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EXHIBIT 10.11
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made and entered into this 29th day of August, 1997, by
and between COTTON VALLEY RESOURCES CORPORATION, hereinafter referred to as
"BUYER" and CROWN PARTNERS L.L.C. MINERALS DIVISION hereinafter referred to as
"SELLER".
Seller owns the undivided interest described in Exhibit "A" in and to
the entire estates created by the oil and gas leases, Corporation Commission
Pooling Orders, operating agreements and other agreements affecting the
interests described in Exhibit "A" attached hereto and made a part hereof,
(hereinafter called the "Leases"), insofar as the Leases cover and related to
the land described in Exhibit "A" (hereinafter called the "Land"), together with
an identical undivided interest in and to all property and rights incident
thereto, including all rights in, to and under all agreements, product purchase
and sales contracts, leases, permits, rights-of-way, easements, licenses,
partnership rights, options and orders in any way relating thereto, in and to
all of the personal property, fixtures and improvements now or as of the
"Effective Time" (as hereinafter defined) thereon, appurtenant thereto or used
or obtained in connection therewith or with the production or treatment or sale
or disposal of liquid or gaseous hydrocarbons produced from or attributable to,
together with all other interests owned by Seller in and to said Land. All of
the foregoing are herein referred to as the "Interests".
Seller desires to sell and convey and Buyer desires to purchase and
pay for the Interests set forth in the Exhibit "A", effective as of March 1,
1997 at 7:00 o'clock a.m. CDT (hereinafter referred to as the "Effective
Time").
IN CONSIDERATION of the above recitals and of the benefits to be
derived by each Party under this Agreement, it is agreed as follows:
1. Sale and Purchase - Seller agrees to sell and convey and Buyer
agrees to purchase and pay for that portion of the Interests set forth on
Exhibit "A", subject to the terms of this Agreement.
2. Purchase Price - The aggregate purchase price for the
Interests shall be $34,545.00.
3. Title Information - Seller shall make available to Buyer title
information pertaining to the Interests prior to Closing including copies of
all title opinions, title reports, and division orders pertaining to the
Interests heretofore received by Seller or to which Seller has reasonable
access.
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All such information now in possession of Seller shall also be open to
inspection by Buyer at any reasonable time from the date hereof through the
closing of title to the interests herein (the "Closing") or the termination of
this Agreement. If such information or any other information or date shall
reflect the existence of any encumbrance, encroachment, defect in or objection
to title which Buyer does not waive (all of which are herein called the "Title
Defects"), written notice of the Title Defects shall be given to Seller prior to
Closing. No matter shall be construed as a Title Defect unless so construed
under generally accepted oil and gas industry title examination standards for
the State of Oklahoma. If Title Defects shall be so specified, Seller may make
reasonable effort to cure or remove all of the Title Defects at the expense of
Seller.
If Title Defects are not cured or removed at or before the Closing,
Buyer may elect in writing to either: (1) extend the Closing Date and during
such extension Seller may make a good faith effort to cure and remove the Title
Defects; (2) waive the Title Defects and proceed with the Closing; or (3)
terminate this Agreement. If this Agreement is so terminated or terminated under
any other provision of this Agreement, Buyer shall return to Seller all of the
items which Seller has delivered to Buyer hereunder. If this Agreement is
terminated for any reason or is breached, this paragraph shall not be construed
to limit Seller's or Buyer's legal or equitable remedies.
4. Seller's Representations - Seller represents, warrants and
agrees as to its respective Interests to and with Buyer that:
(a) The Interests will be free and clear of all liens and
encumbrances by Closing, and Seller has provided
Buyer with Seller's information relating to the
Interests including but not limited to production
information, product pricing information and lease
operating expense.
(b) To the knowledge of Seller, the Leases are in full force and
effect, are valid and subsisting, and cover the entire estate
which they purport to cover, and Seller has never been advised
directly or indirectly by any Lessor under any Lease or by any
other Party of a default under any Lease or of any
requirements or demands to drill additional xxxxx on any of
the Land covered by the Leases.
(c) The Interests entitle Seller to receive not less than
the undivided Interests shown on Exhibit "A" as "Net
Revenue Interests" of all indicated hydrocarbons
produced, saved and marketed from the Land and all
Xxxxx located thereon. Seller's obligation to bear
costs and expenses relating to the development of and
operations on the Leases, Land and Xxxxx thereon will
not be greater than the "Working Interests" set forth
on Exhibit "A".
(d) It is understood that Seller will warrant and forever
defend the title of Buyer as to the acts of Seller to the
Interests against all claims made by, through and under
Seller, but not otherwise.
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5. Closing - Unless extended pursuant to the terms of this
Agreement, the Closing shall occur on or before September 10, 1997, unless
extended by the mutual consent of the Parties hereto. As a condition to Buyer
Closing, the representations of Seller set forth in Paragraph 4 above must be
true and correct. At Closing the following shall occur:
(a) Seller shall execute, acknowledge and deliver an
Assignment, Xxxx of Sale and Conveyance in the form
attached hereto as Exhibit "B" and an Assignment of
General Partnership Interest in the form attached
hereto as Exhibit "C", conveying title to the
Interests to Buyer, free, and clear of all liens and
encumbrances, which instrument shall be effective as
of the Effective Time.
(b) Seller agrees to indemnify and save and hold harmless
Buyer against all claims, costs, expenses and other
liabilities with respect to the interest, which
accrue or relate to times prior to the Effective
Time. Likewise, Buyer agrees to indemnify and save
and hold harmless Seller against all claims, costs,
expenses and other liabilities with respect to the
Interests, which accrue or relate to times after the
Effective Time.
(c) Seller agrees that Buyer shall be entitled to receive
all proceeds from production attributable to the
Interests after the Effective Time and Buyer shall be
responsible for all costs attributable to the
Interests after the Effective Time.
(d) Buyer agrees that Seller shall be entitled to receive
all proceeds from production attributable to the
Interests prior to the Effective Time and Seller
shall be responsible for all costs attributable to
the Interests prior to the Effective Time. Buyer
shall deliver to Seller the Purchase Price as set
forth above. Buyer shall also reimburse Seller for
direct expenses paid by Seller after the Effective
Time and Seller shall remit to Buyer any proceeds for
production after the Effective Time, provided Seller
shall have given notice to Buyer of such expenses and
receipts not less than Three (3) Business Days prior
to the Closing Time.
(f) Seller shall deliver (subject to the terms of applicable
operating agreements) to Buyer exclusive possession of the
Interests. In addition, Seller shall deliver to Buyer all the
lease files, well logs, well files, geological files,
production files, division orders, title documentation,
records pertaining to rentals, delay rentals and shut-in
payments, correspondence, and objective data in possession or
control of Seller that relate to the Interests. Buyer agrees
to maintain and allow Seller to copy such information for a
period of three years from the Effective Time.
(g) At the Closing and thereafter as may be necessary,
the Parties hereto shall execute, acknowledge and
deliver transfer orders, additional assignments and
such other instruments and shall take such other
action as may be necessary to carry out their
obligations under this Agreement.
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6. Gas Balancing - Prior to Closing, Seller agrees to disclose to
Buyer all gas imbalances affecting the Interests. Should Buyer discover (before
Closing) that Seller's interests are either over/under produced due to a gas
balancing arrangement, Buyer may terminate this Agreement.
7. Casualty Loss - If, prior to Closing, all or any part of the
Interests shall be destroyed by fire or other casualty, or if any part of the
Interests shall be taken in condemnation or under the rights of eminent domain
or if any proceedings for such purposes shall be pending or threatened, Buyer
may elect to terminate this Agreement. If Buyer shall so elect, neither Party
shall have any further obligation to the other hereunder.
8. Notices - All communications required or permitted under this
Agreement shall be in writing, and any communication or delivery hereunder
shall be deemed to have been duly made if actually delivered, or if mailed by
registered or certified mail, postage prepaid, addressed as set forth above.
Either Party may, by written notice so delivered to the other, change the
address to which delivery shall thereafter be made.
9. Binding Effect - This Agreement shall be binding upon and
shall inure to the benefit of the Parties thereto and their respective
successors and assigns.
10. Entire Agreement - This Instrument and Exhibits attached
hereto state the entire agreement between the Parties and may be supplemented,
altered, amended, modified or revoked by writing only, signed by each of the
Parties. The headings are for guidance only and shall have no significance in
the interpretation of this Agreement.
11. Final Accounting - Within Sixty (60) Days of the Closing Date,
Seller shall deliver to Buyer a Final Accounting Statement showing the
proration of credits and payment obligations of Buyer and Seller. Within Ten
(10) Days thereafter, the Parties shall use their best efforts to reach
agreement on the final settlement and make final payments accordingly.
12. Taxes - All ad valorem taxes, real property taxes and personal
property taxes with respect to the Interests for the Tax Period in which the
Effective Time occurs shall be apportioned as of the Effective Time between
Seller and Buyer. Such apportionment shall be made using tax information for
the current year if available, and if not available, the prior year actual
taxes.
13. Governing Law - This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Oklahoma. All
assignments and instruments of conveyance executed in accordance with this
Agreement shall be governed by and interpreted and enforced in accordance with
the laws of the State of Oklahoma.
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Executed to be effective for all purposes as of the date and time first above
written.
"BUYER"
COTTON VALLEY RESOURCES CORPORATION
ATTEST
/s/ XXXXX XXXXXXXXX By: /s/ XXXXX X. XXXXX
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Asst. Secretary Xxxxx X. Xxxxx
President
"SELLER"
CROWN PARTNERS L.L.C. MINERALS DIVISION
/s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Managing Partner
