Exhibit 10.1
 
 
PURCHASE AND SALE AGREEMENT
 
This Purchase and Sale Agreement (hereafter, this “Agreement”) is made and
entered into by Cinco NRG, LLC, a Wyoming limited liability company,  with an
address of 11011 Richmond Avenue, Houston, Texas 77042; (the “Seller”), and
Petrodome Bloomington, LLC, a Texas limited liability company,  with an address
of 4200 Montrose Boulevard, Suite 150, Houston, Texas 77006 (as “Buyer”)
(collectively, “the Parties”).
 
For and in consideration of the mutual covenants and agreements set out below,
and the benefits to be derived, the receipt and sufficiency of which are
acknowledged, the Parties hereby enter into this Agreement and agree as follows:
 
ARTICLE I
 
PURCHASE AND SALE
1.1 Property.   All of the following shall be referred to as the “Property”:
 
All Seller’s right, title and interest in the “Oil and Gas Leases”, “Wells”,
“Pipelines”, “Easements” and “Contracts” described in Exhibit “A” attached
hereto and made a part hereof, including the rights of Seller under all
agreements, oil and/or gas purchase and sales contracts, permits and
rights-of-way relating thereto, together with a like undivided interest in the
personal property, fixtures and improvements used in connection therewith, all
of which collectively are referred to herein as “the Property.”  Working
interest and net revenue interest under wells applicable to the Property shall
be as set forth in Exhibit “A”
 
1.2 Purchase and Sale of Property.   In consideration of the premises, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged and a full discharge granted in connection therewith,  upon
full execution of this Agreement, Seller does hereby transfer, grant, bargain,
sell, convey and assign to Buyer all of its right title and interest in and to
the Property, subject to the terms and conditions of this Agreement.
 
The Buyer hereby accepts the foregoing Agreement and binds and obligates itself,
and its successors and assigns, to comply with all obligations of Seller
thereunder and to indemnify and maintain Seller harmless as against such
obligations.  This Agreement shall bind and inure to the benefit of Buyer, and
its successors and assigns.  Nothing contained in this Agreement, express or
implied, is intended to confer upon any other person or entity any benefits,
rights or remedies.
 
1.3 Effective Time.   The purchase and sale of the Property shall be effective
for all purposes as of 12:01 AM. Central Standard Time on January 1, 2015, (the
“Effective Time”). The “Closing Date” shall be not later than February 2, 2015,
subject to extensions as provided herein.
 
 
 

--------------------------------------------------------------------------------

 
 
ARTICLE II
 
PURCHASE PRICE
 
2.1 Purchase Price and Closing Date.   The “Purchase Price” for the Property
shall be Five Hundred Thousand ($500,000.00), as adjusted in accordance with
Section 2.2, the “Adjusted Purchase Price” to be paid on the Closing Date by
wire transfer of immediately available funds paid concurrently with the
execution of this Agreement (Exhibit “B” wiring instructions for Seller).
 
2.2 Adjusted Purchase Price.  The Purchase Price shall be adjusted at or after
Closing as follows and the resulting amount shall be referred to as the Adjusted
Purchase Price.
 
(a) The Purchase Price shall be adjusted upward by the following:
 
(1) The value of all merchantable, allowable oil and/or gas in storage above the
pipeline connection at the Effective Time that is credited to the Property, the
value to be the actual price received by Buyer from the production purchaser  as
of the Effective Time less applicable taxes and royalties;
 
(2) The amount of all actual direct operating expenditures   and capital
expenditures paid by Seller to Buyer that are attributable to the Property
during the period of time between the Effective Time and the Closing Date; and,
 
(b) The Purchase Price shall be adjusted downward by the following:
 
(1) The proceeds received by Seller that are attributable to the Property for
production from the Property for that period of time subsequent to the Effective
Time
 
(2) An amount equal to all unpaid ad valorem, property, production, severance,
and similar taxes and assessments based on or measured by the ownership of the
Property or the production of hydrocarbons or the receipt of proceeds accruing
to the Property prior to the Effective Time, which amount shall be based upon
the taxes assessed against the Property for the preceding calendar year or, in
the cases where the taxes are assessed on other than a calendar year basis, for
the preceding tax period.
 
(3) The Purchase Price shall be adjusted to reflect the payment by Cinco NRG,
LLC to Petrodome Bloomington, LLC for unpaid back expenses related to the
Property incurred prior to the Effective Date in the amount of $239,062.72
 
 
 

--------------------------------------------------------------------------------

 
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of Seller.   Seller makes no representations
and warranties other than the following:
 
(a) Seller is a corporation validly existing and in good standing under the laws
of the State of Wyoming and is duly qualified to carry on its business in the
State of Texas.
 
(b) Seller has all requisite power and authority to carry on its business as
presently conducted, to enter into this Agreement, and to perform its
obligations under this Agreement. The consummation of the transactions
contemplated by this Agreement will not violate or be in conflict with any
provision of Seller’s charter, bylaws or governing documents, or any contracts,
agreements, or instruments to which Seller is a party or is bound, or any
judgment, decree, order, statute, rule or regulation applicable to Seller.
 
(c) The execution, delivery, and performance of this Agreement and the
transactions contemplated by this Agreement have been duly and validly
authorized by all requisite action, corporate and otherwise, on the part of
Seller, to the extent necessary or required.  This Agreement has been duly
executed and delivered on behalf of Seller and this Agreement does constitute a
legal and valid obligation of Seller.
 
(d) Seller has incurred no liability, contingent or otherwise, for brokers’ or
finders’ fees relating to the transactions contemplated by this Agreement for
which Buyer shall have any responsibility.
 
(e) To the best of Seller’s knowledge and belief, no suit, action or other
proceeding (collectively referred to herein as “Claims”) is pending or
threatened before any court or governmental agency and there are no liens
(inchoate or otherwise) that relate to the Property or that might result in
impairment  or loss of Seller’s title to any portion  of the Property, the value
of the Property, or that might hinder or impede the operation or enjoyment of
the Property.
 
3.2 Representations and Warranties of Buyer.   Buyer makes no representations
and warranties other than the following:
 
(a) Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and is duly qualified to carry on its
business in the State of Texas.
 
(b) Buyer has all requisite power and authority to carry on its business as
presently conducted to enter into this Agreement, to purchase the Interests on
the terms described in this Agreement and to perform its other obligations
provided for in this Agreement. The consummation of the transactions
contemplated by this Agreement will not violate, nor be in conflict with, any
provision of Buyer’s charter, bylaws or governing documents, or any agreement or
instrument to which Buyer is a party or is bound, or any judgment, decree,
order, statute, rule or regulation applicable to Buyer.
 
(c) The execution, delivery, and performance of this Agreement and the
transactions contemplated by this Agreement have been duly and validly
authorized by all requisite action, corporate and otherwise, on the part of
Buyer, to the extent necessary or required.  This Agreement has been duly
executed and delivered on behalf of Buyer, this Agreement does constitute legal
and valid obligations of Buyer.
 
(d) Buyer has incurred no liability, contingent or otherwise, for Brokers’ or
finders’ fees relating to the transactions contemplated by this Agreement for
which Seller shall have any responsibility.
 
(e) Buyer has in its possession or available to it sufficient funds in order to
close the purchase and sale transaction as contemplated in this Agreement.
 
 
 

--------------------------------------------------------------------------------

 
 
ARTICLE IV
 
COVENANTS
4.1 Covenants of Seller. To the extent possible, Seller covenants as follows:
 
Seller shall use its best efforts to take or cause to be taken all such actions
as may be necessary or advisable to consummate and make effective the sale of
the Property and the transactions contemplated by this Agreement and to assure
that as of the Closing Date Seller will not be under any material corporate,
legal or contractual restriction that would prohibit or delay the timely
consummation of such transactions.
 
4.2   Covenants of Buyer.   Buyer covenants and agrees with Seller as follows:
 
(a) Buyer shall pay Adjusted Purchase Price to Seller and use reasonable efforts
to take or cause to be taken all such actions as may be necessary or advisable
to consummate and make effective the purchase of the Property and the
transactions contemplated by this Agreement and to assure that as of the
Effective Time and the Closing Date Buyer will not be under any material
corporate, legal or contractual restriction that would prohibit or delay the
timely consummation of such transactions.
 
(b) From and after the Effective Date Buyer shall pay or cause to be paid unpaid
ad valorem, property, production, severance, and similar taxes and assessments
based on or measured by the ownership of the Property or the production of
hydrocarbons or the receipt of proceeds accruing to the Property from and after
the Effective Time and shall indemnify and hold Seller harmless from any
liability for the failure to pay or discharge same.
 
ARTICLE V
 
CLOSING
 
5.1 Date of Closing.   Subject to the conditions stated in this Agreement, the
consummation of the transactions contemplated by this Agreement (the “Closing”)
shall be held at 10:00 a.m. on or before February 2, 2015, or such other date
and time as Buyer and Seller agree to in writing.  This date, as amended, if
amended, shall be referred to as the “Closing Date.”
 
5.2 Place of Closing.   The Closing shall be held at the offices of Buyer, or at
such other place as Buyer and Seller may agree upon in writing.
 
5.3 Closing Obligations.   At the Closing the following events shall occur, each
being a condition precedent to the others and each being deemed to have occurred
simultaneously with the others:
 
(a) Buyer and Seller shall sign the Closing Statement (see Exhibit “C”)
reflecting Article 2.2, with agreement to the Adjusted Purchase Price.
 
(b) Buyer shall deliver to Seller confirmation of a wire transfer to Sellers
account in immediately available funds for the Adjusted Purchase Price.
 
(c) Seller by execution of this document shall deliver to Buyer exclusive
possession of the Property.
 
 
 

--------------------------------------------------------------------------------

 
 
ARTICLE VI
 
OBLIGATIONS AFTER CLOSING
 
6.1 Post-Closing Adjustments.   Within 30 days after the Closing Date, Buyer
shall prepare, in accordance with this Agreement, a statement (the post closing
“Settlement Statement”) setting forth as of the Effective Date each adjustment
or payment which was not finally determined as of the Closing with the Closing
Statement, and showing the calculation of such adjustments. As soon as
practicable after receipt of the Settlement Statement, Seller shall deliver to
Buyer a written report containing any changes which Seller proposes be made to
the Settlement Statement. The Parties shall undertake to agree upon the amounts
due pursuant to such post-closing adjustments no later than 60 days after the
Closing Date.
 
6.2 Sales Taxes.   Buyer shall pay all sales taxes occasioned by the sale of the
Property, if any.
 
6.3 Assumption and Indemnification.   As of and after the Effective Time, Buyer
shall do the following:
 
Buyer shall assume, defend, indemnify and hold Seller and Seller’s employees,
officers, directors, managers, partners, representatives and affiliates harmless
against all Claims, liabilities, costs, demands and causes of action of every
kind in connection with the Property. In addition to the indemnity set forth
above, Buyer shall indemnify, defend and hold Seller and Seller’s employees,
officers, directors, managers, partners, representatives and affiliates harmless
against all liabilities, claims and costs, demands and causes of action of every
kind in connection with the use, occupancy, operation or abandonment of the
Property that occurs after the Effective Time.
 
6.4 Proceeds of Production.   Buyer shall be entitled to receive all proceeds of
production, attributable to the Property on and after the Effective Time. Seller
shall be entitled to receive all proceeds of production attributable to the
Property prior the Effective Time.
 
6.5 Further Assurances.   Seller and Buyer shall execute, acknowledge, and
deliver or cause to be executed, acknowledged, and delivered such instruments
and take such other action as may be necessary or advisable to carry out their
obligations under this Agreement and under any Exhibit, document, certificate,
or other instrument delivered pursuant to this Agreement.
 
6.6 Survival.   Except to the extent otherwise provided in this Section 8.6 all
representations, warranties, covenants, agreements and indemnities provided in
this Agreement shall survive Closing and remain in full force and effect and
binding on each Seller and Buyer for a period of one (1) year following the
Closing Date.  The provisions of Sections 6.3, 7.3, 7.6, 7.7, 7.8 as well as
this Section 6.6 shall survive without limitation.
 
ARTICLE VII
 
MISCELLANEOUS
 
7.1 Expenses.   Except as otherwise specifically provided in this Agreement, all
fees, costs, and expenses incurred by Buyer or Seller in negotiating this
Agreement or in consummating the transactions contemplated by this Agreement
shall be paid by the party incurring the same, including with limitation, legal
and accounting fees, costs and expenses.
 
7.2 Notices.   All notices and communications required or permitted under this
Agreement shall be in writing and shall be effective when delivered addressed as
follows:
 
 
 
 

--------------------------------------------------------------------------------

 
 

Cinco NRG, LLC (Seller) Petrodome Bloomington, LLC (Buyer) 11011 Richmond
Avenue, Suite 525 4200 Montrose Boulevard, Suite 150 Houston, Texas 77042
Houston, Texas 77006 Attention: D, Hughes Watler, Jr. Attention: Gregory K.
Sampson Title: Chief Financial Officer Title: Vice President Land (713) 479-7050
(713) 820-6618 Hughes Watler-HWatler@caprockoil.com Greg
Sampson-greg@petrodomeenergy.com

 
Either party may, by written notice delivered to the other, change the address
to which delivery shall thereafter be made.
 
7.3 Amendment.   This Agreement may not be altered or amended, nor any rights
provided for in this Agreement waived, except by an instrument in writing
executed by the party or parties to be charged with such amendment or waiver.
 
7.4 Announcements.   The Parties shall consult with each other with regard to
all press releases and other announcements concerning this Agreement or the
transaction contemplated by this Agreement and, except as may be required by
applicable laws or regulations of any governmental agency, Buyer and/or Seller
shall not issue any press release or any other announcement without the prior
written consent of the other party.
 
7.5 Counterparts.   This Agreement may be executed by Buyer and Seller in any
number of counterparts, each of which shall be deemed an original instrument,
but all together shall constitute but one and the same instrument. This
Agreement shall become operative when each party has executed at least one
counterpart of this Agreement.
 
7.6 Governing Law and Forum.   This Agreement and the transactions contemplated
by this Agreement shall be construed in accordance with, and governed by, the
laws of the State of Texas.  All suits arising with respect to this Agreement
shall be filed in the state and federal courts of competent jurisdiction in
Harris County, Texas.
 
7.7 Entire Agreement.   This Agreement (including all Exhibits) constitutes the
entire understanding between Buyer and Seller with respect to the subject matter
of this Agreement, and supersedes all negotiations, prior discussions, prior
agreements, and understandings relating to such subject matter. No material
representation, warranty, covenant, agreement, promise, inducement or statement,
whether oral or written, has been made by Seller or Buyer and relied upon by
other that is not set forth in this Agreement or in the instruments referred to
in this Agreement, and Seller and/or Buyer shall not be bound by or liable for
any alleged representation, warranty, covenant, agreement, promise, inducement,
or statement not set forth in this Agreement.
 
7.8 Several and Not Joint.   Notwithstanding any other provision to the
contrary, the parties expressly agree that the respective obligations of the
Sellers hereunder shall be several and not joint.
 
This Agreement is signed on this 28th day of January, 2015 (“the Signing Date”)
by Seller and Buyer, but shall be deemed effective for all purposes as of the
Effective Time.
 
SELLER:

Cinco NRG, LLC.

_________________________________
D. Hughes Watler, Jr, Chief Financial Officer
 
 
BUYER:

Petrodome Bloomington, LLC

_________________________________
Robert G. Wonish, President & COO