Document:

Unassociated Document

Exhibit 10.10

 

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”) is made and entered into as of __________, 2014, by and among BiopharmX Inc., a Delaware corporation (the “Grantor”), and SCM Capital LLC, in its capacity as collateral agent (in such capacity, the “Collateral Agent”) for the Holders (as defined below).

WITNESSETH:

WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as of June 4, 2013, by and among the Grantor and each party listed as a “Buyer” on the Schedule of Buyers attached thereto as Schedule I (the “Purchase Agreement”), the Grantor shall sell, and the Buyers shall purchase, the “Notes” (as defined in the Purchase Agreement);

WHEREAS, it is a condition precedent to the Buyers purchasing the Notes that the Grantor has granted a security interest in and to the Collateral (as defined in this Agreement) to the Collateral Agent for the benefit of the Holders to secure all of the Grantor’s obligations under the Purchase Agreement, the Notes issued pursuant thereto and the other “Subscription Documents” (as defined in the Purchase Agreement, and as the same may be amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, the “Subscription Documents”), on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, for and in consideration of the Purchase Agreement and the Notes, the other premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties covenant and agree as follows:

1.           Definitions. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Purchase Agreement.  In addition to the words and terms defined elsewhere in this Agreement, the following words and terms shall have the following meanings, unless the context otherwise clearly requires:

“Accounts” shall have the meaning given to that term in the Code and shall include without limitation all rights of the Grantor, whenever acquired, to payment for goods sold or leased or for services rendered, whether or not earned by performance.

“Chattel Paper” shall have the meaning given to that term in the Code and shall include without limitation all writings owned by the Grantor, whenever acquired, which evidence both a monetary obligation and a security interest in or a lease of specific goods.

“Code” shall mean the Uniform Commercial Code as in effect on the date of this Agreement and as amended from time to time, of the state or states having jurisdiction with respect to all or any portion of the Collateral from time to time.

“Collateral” shall mean (i) all tangible and intangible assets of the Grantor, including, without limitation, collectively the Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Instruments, Intellectual Property, Inventory and Investment Property of the Grantor, and (ii) Proceeds of each of them.

 

  

  

  

“Deposit Accounts” shall have the meaning given to that term in the Code and shall include a demand, time, savings, passbook or similar account maintained with a bank, savings bank, savings and loan association, credit union, trust company or other organization that is engaged in the business of banking.

“Documents” shall have the meaning given to that term in the Code and shall include without limitation all warehouse receipts (as defined by the Code) and other documents of title (as defined by the Code) owned by the Grantor, whenever acquired.

“Equipment” shall have the meaning given to that term in the Code and shall include without limitation all goods owned by the Grantor, whenever acquired and wherever located, used or brought for use primarily in the business or for the benefit of the Grantor, and not included in Inventory of the Grantor, together with all attachments, accessories and parts used or intended to be used with any of those goods or Fixtures, whether now or in the future installed therein or thereon or affixed thereto, as well as all substitutes and replacements thereof in whole or in part.

“Event of Default” shall mean (i) any of the Events of Default described in the Notes or the Subscription Documents, or (ii) any default by a Grantor in the performance of its obligations under this Agreement.

“Fixtures” shall have the meaning given to that term in the Code, and shall include without limitation leasehold improvements.

“General Intangibles” shall have the meaning given to that term in the Code and shall include, without limitation, all leases under which the Grantor, now or in the future leases and or obtains a right to occupy or use real or personal property, or both, all of the other contract rights of the Grantor, whenever acquired, and customer lists, choses in action, claims (including claims for indemnification), books, records, patents, copyrights, trademarks, blueprints, drawings, designs and plans, trade secrets, methods, processes, contracts, licenses, license agreements, formulae, tax and any other types of refunds, returned and unearned insurance premiums, rights and claims under insurance policies, and computer information, software, records and data, and oil, gas, or other minerals before extraction now owned or acquired after the date of this Agreement by the Grantor.

“Holder” means each Buyer and any person to whom a Buyer assigns all or any portion of a Note in accordance with the terms thereof.

“Instruments” shall have the meaning given to that term in the Code and shall include, without limitation, all negotiable instruments (as defined in the Code), all certificated securities (as defined in the Code) and all other writings which evidence a right to the payment of money now or after the date of this Agreement owned by the Grantor.

 

  

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“Inventory” shall have the meaning given to that term in the Code and shall include without limitation all goods owned by the Grantor, whenever acquired and wherever located, held for sale or lease or furnished or to be furnished under contracts of service, and all raw materials, work in process and materials owned by the Grantor, and used or consumed in the Grantor’s business, whenever acquired and wherever located.

“Investment Property,” “Securities Intermediary” and “Commodities Intermediary” each shall have the meaning set forth in the Code.

“Permitted Liens” shall mean all (i) all existing liens on the assets of a Grantor which have been disclosed to the Buyers by the Grantor on a Schedule II attached hereto or pursuant to the other Note Documents, and (ii) all purchase money security interests hereinafter incurred by a Grantor in the ordinary course of business.

“Proceeds” shall have the meaning given to that term in the Code and shall include without limitation whatever is received when Collateral or Proceeds are sold, exchanged, collected or otherwise disposed of, whether cash or non-cash, and includes without limitation proceeds of insurance payable by reason of loss of or damage to Collateral.

Capitalized terms not otherwise defined in this Agreement or the Purchase Agreement shall have the meanings attributed to such terms in the Code.

2.            Security Interest.

(a)         As security for the full and timely payment of the Notes in accordance with the terms of the Purchase Agreement and the performance of the obligations of the Company under the Purchase Agreement, the Notes and the other Subscription Documents, the Grantor agrees that the Holders shall have, and the Grantor hereby grants and conveys to and creates in favor of the Holders, a security interest under the Code in and to its Collateral, whether now owned or existing or hereafter acquired or arising and regardless of where located. The security interest granted to the Holders in this Agreement shall be a second priority security interest, prior and superior to the rights of all third parties existing on or arising after the date of this Agreement, subject to the Permitted Liens. The lien covering the Collateral will be subordinate only to the liens granted by Grantor to lenders in the same Collateral to secure the Permitted Liens.

(b)        All of the Equipment, Inventory and Goods owned by the Grantor is located in the states as specified on Schedule I attached hereto (except to the extent any such Equipment, Inventory or Goods is in transit or located at such Grantor’s job site in the ordinary course of business).  Except as disclosed on Schedule I, none of the Collateral is in the possession of any bailee, warehousemen, processor or consignee.  Schedule I discloses such Grantor name as of the date hereof as it appears in official filings in the state of its incorporation, the organizational identification number issued by Grantor’s state of incorporation, formation or organization (or a statement that no such number has been issued), and the chief place of business, chief executive officer and the office where Grantor keeps its books and records.  The Grantor has only one state of incorporation.  The Grantor does not do business and have not done business during the past five (5) years under any trade name or fictitious business name except as disclosed on Schedule I attached hereto.

 

  

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3.            Provisions Applicable to the Collateral. The parties agree that the following provisions shall be applicable to the Collateral:

(a)         The Grantor covenants and agrees that at all times during the term of this Agreement it shall keep accurate and complete books and records concerning the Collateral that is now owned by the Grantor.

(b)         The Holders or their representatives shall have the right, upon reasonable prior written notice to a Grantor and during the regular business hours of the Grantor, to examine and inspect the Collateral and to review the books and records of the Grantor concerning the Collateral that is now owned or acquired after the date of this Agreement by the Grantor and to copy the same and make excerpts therefrom; provided, however, that from and after the occurrence of an Event of Default, the rights of inspection and entry shall be subject to the requirements of the Code.

(c)         The Grantor shall at all times during the term of this Agreement keep the Equipment, Inventory and Fixtures that are now owned by the Grantor in the states set forth on Schedule I or, upon written notice to the Collateral Agent, at such other locations for which the Holders have filed financing statements, and in no other states without 20 days’ prior written notice to the Holders, except that the Grantor shall have the right until one or more Events of Default shall occur to sell, move or otherwise dispose of Inventory and other Collateral in the ordinary course of business.

(d)         The Grantor shall not move the location of its principal executive offices without prior written notification to the Collateral Agent.

(e)         Without the prior written consent of the Holders, the Grantor shall not sell, lease or otherwise dispose of any Equipment or Fixtures, except in the ordinary course of their business.

(f)          Promptly upon request of the Holders or the Collateral Agent from time to time, the Grantor shall furnish the Holders or the Collateral Agent with such information and documents regarding the Collateral and the Grantor’s financial condition, business, assets or liabilities, at such times and in such form and detail as the Holders may reasonably request.

(g)         During the term of this Agreement, the Grantor shall deliver to the Holders or the Collateral Agent, upon their reasonable, written request from time to time, without limitation,

 

   (i)      all invoices and customer statements rendered to account debtors, documents, contracts, chattel paper, instruments and other writings pertaining to the Grantor’s contracts or the performance of the Grantor’s contracts,

 

  

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   (ii)     evidence of the Grantor’s accounts and statements showing the aging, identification, reconciliation and collection thereof, and

 

   (iii)    reports as to the Grantor’s inventory and sales, shipment, damage or loss thereof, all of the foregoing to be certified by authorized officers or other employees of the Grantor, and Grantor shall take all necessary action during the term of this Agreement to facilitate perfection of any and all security interests in favor of the Holders by the Collateral Agent.

(h)         Notwithstanding the security interest in the Collateral granted to and created in favor of the Holders under this Agreement, the Grantor shall have the right until one or more Events of Default shall occur, at its own cost and expense, to collect the Accounts and the Chattel Paper and to enforce their contract rights.

(i)          After the occurrence of an Event of Default, the Collateral Agent shall have the right, in its sole discretion, to give notice of the Holders’ security interest to account debtors obligated to the Grantor and to take over and direct collection of the Accounts and the Chattel Paper, to notify such account debtors to make payment directly to the Holders and to enforce payment of the Accounts and the Chattel Paper and to enforce the Grantor’s contract rights. It is understood and agreed by the Grantor that the Collateral Agent shall have no liability whatsoever under this subsection (i) except for their own gross negligence or willful misconduct.

(j)          At all times during the term of this Agreement, the Grantor shall promptly deliver to the Collateral Agent, upon its written request, all existing leases, and all other leases entered into by the Grantor from time to time, covering any Equipment or Inventory which is leased to third parties.

(k)         The Grantor shall not change its name, entity status, federal taxpayer identification number, or provincial organizational or registration number, or the state under which it is organized without the prior written consent of the Holders, which consent shall not be unreasonably withheld.

(l)          The Grantor shall not close any of its Deposit Accounts or open any new or additional Deposit Accounts without first giving the Holders at least fifteen (15) days’ prior written notice thereof; however, Holders grant Collateral Agent the power to waive a portion of the notice period if such waiver does not harm Holders’ security position.

(m)        The Grantor shall cooperate with the Holders and the Collateral Agent, at the Grantor’s reasonable expense, in perfecting Holders’ security interest in any of the Collateral.

(n)         The Collateral Agent may file any necessary financing statements and other documents the Collateral Agent deems reasonably necessary in order to perfect Holders’ security interest without either Grantor’s signature.  The Grantor grants to the Collateral Agent a power of attorney for the sole purpose of executing any documents on behalf of the Grantor which the Collateral Agent deems reasonably necessary to perfect Holders’ security interest.  Such power, coupled with an interest, is irrevocable.

 

  

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4.            Actions with Respect to Accounts. The Grantor irrevocably makes, constitutes and appoints the Collateral Agent its true and lawful attorney-in-fact with power to sign its name and to take any of the following actions after the occurrence and prior to the cure of an Event of Default, at any time without notice to either Grantor and at the Grantor’s reasonable expense:

(a)         Verify the validity and amount of, or any other matter relating to, the Collateral by mail, telephone, telegraph or otherwise;

(b)         Notify all account debtors that the Accounts have been assigned to the Holders and that the Holders have a security interest in the Accounts;

(c)         Direct all account debtors to make payment of all Accounts directly to the Holders;

(d)         Take control in any reasonable manner of any cash or non-cash items of payment or proceeds of Accounts;

(e)         Receive, open and respond to all mail addressed to the Grantor;

(f)          Take control in any manner of any rejected, returned, stopped in transit or repossessed goods relating to Accounts;

(g)         Enforce payment of and collect any Accounts, by legal proceedings or otherwise, and for such purpose the Holders may:

 

   (1)           Demand payment of any Accounts or direct any account debtors to make payment of Accounts directly to the Holders;

   (2)           Receive and collect all monies due or to become due to the Grantor pursuant to the Accounts;

   (3)           Exercise all of the Grantor’s rights and remedies with respect to the collection of Accounts;

   (4)           Settle, adjust, compromise, extend, renew, discharge or release Accounts in a commercially reasonable manner;

 

   (5)           Sell or assign Accounts on such reasonable terms, for such reasonable amounts and at such reasonable times as the Holders reasonably deem advisable;

   (6)           Prepare, file and sign the Grantor’s name or names on any Proof of Claim or similar documents in any proceeding filed under federal or state bankruptcy, insolvency, reorganization or other similar law as to any account debtor;

 

  

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   (7)           Prepare, file and sign the Grantor’s name or names on any notice of lien, claim of mechanic’s lien, assignment or satisfaction of lien or mechanic’s lien or similar document in connection with the Collateral;

   (8)           Endorse the name of the Grantor upon any chattel papers, documents, instruments, invoices, freight bills, bills of lading or similar documents or agreements relating to Accounts or goods pertaining to Accounts or upon any checks or other media of payment or evidence of a security interest that may come into the Holders’ possession;

   (9)           Sign the name or names of the Grantor to verifications of Accounts and notices of Accounts sent by account debtors to the Grantor; or

   (10)         Take all other actions that the Holders reasonably deem to be necessary or desirable to protect the Grantor’s interest in the Accounts.

(h)         Negotiate and endorse any Document in favor of the Holders or their designees, covering Inventory which constitutes Collateral, and related documents for the purpose of carrying out the provisions of this Agreement and taking any action and executing in the name(s) of Grantor any instrument which the Holders may reasonably deem necessary or advisable to accomplish the purpose hereof. Without limiting the generality of the foregoing, the Collateral Agent shall have the right and power to receive, endorse and collect checks and other orders for the payment of money made payable to the Grantor representing any payment or reimbursement made under, pursuant to or with respect to, the Collateral or any part thereof and to give full discharge to the same. The Grantor does hereby ratify and approve all acts of said attorney and agrees that said attorney shall not be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law, except for said attorney’s own gross negligence or willful misconduct. This power, being coupled with an interest, is irrevocable until the Notes are paid in full (at which time this power shall terminate in full) and the Grantor shall have performed all of its obligations under this Agreement. The Grantor further agrees to use its reasonable efforts to assist the Collateral Agent in the collection and enforcement of the Accounts and will not hinder, delay or impede the Holders in any manner in its collection and enforcement of the Accounts.

 

  

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5.           Preservation and Protection of Security Interest. The Grantor represents and warrants that it has, and covenants and agrees that at all times during the term of this Agreement, it will have, good and marketable title to the Collateral now owned by it free and clear of all mortgages, pledges, liens, security interests, charges or other encumbrances, except for the Permitted Liens and those junior in right of payment and enforcement to that of the Holders or in favor of the Holders, and shall defend the Collateral against the claims and demands of all persons, firms and entities whomsoever. Assuming Holders have taken all required action to perfect a security interest in the Collateral as provided by the Code, the Grantor represents and warrants that as of the date of this Agreement the Holders have, and that all times in the future the Holders will have, a second priority perfected security interest in the Collateral, prior and superior to the rights of all third parties in the Collateral existing on the date of this Agreement or arising after the date of this Agreement, and subordinate only to the liens granted by Grantor to lenders in the same Collateral to secure the Permitted Liens. Except as permitted by this Agreement, the Grantor covenants and agrees that it shall not, without the prior written consent of the Holders (i) borrow against the Collateral or any portion of the Collateral from any other person, firm or entity, except for borrowings which are subordinate to the rights of the Holders, (ii) grant or create or permit to attach or exist any mortgage, pledge, lien, charge or other encumbrance, or security interest on, of or in any of the Collateral or any portion of the Collateral except those in favor of the Holders or the Permitted Liens, (iii) permit any levy or attachment to be made against the Collateral or any portion of the Collateral, except those subject to the Permitted Liens, or (iv) permit any financing statements to be on file with respect to any of the Collateral, except financing statements in favor of the Holders or those with respect to the Permitted Liens. The Grantor shall faithfully preserve and protect the Holders’ security interest in the Collateral and shall, at its own reasonable cost and expense, cause, or assist the Holders to cause that security interest to be perfected and continue perfected so long as the Notes or any portion of the Notes are outstanding, unpaid or executory. For purposes of the perfection of the Holders’ security interest in the Collateral in accordance with the requirements of this Agreement, the Grantor shall from time to time at the request of the Holders file or record, or cause to be filed or recorded, such instruments, documents and notices, including assignments, financing statements and continuation statements, as the Holders may reasonably deem necessary or advisable from time to time in order to perfect and continue perfected such security interest. The Grantor shall do all such other acts and things and shall execute and deliver all such other instruments and documents, including further security agreements, pledges, endorsements, assignments and notices, as the Holders in their discretion may reasonably deem necessary or advisable from time to time in order to perfect and preserve the priority of such security interest as a second lien security interest in the Collateral prior to the rights of all third persons, firms and entities, subordinate only to the liens granted by Grantor to lenders in the same Collateral to secure the Permitted Liens and except as may be otherwise provided in this Agreement. The Grantor agrees that a carbon, photographic or other reproduction of this Agreement or a financing statement is sufficient as a financing statement and may be filed instead of the original.

6.           Insurance. Risk of loss of, damage to or destruction of the Equipment, Inventory and Fixtures is on the Grantor. The Grantor shall insure the Equipment, Inventory and Fixtures against such risks and casualties and in such amounts and with such insurance companies as is ordinarily carried by corporations or other entities engaged in the same or similar businesses and similarly situated or as otherwise reasonably required by the Holders in their sole discretion. In the event of loss of, damage to or destruction of the Equipment, Inventory or Fixtures during the term of this Agreement, the Grantor shall promptly notify the Collateral Agent of such loss, damage or destruction. At the reasonable request of the Holders, the Grantor’s policies of insurance shall contain loss payable clauses in favor of the Grantor and the Holders as their respective interests may appear and shall contain provision for notification of the Holders thirty (30) days prior to the termination of such policy. At the request of the Holders, copies of all such policies, or certificates evidencing the same, shall be deposited with the Holders. If any Grantor fails to effect and keep in full force and effect such insurance or fail to pay the premiums when due, the Holders may (but shall not be obligated to) do so for the account of such Grantor and add the cost thereof to the Notes.  The Holders are irrevocably appointed attorney-in-fact of the Grantor to endorse any draft or check which may be payable to the Grantor in order to collect the proceeds of such insurance. Unless an Event of Default has occurred and is continuing, the Holders will turn over to the Grantor the proceeds of any such insurance collected by it on the condition that the Grantor apply such proceeds either (i) to the repair of damaged Equipment, Inventory or Fixtures, or (ii) to the replacement of destroyed Equipment, Inventory or Fixtures with Equipment, Inventory or Fixtures of the same or similar type and function and of at least equivalent value (in the sole judgment of the Holders), provided such replacement Equipment, Fixtures or Inventory is made subject to the security interest created by this Agreement and constitutes a second lien security interest in the Equipment, Inventory and Fixtures subordinate only to the liens granted by Grantor to lenders in the same Collateral to secure  the Permitted Liens and other security interests permitted under this Agreement, and is perfected by the filing of financing statements in the appropriate public offices and the taking of such other action as may be necessary or desirable in order to perfect and continue perfected such security interest. Any balance of insurance proceeds remaining in the possession of the Holders after payment in full of the Notes shall be paid over to the applicable Grantor or its order.

 

  

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7.           Maintenance and Repair. The Grantor shall maintain the Equipment, Inventory and Fixtures, and every portion thereof, in good condition, repair and working order, reasonable wear and tear alone excepted, and shall pay and discharge all taxes, levies and other impositions assessed or levied thereon as well as the cost of repairs to or maintenance of the same. If any Grantor fails to do so, the Holders may (but shall not be obligated to) pay the cost of such repairs or maintenance and such taxes, levies or impositions for the account of such Grantor and add the amount of such payments to the principal of the Notes.

8.           Preservation of Rights against Third Parties; Preservation of Collateral in Holders’ Possession. Until such time as the Holders exercise their right to effect direct collection of the Accounts and the Chattel Paper and to effect the enforcement of the Grantor’s contract rights, the Grantor assumes full responsibility for taking any and all commercially reasonable steps to preserve rights in respect of the Accounts and the Chattel Paper and their contracts against prior parties. The Holders shall be deemed to have exercised reasonable care in the custody and preservation of such of the Collateral as may come into its possession from time to time if the Holders take such action for that purpose as the relevant Grantor shall request in writing, provided that such requested action shall not, in the judgment of the Holders, impair the Holders’ security interest in the Collateral or its right in, or the value of, the Collateral, and provided further that the Holders receive such written request in sufficient time to permit the Holders to take the requested action.

9.   Events of Default and Remedies.

(a)        If any one or more of the Events of Default shall occur or shall exist, the Collateral Agent may then or at any time thereafter, so long as such default shall continue, foreclose the lien or security interest in the Collateral in any way permitted by law, or upon fifteen (15) days’ prior written notice to the relevant Grantor, sell any or all Collateral at private sale at any time or place in one or more sales, at such price or prices and upon such terms, either for cash or on credit, as the Collateral Agent, in its sole discretion, may elect, or sell any or all Collateral at public auction, either for cash or on credit, as the Collateral Agent, in its sole discretion, may elect, and at any such sale, the Collateral Agent may bid for and become the purchaser of any or all such Collateral. Pending any such action the Collateral Agent may liquidate the Collateral.

 

  

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(b)         If any one or more of the Events of Default shall occur or shall exist, the Collateral Agents may then, or at any time thereafter, so long as such default shall continue, grant extensions to, or adjust claims of, or make compromises or settlements with, debtors, guarantors or any other parties with respect to Collateral or any securities, guarantees or insurance applying thereon, without notice to or the consent of any Grantor, without affecting the Grantor’s liability under this Agreement or the Notes. The Grantor waives notice of acceptance, of nonpayment, protest or notice of protest of any Accounts or Chattel Paper, any of its contract rights or Collateral and any other notices to which the Grantor may be entitled.

(c)         If any one or more of the Events of Default shall occur or shall exist and be continuing, then in any such event, the Collateral Agent shall have such additional rights and remedies in respect of the Collateral or any portion thereof as are provided by the Code and such other rights and remedies in respect thereof which it may have at law or in equity or under this Agreement, including without limitation the right to enter any premises where Equipment, Inventory and/or Fixtures are located and take possession and control thereof without demand or notice and without prior judicial hearing or legal proceedings, which the Grantor expressly waives.

(d)         The Collateral Agent shall apply the Proceeds of any sale or liquidation of the Collateral, and, subject to Section 5, any Proceeds received by the Collateral Agent from insurance, first to the payment of the reasonable costs and expenses incurred by the Collateral Agent in connection with such sale or collection, including without limitation reasonable attorneys’ fees and legal expenses; second to the payment of the Notes, pro rata, whether on account of principal or interest or otherwise as the Collateral Agent, in its sole discretion, may elect, and then to pay the balance, if any, to the relevant Grantor or as otherwise required by law. If such Proceeds are insufficient to pay the amounts required by law, the Grantors shall be liable for any deficiency.

(e)         Upon the occurrence of any Event of Default, the Grantor shall promptly upon written demand by the Collateral Agent assemble the Equipment, Inventory and Fixtures and make them available to the Holders at a place or places to be designated by the Collateral Agent The rights of the Collateral Agent under this paragraph to have the Equipment, Inventory and Fixtures assembled and made available to it is of the essence of this Agreement and the Collateral Agent may, at its election, enforce such right by an action in equity for injunctive relief or specific performance, without the requirement of a bond.

10.          Defeasance. Notwithstanding anything to the contrary contained in this Agreement upon payment and performance in full of the Notes, this Agreement shall terminate and be of no further force and effect and the Holders shall thereupon terminate their security interest in the Collateral. Until such time, however, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns, provided that, without the prior written consent of the Holders, no Grantor may assign this Agreement or any of its rights under this Agreement or delegate any of its duties or obligations under this Agreement and any such attempted assignment or delegation shall be null and void. This Agreement is not intended and shall not be construed to obligate the Holders to take any action whatsoever with respect to the Collateral or to incur expenses or perform or discharge any obligation, duty or disability of any Grantor.

 

  

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11.         The Collateral Agent.

(a)         Delegation of Duties.  The Collateral Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Collateral Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects with reasonable care.

(b)         Liability of Collateral Agent.  None of the Collateral Agent Related Persons (as defined below) shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Transaction Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Holders for any recital, statement, representation or warranty made by any other party, or any officer thereof, contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Collateral Agent under or in connection with, this Agreement or any other Transaction Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for any failure of any other party to this Agreement or any other Transaction Document to perform its obligations hereunder or thereunder.  No Collateral Agent Related Person shall be under any obligation to any Holder to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Company or any of the Company’s Subsidiaries or Affiliates.  “Collateral Agent Related Persons” means the Collateral Agent and any successor agent arising hereunder, together with their respective affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such persons and affiliates.

(c)         Reliance by Collateral Agent.  The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper person or persons, and upon advice and statements of legal counsel (including counsel to the Company or any Grantor), independent accountants and other experts selected by the Collateral Agent. The Collateral Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Majority Holders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Holders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Majority Holders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Holders. “Majority Holders” means at any time a Holder or Holders then holding in excess of 50% of the then aggregate unpaid principal amount of the Notes.

 

  

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(d)         Notice of Default.  The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any default or Event of Default, except with respect to defaults in the delivery of any documents or certificates required to be delivered to the Collateral Agent hereunder for the benefit of the Holders, unless the Collateral Agent shall have received written notice from a Holder or the Company or any Grantor referring to this Agreement, describing such default or Event of Default and stating that such notice is a “notice of default”.  The Collateral Agent will notify the Holders of its receipt of any such notice.  The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Majority Holders in accordance with this Agreement; provided, however, that unless and until the Collateral Agent has received any such request, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such default or Event of Default as it shall deem advisable or in the best interest of the Holders.

(e)         Indemnification of Collateral Agent.  Whether or not the transactions contemplated hereby and by the other Subscription Documents are consummated, the Holders shall indemnify upon demand the Collateral Agent Related Persons (to the extent not reimbursed by or on behalf of the Company or any Guarantor and without limiting the obligation of the Company or the Grantor to do so), pro rata, from and against any and all Indemnified Liabilities (as defined below); provided, however, that no Holder shall be liable for the payment to the Collateral Agent Related Persons of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Holder shall reimburse the Collateral Agent upon demand for its ratable share of any costs or out of pocket expenses (including fees and disbursements of legal counsel) incurred by the Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Transaction Document, or any document contemplated by or referred to herein, to the extent that the Collateral Agent is not reimbursed for such expenses by or on behalf of the Company.  Notwithstanding the foregoing, no Holder shall be required to pay, in total under this paragraph (e) and any similar provision in any other Transaction Document, any amount in excess of the total gross purchase price of the Notes purchased by such Holder.  The undertaking in this paragraph shall survive the payment of all obligations hereunder and the resignation or replacement of the Collateral Agent.  “Indemnified Liabilities” means all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including fees and disbursements of legal counsel) of any kind or nature whatsoever which may at any time (including at any time following repayment of the Notes and the termination, resignation or replacement of the Collateral Agent) be imposed on, incurred by or asserted against any Collateral Agent Related Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby and thereby, or any action taken or omitted by any such Collateral Agent Related Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any bankruptcy or insolvency proceeding or appellate proceeding) related to or arising out of this Agreement or the Notes or the other Subscription Documents or the use of the proceeds thereof, whether or not any Collateral Agent Related Person is a party thereto.

 

  

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(f)          Collateral Agent in Individual Capacity.  Any Collateral Agent Related Person may engage in transactions with, make loans to, acquire equity interests in and generally engage in any kind of business with the Company or any Grantor and their affiliates, including purchasing and holding Notes, as though the Collateral Agent were not the Collateral Agent hereunder and without notice to or consent of the Holders.  The Holders acknowledge that, pursuant to such activities, any Collateral Agent Related Person may receive information regarding the Company or any Grantor and their affiliates (including information that may be subject to confidentiality obligations in favor of the Company or any Grantor and their affiliates) and acknowledge that the Collateral Agent shall be under no obligation to provide such information to them.  With respect to any Notes it holds, a Collateral Agent Related Person shall have the same rights and powers under this Agreement as any other Holder and may exercise the same as though the Collateral Agent were not the Collateral Agent, and the terms “Holder” and “Holders” include any such Collateral Agent Related Person in its individual capacity.

(g)         Successor Collateral Agent.  The Collateral Agent may, and at the request of the Majority Holders shall, resign as Collateral Agent upon 30 days’ notice to the Holders.  If the Collateral Agent resigns under this Agreement, the Majority Holders shall appoint from among the Holders a successor agent for the Holders, which successor agent shall be approved by the Company, such approval not to be unreasonably withheld.  If no successor agent is appointed prior to the effective date of the resignation of the Collateral Agent, the Collateral Agent may appoint, after consulting with the Holders and the Company, a successor agent from among the Holders.  Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent and the term “Collateral Agent” shall mean such successor agent and the retiring Collateral Agent’s appointment, powers and duties as Collateral Agent shall be terminated. After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement.  If no successor agent has accepted appointment as Collateral Agent by the date which is 30 days following a retiring Collateral Agent’s notice of resignation, the retiring Collateral Agent’s resignation shall nevertheless thereupon become effective and the Holders shall perform all of the duties of the Collateral Agent hereunder until such time, if any, as the Majority Holders appoint a successor agent as provided for above.

12.         Miscellaneous.

(a)        The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall for any reason be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability of such provision in any other jurisdiction or any other provision of this Agreement in any jurisdiction.

 

  

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(b)         No failure or delay on the part of the Holders in exercising any right, remedy, power or privilege under this Agreement and the Notes shall operate as a waiver thereof or of any other right, remedy, power or privilege of the Holders under this Agreement, the Notes or any of the other Subscription Documents; nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other right, remedy, power or privilege or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges of the Holders under this Agreement, the Notes and the other Subscription Documents are cumulative and not exclusive of any rights or remedies which they may otherwise have.

(c)         Unless otherwise provided herein, all demands, notices, consents, service of process, requests and other communications hereunder shall be in writing and shall be delivered in person or by overnight courier service, or mailed by certified mail, return receipt requested, addressed:

If to Grantor:

At the address for the Company set forth in the Purchase Agreement

If to Collateral Agent:

[name]

Attn:

[address]

Facsimile:

Any such notice shall be effective when delivered, if delivered by hand delivery, overnight courier service, or U.S. Mail return receipt requested.

 

(d)         The section headings contained in this Agreement are for reference purposes only and shall not control or affect its construction or interpretation in any respect.

(e)         Unless the context otherwise requires, all terms used in this Agreement which are defined by the Code shall have the meanings stated in the Code.

(f)          The Code shall govern the settlement, perfection and the effect of attachment and perfection of the Holders’ security interest in the Collateral, and the rights, duties and obligations of the Holders and the Grantor with respect to the Collateral. This Agreement shall be deemed to be a contract under the laws of the State of New York and the execution and delivery of this Agreement and, to the extent not inconsistent with the preceding sentence, the terms and provisions of this Agreement shall be governed by and construed in accordance with the laws of that State.  EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

  

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(g)         This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.  Any party delivering an executed counterpart of this Agreement by facsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

[SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed and delivered this Security Agreement as of the day and year set forth at the beginning of this Security Agreement.

 

	

GRANTOR:

	

BIOPHARMX INC.

	 
	 	 	 	 
	 	
By: 

	 	 
	 	Name:	

Jim Pekarsky

	 
	 	Title:	
Chief Executive Officer

	 
	 	 	 	 

 

ACCEPTED BY:

SCM CAPITAL LLC

as Collateral Agent

 

	 	 
	 	 	 
	
By: 

	 	 
	Name:	 	 
	Title:	 	 
	 	 	 

 

[SIGNATURE PAGE TO BIOPHARMX SECURITY AGREEMENT]

 

  

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Schedule I

	
1.

	
State(s)/Jurisdictions in which Collateral is located:

California

	
2.

	
Grantor Information:

 

	
Grantor

	  
	
BiopharmX Inc.

a Delaware corporation

File No.: 5026776

 

Executive Offices Address:

 

500 Ellis Street

Mountain View, California 94043

Chief Executive Officer: Mr. Jim Pekarsky

E-mail: jpekarsky@biopharmx.com

 

Foreign Corporation Qualification Numbers:

 

None

 

	  

 

  

17

  

 

Schedule II

Permitted Liens

None.

 

 

18Unassociated Document

Exhibit 10.1

 

 

PURCHASE AND SALE AGREEMENT

 

 

 

BETWEEN

 

 

RIDGEWOOD ENERGY CORPORATION,

 

as Manager for and on Behalf of

 

RIDGEWOOD ENERGY A-1 FUND, LLC

 

RIDGEWOOD ENERGY GULF OF MEXICO OIL AND GAS FUND, L.P.

 

RIDGEWOOD ENERGY P FUND, LLC

 

RIDGEWOOD ENERGY W FUND, LLC

 

RIDGEWOOD ENERGY Y FUND, LLC

 

(as Sellers)

 

and

 

CASTEX ENERGY PARTNERS, L.P.

 

(as Buyer)

 

 

DATED:  January 17, 2014

 

  

  

  

    

SCHEDULE OF EXHIBITS AND SCHEDULES

 

	
Exhibit “A”

	
Leases, Lease Related Interests and Easements

	
Exhibit “A-1”

	
Wells

	
Exhibit “A-2”

	
Contracts

	
Exhibit “A-3”

	
Permits

	
Exhibit “A-4”

	
Data

	
Exhibit “B”

	
Allocated Values

	
Exhibit “C-1”, “C-2”, “C-3”

	
Form of Assignment

	
Exhibit “D”

	
Form of FIRPTA Certificate

	
Exhibit “E”

	
Seller’s Certificate

	
Exhibit “F”

	
Buyer’s Certificate

 

 

 

 

 

 

PURCHASE AND SALE AGREEMENT

RIDGEWOOD ENERGY CORPORATION and

CASTEX ENERGY PARTNERS L.P.

 

  

 

THIS PURCHASE AND SALE AGREEMENT (“Agreement”), dated as of January 17, 2014 (the “Execution Date”), is between Ridgewood Energy Corporation, a Delaware corporation, as Manager for and on behalf of, Ridgewood Energy A-1 Fund, LLC, a  Delaware limited liability company, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., a Delaware limited partnership, Ridgewood Energy P Fund, LLC, a Delaware limited liability company, Ridgewood Energy W Fund, LLC, a  Delaware limited liability company, and Ridgewood Energy Y Fund, LLC, a Delaware limited liability company (collectively, “Sellers”; and each individually, a “Seller”), and Castex Energy Partners, L.P., a Texas limited partnership (“Buyer”).  Buyer and Seller are hereinafter sometimes referred to individually as a “Party” and collectively as the “Parties.”  Unless otherwise defined herein, capitalized terms used in this Agreement shall have the respective meanings ascribed to such terms in Section 12.1 of this Agreement.

 

W I T N E S S E T H:

 

WHEREAS Sellers collectively own or hold the Properties (as defined below) as specified in Exhibits “A” and “A-1” and desire to sell, assign and convey to Buyer and Buyer desires to purchase and accept the Properties, all subject to the terms and conditions set forth below;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the benefits to be derived by Sellers and Buyer hereunder, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sellers and Buyer hereby agree as follows:

 

Article I.

Purchase and Sale

 

1.1           Purchase and Sale.  Subject to the terms and conditions of this Agreement, Buyer agrees to purchase and acquire from each Seller, and each Seller agrees to sell, transfer, assign, convey and deliver to Buyer, at the Closing, but effective as of the Effective Time (as defined below), all of such Seller’s rights, title and interests in, to and under, or derived from, and ownership interests in, the assets, properties (immovable, movable or mixed) and appurtenant rights (contractual or otherwise) set forth below (each a “Property,” and collectively, the “Properties”), free and clear of all Liens:

 

(a)           All of the oil, gas, other Hydrocarbon and mineral leases, subleases, working interests, royalty interests, overriding royalty interests, production payments, net profit interests, reversionary interests, carried interest, rights to take royalties in-kind and all other interests of any kind or character in Hydrocarbons in place and the leasehold estates created thereby, described on Exhibit “A” (collectively, the “Leases”), together with all other mineral interests of every nature related to the lands covered by the Leases or lands pooled or unitized therewith (the “Lands”) and all corresponding interests in and to all the property and rights incident thereto of any nature that arise by Law or otherwise, including all rights in any pooled or unitized acreage by virtue of the Leases having been pooled into such pools or units, all production from the pool or unit allocated to any such Lands; and all interests in any wells within the pool or unit associated with the Lands; and all reversionary interests, convertible interests, and net profits interests applicable to the Leases or Lands (together with Lands, collectively, the “Lease Related Interests”);

 

  

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(b)           All easements, rights-of-way, servitudes, surface leases, subsurface leases, permits, licenses or other interests in production of Hydrocarbons that are listed and described in Exhibit “A” (collectively, the “Easements”);

 

(c)           All of the oil and gas wells located on the lands covered by the Leases, Easements or any Lands or lands pooled or unitized therewith (whether producing, plugged and abandoned, shut-in, injection, disposal or water supply), including the wellbores described on Exhibit “A-1”, and all wellbores spudded after the date of this Agreement and prior to the Closing located on the Leases, Easements or any Lands or lands pooled or unitized therewith, and all movable property, improvements, fixtures, facilities, wells, gathering lines, flow lines, injection lines, pipelines, tanks, boilers, buildings, machinery, equipment (surface and downhole), inventory, pipelines, utility lines, power lines, telephone lines, boats, automobiles, roads and other appurtenances, to the extent the same are situated upon and used or held for use by Seller solely in connection with the Leases or such wells, or the production of oil, gas or other Hydrocarbon and non-Hydrocarbon substances attributable thereto (collectively, the “Wells”);

 

(d)           All of the presently existing and valid unitization, communitization and pooling declarations, orders, and agreements (including all units formed by voluntary agreement and those formed under the rules, regulations, orders or other official acts of any governmental entity or tribal authority having appropriate jurisdiction) to the extent they relate to the Leases, Easements, Wells or any Lands or lands pooled or unitized therewith or the production of oil, gas or Hydrocarbon and non-Hydrocarbon substances attributable thereto which are listed and described on Exhibit “A-2” (collectively, the “Contracts”);

 

(e)           All of the presently existing and valid oil sales contracts, casing-head gas sales contracts, gas sales contracts, processing contracts, gathering contracts, transportation contracts, farm-out contracts, farm-in contracts, balancing contracts (including but not limited to gas imbalances), suspense funds, operating agreements, areas of mutual interest, and other contracts, agreements and instruments (to the extent said contracts are transferable by a Seller without material expense to a Seller not advanced or reimbursed by Buyer, and not subject to material restrictions on transfer under third-party agreements), to the extent they relate to the Leases, Easements, Wells or any Lands or lands pooled or unitized therewith or the production of oil, gas or other Hydrocarbon and non-Hydrocarbon substances attributable thereto (the “Contracts”); including those contracts described in clauses (a), (b) and (d) of this Section 1.1 which are listed and described on Exhibit “A-2”;

 

(f)           All Hydrocarbons produced on or after the Effective Time that are attributable to a Seller’s interests in the properties, rights, titles, and interests described in clauses (a) through (e) of this Section 1.1, including to the extent attributable to Hydrocarbons stored in tanks and pipeline linefill as of the Effective Time;

 

(g)           All environmental and other governmental (whether federal, state or local) permits, licenses, orders, authorizations, franchises and related instruments or rights relating to the ownership, operation or use of the properties described in clauses (a) through (e) of this Section 1.1 (the “Permits”) which, if any, are described on Exhibit “A-3”;

 

  

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(h)           All of a Seller’s maps, logs, geologic interpretations and other data in the Seller’s (or any of Seller’s affiliates’) files, including, without limitation, all seismic data and seismic reprocessing underlying the Properties (to the extent transferable by such Seller without material expense to Seller not advanced or reimbursed by Buyer, and not subject to material restrictions on transfer under third-party agreements or applicable Law) collectively (the “Data”) which, if any, is described on Exhibit “A-4”; and

 

(i)           All cash (including restricted cash) received from working interest owners by or on behalf of a Seller (or its affiliates) to the extent attributable to the Properties for work to be completed on or after the Effective Time.

 

1.2           Excluded Assets.  Notwithstanding any other provision in this Agreement to the contrary, all of a Seller’s rights, title and interest in and to any of its assets other than the Properties will remain the property of such Seller after the Closing (the “Excluded Assets”).

 

1.3           Assumed Liabilities.  Buyer will assume from Sellers and shall, from and after the Closing Date, timely pay, discharge, perform or otherwise satisfy all Liabilities, other than the Retained Liabilities, related to the Properties, whether express or implied or arising before or after the Effective Time (collectively, the “Assumed Liabilities”), including the following:

 

(a)           All Liabilities under or arising out of the Contracts actually transferred to Buyer at the Closing, whether prior to, on or following the Closing Date;

 

(b)           All Liabilities under the Permits, including those associated with the renewals thereof, or arising from the failure to renew or to operate in accordance with such Permits;

 

(c)           All Liabilities pursuant to any Environmental Law arising from or relating to any action, event, or circumstance occurring after the Effective Time, including any release of any Hazardous Substances or any violation of any Environmental Laws with respect to the Properties, whether known or unknown, fixed or contingent;

 

(d)           Any and all plugging and abandonment liabilities and obligations with respect to any and all of the Properties (whether or not the Louisiana Office of Conservation or any other Governmental Authority reflects the pertinent well, unit or other property as having been previously plugged, abandoned or remediated for regulatory purposes or otherwise), including, the obligation to reclaim all well sites located on the Leases and for decommissioning and site clearance for all platforms, flowlines and pipelines located on the Properties, whether arising before, at or after the Effective Time;

 

(e)           Any Liability for Taxes allocated to Buyer pursuant to Section 1.10; and

 

  

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(f)           Any gas imbalances attributable to any all of the Properties to the extent an adjustment to the Purchase Price has been made with respect thereto (including without limitation with respect to Taxes or royalties due or payable on the value of any such underproduced or overproduced gas).

 

1.4           Retained Liabilities.  Notwithstanding any provision in this Agreement to the contrary, Buyer is not assuming, and each Seller shall pay, discharge, perform or otherwise satisfy the following Liabilities, whether express or implied (collectively, the “Retained Liabilities”):

 

(a)           All Liabilities related to an Excluded Asset;

 

(b)           All Liabilities pursuant to any Environmental Law arising from or relating to any action, event, or circumstance occurring or existing on or prior to the Effective Time, including any release of any Hazardous Substances or any violation of any Environmental Laws with respect to the Properties, whether known or unknown, fixed or contingent; and

 

(c)           Any Liability for Taxes allocated to Sellers pursuant to Section 1.10.

 

1.5           Purchase Price.  In consideration for the purchase of the Properties, Buyer will, at the Closing, (a) pay and deliver to Sellers cash in the aggregate amount of Twenty Five Million Dollars ($25,000,000.00) (the “Purchase Price”) and (b) assume, in accordance with Section 1.3, the Assumed Liabilities.  The Purchase Price shall be subject to the following adjustments:

 

(a)           The Purchase Price shall be adjusted upward (increased) without duplication by the following:

 

(1)           the amount of (i) gross proceeds received by Buyer, or offset by Third Persons against amounts owed by Buyer, from the sale of Hydrocarbons produced before the Effective Time from or attributable to the Properties and (ii) any other income, revenues, credits, refunds, deposits, accounts receivable and proceeds that are paid to or received by Buyer, or offset by Third Persons against amounts owed by Buyer, with respect to the Properties and are, in accordance with GAAP, attributable to the period of time before the Effective Time;

 

(2)           all costs, expenses, expenditures, payments and payables (including without limitation capital expenditures, royalties, rentals, Taxes, deposits, billings under an operating agreement, prepaid insurance premiums (provided that the Purchase Price shall not be adjusted upward for any insurance premium allocable to any period after the Closing as to which Buyer is not an insured on such insurance, utility charges, processing, gathering or transportation charges) and Losses that are based on, related to or arising out of (in whole or in part) the ownership, operation or use of any Property and are, in accordance with GAAP, attributable to the period of time at or after the Effective Time, to the extent they are paid by or on behalf of a Seller, or offset by Third Parties against amounts owed to a Seller;

 

  

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(3)           the value of all Hydrocarbons in storage (or otherwise present in any Equipment as line fill or otherwise) as of the Effective Time that is credited to the Properties, such value to be the actual price received for such Hydrocarbons upon the first sale thereof or, absent a sale, then such value to be based upon the average market price posted in the area for Hydrocarbons of similar quality and grade in effect as of the Effective Time and upon the quantity as gauged or measured by the operator of the affected Properties, in each case net of royalties and severance Taxes not yet paid thereon;

 

(4)           the amount, if any, for any underproduced gas position of Sellers as determined pursuant to Section 1.6; and

 

(5)           any other amounts agreed upon by Sellers and Buyer.

 

(b)           The Purchase Price shall be adjusted downward (decreased) without duplication by the following:

 

(1)           the amount of (i) gross proceeds received by Sellers, or offset by Third Persons against amounts owed by Sellers, from the sale of Hydrocarbons produced after the Effective Time from or attributable to the Properties and (ii) any other income and proceeds actually received by Seller, or offset by Third Persons against amounts owed by Sellers, that are, in accordance with GAAP, attributable to the period of time after the Effective Time with respect to the Properties;

 

(2)           all costs, expenses, expenditures, payments and payables (including without limitation capital expenditures, royalties, rentals, Taxes, deposits, billings under an operating agreement, prepaid insurance premiums, utility charges, processing, gathering or transportation charges) and Losses that are based on, related to or arising out of (in whole or in part) the ownership, operation or use of any Property and are, in accordance with GAAP, attributable to the period of time before the Effective Time, to the extent they are paid by Buyer (or offset by Third Parties against amounts owed to Buyer) before Sellers submit the Final Settlement Statement under Section 1.7(b)(1);

 

(3)           the amount, if any, for any overproduced gas position of Sellers as determined pursuant to Section 1.6;

 

(4)           the aggregate Allocated Value of any Properties withheld from Closing pursuant to the terms of this Agreement, including any reductions of the Purchase Price required pursuant to Section 4.1 (Casualty Loss);

 

(5)           the aggregate amount of all Indebtedness that encumbers the Properties as of the Closing Date; and

 

(6)           any other amounts agreed upon by Sellers and Buyer.

 

  

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1.6           Gas Imbalances.

 

(a)           The Parties hereby agree that Sellers’ estimated accumulated imbalance from January 1, 2012 through September 30, 2013 (“Pre-effective Period”), is  50,352 MMBtu underdelivered, which will be handled as follows:

 

(i)         Within fifteen (15) business days after the Closing Date, the Parties shall request in writing cash out with Apache Corporation, Operator of the Properties (hereinafter, “Apache”), for the period commencing January 1, 2012 through December 31, 2013.  Such written request shall be pursuant to Section VII of Exhibit “E” of that certain Joint Operating Agreement by and among Phoenix Exploration Company LP, Phoenix Exploration Louisiana, C LLC, and Ridgewood Energy Corporation dated May 1, 2009 (the “Gas Balancing Agreement”), which calls for cash out each calendar year.  The cash out request shall stipulate that settlement dollars attributable for the Pre-effective Period shall be distributed to the Sellers, while settlement dollars attributable to Sellers’  underproduction for the October 1, 2013 through December 1, 2013 period shall be distributed to the Buyer.

 

(ii)         If Apache declines to cash out the imbalances pursuant to the request described in Section 1.6(i) or if Apache does not respond to either Party within ninety (90) days from date of the written request, then within 15 business days of receipt of such written denial from Apache or within the 105th day of the written request (if Apache fails to respond), Buyer shall make written request to Apache to assign Sellers’ imbalance for the Pre-effective Period to Buyer.  If the request made pursuant to this Section 1.6(ii) is approved, Buyer shall assume the Pre-effective Period imbalance obligation.  Such payment shall be made pursuant to the Final Settlement Statement (defined below) and shall be calculated as set forth in the Gas Balancing Agreement (each monthly field imbalance multiplied by the respective first of month Index Price as reported in the publication Platts Gas Daily Price Guide for the appropriate pipeline index less applicable transportation, gathering or deductions as published in the respective gas pipeline tariff). Notwithstanding anything to the contrary herein, the calculation stipulated above shall specifically exclude as a deduct from such payment, any transportation costs or fees associated with the Phase II Transportation Fee and the Phase III Transportation Fee as provided for in the Belle Isle Facility Agreement referenced in Article 2.1 (g) herein.

 

(b)           If Apache declines both requests described in Sections 1.6(i) and 1.6(ii), Sellers shall be responsible for the pre-Effective Date imbalance.

 

1.7           Closing Statements and Post Closing Adjustments.

 

(a)           Pre-Closing Obligations of Seller.  Subsequent to execution of this Agreement, but prior to Closing, Sellers shall refrain from taking any of the following actions without the prior consent of Buyer (which shall not be unreasonably withheld):

 

(1)           except in the ordinary course of business and consistent with past practices, voluntarily waive or release any material rights with respect to any Property;

 

(2)           enter into any contract requiring an expenditure net to Seller(s)’ interests in excess of One Hundred Thousand Dollars ($100,000) attributable to any Property;

 

  

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(3)           enter in any contract for the sale or other disposition, or any call or option for such purchase, of Hydrocarbons produced or to be produced from the Property that is not terminable by Seller(s) without penalty on seventy (60) days’ notice or less;

 

(4)           voluntarily compromise, settle or adjust any amounts payable by reason of any Casualty Loss; or

 

(5)            commit to do any of the above.

 

(b)           Preliminary Settlement Statement.  At least seven Business Days before the Closing and using the best information then available, Sellers shall prepare and deliver to Buyer a settlement statement (the “Preliminary Settlement Statement”) that shall set forth the Purchase Price adjusted as of the Closing as provided in Section 1.5 (the “Closing Amount”) and each adjustment to the Purchase Price and the calculation of such adjustments used to determine the Closing Amount.  Within three Business Days after its receipt of the Preliminary Settlement Statement, Buyer shall submit to Sellers in writing any objections or proposed changes thereto; Buyer shall be deemed to have agreed with all adjustments, other than as set forth in a timely submission.  Sellers and Buyer shall attempt to resolve any differences before the Closing; the final Preliminary Settlement Statement shall consist only of those adjustments agreed to (or deemed agreed to) at or before the Closing.  All other adjustments to the Purchase Price not determined as of Closing shall be taken into account as provided in Section 1.7(b).

 

(c)           Post-Closing Adjustments.

 

(1)            On or before  December 31, 2014 , Sellers shall prepare and deliver to Buyer, in accordance with this Agreement and GAAP, a statement (herein called the “Final Settlement Statement”) setting forth each adjustment to the Purchase Price that was not included in the Preliminary Settlement Statement and showing the calculation of such adjustment.  At Buyer’s request, Sellers shall supply reasonable documentation to support any credit, charge, receipt or other item.  Within thirty (30) days of receipt of the Final Settlement Statement, Buyer shall deliver to Sellers a written report containing (1) any changes that Buyer proposes be made to the Final Settlement Statement and (2) supporting documentation for such changes; if Buyer does not timely deliver such report, Buyer shall be deemed to have agreed with the Final Settlement Statement.  The Parties shall negotiate in good faith and undertake to agree with respect to the amounts due pursuant to such post-Closing adjustment(s) no later than thirty (30) days after Buyer’s submission of its written report hereunder to Sellers.

 

(2)            In the event the Parties cannot reach agreement within the period provided in Section 2.06(a), then any Party may refer the matter in dispute to any “Big 4” accounting firm (or to any other nationally-recognized, independent accounting firm mutually agreed by the Parties) which is not currently engaged by either Party for review and determination.  The accounting firm shall conduct the proceedings in Houston, Texas in accordance with the Commercial Arbitration Rules of the AAA to the extent such rules do not conflict with the terms of this Section.  The accounting firm’s determination shall be in writing and made within thirty (30) days after submission of the matters in dispute and shall be final and binding on the Parties, without right of appeal.  In determining the proper amount of any adjustment to the Purchase Price, the accounting firm shall not increase the Purchase Price more than the increase proposed by Sellers nor decrease the Purchase Price more than the decrease proposed by Buyer, as applicable.  The accounting firm shall act as an arbitrator for the limited purpose of determining the specific disputed matters submitted by any Party and may not award damages or penalties to any Party with respect to any matter.  Each Party shall each bear its own legal fees and other costs of presenting its case.  Buyer shall bear one-half of the costs and expenses of the accounting firm, and the affected Seller shall bear the other half.

 

  

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(3)           The date of final determination of the Adjusted Purchase Price (whether by agreement of the Parties under subsection (a) above or upon an arbitrator’s award pursuant to subsection (b) above) is referred to as the “Final Settlement Date”.  Within two (2) Business Days after the Final Settlement Date, (i) if the Adjusted Purchase Price is less than the Closing Amount, the affected Seller shall pay to Buyer in immediately available funds the amount of such difference or (ii) if the Adjusted Purchase Price is more than the Closing Amount, Buyer shall pay to the affected Seller in immediately available funds the amount of such difference.

 

(d)           Amount to be Paid at Closing.  The amount paid by Buyer at Closing will include all (i) undisputed amounts from the Preliminary Closing Statement and (ii) any changes to the Closing Statement agreed on by Buyer and Sellers based on such discussions pursuant to this Agreement.

 

1.8           Effective Time.  The purchase and sale of the Properties shall be effective as of October 1, 2013, at 12:01 a.m., Central Time Zone (the “Effective Time”).

 

1.9           Allocations.  For purposes ofpurchase price adjustments, if any, pursuant to Section 1.5(b)(4) or Casualty Loss pursuant to Section 4.1, the Purchase Price shall be allocated to each Property as set forth on Exhibit “B” (each an “Allocated Value” and collectively the “Allocated Values”).      The Parties agree that this transaction is not subject to the reporting requirement of Section 1060 of the Internal Revenue Code of 1986, as amended, and that, therefore, IRS Form 8594, Asset Acquisition Statement, is not required to be and will not be filed for this transaction.  In the event the Parties mutually agree that a filing of Form 8594 is required or if the IRS requires such a filing, the Parties will confer and cooperate in the preparation and filing of their respective forms to reflect a consistent reporting of the agreed upon allocation in accordance with the Allocated Values.

 

1.10         Taxes.  Notwithstanding anything to the contrary herein, it is acknowledged and agreed by and between Sellers and Buyer that the Purchase Price excludes any sales taxes or other taxes in connection with the sale of Properties pursuant to this Agreement.  If a determination is ever made that sales, use, gross receipts, transfer, real property transfer, documentary stamp, recording and other similar Taxes arising from and with respect to the purchase and sale of the Properties applies, Buyer and Sellers shall each be liable for fifty percent (50%) of such tax.  Buyer shall indemnify and hold Sellers harmless with respect to the payment of any of such taxes, including any interest or penalties assessed thereon, for which Buyer is responsible and Sellers shall indemnify and hold Buyer harmless with respect to the payment of any of such taxes, including any interest or penalties assessed thereon, for which Sellers are responsible, each pursuant to this section.  The indemnity and hold harmless obligation contained in the preceding sentence shall survive the Closing.  All ad valorem real property Taxes, personal property Taxes, fees or assessments due with respect to the Properties (collectively, “Property Taxes”) shall be prorated between Seller, on the one hand, and Buyer, on the other hand, as of the Effective Time on a calendar year basis based upon the number of days in the calendar year prior to the Effective Time and following the Effective Time, using the calendar year 2012 Tax rates and assessments by the appropriate Governmental Entity.  Such proration shall be recalculated at such time as the calendar year 2013 tax assessments are available, and the Parties shall cooperate with each other in all respects in connection with such recalculation and promptly pay any sums due in consequence thereof to the Party entitled to recover the same.  If any Party pays Taxes for which it is entitled to be reimbursed pursuant to this Section 1.9, the other Party responsible therefor shall promptly reimburse the Party so paying upon notice of the amount paid by such Party.  Each Party shall be responsible for its own income, franchise and margin Taxes, if any, that may result from the transactions contemplated by this Agreement.

 

  

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Article II.

Sellers’ Representations And Warranties

 

2.1           Sellers’ Representations and Warranties.  Each Seller represents and warrants to Buyer as of the date hereof, and as of the Closing, that:

 

(a)           Such Seller is duly formed as an entity, and is validly existing and in good standing under the Laws of the applicable state as set forth in the Preamble of this Agreement, and is duly organized, validly existing and in good standing under the applicable state, and is duly qualified to carry on its business in those states where the conduct of its business or ownership or leasing of its Properties is such as to require such Seller to be so qualified.

 

(b)           Sellers have all requisite power and authority to carry on their business as presently conducted, to enter into this Agreement and the other documents and agreements contemplated hereby, and to perform their obligations under this Agreement and the other documents and agreements contemplated hereby.  The consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, any provision of Sellers’ governing agreements or any material agreement or instrument to which any Seller is a party or by which any Seller is bound, or any judgment, decree, order, statute, rule, or regulation applicable to Seller.  This Agreement, and all agreements, contracts, documents and instruments required hereunder (“Ancillary Agreements”) to be executed and delivered by Sellers or any of Sellers’ affiliates at Closing, constitute Sellers’ or such affiliates’ legal, valid and binding obligations in accordance with their respective terms, subject to applicable bankruptcy and other similar Laws of general application with respect to creditors.

 

(c)           The execution, delivery and performance of this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite authorizing action, corporate, partnership or otherwise, on the part of Sellers and each of Sellers’ affiliates that are parties thereto.

 

(d)           This Agreement and all Ancillary Agreements to be executed and delivered by Sellers or any of Sellers’ affiliates at Closing constitute legal, valid and binding obligations of Sellers or such affiliate in accordance with their respective terms, subject to applicable bankruptcy and other similar Laws of general application with respect to creditors.

 

  

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(e)           There are no bankruptcy, reorganization or receivership proceedings pending, being contemplated by, or, to the actual knowledge of Sellers, threatened against any Seller.

 

(f)            Sellers have good and defensible title with respect to the interests in all of the Properties conveyed to Buyer, and Sellers hereby represent and warrant that the interests in the Properties are not less than as set forth on Exhibits A, A-1 and B to this Agreement, and further represent and warrant that the Properties are free of any Claim against such title by, through or under Sellers, third parties, or any of Sellers’ affiliates.

 

(g)           Other than consents of the type customarily received following the Closing, and the required consent from Apache Corporation to assign that certain Agreement for Utilization of Potomac Facility, Belle Isle Facility and Associated Infrastructure by the Potomac Lease Partnership and Marathon Lease Partnership dated October 31, 2012, effective May 23, 2012 between Apache Corporation, Castex Energy Partners, L.P., Castex Energy 2008, L.P. and Ridgewood Energy Corporation (the “Belle Isle Facility Agreement”) there are no consents or approvals requested that are applicable to the transfer of the Properties in connection with the transactions contemplated by this Agreement.  There are no preferential purchase rights, rights of first refusal or similar rights (each, a “Preferential Right”) that are applicable to the transfer of the Properties in connection with the transactions contemplated by this Agreement.  Sellers represent that, as of Closing, consent to assign the Belle Isle Facility Agreement will have been obtained from Apache.

 

(h)           Sellers (i) have timely filed all material tax returns for non-income taxes with respect to the Properties required to be filed by Sellers (taking into account any extension of time to file granted or obtained) and all such tax returns are true, correct and complete in all material aspects; (ii) has paid all material non-income taxes with respect to the Properties that have become due; (iii) is not currently subject to an extension or waiver of the statute of limitations applicable to any tax return referred to in Section 2.1(h)(i) or with respect to a material non-income tax assessment or deficiency with respect to the Properties, which period has not yet expired; and (iv) is not currently subject to any proceeding with respect to material non-income taxes, and no such proceeding has been threatened in writing with respect to any non-income taxes, with respect to the Properties.

 

(i)            None of such Properties are subject to any Lien or any Indebtedness and there are no overriding royalty interests or reversionary interests burdening the Properties other than the lessor’s royalty interest.

 

(j)            Sellers have been in compliance in all material respects with, and has developed, operated and maintained the Properties (to the extent such activities have been performed by any Seller or its affiliates) in compliance in all material respects with, all applicable Laws.

 

  

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(k)            No Seller has incurred Liability for broker’s or finder’s fees with respect to the transactions contemplated by this Agreement other than obligations that are the sole responsibility of Seller.

 

(l)            To Sellers’ knowledge, there is no order, action, suit, proceeding, Claim or investigation pending, or threatened in writing, against any Seller that relates to the Properties or that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, the transactions contemplated by this Agreement.

 

(m)           Sellers are experienced and knowledgeable investors in the oil and gas business.  Prior to entering into this Agreement, Sellers were advised by and has relied solely on its own expertise and legal, tax, reservoir engineering, and other professional counsel concerning this Agreement, the Properties and the value the Properties.  In making their decision to enter into this Agreement and to consummate the transactions contemplated herein, Sellers: (i) have satisfied themselves, based upon the representations and warranties of Buyer set forth in this Agreement and their own independent investigations, as to the physical and environmental condition of the immovable and movable assets, and as to title to the Properties, (ii) have relied on no representations or warranties of Buyer (other than as expressly set forth in this Agreement) and otherwise have relied solely on their own independent investigations, evaluations, appraisals and judgments of the Properties, (iii) have relied on no representations or warranties of any related Person of Buyer, (iv) have, with their legal counsel and other advisers, carefully reviewed all of the provisions of this Agreement, and (v) fully understand the legal effects of this Agreement, including without limitation the meaning and effect of each provision of this Agreement.  Sellers acknowledge that Buyer has NOT made, and Buyer expressly disclaims and negates, any representation or warranty (other than those express representations and warranties made in this Agreement), whether express, statutory, implied or otherwise.

 

(n)           Ridgewood Energy Corporation is the duly appointed manager of Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf Of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC And Ridgewood Energy Y Fund, LLC and is authorized to negotiate, execute and finalize this Agreement on their behalf.

 

Article III.

Buyer’s Representations and Warranties

 

3.1           Buyer’s Representations and Warranties.  Buyer represents and warrants to Sellers as of the date hereof, and as of Closing, that:

 

(a)           Buyer is a limited partnership 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 those states where the conduct of its business or ownership or leasing of its properties is such as to require Buyer to be so qualified.

 

 

  

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(b)           Buyer has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement and the other documents and agreements contemplated hereby, and to perform it obligations under this Agreement and the other documents and agreements contemplated hereby.  The consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, any provision of Buyer’s partnership agreement or governing documents or any material agreement or instrument to which Buyer is a party or by which Buyer is bound, or any judgment, decree, order, statute, rule, or regulation applicable to Buyer.  This Agreement, and the Ancillary Agreements to be executed and delivered by Buyer or any of Buyer’s affiliates at Closing, constitute Buyer’s or such affiliates’ legal, valid and binding obligations in accordance with their respective terms, subject to applicable bankruptcy and other similar Laws of general application with respect to creditors.

 

(c)           The execution, delivery and performance of this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite authorizing action, partnership or otherwise, on the part of Buyer and each of Buyer’s affiliates that is a party thereto.

 

(d)           This Agreement and all Ancillary Agreements to be executed and delivered by Buyer or any of Buyer’s affiliates at Closing constitute legal, valid and binding obligations of Buyer or such affiliate in accordance with their respective terms, subject to applicable bankruptcy and other similar Laws of general application with respect to creditors.

 

(e)           There are no bankruptcy, reorganization or receivership proceedings pending, being contemplated by, or, to the actual knowledge of Buyer, threatened against Buyer.

 

(f)            Buyer has incurred no Liability for broker’s or finder’s fees with respect to the transactions contemplated by this Agreement other than obligations that are the sole responsibility of Buyer.

 

(g)           To Buyer’s knowledge, there is no order, action, suit, proceeding, Claim or investigation pending, or threatened in writing, against Buyer that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, the transactions contemplated by this Agreement.

 

(h)           Buyer acknowledges that neither the solicitation of an offer for, nor the sale of, the Properties by Seller has been registered under any securities Laws.  Buyer intends to acquire the Properties for its own benefit and account and is not acquiring the Properties with the intent of distributing fractional undivided interests in any Property in a manner that would violate any federal or state securities Laws.  At no time has Buyer been solicited by or through any public promotion in connection with the transactions contemplated by this Agreement.

 

(i)            Buyer is eligible under all applicable laws and regulations to own leases covering the Leases and has the financial resources available to close the transactions contemplated by this Agreement without financing that is subject to any material contingency.

 

  

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(j)            Buyer is a sophisticated, experienced and knowledgeable purchaser, owner and operator of oil and gas properties and related facilities (with sufficient financial resources, technical expertise and personnel), is knowledgeable of the usual and customary practices of prudent oil and gas operators, is able to evaluate (and has in fact evaluated) the Properties for purchase and the merits and economic and other risks of acquiring and owning the Properties and assuming the Assumed Liabilities and Buyer’s other obligations under this Agreement and is not a “consumer” within the meaning of the Texas Deceptive Trade Practices-Consumer Protection Act, Tex. Bus. & Com. Code art. 17.41 et seq., the Louisiana Unfair Trade Practices and Consumer Protection Law, La. R.S. 51:1401 et seq., or any comparable Law.  In making its decision to enter into this Agreement and to consummate the transactions contemplated herein, Buyer (i) has satisfied itself, based upon the representations and warranties of Sellers set forth in this Agreement and its own independent investigation, as to the physical and environmental condition of the Properties, (ii) has relied on no representations or warranties of the Sellers (other than as expressly set forth in this Agreement) and otherwise has relied solely on its own independent investigation, evaluation, appraisal and judgment of the Properties, (iii) has, with its legal counsel and other advisers, carefully reviewed all of the provisions of this Agreement and (iv) fully understands the legal effects of this Agreement, including without limitation the meaning and effect of each provision of this Agreement.  Buyer acknowledges that Sellers have not made, and that Sellers expressly disclaim and negate, any representation or warranty (other than those express representations and warranties made in this Agreement), whether express, statutory, implied or otherwise.

 

Article IV.

Casualty Loss

 

4.1           Casualty Loss.

 

(a)            If, after the Execution Date and prior to the Closing, any Property (or any part thereof) is damaged or destroyed (including any well, platform or other infrastructure) as a result of flood, wind, hurricane or other act of God, fire, theft, vandalism, terrorism, act of war, explosion or other casualty event (each a “Casualty Event”), this Agreement shall remain in full force and effect notwithstanding any such Casualty Event.

 

(b)           In the event of any loss described in Section 4.1(a), Sellers must elect, by written notice to Buyer prior to the Closing Date, either to (i) cause the Property affected by the Casualty Event to be repaired, restored or replaced, at Sellers’ sole cost, as promptly as reasonably practicable (which work may extend after the Closing Date), (ii) indemnify Buyer, pursuant to an agreement to be executed at the Closing reasonably acceptable to the Parties, against any costs or expenses that Buyer reasonably incurs to repair, restore or replace the Property or (iii) deem the Property affected by the Casualty Event to be an Excluded Asset that shall be excluded from the Properties to be conveyed to Buyer at the Closing and reduce the Purchase Price by the Allocated Value of such Property pursuant to Section 1.5(b).  In each case, the Seller shall retain all rights to insurance and other Claims against third parties with respect to the Casualty Events, except to the extent the Parties otherwise agree in writing.

 

  

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Article V.

 

Termination

 

5.1           Right of Termination

 

This Agreement may be terminated at any time at or before the Closing by written notice given at or before the Closing:

 

	
  

	
(a)

	
By mutual written consent of Sellers and Buyer;

 

(b)           By Sellers if any of the conditions in Section 8.1 has been neither waived by Sellers nor satisfied by the time of the Closing ;

 

(c)           By Buyer if any of the conditions in Section 8.2 has been neither waived by Buyer nor satisfied by the time of the Closing;

 

(d)           By Sellers if there has been a material breach by Buyer of any of its representations, warranties or obligations contained in this Agreement that is not cured before the earlier of the Closing and five (5) Business Days after Buyer receives written notice of such breach;

 

(e)           By Buyer if there has been a material breach by a Seller of any of its representations, warranties or obligations contained in this Agreement that is not be cured before the earlier of the Closing and five (5) Business Days after Sellers receive written notice of such breach; or

 

(f)           By Sellers or Buyer if Closing does not occur on or before the Closing Date, unless extended by the Parties.

 

(g)           Notwithstanding the foregoing, a Party shall not have the right to terminate this Agreement pursuant to Section 5.1 (b), (c), (d), (e) or (f) if such Party is at such time in material breach of any provision of this Agreement.

 

5.2           Effect of Termination

 

If this Agreement is terminated pursuant to Section 5.1, this Agreement shall become void and of no further force or effect.

 

Article VI.

Closing Date

 

6.1           Date and Place of Closing.  The purchase by Buyer and the sale by Seller of the Properties as contemplated by this Agreement (the “Closing”) shall take place at 10:00 am on January 31, 2014 (the “Closing Date”), at the offices of the Seller at 1254 Enclave Parkway, Suite 600, Houston, Texas 77077, or such other time or place as the Parties may agree in writing.

 

  

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Article VII.

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:

 

7.1           Seller’s Obligations.

 

(a)           Sellers shall execute, acknowledge and deliver one or more counterparts of one or more Assignments in substantially the form attached hereto as Exhibits “C-1”, “C-2”, and “C-3” (each, an “Assignment”) that collectively assigns the Properties of Sellers to Buyer effective as of the Effective Time.

 

(b)           Sellers shall deliver or cause to be delivered an executed statement described in Treasury Regulation §1.1445-2(b)(2) certifying that such Seller is not a foreign Person within the meaning of the Internal Revenue Code of 1986, as amended in substantially the form attached hereto as Exhibit “D”.

 

(c)           Sellers shall deliver or cause to be delivered a certificate duly executed by an authorized representative of Sellers, dated as of the Closing, (i) certifying that the representations and warranties contained in this Agreement are true and correct to the best of Sellers’ knowledge, (ii) certifying on behalf of Sellers that the transaction(s) contemplated hereunder has been duly authorized and (iii) certifying on behalf of Sellers the incumbency of each individual executing this Agreement or any document delivered in connection with the Closing on behalf of Sellers substantially in the form attached hereto as Exhibit “E”.

 

(d)           Sellers shall execute and deliver the remaining documents, instruments and materials required of Sellers by this Agreement or otherwise reasonably requested by Buyer or Buyer’s counsel.

 

7.2           Buyer’ Obligations.

 

(a)           Buyer shall deliver by wire transfer of immediately available funds to Sellers, in accordance with Sellers’ written wire transfer instructions, which are to be provided by Sellers to Buyer at least three (3) business days before the Closing, an amount equal to the Closing Amount.

 

(b)           Buyer shall execute, acknowledge and deliver each counterpart of each Assignment.

 

(c)           Buyer shall deliver or cause to be delivered a certificate duly executed by an authorized representative of Buyer, dated as of the Closing, (i) certifying that the representations and warranties contained in this Agreement are true and correct to the best of Sellers’ knowledge, (ii) certifying on behalf of Buyer that the transaction(s) contemplated hereby has been duly authorized and (iii) certifying on behalf of Buyer the incumbency of each officer of Buyer executing this Agreement or any document delivered in connection with the Closing on behalf of Buyer substantially in the form attached hereto as Exhibit “F”.

 

  

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(d)           Buyer shall execute and deliver the remaining documents, instruments and materials required of Buyer by this Agreement or otherwise reasonably requested by Seller or Seller’s counsel.

 

Article VIII.

Closing Conditions

 

8.1           Sellers’ Conditions.  The obligations of Sellers at the Closing are, at the option of Sellers, subject to the satisfaction of the following conditions:

 

(a)           All representations and warranties of Buyer in this Agreement shall be true in all material respects (or, if any specific representation or warranty is expressly qualified by concepts of “materiality,” then each of such representations and warranties will be true and correct in all respects) at the Closing as if made at and as of the Closing.  Buyer shall have performed in all material respects the agreements and covenants required by this Agreement to be performed and satisfied by Buyer at the Closing.

 

(b)           The execution, delivery and performance of this Agreement and the transactions contemplated hereby shall have been duly and validly authorized by all necessary action on the part of Buyer.

 

(c)           No action or proceeding shall have been instituted (excluding any such matter instituted by any Seller) before any Governmental Authority or arbitrator to restrain or prohibit the consummation, in whole or in part, of the transactions contemplated herein, or to obtain substantial damages from Seller in respect or arising of this Agreement.

 

8.2           Buyer’s Conditions.  The obligations of Buyer at the Closing are, at the option of Buyer, subject to the satisfaction of the following conditions:

 

(a)           All representations and warranties of Sellers in this Agreement shall be true in all material respects (or, if any specific representation or warranty is expressly qualified by concepts of “materiality,” then each of such representations and warranties will be true and correct in all respects) at the Closing as if made at and as of the Closing.  Sellers shall have performed in all material respects the agreements and covenants required by this Agreement to be performed and satisfied by Sellers at or before the Closing.

 

(b)           The execution, delivery and performance of this Agreement and the transactions contemplated thereby have been duly and validly authorized by all necessary action on the part of Sellers.

 

(c)           No action or proceeding shall have been instituted (excluding any such matter instituted by Buyer) before any Governmental Authority or arbitrator to restrain or prohibit the consummation, in whole or in part, of the transactions contemplated herein, or to obtain substantial damages from Buyer in respect or arising out of this Agreement.

 

(d)           The Properties shall be free and clear of any and all Liens, overriding royalty interests, or other encumbrances less and except the lessor’s royalties.

 

  

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(e)           Sellers’ interest in the Properties shall not be less than that set forth on Exhibits A, A-1 and B.

 

(f)            Sellers shall have obtained written consent to assign the Belle Isle Facility Agreement from Apache Corporation.

 

Article IX.

Indemnification and Title

 

9.1           Indemnification.

 

(a)           Indemnification by Sellers.  From and after Closing, Seller shall indemnify, defend and hold harmless Buyer, its current and future affiliates, and each of their respective stockholders, members, partners, directors, managers, officers, employees, agents, consultants, advisers and other Representatives (the “Buyer Indemnified Parties”) from and against any and all Losses actually incurred or suffered by the Buyer Indemnified Parties as a result of, relating to or arising out of (i) any breach of any representation or warranty made by Seller contained in this Agreement or in any Ancillary Agreement, (ii) any breach of any covenant or agreement made or to be performed by Seller under this Agreement or any Ancillary Agreement, and (iii) the Retained Liabilities.

 

(b)           Indemnification by Buyer.  From and after Closing, Buyer shall indemnify, defend and hold harmless Seller, its current and future affiliates, and each of their respective stockholders, members, partners, directors, managers, officers, employees, agents, consultants, advisers and other Representatives (the “Seller Indemnified Parties”) from and against any and all Losses actually incurred or suffered by the Seller Indemnified Parties as a result of, relating to or arising out of (i) any breach of any representation or warranty made by Buyer contained in this Agreement or any Ancillary Agreement, (ii) the breach of any covenant or agreement made or to be performed by Buyer under this Agreement, and (iii) the Assumed Liabilities.

 

9.2           Limitations on Liability.

 

(a)           Survival.  All of the representations and warranties of Seller and Buyer contained in Article II and all of the covenants set forth herein, shall continue in full force and effect for a period of twelve (12) months from the Closing Date.

 

(b)           Indirect and Punitive Damages.  Under no circumstances shall any Party be liable to the other Party for any indirect, contingent, consequential, unforeseen, exemplary or punitive, special damages of any nature (including lost profits); provided, however, that any such damages recovered by any Third Party for which a Party owes another Party an indemnity under this Agreement shall not be waived.

 

(c)           Insurance and Duplication.  The Parties will make appropriate adjustments for any insurance proceeds actually received by the any Buyer Indemnified Party or Seller Indemnified Party in determining Losses for purposes of this Article IX.  Any Liability for indemnification under this Agreement shall be determined without duplication of recovery by reason of the state of facts giving rise to such Liability constituting a breach of more than one representation, warranty, covenant or agreement.

 

  

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9.3           Indemnification Procedures.  All claims for indemnification under this Agreement related to Third Party Claims shall be asserted and resolved pursuant to this Section 7.3.

 

(a)           Promptly after the receipt by any Person seeking indemnification hereunder (an “Indemnified Party”) of a notice of any Claim by any Third Party that may be subject to indemnification hereunder (a “Third Party Claim”), such Indemnified Party shall give written notice of such Third Party Claim to the indemnifying Party (the “Indemnifying Party”) stating the nature and basis of the Third Party Claim and the amount thereof, to the extent known, along with copies of the relevant documents evidencing the Third Party Claim and the basis for indemnification sought.  Failure of the Indemnified Party to give such notice shall not relieve the Indemnifying Party from liability on account of this indemnification, except if and to the extent that the Indemnifying Party is actually prejudiced thereby.

 

(b)           The Indemnifying Party, at its own expense, shall have the right, exercisable within 30 days of receipt of notice of the Third Party Claim, to assume the defense of the Indemnified Party against the Third Party Claim so long as (i) the Indemnifying Party proceeds in good faith and in a timely manner and (ii) such Third Party Claim involves (and continues to involve) solely monetary damages.

 

(c)           So long as the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 9.3(b), (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, it being understood that the Indemnifying Party shall pay all costs and expenses of counsel for the Indemnified Party (A) for all periods prior to such time as the Indemnifying Party has notified the Indemnified Party that it has assumed the defense of such Third Party Claim and (B) if there is a conflict of interest between the Indemnifying Party and the Indemnified Party, (ii) the Indemnified Party shall not file any papers or consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed), and (iii) the Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed).

 

(d)           The Parties shall use commercially reasonable efforts to minimize Losses from Third Party Claims and shall act in good faith and in a timely manner in responding to, defending against, settling or otherwise dealing with Third Party Claims.  The Parties shall also cooperate in any such defense and give each other reasonable access to all information relevant thereto.  Whether or not the Indemnifying Party shall have assumed the defense of a Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party hereunder for any settlement entered into without the Indemnifying Party’s prior written consent, which consent shall not unreasonably withheld or delayed.  Notwithstanding the foregoing, the Indemnified Party shall have the sole and exclusive right to settle any Third Party Claim, on such terms and conditions as it deems reasonably appropriate, to the extent such claim involves equitable or other non-monetary relief.

 

  

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9.4           Fault of Parties.  THE INDEMNIFICATION PROVIDED FOR IN THIS ARTICLE IX SHALL BE APPLICABLE WHETHER OR NOT THE CLAIMS IN QUESTION AROSE FROM THE SOLE, CONCURRENT ACTIVE OR PASSIVE NEGLIGENCE OF THE PARTIES OR ANY THIRD PARTY AND REGARDLESS OF WHO MAY BE AT FAULT OR OTHERWISE RESPONSIBLE UNDER ANY OTHER CONTRACT, OR ANY STATUTE, RULE, OR THEORY OF LAW, INCLUDING, BUT NOT LIMITED TO, THEORIES OF STRICT LIABILITY BUT EXCLUDING GROSS NEGLIGENCE AND WILLFUL MISCONDUCT OF A PARTY.  THE PARTIES ACKNOWLEDGE THAT THE FOREGOING INDEMNITIES TOGETHER WITH THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.

 

Article X.

 

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 fully made if actually delivered, or if mailed by registered or certified mail, postage prepaid, to the address as set forth below:

 

SELLERS

 

Ridgewood Energy Corporation, individually and on behalf of other Sellers

1254 Enclave Parkway, Suite 600

Houston, Texas 77077

W. Gregory Tabor

Phone: (281) 293-8449

Fax: (281) 293-7705

E-mail: gtabor@ridgewoodenergy.com

BUYER

 

Castex Energy Partners, L.P.

333 Clay Street, Suite 2000

Houston, TX  77002

Attention:  Peter D. Addison

Phone: 281-878-0065

E-mail address:  paddison@castexenergy.com

 

  

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Article XI.

Miscellaneous

 

11.1           Disclaimer of Warranties.

 

(a)           SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, INFORMATION OR MATERIALS HERETOFORE OR HEREAFTER FURNISHED BUYER IN CONNECTION WITH THE PROPERTIES, OR AS TO THE QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE PROPERTIES OR THE ABILITY OF THE PROPERTIES TO PRODUCE HYDROCARBONS OR THE AMOUNT OF HYDROCARBONS THE PROPERTIES MAY PRODUCE.  ANY AND ALL SUCH DATA, INFORMATION AND OTHER MATERIALS FURNISHED BY SELLER IS PROVIDED TO BUYER AS A CONVENIENCE AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT BUYER’S SOLE RISK.  BUYER EXPRESSLY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, TEX. BUS. & COM. CODE ART. 17.41 ET SEQ. AND THE LOUISIANA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW, LA. R.S. 51:1401 ET SEQ., OR ANY COMPARABLE LAW.  BUYER ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND BUYER ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO ITS ATTENTION AND EXPLAINED IN DETAIL AND THAT BUYER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER.  ALL INSTRUMENTS OF CONVEYANCE TO BE DELIVERED BY SELLER AT CLOSING SHALL EXPRESSLY SET FORTH THE DISCLAIMERS OF REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS PARAGRAPH.

 

(b)           WITHOUT LIMITING THE GENERALITY OF SECTION 11.1(a), THE SELLER FURTHER MAKES NO REPRESENTATION OR WARRANTY TO BUYER, EITHER EXPRESS OR IMPLIED,, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, AS TO:

 

(i)         TITLE, OWNERSHIP, PEACEFUL POSSESSION, EVICTION (UNDER LOUISIANA CIVIL CODE ARTICLE 2500 OR OTHERWISE) OR NON-DECLARED ENCUMBRANCES (UNDER LOUISIANA CIVIL CODE ARTICLE 2500 OR OTHERWISE), OTHER THAN AS SET FORTH IN SECTION 2.1(f).

 

(ii)        PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GEOLOGICAL OR GEOPHYSICAL DATA OR INTERPRETATIONS, THE EXISTENCE, QUALITY, QUANTITY, RECOVERABILITY OR COST OF RECOVERY OF PROSPECTS OR HYDROCARBON RESERVES OR THE GEOGRAPHIC, GEOLOGIC OR GEOPHYSICAL CHARACTERISTICS ASSOCIATED WITH ANY PROPERTY.

 

(iii)       THE COSTS, EXPENSES, LIABILITIES, STATUS, REVENUES, RECEIPTS OR ECONOMIC VALUE ASSOCIATED WITH: THE PAST PRESENT OR FUTURE PRODUCTIVITY OR FINANCIAL VIABILITY OF; ANY CONTRACTUAL, PRICING, ECONOMIC OR FINANCIAL DATA ASSOCIATED WITH; THE ABILITY TO SELL OR MARKET ANY HYDROCARBONS PRODUCED FROM; OR THE RIGHT OR OBLIGATIONS RELATED TO THIS AGREEMENT, ANY ASSIGNMENT OR PROPERTY, OR ANY AGREEMENT TO WHICH ANY PROPERTY IS SUBJECT.

 

  

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(iv)       THE CONDITION MERCHANTABILITY OF THE PROPERTIES OR ANY FITNESS OF THE PROPERTIES FOR BUYER’ INTENDED USE OR PURPOSE, FOR ANY OTHER PARTICULAR USE OR PURPOSE OR FOR ORDINARY USE (UNDER LOUISIANA CIVIL CODE ARTICLE 2475 OR 2524, THE TEXAS UNIFORM COMMERCIAL CODE—SALES SECTION 2.314 OR SECTION 2.315 OR OTHERWISE) OR MERCHANTABILITY.

 

(v)        FREEDOM FROM, DIMINUTION IN VALUE BECAUSE OF OR THE PRESENCE OR ABSENCE OF REDHIBITORY OR OTHER DEFECTS OR VICES (UNDER LOUISIANA CIVIL CODE ARTICLE 2520 ET SEQ. OR OTHERWISE), WHETHER KNOWN OR UNKNOWN AND WHETHER APPARENT, PATENT, LATENT, HIDDEN OR OTHERWISE.  IT IS HEREBY ACKOWNLEDGED THAT BUYER IS ACCEPTING THE PROPERTIES “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS” AND IN PRESENT CONDITION AND STATE OF REPAIR.

 

(vi)       THE COST, EXPENSE OR ABILITY TO COPY, TRANSMIT OR USE ANY ELECTRONIC DATA, RECORDS OR OTHER INFORMATION OBTAINED FROM SELLER.

 

11.2           Sellers Several Liability.  Each Seller shall be several and not jointly liable for the obligations of each respective Seller under this Agreement and any other documents executed in connection herewith in accordance with such Seller’s ownership percentage interest in the Properties as follows:

 

	
Fund Name

	
WI%

	
Ridgewood Energy P Fund, LLC

	
6.25%

	
Ridgewood Energy W Fund, LLC

	
6.25%

	
Ridgewood Energy Y Fund, LLC

	
6.25%

	
Ridgewood Energy A-1 Fund, LLC

	
25%

	
Ridgewood Energy Gulf of Mexico

	  
	
  Oil and Gas Fund, LP

	
6.25%

 

Under no circumstances shall one Seller be liable under this Agreement or any documents executed herewith for any obligations to Buyer of another Seller or for obligations or damages in excess of its percentage liability set forth above.   Buyer specifically acknowledges that each Seller is an entity separate and independent of every other Seller, other than under Ridgewood Energy Corporation’s common management.    Each Seller agrees that Ridgewood Energy Corporation shall be entitled to act on behalf of each Seller with respect to all matters relating to this Agreement, including, but not limited to, entering into amendments relating to this Agreement.

 

11.3           Entire Agreement.  This Agreement and the Ancillary Agreements state the entire agreement between the Parties and may be supplemented, altered, amended, modified or revoked by writing only, signed by all of the Parties.  This Agreement supersedes any prior agreements between the Parties concerning sale of the Properties.

 

  

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11.4           Press Release.  No Party shall issue a press release or public communication concerning this purchase and sale, except as required by Law or with the written consent of the other Parties.  Such consent shall not be unreasonably withheld.  Each Party will endeavor to consult with the other Party in a timely manner on all press releases required by Law.

 

11.5           Interpretive Matters.  The headings of the Articles and Sections in this Agreement are for guidance only and shall have no significance in the interpretations of this Agreement.  Capitalized terms shall have the meanings provided as defined herein.  All defined terms include both the singular and the plural of such terms.  All references to “Paragraphs” refer to Paragraphs herein, and all references to “Exhibits” refer to Exhibits attached hereto and made a part hereof.  When the term “herein” is used, reference is made to the entire document and not to any particular Paragraph or Subparagraph.  The term “including” means “including without limitation.”  Unless otherwise specified herein, all amounts and payments shall be in United States dollars, and all references to “$” or dollar amounts will be to lawful currency of the United States of America.  All references to “$” or dollar amounts shall be to precise amounts and not rounded up or down. All references to “day” or “days” will mean calendar days.

 

11.6           Choice of Law.  This Agreement, each Ancillary Agreement, the legal relations between the Parties, any disputes arising out of this Agreement and any losses based on, related to or arising out of this Agreement or any Property shall be governed and construed in accordance with the Laws of the State of Texas, without giving effect to the principles of conflict of laws thereof.

 

11.7           Waiver.  Either Party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other Party hereto or (b) waive compliance with any of the agreements of the other Party or with any conditions to its own obligations.  Any agreement on the part of a Party hereto to any such extension or waiver will be valid if set forth in an instrument in writing signed on behalf of such Party.

 

11.8           Amendment.  This Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto.  No supplement, alteration or modification of this Agreement will be binding unless executed in writing by the Parties hereto.

 

11.9           Assignment.  This Agreement shall be binding upon and inure to the benefit of the successors and assigns of each Party hereto.  Neither this Agreement nor any right or obligation hereunder may be assigned or delegated by either Party in whole or in part to any other Person, including by operation of Law or in connection with any acquisition, merger, or change of control of a Party, without the prior written consent of the nonassigning Party.

 

11.10           Expenses.  Whether or not the transactions contemplated by this Agreement are ultimately consummated, each Party shall bear its own costs and expenses in connection with the negotiation, execution and delivery of this Agreement except as otherwise provided herein.

 

  

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11.11           Further Assurances.  The Parties will deliver any and all other instruments or documents required to be delivered pursuant to, or reasonably necessary or proper in order to give effect to, the terms and provisions of this Agreement.

 

11.12           Counterpart Execution.  This Agreement may be executed in one or more counterparts (including by facsimile or other electronic transmission) and each counterpart shall constitute a binding agreement as if the Parties had executed a single document.

 

11.13           Severance of Invalid Provisions.  If, for any reason and for so long as, any clause or provision of this Agreement is held by a court of competent jurisdiction to be illegal, invalid, unenforceable or unconscionable under any present or future Law (or interpretation thereof), the remainder of this Agreement shall not be affected by such illegality or invalidity.  Any such invalid provision shall be deemed severed from this Agreement as if this Agreement had been executed with the invalid provision eliminated.  The surviving provisions of this Agreement shall remain in full force and effect unless the removal of the invalid provision destroys the legitimate purpose of this Agreement; in which event this Agreement shall be null and void.  The Parties shall negotiate in good faith for any required modifications to this Agreement.

 

Article XII.

Defined Terms

 

12.1           Definitions.  Unless otherwise defined in this Agreement, the following terms have the meanings specified or referred to in this Article XII:

 

“Claims” shall include claims, demands, causes of action, Liabilities, damages, penalties and judgments of any kind or character and all costs, expenses, fines, penalties and fees in connection therewith, including attorney’s fees.

 

“Environmental Laws” means any and all laws (including common law), legislation, regulation, order, permit, license, code or governmental policy having the force of law that is applicable to the Properties concerning (a) the environment, including pollution, contamination, environmental response, environmental investigations, environmental monitoring, clean-up, decontamination, abatement, preservation, protection, management and reclamation of the environment, (b) human health or safety relating to workplace requirements or conditions or the exposure of employees, workers or other Persons to any chemical or substance, or (c) the production and management or release or threatened release of any chemical or substance (including waste and Hazardous Substances), including purchase, manufacture, generation, use, treatment, processing, handling, storage, disposal, transportation, re-use, recycling or reclamation of any chemical or substance (including waste and Hazardous Substances).

 

“Governmental Entity” means any governmental authority or entity, including any agency, board, bureau, commission, court, municipality, department, subdivision or instrumentality thereof, or any arbitrator or arbitration panel.

 

 “Hazardous Substances” means any pollutants, contaminants, toxic or hazardous or extremely hazardous substances, materials, wastes, constituents, compounds, or chemicals that are regulated by, or may form the basis of Liability under, any Environmental Laws; provided, however, NORM shall not constitute a “Hazardous Substance.”

 

  

23

  

 

“Hydrocarbons” means all of the oil, liquid hydrocarbons, gas, and any and all other liquid or gaseous hydrocarbons, as well as their respective constituent products (including, without limitation, condensate, casinghead gas, distillate and natural gas liquids), and, to the extent useful for the exploration for and production of the foregoing, any other minerals produced in association therewith (including, without limitation, elemental sulfur, helium, carbon dioxide and other non-hydrocarbon substances produced in association with any of the above described items).

 

“Indebtedness” means, with respect to any Person, without duplication, (a) borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the indebtedness secured thereby has been assumed, (f) guarantee and other contingent obligations of such Person with respect to indebtedness of others, (g) all capital lease obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (j) any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which lease or other arrangement is required or is permitted to be classified and accounted for as an operating lease under GAAP but which is intended by the parties thereto for tax, bankruptcy, regulatory, commercial Law, real estate Law and all other purposes as a financing arrangement.  The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Laws” means all laws, statutes, common law, rules, codes, regulations, restrictions, ordinances, orders, decrees, approvals, directives, judgments, rulings, injunctions, writs, awards and decrees of, or issued or entered by, all Governmental Entities.

 

“Liabilities” means any debt, liabilities or obligations of any nature (whether accrued or fixed, absolute or contingent, matured or not matured, determined or determinable, or as a guarantor or otherwise).

 

“Lien” means any charge, Claim, mortgage, lien, option, pledge, security interest or other restriction of any kind (other than those created under applicable United States federal or state securities Laws).

 

  

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“Losses” means any Liabilities, damages, losses, claims, causes of action, payments, charges, judgments, assessments, penalties, fines, awards, settlements, Taxes, Liens, deficiencies, costs and expenses (including reasonable attorneys’ and consultants’ fees and expenses) net of any: (a) insurance proceeds realized by and paid to any Person in respect of or related to the event, cause or condition giving rise thereto (as used in this definition the “Cause”), (b) Tax benefits in respect of or related to the Cause and (c) amounts actually recovered from third parties with respect to such Cause, in any case, after giving effect to any expenditures to obtain such payments and any applicable deductible or retention and resulting retrospective premium adjustment.

 

 “Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Entity or other entity of any kind.

 

“Representatives” means a Person’s directors, officers, partners, members, managers, employees, agents, investors or advisors (including attorneys, accountants, consultants, bankers and financial advisors) and any representatives of those advisors.

 

“Taxes” means (a) all taxes, including any foreign, federal, state or local income tax, surtax, remittance tax, presumptive tax, net worth tax, special contribution, production tax, pipeline transportation tax, freehold mineral tax, value added tax, withholding tax, gross receipts tax, windfall profits tax, profits tax, severance tax, personal property tax, real property tax, ad valorem tax, sales tax, goods and services tax, service tax, transfer tax, use tax, excise tax, premium tax, stamp tax, motor vehicle tax, entertainment tax, insurance tax, capital stock tax, franchise tax, occupation tax, payroll tax, employment tax, unemployment tax, disability tax, alternative or add on minimum tax and estimated tax, imposed by a Governmental Entity, including any Liability under any state abandonment or unclaimed property, escheat or similar Laws, together with any interest, fine, additions to tax or penalty thereon, (b) any Liability for the payment of any amounts of any of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby Liability for payment of such amounts was determined or taken into account with reference to the Liability of any other Person, (c) any Liability for the payment of any amounts as a result of being a party to any tax sharing or allocation agreements or arrangements (whether or not written) or with respect to the payment of any amounts of any of the foregoing types as a result of any express or implied obligation to indemnify any other Person, and (d) any Liability for the payment of any of the foregoing types as a successor, transferee Liability or otherwise.

 

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

  

25

  

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution Date.

 

	  	
Ridgewood Energy Corporation, as 

Manager for and on Behalf of:

 

Ridgewood Energy A-1 Fund, LLC

Ridgewood Energy P Fund, LLC

Ridgewood Energy W Fund, LLC

Ridgewood Energy Y Fund, LLC

Ridgewood Energy Gulf of Mexico Oil and 

Gas Fund, L.P.            

 

 

	  	By:	/s/ W. Greg Tabor	 
	 	Name:	W. Greg Tabor	 
	 	Title:	
Executive Vice President

	 

 

 

	  	
Castex Energy Partners, L.P.

By:  Castex Energy II, LLC, its general partner                                      

 

	  	By:	/s/ Peter D. Addison	 
	 	Name:	Peter D. Addison	 
	 	Title:	Vice-President	 

 

[Signature Page to Purchase and Sale Agreement]

  

  

 

Exhibit “A”

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17,  2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC and Ridgewood Energy Y Fund, LLC as Seller and Castex Energy Partners, L.P., as Buyer

	
Working Interest: 50.0000%

	
Net Revenue Interest: 36.5000%

Leases:

Lease for Oil, Gas and Other Liquid or Gaseous Minerals (State Lease 20035) dated March 11, 2009, by and between the State Mineral Board of The State Of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded on April 1, 2009,  File Number 303699, Conveyance Book Number 184, Page 764 of St. Mary Parish, Louisiana.

Lease for Oil, Gas and Other Liquid or Gaseous Minerals (State Lease 20219) dated December  9, 2009, by and between the State Mineral Board of The State Of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded on January 8, 2010,  File Number  306114, Conveyance Book 201, Page 90 of St. Mary Parish, Louisiana.

Lease for Oil, Gas and Other Liquid or Gaseous Minerals (State Lease 20220) dated December  9, 2009, by and between the State Mineral Board of The State Of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded on April 1, 2009,  File Number 306115, Conveyance Book 201, Page 104 of St. Mary Parish, Louisiana.

Lease for Oil, Gas and Other Liquid or Gaseous Minerals (State Lease 20222) dated December 9, 2009, by and between the State Mineral Board of The State Of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded on April 1, 2009,  File Number 306117, Conveyance Book 201, Page 132 of St. Mary Parish, Louisiana.

Lease for Oil, Gas and Other Liquid or Gaseous Minerals (State Lease 20526) dated January 12, 2011, by and between the State Mineral Board of The State Of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded on February 24, 2011,  File Number 309638, Conveyance Book 227, Page 109 of St. Mary Parish, Louisiana.

Lease for Oil, Gas and Other Liquid or Gaseous Minerals (State Lease 20527) dated January 12, 2011, by and between the State Mineral Board of The State Of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded on February 24, 2011,  File Number 309639, Conveyance Book 227, Page 127 of St. Mary Parish, Louisiana.

 

  

  

  

 

Exhibit "A-1"

Attached to and made a part of that certain Purchase and Sale Agreement dated  January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy  A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC and Ridgewood Energy Y Fund, LLC as Seller and Castex Energy Partners, L.P., as Buyer

 

 

 

Wells

	
WELL

	
Working Interest

	
Net Revenue Interest

	  	  	  
	
SL 20035 #1

	
0.500

	
0.365

	
SL 20035 #2

	
0.500

	
0.365

 

 

Facilities / Platforms

 

Potomac Facility:

Production handling, processing and salt water disposal facility designed to handle approximately 100 MMCFGD, 3,000 BOPD, and 2,000 BWPD, located in Atchafalaya Bay, St Mary Parish, LA

 

 

Flowlines

Transportation flowline from Potomac Facility connecting to Tennessee Gas Pipeline Company gas sales pipeline, located in Atchafalaya Bay, St Mary Parish, LA

 

  

  

  

 

Exhibit “A-2”

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17,  2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC and Ridgewood Energy Y Fund, LLC as Seller and Castex Energy Partners, L.P., as Buyer

CONTRACTS

Agreements:

Agreement for Utilization of Potomac Facility, Belle Isle Facility and Associated Infrastructure by the Potomac Lease Partnership and Marathon Lease Partnership dated October 31, 2012, effective May 23, 2012 between Apache Corporation, Castex Energy Partners, L.P., Castex Energy 2008, L.P. and Ridgewood Energy Corporation.

Production Handling Agreement dated effective December 30, 2010, by and between Phoenix Exploration LP, as Operator of the Host Processing Facility and Phoenix Exploration Louisiana C, LLC, Castex Energy 2005, L.P. and Petsec Exploration and Production L.L.C., as Producer.

Ratification of Production Handling Agreement, dated June 21, 2011 but effective as of  December 30, 2010, by and between Phoenix Exploration Company LP, Phoenix Exploration Louisiana C, LLC, Castex Energy 2005 L.P., Petsec Exploration and Production  L. L. C. and Ridgewood Energy Corporation.

Amendment to Production Handling Agreement, entered into on April 9, 2012 but effective as of  December 30, 2010, by and between Apache Corporation, Castex Energy 2008, L. P., Castex Energy Partners, LP, GOME 1271 LLC, Petsec Exploration and Production L.L.C., and Ridgewood Energy Corporation.

Atchafalaya Bay VUA, dated August 10, 2011 between The State Mineral and Energy Board, on behalf of the State of Louisiana, Lessor and  Phoenix Exploration Louisiana C LLC, Operator and Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC and Ridgewood Energy Y Fund, LLC, together as Lessee,  recorded on September 14, 2011, File Number 311482, Conveyance book 241, Page 34 of St. Mary Parish, Louisiana.

Participation Agreement dated effective May 1, 2009, by and between Phoenix Exploration Louisiana C LLC and Ridgewood Energy Corporation.

Joint Operating Agreement between Phoenix Exploration Company, L.P., as Operator and Ridgewood Energy Corporation effective May 1, 2009.

 

  

  

  

 

Exhibit “A-3”

 

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, and Ridgewood Energy Y Fund, LLC as Seller and Castex Energy Partners, L.P., as Buyer

 

 

PERMITS

 

None.

 

 

 

 

 

  

  

  

  

 

Exhibit “A-4”

 

Attached to and made a part of that certain Purchase and Sale Agreement dated  January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, and Ridgewood Energy Y Fund, LLC as Seller and Castex Energy Partners, L.P., as Buyer

 

 

DATA

 

None.

 

 

 

 

 

  

  

  

  

 

Exhibit "B"

 

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC and Ridgewood Energy Y Fund, LLC as Seller and Castex Energy Partners, L.P., as Buyer

Allocated Interest

	
WELL

	
WI

	
NRI

	
Allocated Value

	  	  	  	  
	
SL 20035 #1

	
0.500

	
0.365

	
$1,250,000

	
SL 20035 #2

	
0.500

	
0.365

	
$23,750,000

	  	  	  	  
	  	  	  	  
	
TOTAL

	  	  	
$25,000,000

 

 

 

 

 

  

  

  

 

Exhibit “C-1”

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, Ridgewood Energy Y Fund, LLC, Ridgewood Energy A-1 Fund, LLC and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., as Seller, and Castex Energy Partners, L.P., as Buyer

ASSIGNMENT OF OIL AND GAS LEASE

 

	
STATE OF LOUISIANA

	
§

	  
	  	
§

	
KNOW ALL MEN BY THESE PRESENTS:

	
PARISH OF ST. MARY

	
§

	  

 

THAT, this Assignment of Oil and Gas Lease (“Assignment”) is made and entered into by and between  Ridgewood Energy P Fund, LLC, a Delaware limited liability company, Ridgewood Energy W Fund, LLC, a Delaware limited liability company, Ridgewood Energy Y Fund, LLC, a Delaware limited liability company, Ridgewood Energy A-1 Fund, LLC, a Delaware limited liability company and Ridgewood Energy Gulf of Mexico Oil and Gas Fund , L.P., a Delaware limited partnership,  14 Philips Parkway, Montvale, New Jersey, 07645 (hereinafter referred to as "Assignor") and Castex Energy Partners, L.P., a Texas limited partnership, 333 Clay Street, Suite 2000, Houston, Texas 77002 (hereinafter referred to as "Assignee").

FOR AND IN CONSIDERATION OF THE SUM OF ONE HUNDRED DOLLARS and other good and valuable consideration in hand paid, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby transfer, grant, bargain, sell, convey and assign to Assignee all of its right title and interest, being not less than an undivided fifty percent (50% of 8/8ths) working interest and a proportionately-reduced seventy-three percent (73% of 8/8ths) net revenue interest, in and to the following property (hereinafter referred to as the “Subject Interests”):

 

 

Louisiana State Lease No. 20219 dated December 9, 2009, by and between the State of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded January 8, 2010, in File No. 306114, Conveyance Book No. 201, Page No. 90 of the Conveyance Records of St. Mary Parish, Louisiana.

Louisiana State Lease No. 20220 dated December 9, 2009, by and between the State of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded January 8, 2010, in File No. 306115, Conveyance Book No. 201, Page No. 104 of the Conveyance Records of St. Mary Parish, Louisiana.

Louisiana State Lease No. 20222 dated December 9, 2009, by and between the State of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded January 8,  2010, in File No. 306117, Book 201, Page 132 of the Conveyance Records of St. Mary Parish, Louisiana, (hereinafter collectively referred to as the “Leases”

TO HAVE AND TO HOLD the Subject Interests, together with all the property, rights, privileges, benefits and appurtenances in any way belonging to, incidental to, or appertaining thereto, unto Assignee, its successors and permitted assigns forever, subject to the other matters in this Assignment.

 

This Assignment is delivered pursuant to that certain unrecorded Purchase and Sale Agreement dated effective October 1, 2013 by and between Assignor and Assignee (“Purchase and Sale Agreement”). If there is a conflict between the Purchase and Sale Agreement and this Assignment, the provisions of the Purchase and Sale Agreement shall prevail.

 

  

  

  

 

This Assignment is made subject to all the terms and conditions of (i) that certain unrecorded Participation Agreement dated effective May 1, 2009 by and between Phoenix Exploration Louisiana C LLC and Ridgewood Energy Corporation, (ii) the Joint Operating Agreement dated effective as of May 1, 2009, by and between Phoenix Exploration Company, L.P., as Operator and Ridgewood Energy Corporation, (iii) an unrecorded Data Licensing Agreement dated May 30, 2007, which is more specifically referenced in the Participation Agreement, (iv) that certain Assignment of Oil and Gas Lease dated effective December 9, 2009, by and between Theopilus Oil, Gas & Land Services, LLC and Phoenix Exploration Louisiana C LLC  (v) that certain Partial Assignment of Oil, Gas and Mineral Lease dated effective December 9, 2009 , by and between  Phoenix Exploration C LLC and Ridgewood Energy Corporation ,(vi)  that certain Partial Assignment of Oil, Gas and Mineral Lease dated effective  December 9, 2009, by and between Ridgewood Energy Corporation and Assignor,  (vii)  that certain unrecorded  Purchase and Sale Agreement dated effective as of October 1, 2013 by and between Assignor and  Assignee, and (viii) any and all existing burdens of record, and (ix) the terms and conditions of the Leases.

 

Assignor warrants title to the Lease only until January 31, 2015 against every person lawfully claiming or to claim the same by, through or under Assignor, but not otherwise.  Notwithstanding this limitation of warranties, this Assignment is made with full rights of substitution and subrogation of Assignee in and to all rights and actions of warranty against previous owners, assignors and grantors.

 

Except for the above special warranty of title, the Subject Interests are hereby assigned to, and accepted by, Assignee AS IS AND WHERE IS AND WITHOUT WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF TITLE, MERCHANTABILITY, CONDITION, FITNESS FOR A PARTICULAR PURPOSE, OR FREEDOM FROM REDHIBITORY DEFECTS OR VICES, WHETHER KNOWN OR UNKNOWN AND WHETHER APPARENT, PATENT, LATENT, HIDDEN OR OTHERWISE.

 

Assignee hereby assumes the duties, liabilities and obligations, express or implied, imposed upon Assignor under the provisions of the Lease and under all applicable laws, rules, regulations, orders and ordinances, to the extent such duties, liabilities and obligations relate to the Subject Interests and accrue or arise from and after the Effective Date of this Assignment (“Assumed Liabilities”).

 

ASSIGNEE SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS ASSIGNOR, ITS PARENT AND SUBSIDIARY COMPANIES, AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND OTHER REPRESENTATIVES (THE “ASSIGNOR GROUP”) FROM AND AGAINST ALL CLAIMS ARISING FROM OR RELATING TO (I) THE ASSUMED LIABILITIES.

 

It is agreed that all assignments or transfers of all or any portion of the Subject Interests may be made by Assignee shall be made expressly subject to this Assignment and the Purchase and Sale Agreement, and the assignment or transfer must incorporate a provision that the assignee or transferee adopts, ratifies, confirms and agrees to comply with the terms of this Assignment and the Purchase and Sale  Agreement and agrees, as to the interest to be so acquired, to assume the obligations of the assignor or transferor and to be bound by all of the terms and provisions of this Assignment and the Purchase and Sale Agreement.

 

The terms, covenants and conditions hereof shall be binding upon, and shall inure to the benefit of, Assignor and Assignee and their respective successors and permitted assigns, and such terms, covenants and conditions shall be covenants running with the Lease and with each transfer or assignment of the Lease or any portion thereof.

 

  

Page 2

  

 

This Assignment is subject to the approval of the State Mineral Board of the State of Louisiana and Assignee does hereby accept such assignment and agrees to assume and fulfill its share of all obligations, conditions and stipulations in the Lease, and the rules and regulations of the State Mineral Board insofar as applicable to the Subject Interests.

 

This Assignment may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

 

IN WITNESS WHEREOF, this Assignment is executed before the undersigned competent witnesses on the dates set forth below each signature, but shall be effective for all purposes as of October 1, 2013 (“Effective Date”).

 

 

	
WITNESSES:

	  	
ASSIGNOR:

	  	  	  
	  	  	
Ridgewood Energy P Fund LLC,

	  	  	
Ridgewood Energy W Fund, LLC,

	  	  	
Ridgewood Energy Y Fund, LLC,

	  	  	
Ridgewood Energy A-1 Fund LLC and

	  	  	
Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P.

	  	  	
By:Ridgewood Energy Corporation,  Manager

	  	  	  
	 	 	 
	  	  	
By:

	 
	
Name:

	  	  	
Name:

	
W. Greg Tabor

	  	  	
Title:

	
Executive Vice President

	  	  	
Date:

	  
	
Name:

	  	  	  	  

	
WITNESSES:

	  	
ASSIGNEE:

	  	  	  
	  	  	
Castex Energy II, LLC, as general partner of Castex Energy Partners L.P.

	  	  	  
	 	 	 
	  	  	
By:

	 
	
Name:

	  	  	
Name:

	
Peter D. Addison

	  	  	
Title:

	
Vice President

	  	  	
Date:

	  
	
Name:

	  	  	  	  

  

Page 3

  

 

ACKNOWLEDGMENT

	
STATE OF TEXAS

	
§

	  	
§

	
COUNTY OF HARRIS

	
§

On this ____ day of ______________, 2014, before me appeared W. Greg Tabor, to me personally known, who, being by me duly sworn (or affirmed) did say that he is the Executive Vice President of Ridgewood Energy Corporation, a Delaware corporation, as Manager for and on behalf of, Ridgewood Energy P Fund, LLC, a Delaware limited liability company, Ridgewood Energy W Fund, LLC, a Delaware limited liability company, Ridgewood Energy Y Fund, LLC, a Delaware limited liability company, Ridgewood Energy A-1 Fund, LLC, a Delaware limited liability company,  and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., a Delaware limited partnership, and that the instrument was signed on behalf of said companies by the authority of its Board of Directors and that he acknowledged the instrument to be the free act and deed of each  company.

	  	  
	  	
Name:

	  
	  	
NOTARY PUBLIC IN AND FOR

	  	
THE STATE OF TEXAS

 

 

 

 

ACKNOWLEDGMENT

	
STATE OF TEXAS

	
§

	  	
§

	
COUNTY OF HARRIS

	
§

 

 

On this ____ day of ____________, 2014, before me appeared Peter D. Addison, to me personally known, who, being by me duly sworn (or affirmed) did say that he is the Vice President of Castex Energy II, LLC, General Partner of Castex Energy Partners, L.P., a Texas limited partnership, and that the instrument was signed on behalf of said limited partnership and that he acknowledged the instrument to be the free act and deed of the limited partnership.

	  	  
	  	
Name:

	  
	  	
NOTARY PUBLIC IN AND FOR

	  	
THE STATE OF TEXAS

  

Page 4

  

 

Exhibit “C-2”

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, Ridgewood Energy Y Fund, LLC, Ridgewood Energy A-1 Fund, LLC and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., as Seller, and Castex Energy Partners, L.P., Buyer

ASSIGNMENT OF OIL AND GAS LEASE

 

	
STATE OF LOUISIANA     

	
§

	  
	  	
§

	
KNOW ALL MEN BY THESE PRESENTS:

	
PARISH OF ST. MARY

	
§

	  

THAT, this Assignment of Oil and Gas Lease (“Assignment”) is made and entered into by and between  Ridgewood Energy P Fund, LLC, a Delaware limited liability company, Ridgewood Energy W Fund, LLC, a Delaware limited liability company, Ridgewood Energy Y Fund, LLC, a Delaware limited liability company, Ridgewood Energy A-1 Fund, LLC, a Delaware limited liability company and Ridgewood Energy Gulf of Mexico Oil and Gas Fund , L.P., a Delaware limited partnership,  14 Philips Parkway, Montvale, New Jersey, 07645 (hereinafter referred to as "Assignor") and Castex Energy Partners, L.P., a Texas limited partnership, 333 Clay Street, Suite 2000, Houston, Texas 77002 (hereinafter referred to as "Assignee").

FOR AND IN CONSIDERATION OF THE SUM OF ONE HUNDRED DOLLARS and other good and valuable consideration in hand paid, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby transfer, grant, bargain, sell, convey and assign to Assignee all of its right, title and interest, being no less than an undivided fifty percent (50% of 8/8ths) working interest and a proportionately-reduced seventy-three percent (73% of 8/8ths) net revenue interest, in and to the following property (hereinafter referred to as the “Subject Interests”):

 

Louisiana State Lease No. 20526 dated January 12, 2011, by and between  the State of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded February 24, 2011, in File No. 309638, Conveyance Book No. 227, Page No. 109 of the Conveyance Records of St. Mary Parish, Louisiana.

Louisiana State Lease No. 20527 dated January 12, 2011, by and between the State of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded February 24, 2011, in File No. 309639, Book 227, Page 127 of the Conveyance Records of St. Mary Parish, Louisiana, (hereinafter collectively referred to as the “Leases”

TO HAVE AND TO HOLD the Subject Interests, together with all the property, rights, privileges, benefits and appurtenances in any way belonging to, incidental to, or appertaining thereto, unto Assignee, its successors and permitted assigns forever, subject to the other matters in this Assignment.

 

This Assignment is delivered pursuant to that certain unrecorded Purchase and Sale Agreement dated effective October 1, 2013 by and between Assignor and Assignee (“Purchase and Sale Agreement”). If there is a conflict between the Purchase and Sale Agreement and this Assignment, the provisions of the Purchase and Sale Agreement shall prevail.

 

  

 

  

 

This Assignment is made subject to all the terms and conditions of (i) that certain unrecorded Participation Agreement dated effective May 1, 2009 by and between Phoenix Exploration Louisiana C LLC and Ridgewood Energy Corporation, (ii) the Joint Operating Agreement dated effective as of May 1, 2009, by and between Phoenix Exploration Company, L.P., as Operator and Ridgewood Energy Corporation, (iii) an unrecorded Data Licensing Agreement dated May 30, 2007, which is more specifically referenced in the Participation Agreement, (iv) that certain Assignment of Oil and Gas Lease dated effective January 12, 2011, by and between Theopilus Oil, Gas & Land Services, LLC and Phoenix Exploration Louisiana C LLC and Ridgewood  Energy Corporation (v) that certain Assignment of Overriding Royalty Interest dated effective January 12, 2011, between Ridgewood Energy Corporation and Phoenix Exploration Louisiana C LLC,(vi)  that certain Partial Assignment of Oil, Gas and Mineral Lease dated effective  January 12, 2011, by and between Ridgewood Energy Corporation and Assignor,  (vii)  that certain unrecorded  Purchase and Sale Agreement dated effective as of October 1, 2013 by and between Assignor and  Assignee, and (viii) any and all existing burdens of record, and (ix) the terms and conditions of the Leases.

    

    

Assignor warrants title to the Lease only until January 31, 2015 against every person lawfully claiming or to claim the same by, through or under Assignor, but not otherwise.  Notwithstanding this limitation of warranties, this Assignment is made with full rights of substitution and subrogation of Assignee in and to all rights and actions of warranty against previous owners, assignors and grantors.

 

Except for the above special warranty of title, the Subject Interests are hereby assigned to, and accepted by, Assignee AS IS AND WHERE IS AND WITHOUT WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF TITLE, MERCHANTABILITY, CONDITION, FITNESS FOR A PARTICULAR PURPOSE, OR FREEDOM FROM REDHIBITORY DEFECTS OR VICES, WHETHER KNOWN OR UNKNOWN AND WHETHER APPARENT, PATENT, LATENT, HIDDEN OR OTHERWISE.

 

Assignee hereby assumes the duties, liabilities and obligations, express or implied, imposed upon Assignor under the provisions of the Lease and under all applicable laws, rules, regulations, orders and ordinances, to the extent such duties, liabilities and obligations relate to the Subject Interests and accrue or arise from and after the Effective Date of this Assignment (“Assumed Liabilities”).

 

ASSIGNEE SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS ASSIGNOR, ITS PARENT AND SUBSIDIARY COMPANIES, AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND OTHER REPRESENTATIVES (THE “ASSIGNOR GROUP”) FROM AND AGAINST ALL CLAIMS ARISING FROM OR RELATING TO (I) THE ASSUMED LIABILITIES.

 

It is agreed that all assignments or transfers of all or any portion of the Subject Interests may be made by Assignee shall be made expressly subject to this Assignment and the Purchase and Sale Agreement, and the assignment or transfer must incorporate a provision that the assignee or transferee adopts, ratifies, confirms and agrees to comply with the terms of this Assignment and the Purchase and Sale  Agreement and agrees, as to the interest to be so acquired, to assume the obligations of the assignor or transferor and to be bound by all of the terms and provisions of this Assignment and the Purchase and Sale Agreement.

 

The terms, covenants and conditions hereof shall be binding upon, and shall inure to the benefit of, Assignor and Assignee and their respective successors and permitted assigns, and such terms, covenants and conditions shall be covenants running with the Lease and with each transfer or assignment of the Lease or any portion thereof.

 

This Assignment is subject to the approval of the State Mineral Board of the State of Louisiana and Assignee does hereby accept such assignment and agrees to assume and fulfill its share of all obligations, conditions and stipulations in the Lease, and the rules and regulations of the State Mineral Board insofar as applicable to the Subject Interests.

 

  

Page 2

  

 

This Assignment may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

 

IN WITNESS WHEREOF, this Assignment is executed before the undersigned competent witnesses on the dates set forth below each signature, but shall be effective for all purposes as of October 1, 2013 (“Effective Date”).

 

	
WITNESSES:

	  	
ASSIGNOR:

	  	  	  
	  	  	
Ridgewood Energy P Fund LLC,

	  	  	
Ridgewood Energy W Fund, LLC,

	  	  	
Ridgewood Energy Y Fund, LLC,

	  	  	
Ridgewood Energy A-1 Fund LLC and

	  	  	
Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P.

	  	  	
By:Ridgewood Energy Corporation, Manager

	  	  	
By:

	 
	
Name:

	  	  	
Name:

	
W.Greg Tabor

	  	  	
Title:

	
Executive Vice President

	  	  	
Date:

	  
	
Name:

	  	  	  	  

	  	  	  
	
WITNESSES:

	  	
ASSIGNEE:

	  	  	  
	  	  	
Castex Energy Partners II, LLC, as general partner of Castex Energy Partners L.P.

	  	  	
By:

	  
	
Name:

	  	  	
Name:

	  
	  	  	
Title:

	  
	  	  	
Date:

	  
	
Name:

	  	  	  	  

  

Page 3

  

    

ACKNOWLEDGMENT

	
STATE OF TEXAS

	
§

	  
	  	
§

	  
	
COUNTY OF HARRIS     

	
§

	  

On this ____ day of ______________, 2014, before me appeared W.Greg Tabor, to me personally known, who, being by me duly sworn (or affirmed) did say that he is the Executive Vice President of Ridgewood Energy Corporation, a Delaware corporation, as Manager for and on behalf of, Ridgewood Energy P Fund, LLC, a Delaware limited liability company, Ridgewood Energy W Fund, LLC, a Delaware limited liability company, Ridgewood Energy Y Fund, LLC, a Delaware limited liability company, Ridgewood Energy A-1 Fund, LLC, a Delaware limited liability company,  and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., a Delaware limited partnership, and that the instrument was signed on behalf of said companies by the authority of its Board of Directors and that he acknowledged the instrument to be the free act and deed of each  company.

	  	  
	  	
Name:

	  
	  	
NOTARY PUBLIC IN AND FOR

	  	
THE STATE OF TEXAS

ACKNOWLEDGMENT

	
STATE OF TEXAS

	
§

	  
	  	
§

	  
	
COUNTY OF HARRIS     

	
§

	  

On this ____ day of ____________, 2014, before me appeared Peter D. Addison, to me personally known, who, being by me duly sworn (or affirmed) did say that he is the Vice President of Castex Energy II, LLC, General Partner of of Castex Energy Partners, L.P., a Texas limited partnership, and that the instrument was signed on behalf of said limited partnership and that he acknowledged the instrument to be the free act and deed of the limited partnership.

	  	  
	  	
Name:

	  
	  	
NOTARY PUBLIC IN AND FOR

	  	
THE STATE OF TEXAS

  

Page 4

  

 

Exhibit “C-3”

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17,2014, by and between Ridgewood Energy Corporation, Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, Ridgewood Energy Y Fund, LLC, Ridgewood Energy A-1 Fund, LLC and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., as Seller, and Castex Energy Partners, L.P., as Buyer

ASSIGNMENT OF OIL AND GAS LEASE

 

 

	
STATE OF LOUISIANA

	
§

	  
	  	
§

	
KNOW ALL MEN BY THESE PRESENTS:

	
PARISH OF ST. MARY

	
§

	  

THAT, this Assignment of Oil and Gas Lease (“Assignment”) is made and entered into by and between  Ridgewood Energy P Fund, LLC, a Delaware limited liability company, Ridgewood Energy W Fund, LLC, a Delaware limited liability company, Ridgewood Energy Y Fund, LLC, a Delaware limited liability company, Ridgewood Energy A-1 Fund, LLC, a Delaware limited liability company and Ridgewood Energy Gulf of Mexico Oil and Gas Fund , L.P., a Delaware limited partnership,  14 Philips Parkway, Montvale, New Jersey, 07645 (hereinafter referred to as "Assignor") and Castex Energy Partners, L.P., a Texas limited partnership, 333 Clay Street, Suite 2000, Houston, Texas 77002 (hereinafter referred to as "Assignee").

FOR AND IN CONSIDERATION OF THE SUM OF ONE HUNDRED DOLLARS and other good and valuable consideration in hand paid, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby transfer, grant, bargain, sell, convey and assign to Assignee all of its right, title and interest, being not less than an undivided fifty percent (50% of 8/8ths) working interest and a proportionately-reduced seventy-three percent (73% of 8/8ths) net revenue interest, in and to the following property (hereinafter referred to as the “Subject Interests”):

 

Louisiana State Lease No. 20035 dated March 11, 2009, by and between the State of Louisiana, as Lessor, and Theophilus Oil, Gas & Land Services, LLC, as Lessee, recorded April 1, 2009, in File No. 303699, Conveyance Book No. 184, Page No. 764 of the Conveyance Records of St. Mary Parish, Louisiana,(hereinafter referred to as the “Lease”)

TO HAVE AND TO HOLD the Subject Interests, together with all the property, rights, privileges, benefits and appurtenances in any way belonging to, incidental to, or appertaining thereto, unto Assignee, its successors and permitted assigns forever, subject to the other matters in this Assignment.

 

This Assignment is delivered pursuant to that certain unrecorded Purchase and Sale Agreement dated effective October 1, 2013 by and between Assignor and Assignee (“Purchase and Sale Agreement”). If there is a conflict between the Purchase and Sale Agreement and this Assignment, the provisions of the Purchase and Sale Agreement shall prevail.

 

            This Assignment is made subject to all the terms and conditions of (i) that certain unrecorded Participation Agreement dated effective May 1, 2009 by and between Phoenix Exploration Louisiana C LLC and Ridgewood Energy Corporation, (ii) the Joint Operating Agreement dated effective as of May 1, 2009, by and between Phoenix Exploration Company, L.P., as Operator and Ridgewood Energy Corporation, (iii) an unrecorded Data Licensing Agreement dated May 30, 2007, which is more specifically referenced in the Participation Agreement, (iv) that certain Assignment of Oil and Gas Lease dated effective March 11, 2009, by and between Theopilus Oil, Gas & Land Services, LLC and Phoenix Exploration Louisiana C LLC, (v)  that certain Partial Assignment of Oil, Gas and Mineral Lease dated effective May 1, 2009, by and between Phoenix Exploration Louisiana C LLC and Ridgewood Energy Corporation, (vi) that certain Partial Assignment of Oil, Gas and Mineral Lease dated effective May 1, 2009 by and between  Ridgewood Energy Corporation and Assignor,  (vii)  that certain unrecorded  Purchase and Sale Agreement dated effective as of October 1, 2013 by and between Assignor and  Assignee, and (viii) any and all existing burdens of record, and (ix) the terms and conditions of the Lease.

 

  

  

  

 

Assignor warrants title to the Lease only until January 31, 2015 against every person lawfully claiming or to claim the same by, through or under Assignor, but not otherwise.  Notwithstanding this limitation of warranties, this Assignment is made with full rights of substitution and subrogation of Assignee in and to all rights and actions of warranty against previous owners, assignors and grantors.

 

Except for the above special warranty of title, the Subject Interests are hereby assigned to, and accepted by, Assignee AS IS AND WHERE IS AND WITHOUT WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF TITLE, MERCHANTABILITY, CONDITION, FITNESS FOR A PARTICULAR PURPOSE, OR FREEDOM FROM REDHIBITORY DEFECTS OR VICES, WHETHER KNOWN OR UNKNOWN AND WHETHER APPARENT, PATENT, LATENT, HIDDEN OR OTHERWISE.

 

Assignee hereby assumes the duties, liabilities and obligations, express or implied, imposed upon Assignor under the provisions of the Lease and under all applicable laws, rules, regulations, orders and ordinances, to the extent such duties, liabilities and obligations relate to the Subject Interests and accrue or arise from and after the Effective Date of this Assignment (“Assumed Liabilities”).

 

ASSIGNEE SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS ASSIGNOR, ITS PARENT AND SUBSIDIARY COMPANIES, AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND OTHER REPRESENTATIVES (THE “ASSIGNOR GROUP”) FROM AND AGAINST ALL CLAIMS ARISING FROM OR RELATING TO (I) THE ASSUMED LIABILITIES.

 

It is agreed that all assignments or transfers of all or any portion of the Subject Interests may be made by Assignee shall be made expressly subject to this Assignment and the Purchase and Sale Agreement, and the assignment or transfer must incorporate a provision that the assignee or transferee adopts, ratifies, confirms and agrees to comply with the terms of this Assignment and the Purchase and Sale  Agreement and agrees, as to the interest to be so acquired, to assume the obligations of the assignor or transferor and to be bound by all of the terms and provisions of this Assignment and the Purchase and Sale Agreement.

 

The terms, covenants and conditions hereof shall be binding upon, and shall inure to the benefit of, Assignor and Assignee and their respective successors and permitted assigns, and such terms, covenants and conditions shall be covenants running with the Lease and with each transfer or assignment of the Lease or any portion thereof.

 

 

This Assignment is subject to the approval of the State Mineral Board of the State of Louisiana and Assignee does hereby accept such assignment and agrees to assume and fulfill its share of all obligations, conditions and stipulations in the Lease, and the rules and regulations of the State Mineral Board insofar as applicable to the Subject Interests.

 

This Assignment may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

 

  

Page 2

  

 

IN WITNESS WHEREOF, this Assignment is executed before the undersigned competent witnesses on the dates set forth below each signature, but shall be effective for all purposes as of October 1, 2013 (“Effective Date”).

 

	
WITNESSES:

	  	
ASSIGNOR:

	  	  	  
	  	  	
Ridgewood Energy P Fund LLC,

	  	  	
Ridgewood Energy W Fund, LLC,

	  	  	
Ridgewood Energy Y Fund, LLC,

	  	  	
Ridgewood Energy A-1 Fund LLC and

	  	  	
Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P.

	  	  	
By:Ridgewood Energy Corporation,  Manager

	  	  	  
	 	 	 
	  	  	
By:

	 
	
Name:

	  	  	
Name:

	
W. Greg Tabor

	  	  	
Title:

	
Executive Vice President

	  	  	
Date:

	  
	
Name:

	  	  	  	  

	
WITNESSES:

	  	
ASSIGNEE:

	  	  	  
	  	  	

Castex Energy II, LLC, as General Partner of Castex Energy Partners L.P.

	  	  	  
	 	 	 
	  	  	
By:

	  
	
Name:

	  	  	
Name:

	
 

	  	  	
Title:

	
 

	  	  	
Date:

	  
	
Name:

	  	  	  	  

  

Page 3

  

 

ACKNOWLEDGMENT

	
STATE OF TEXAS

	
§

	  	
§

	
COUNTY OF HARRIS

	
§

On this ____ day of ______________, 2014, before me appeared W. Greg Tabor, to me personally known, who, being by me duly sworn (or affirmed) did say that he is the Executive Vice President of Ridgewood Energy Corporation, a Delaware corporation, as Manager for and on behalf of, Ridgewood Energy P Fund, LLC, a Delaware limited liability company, Ridgewood Energy W Fund, LLC, a Delaware limited liability company, Ridgewood Energy Y Fund, LLC, a Delaware limited liability company, Ridgewood Energy A-1 Fund, LLC, a Delaware limited liability company,  and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., a Delaware limited partnership, and that the instrument was signed on behalf of said companies by the authority of its Board of Directors and that he acknowledged the instrument to be the free act and deed of each  company.

 

 

	  	  
	  	
Name:

	  
	  	
NOTARY PUBLIC IN AND FOR

	  	
THE STATE OF TEXAS

 

 

ACKNOWLEDGMENT

	
STATE OF TEXAS

	
§

	  	
§

	
COUNTY OF HARRIS

	
§

 

On this ____ day of ____________, 2014, before me appeared Peter D. Addison, to me personally known, who, being by me duly sworn (or affirmed) did say that he is the Vice-President of Castex Energy II, LLC, General Partner of Castex Energy Partners, L.P., a Texas limited partnership, and that the instrument was signed on behalf of said limited partnership and that he acknowledged the instrument to be the free act and deed of the limited partnership.

 

 

 

	  	  
	  	
Name:

	  
	  	
NOTARY PUBLIC IN AND FOR

	  	
THE STATE OF TEXAS

  

Page 4

  

 

Exhibit “D”

 

 

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC and Ridgewood Energy Y Fund, LLC as Seller and Castex Energy Partners, L.P., as Buyer

 

 

AFFIDAVIT PURSUANT TO FOREIGN INVESTMENT

AND REAL PROPERTY ACT

 

 

 

The undersigned hereby declare, under penalties of perjury, that the name(s), address(es) and United States taxpayer identification number(s)s of the owner(s) of the immovable/real property to be sold to Buyer under the Purchase and Sale Agreement dated effective as of October 1, 2013 are as follows:

 

	
Name and Address

	
I.D. Number

INSERT NAMES OF SELLERS AND I.D. NUMBERS

Ridgewood Energy Corporation is a corporation organized and existing under the laws of the State of _____________.  Ridgewood Energy A-1 Fund, LLC is a limited liability company organized and existing under the laws of the State of _________.  Ridgewood Energy gulf of Mexico Oil and Gas Fund, L.P. is a limited partnership organized and existing under the laws of the State of _________. Ridgewood Energy P Fund, LLC is a limited liability company organized and existing under the laws of the State of _________.  Ridgewood Energy W Fund, LLC is a limited liability company organized and existing under the laws of the State of _________. Ridgewood Energy Y Fund, LLC is a limited liability company organized and existing under the laws of the State of _________.  As such, neither entity is a foreign citizen or foreign entity. The undersigned understands that the purchaser of the property intends to rely on the foregoing representations in connection with the United States Foreign Investment and Real Property Act.

INSERT RIDGEWOOD SIGNATURE BLOCKS

 

  

  

  

Exhibit “E”

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, and Ridgewood Energy Y Fund, LLC as Seller, and Castex Energy Partners, L.P., as Buyer

Form of Certificates

SELLER’S CERTIFICATE

I, _____________________________, ________________________ of Ridgewood Energy Corporation, a Delaware corporation, as Manager for and on behalf of, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy W Fund, LLC, Ridgewood Energy P Fund, LLC, Ridgewood Energy Y Fund, LLC,  Delaware limited liability companies, and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., a Delaware limited partnership (“Seller”), on this ____ day of _______________, 2014, do hereby certify in accordance with the terms contained in, and pursuant to Section 2.1 and Section 7.1(c) of, that certain Purchase and Sale Agreement by and between Seller and Castex Energy Partners, L.P., a Texas limited partnership, dated  _______________________, 2014 (the “Purchase and Sale Agreement”), that (i) each of Seller’s representations and warranties in the Purchase and Sale Agreement is true and correct in all material respects (or, with respect to representations and warranties qualified by materiality, in all respects) as of the date hereof as if made on the date hereof (except to the extent any such representation or warranty is stated to relate to an earlier date in which case such representation and warranty was true and correct on and as of such earlier date), and (ii) Seller has performed and complied in all material respects with each of the Seller’s covenants and conditions contained in the Purchase and Sale Agreement prior to or as of the date hereof.

 

 

	 	
Ridgewood Energy A-1 Fund, LLC

	 
	 	
Ridgewood Energy W Fund, LLC

	 
	 	
Ridgewood Energy P Fund, LLC

	 
	 	
Ridgewood Energy Y Fund, LLC

	 
	 	
Ridgewood Energy Gulf of Mexico Oil 

 and Gas Fund, L.P.

	 
	 	
By: Ridgewood Energy Corporation, as Manager

	 
	 	 	 
	
 

	
By: 

	 	 
	 	Name:	 	 
	 	Title:	 	 

 

  

  

  

 

Exhibit “F”

Attached to and made a part of that certain Purchase and Sale Agreement dated January 17, 2014, by and between Ridgewood Energy Corporation, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, and Ridgewood Energy Y Fund, LLC as Seller, and Castex Energy Partners, L.P., as Buyer

BUYER’S CERTIFICATE

I, _____________________________, ________________________ of Castex Energy Partners, L.P., a Texas limited partnership (“Buyer”), on this ____ day of _______________, 2014, do hereby certify in accordance with the terms contained in, and pursuant to Section 3.1 and Section 7.2(c) of, that certain Purchase and Sale Agreement by and between Ridgewood Energy Corporation, a Delaware corporation, as Manager for and on behalf of Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy P Fund, LLC, Ridgewood Energy W Fund, LLC, Ridgewood Energy Y Fund, LLC, Delaware limited liability companies, and Ridgewood Energy Gulf of Mexico Oil and Gas Fund, L.P., Sellers, and Buyer, dated ________________, 2014 (the “Purchase and Sale Agreement”), that (i) each of Buyer’s representations and warranties given in the Purchase and Sale Agreement is true and correct in all material respects (or, with respect to representations and warranties qualified by materiality, in all respects) as of the date hereof as if made on the date hereof (except to the extent any such representation or warranty is stated to relate to an earlier date in which case such representation and warranty was true and correct on and as of such earlier date), and (ii) Buyer has performed and complied in all material respects with each of the Buyer’s covenants and conditions contained in the Purchase and Sale Agreement prior to or as of the date hereof.

 

	 	

CASTEX ENERGY PARTNERS, L.P.

	 
	 	 	 
	 	 	 
	
 

	
By: 

	 	 
	 	Name:	 	 
	 	Title:

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