxxx, Xxxxxxx Xxxxxx, Xxxxx
|
$ | 71,660 | ||
d. There
is no assignment to Azalea from Nowitzki Oil and Gas, L.P. of the following
properties:
|
Property:
|
Title
Defect Amount:
|
|||
|
Xxxxxxx
Xxxx Xxxxx XX Xxxx, Xxxxxxxxx Xxxxxx Mississippi
|
$ | 155,932 | ||
|
Coot
Xxxxx 1, Xxxxxxxxx County, Mississippi
|
$ | 131,074 | ||
|
Xxxxxx-Xxxx
Xxxx #0-0, Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx
|
$ | 64,757 | ||
|
Board
of Supervisors 16-14 #1-1, Xxxxxxxxx County, Mississippi
|
$ | 11,994 | ||
|
Xxxxxxx
#1-1, Xxxxxxxxx County, Mississippi
|
$ | 4,565 | ||
|
Xxxxxx-Xxxx
Xxxx #0-0, Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx
|
$ | 1,852 | ||
|
Xxxxxx
1-34, Xxxxxxxx County, Oklahoma
|
$ | 125,478 | ||
|
Xxxxxxx
#1-4 1-4, Xxxxxxxx County, Oklahoma
|
$ | 587 | ||
|
e.
|
The
following mortgages burden the
Interests:
|
See
Exhibit A
2. Article
5.06(a): Azalea and Reef have agreed to resolve any matters pertain to Article
5.06(a) under the terms of a separate letter agreement to be executed by both
parties.
3. Article
5.06(b): There are preferential rights to purchase which burden the following
properties:
|
Property:
|
Operator:
|
|||
|
a. Bonanza,
|
Xxxxx
County, Texas
|
Dinero
|
||
|
b. Unidentified
|
Xxxxx
County, Oklahoma
|
Xxxxxxxx
Oil
Corp.
|
You have
notified us of the exercise of the preferential rights on the Bryan’s Mill Unit
PF Record 1-1 property, the Xxxxx Xxxxxx 1-18, the Xxxxx Xxxxxx 31-8 and the
Xxxxxxx Xxxxxx 2. This letter confirms that we have agreed to remove those
properties from the sale.
The
Mortgages listed on Exhibit A are treated in this letter as Title Defects, but
we have assigned no Title Defect Amount to any of said encumbrances because we
have not been provided with the balances due, and Azalea has agreed to convey
the Interests free of all such burdens and encumbrances at Closing.
Thank you
for your prompt attention to these matters, and let us know what we can do to
perfect title in Azalea.
Yours
truly,
|
/s/ H. Xxxx Xxxxxxx
|
|
H.
Xxxx Xxxxxxx
|
|
Executive
Vice President
|
|
RCWI,
L.P.
|
EXHIBIT
A
This
Exhibit A is attached to that certain letter dated January 14, 2010 from RCWI,
L.P. to Azalea Properties, Ltd.
Azalea
Properties Ltd, L.P. mortgages in favor of Texas Capital Bank, N.A.
|
Date
|
Recording
Reference
|
County
|
State
|
|||
|
04/01/2002
|
#00-0000000
|
Los
Angeles
|
California
|
|||
|
10/01/2008
|
#20088253414
|
Los
Angeles
|
California
|
|||
|
10/01/2008
|
#410629
|
Xxxx
|
Colorado
|
|||
|
08/22/2003
|
668/951
|
Acadia
|
Louisiana
|
|||
|
03/16/2007
|
762/927
|
Acadia
|
Louisiana
|
|||
|
12/28/2007
|
783/161
|
Acadia
|
Louisiana
|
|||
|
08/22/2003
|
692/11518
|
East
Baton Rouge
|
Louisiana
|
|||
|
03/16/2007
|
348/11943
|
East
Baton Rouge
|
Louisiana
|
|||
|
12/28/2007
|
66/12028
|
East
Baton Rouge
|
Louisiana
|
|||
|
10/01/2008
|
696/12103
|
East
Baton Rouge
|
Louisiana
|
|||
|
4/16/2004
|
1658/305
|
Terrebonne
|
Louisiana
|
|||
|
3/16/2007
|
1966/817
|
Terrebonne
|
Louisiana
|
|||
|
12/28/2007
|
2056/565
|
Terrebonne
|
Louisiana
|
|||
|
10/1/2008
|
2132/406
|
Terrebonne
|
Louisiana
|
|||
|
04/16/2004
|
#20405191
|
Xxxxxxxxxx
|
Louisiana
|
|||
|
03/16/2007
|
#20703906
|
Xxxxxxxxxx
|
Louisiana
|
|||
|
12/28/2007
|
#20800687
|
Xxxxxxxxxx
|
Louisiana
|
|||
|
10/01/2008
|
#20811995
|
Xxxxxxxxxx
|
Louisiana
|
|||
|
01/18/2008
|
608/450
|
Xxxxxxxxx
|
Mississippi
|
|||
|
10/01/2008
|
618/281
|
Xxxxxxxxx
|
Mississippi
|
|||
|
12/28/2007
|
#374623
|
Bottineau
|
North
Dakota
|
|||
|
10/01/2008
|
#378182
|
Bottineau
|
North
Dakota
|
|
04/16/2004
|
1298/286
|
Lea
|
New
Mexico
|
|||
|
03/16/2007
|
1505/289
|
Lea
|
New
Mexico
|
|||
|
12/28/2007
|
1558/973
|
Lea
|
New
Mexico
|
|||
|
01/18/2008
|
1562/623
|
Lea
|
New
Mexico
|
|||
|
10/01/2008
|
1606/364
|
Lea
|
New
Mexico
|
|||
|
08/15/2007
|
RB3365/685
|
Canadian
|
Oklahoma
|
|||
|
12/28/2007
|
RB3406/983
|
Canadian
|
Oklahoma
|
|||
|
10/01/2008
|
RB3501/434
|
Canadian
|
Oklahoma
|
|||
|
10/01/2008
|
997/680
|
Xxxxxx
|
Oklahoma
|
|||
|
01/01/2008
|
0000/000
|
Xxxxx
Xxxxx
|
Xxxxxxxx
|
|||
|
01/18/2008
|
481/738
|
Crane
|
Texas
|
|||
|
10/01/2008
|
499/807
|
Crane
|
Texas
|
|||
|
04/16/2004
|
366/699
|
Xxxxx
|
Texas
|
|||
|
01/18/2008
|
468/38
|
Xxxxx
|
Texas
|
|||
|
10/01/2008
|
486/164
|
Xxxxx
|
Texas
|
|||
|
12/28/2008
|
78/704
|
Crosby
|
Texas
|
|||
|
10/01/2008
|
83/97
|
Crosby
|
Texas
|
|||
|
01/18/2008
|
#2008-0420
|
Xxxxxx
|
Texas
|
|||
|
10/01/2008
|
#2008-4647
|
Xxxxxx
|
Texas
|
|||
|
04/16/2004
|
000/000
|
Xxxxxxxx
|
Xxxxx
|
|||
|
01/18/2008
|
634/452
|
Hemphill
|
Texas
|
|||
|
10/01/2008
|
650/594
|
Hemphill
|
Texas
|
|||
|
08/22/2008
|
Loving
|
Texas
|
||||
|
01/01/08
|
80/435
|
Loving
|
Texas
|
|||
|
04/16/2004
|
150/402
|
Xxxxxx
|
Texas
|
|||
|
03/16/2007
|
197/356
|
Xxxxxx
|
Texas
|
|||
|
12/28/2007
|
217/271
|
Xxxxxx
|
Texas
|
|||
|
10/01/2008
|
238/19
|
Xxxxxx
|
Texas
|
|||
|
04/16/2004
|
157/214
|
XxXxxxxx
|
Texas
|
|||
|
10/01/2008
|
180/164
|
XxXxxxxx
|
Texas
|
|
01/18/2008
|
0000/0
|
Xxxxxx
|
Xxxxx
|
|||
|
00/00/00
|
000/000
|
Xxxxxx
|
Xxxxx
|
|||
|
8/15/2007
|
572/60
|
Xxxxxxx
|
Texas
|
|||
|
12/28/2007
|
577/657
|
Xxxxxxx
|
Texas
|
|||
|
10/01/2008
|
591/640
|
Xxxxxxx
|
Texas
|
|||
|
08/22/2003
|
744/35
|
Xxxx
|
Texas
|
|||
|
10/01/2008
|
851/6
|
Xxxx
|
Texas
|
|||
|
01/18/2008
|
833/420
|
Xxxx
|
Texas
|
|
Nowitzki Oil & Gas,
L.P. mortgage in
favor of the Bank of Scotland
|
||||||
|
09/01/2006
|
556/430
|
Wheeler
|
Texas
|
|||
|
Modano
Oil &I Gas,
L.P. mortgage in favor the Bank of Scotland
|
||||||
|
08/06/2003
|
0000/000
|
Xxxxxx
|
Xxxxx
|
|||
|
Talbot
Investment Company mortgage in favor of the First Enterprise
Bank
|
||||||
|
07/11/1996
|
96-1162623
|
Los
Angeles
|
California
|
|||
