Exhibit 99.2
PURCHASE AND SALES
AGREEMENT
THIS PURCHASE AND SALES
AGREEMENT (the “
Agreement ”), is entered into as of this
day of
December 2006, by and between Caltex Energy Company
(“collectively referred herein as Caltex or Seller”) a
Texas General Partnership having its principal place of business
located at PO Box 8, Luling, TX 78648 and Imperial Petroleum, Inc.,
(“Imperial or Buyer”), a Nevada corporation located at
329 Main Street, Suite 801, Evansville, IN 47708.
W I T N E S S E T
H:
WHEREAS, Caltex is the owner of
certain oil and gas wells, leases, interests and assets comprising
those properties set forth on Exhibit “A” attached
hereto; and
WHEREAS, Caltex desires to sell and
Imperial desires to purchase all of its right, title and interest
in and to those assets comprising those properties as described on
Exhibit “A” and any and all equipment used by Caltex in
conjunction with the operation of said properties and located on
the premises, with the exception of that equipment hereinafter
defined in Section 1.01 (b), collectively referred to as the
“Acquired Assets” ; and
WHEREAS, the Board of Directors of
Imperial and the Managing General Partner of Caltex each deem it in
the best interests of each party to complete the transaction herein
contemplated;
NOW, THEREFORE, in consideration of
the premises and of the mutual agreements, provisions, covenants,
representations and warranties herein contained, the parties hereto
hereby agree as follows:
1. Purchase and Sale of
Assets.
1.01 Purchase and
Sale. On and subject
to the terms and conditions of this Agreement, Imperial agrees to
purchase from Caltex and Caltex agrees to sell, transfer, convey
and deliver to Imperial all of Caltex’s right, title and
interest in and to the Acquired Assets, including without
limitation, the following assets:
(a) all of Caltex’s right,
title and interest in and to each of the leases, wells and
properties as more particularly described on Exhibit
“A” attached hereto, and all equipment, buildings,
fixtures and other improvements located thereon and all rights,
easements, rights-of-way and other interests incidental thereto and
used or necessary for the use and enjoyment of the properties by
Imperial;
(b) all machinery, equipment,
trucks, tractors and trailers and related spare components and
parts, inventories of raw materials, supplies and minerals,
processed goods, goods in process, and tools located on the
properties or used in connection with the properties, except and
excluding swab trucks and equipment related to the production of
these leases and wells by swabbing;
(c) all certificates, licenses,
permits, registrations and applications therefor necessary, useful
for, used or held for use by Caltex in the ownership or operation
of the properties, excluding Caltex’s financial assurance
bond filed with the Railroad Commission of Texas, (collectively,
the “Permits”); whether held in the name of Caltex or
in an affiliate entity;
(d) all water wells and water
rights, licenses, permits and applications therefor to locate,
drill for, produce, use, gather, restrict flow, store or remove
water on, from or to the properties (collectively, the “Water
Rights”); and
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(e) all books, records, ledgers,
files, documents, correspondence, lists, plats, maps, plans,
drawings, blueprints, specifications, assays, studies, reports and
other written or printed materials in Caltex’s possession
necessary, useful for, held for use by Caltex useful in the
ownership or operation of the properties on Exhibit
“A”, including any stock certificates, stock
appreciation rights, warrant certificates or similar documents
conveying ownership of the properties;
1.02 Purchase Price &
Terms. Imperial
agrees to purchase the Acquired Assets from Caltex in exchange for
a total consideration of $300,000 (the “Purchase
Price”) subject to the terms of this Agreement and to be paid
as follows:
(a) Imperial shall pay a
non-refundable earnest money deposit of $10,000.00 concurrent with
the signing of this Agreement. Such deposit shall be credited
against the Purchase Price at Closing. In the event that Imperial
does not close the purchase of the Acquired Assets, for any reason
except failure of title due to defects not cured by Caltex,
including but not limited to environmental, regulatory or
permitting title defects, then Caltex shall retain the Earnest
Money Deposit as liquidated damages and the parties shall have no
other obligations to each other with respect o this
Agreement.
(b) Imperial shall pay the balance
of $290,000.00 in cash by wire transfer or immediately available
funds at Closing.
1.03 Effective
Date: The purchase of
the Acquired Assets shall be effective as of 7:00 a.m. on
December 1, 2006 (“Effective Date”), such that
Buyer shall be entitled to the proceeds from the production and
sale of oil and natural gas from and after the Effective Date and
shall be responsible for expenses incurred in connection with the
direct operation of the properties from and after the Effective
Date.
1.04 Closing.
Subject to the terms and provisions
of this Agreement, the closing of the transactions contemplated by
this Agreement will be at 10:00 a.m. at the offices Imperial
Petroleum, Inc., 329 Main Street, Suite 801, Evansville, IN 47708,
on or before, January 31, 2007, or at such earlier or later
date or such other place or in such other manner as shall be
mutually agreed upon by Imperial and Caltex, such date and time
sometimes being referred to herein as the “Closing” or
“Closing Date” or “Final Closing
Date”.
2. Representations and
Warranties of Imperial.
Imperial represents and warrants to
Caltex that, to the best of its knowledge, the statements contained
in this Section 2 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing
Date.
2.01 Organization,
Qualification and Corporate Power. Imperial is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada. Imperial is duly authorized to conduct business and is
in good standing under the laws of each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties requires such qualification. Imperial has full corporate
power and authority to carry on the business in which it is engaged
and to own and use the properties owned and used by it.
2.02 Authority.
Imperial has all requisite corporate
power and authority to execute and deliver this Agreement and all
agreements, instruments and documents to be executed and delivered
by Imperial hereunder, to consummate the transactions contemplated
hereby and to perform all terms and conditions hereof to be
performed by it. The execution and delivery of this Agreement by
Imperial and all agreements, instruments, and documents to be
executed and delivered by Imperial hereunder, the performance by
Imperial of all the terms and conditions hereto to be performed by
it and the consummation of the transactions contemplated hereby
have been duly authorized and approved by the Board of Directors of
Imperial, and no other corporate proceedings of Imperial are
necessary with respect thereto. All persons who have executed and
delivered this Agreement, and all persons who will execute and
deliver the other
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agreements, documents and instruments to be
executed and delivered by Imperial hereunder, have been duly
authorized to do so by all necessary actions on the part of
Imperial. This Agreement constitutes, and each other agreement and
instrument to be executed by Imperial hereunder, when executed and
delivered by Imperial, will constitute, the valid and binding
obligation of Imperial enforceable against it in accordance with
its terms.
2.03 Bonding.
Imperial has in place a Performance
Bond under the name of IPT Oil Company (RRC # 425811) and
alternatively in the name of Double Eagle Petroleum Corp, an
affiliate (RRC #224852) satisfactory with the Railroad Commission
of Texas to allow it to operate any and all wellbores purchased
under this Agreement and to facilitate the transfer of operatorship
of such wellbores.
2.04
Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge or other
restriction of any federal, state or local government, governmental
agency or court to which Imperial is subject or any provision of
its Certificate of Incorporation, Bylaws or Board of Directors or
stockholder resolutions of Imperial or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel or require any notice under any
contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, security interest or other arrangement to which
Imperial is a party or by which it is bound or to which any of its
assets is subject or result in the imposition of any security
interest upon any of its assets. Imperial is not required to give
any notice to, make any filing with, or obtain any authorization,
consent or approval of any federal, state or local government,
governmental agency, bank, financial institution or other person or
entity in order for Imperial to consummate the transactions
contemplated by this Agreement.
2.05
Disclosure. The
representations and warranties contained in this Section 2 do
not contain any untrue statement of a fact or omit to state any
fact necessary in order to make the statements and information
contained in this Section 2 not misleading.
2.05
Representation. Imperial represents and warrants that in making
the decision to acquire the Acquired Assets, it has relied upon its
own independent investigations and the independent investigations
by its representatives, including its own professional legal, tax,
and business advisors, and that Imperial and its representatives
have been given the opportunity to examine all relevant documents
and to ask questions of and to receive answers from
Caltex.
3. Representations and
Warranties Concerning Caltex.
Caltex, represents and warrants to
Imperial that, to the best of their knowledge, the statements
contained in this Section 3 are correct and complete as of the
date of this Agreement and will be correct and complete as of the
Closing Date.
3.01 Organization,
Qualification and Corporate Power. Caltex is a Texas partnership duly organized,
validly existing and in good standing under the laws of the State
of Texas. Caltex is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties requires such qualification. Caltex has full corporate
power and authority to carry on the business in which it is engaged
and to own and use the properties owned and used by it.
3.02 Authority.
Caltex has all requisite power and
authority to execute and deliver this Agreement and all agreements,
instruments and documents to be executed and delivered by Caltex
hereunder, to consummate the transactions contemplated hereby and
to perform all terms and conditions hereof to be performed by it.
This Agreement constitutes, and each other agreement and instrument
to be executed by Caltex hereunder, when executed and delivered by
Caltex, will constitute, the valid and binding obligation of Caltex
enforceable against it in accordance with its terms.
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3.03
Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge or other
restriction of any government, governmental agency or court to
which Caltex is subject or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify,
or cancel or require any notice under any contract, lease,
sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of
indebtedness, security interest or other arrangement to which
Caltex is a party or by which it is bound or to which any of its
assets is subject or result in the imposition of any security
interest upon any of its assets. Caltex is not required to give any
notice to, make any filing with, or obtain any authorization,
consent or approval of any federal, state or local government,
governmental agency, bank, financial institution or other party in
order for Caltex and Imperial to consummate the transactions
contemplated by this Agreement.
3.04 Title.
The Acquired Assets are being
transferred pursuant to this Agreement to Buyer without warranty,
either express or implied. To the best of its knowledge, Caltex has
not received or been notified of any adverse claims against the
Acquired Assets, except as disclosed to Buyer and upon the Closing
Date will transfer the Acquired Assets free and clear of any liens,
claims, mortgages, security interests, pledges, encumbrances or
restrictions on transfer of any kind or nature. Imperial shall
conduct its title investigation and notify Caltex in writing of any
defects in the title to the Acquired Assets from time to time but
in any event not later than 20 calendar days prior to the Closing
Date. Caltex shall have 10 calendar days from receipt of
notification to either cure the title defect or remove the entire
property from the sale.
3.05 Permits.
To the best knowledge of Seller,
Seller has received no notice and has no knowledge of any
revocation, termination or modification of any Permit affecting the
Acquired Assets that would have a material adverse effect on the
continued operation of the Acquired Assets by the Buyer after
Closing. Seller agrees to maintain any and all existing Permits in
full force and effect at its sole cost until Closing.
3.06 Governmental
Approvals. To the
best knowledge of Seller, Seller has not received any notification
of a required consent, approval, waiver, order or authorization of,
or registration, declaration or filing with, any federal, state or
local governmental authority (including, without limitation, any
department, bureau or agency), required to be obtained or made in
connection with the execution and delivery of this Agreement by
Seller or the consummation by Seller of the transactions
contemplated hereby the failure of which to obtain would have a
material adverse affect on the Acquired Assets, Imperial or
Imperial’s ability to own, operate or exploit the Acquired
Assets. Seller has not received any demands from the Texas Railroad
Commission or the Environmental Protection Agency, or any similar
body having jurisdiction over mineral rights and operations within
the States of Texas to plug and abandon, repair, or otherwise alter
the present operations of any of the properties or wells comprising
the Acquired Assets.
3.07 Tax
Matters. To the best
knowledge of Seller, there is no dispute or claim concerning any
federal, state or local tax liability either (A) claimed or
raised by any authority in writing or (B) as to which Caltex
or any of the directors and officers (and employees responsible for
tax matters) of Caltex or any affiliate have knowledge based upon
personal contact with any agent of such authority. Caltex has paid
all of its outstanding tax obligations in each jurisdiction where
such obligation has been incurred. Caltex warrants that there are
no tax liabilities on said properties.
3.08
Litigation. To the
best knowledge of Seller, and except as disclosed to Buyer , there
is no litigation and there are no arbitration proceedings or
governmental proceedings, suits or investigations pending,
instituted or threatened against Caltex or any of the Acquired
Assets. Caltex has not received any notifications or charges from
any federal, state, or local governmental authority involving oil
and gas, occupational safety and health or water quality or other
environmental matters.
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3.09 Environment, Health and
Safety. To the best
knowledge of Seller, there are no claims and Seller is not aware of
the potential for any claims arising out of environmental
issue
