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EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
AND ASSIGNMENT OF PARTNERSHIP INTEREST
This Purchase and Sale Agreement and Assignment of Partnership
Interest (this "AGREEMENT") dated August 30, 1996, by and between TORCH ENERGY
FINANCE FUND LIMITED PARTNERSHIP I, a Texas limited partnership ("SELLER") and
SOUTHERN MINERAL CORPORATION, a Nevada corporation ("PURCHASER").
W I T N E S S E T H:
WHEREAS, Seller is the sole limited partner and Purchaser is the sole
general partner of SMC Development L.P., a Texas limited partnership (the
"PARTNERSHIP"), formed pursuant to that certain Agreement of Limited
Partnership (the "PARTNERSHIP AGREEMENT") dated January 5, 1996, by and between
Purchaser and Seller; and
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller all of Seller's right, title and interest in and to the
Partnership; and
WHEREAS, it is the intention of Purchaser to wind up and dissolve the
Partnership subsequent to its purchase of Seller's interest in the Partnership.
NOW, THEREFORE, in consideration of the premises, the considerations
enumerated herein and the respective representations, warranties, and mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Conveyance and Transfer of Seller's Partnership Interests. Seller
does hereby grant, sell, convey, transfer and assign to Purchaser, and
Purchaser does hereby purchase all of Seller's right, title and interest in and
to the Partnership ("SELLER'S PARTNERSHIP INTEREST"), upon the terms and
subject to the conditions set forth in this Agreement.
1.2 Purchase Price. The purchase price which Purchaser shall pay for
the Seller's Partnership Interest is THREE MILLION DOLLARS ($3,000,000) (the
"PURCHASE PRICE"). The Purchase Price shall be paid in immediately available
funds no later than 5:00 p.m., Houston, Texas time, on August 30, 1996, by wire
transfer to Texas Commerce Bank, ABA No. 113000609, Account No. 00101767227,
Torch Energy Advisors, Inc., Ref. SMC Development Sale. If Purchaser fails to
timely pay the Purchase Price, this Agreement shall become null and void and be
of no further force or effect.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that as of the date
hereof:
2.1 Organization and Good Standing. Seller is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Texas, and has all requisite partnership power and authority to
execute and enter into this Agreement, to grant, sell, convey, assign and
transfer Seller's Partnership Interest unto Purchaser and to consummate the
transactions contemplated hereby and to perform all the terms and conditions
hereof to be performed by it. This Agreement has been duly executed and
delivered by Seller and constitutes the valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other laws relating
to or affecting the enforcement of creditors' rights generally and general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
2.2 No Violations. This Agreement and the execution and delivery
hereof by Seller do not, and the fulfillment and compliance with the terms and
conditions hereof and the consummation of the transactions contemplated hereby
will not conflict with, or require the consent of any person under, any of the
terms or conditions of the governing documents of Seller, or any material
agreement or other written obligation by which Seller is bound or to which any
material portion of its assets is subject.
2.3 No Default. Seller is not in default under any material agreement
or other written obligation by which it is bound or to which any material
portion of its assets or the Seller's Partnership Interest is subject.
2.4 No Encumbrances. The Seller's Partnership Interest is free and
clear of all Encumbrances.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller that as of the date
hereof:
3.1 Organization, Good Standing, Authority and Authorization.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of Nevada. Purchaser has all requisite corporate power
and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform all the terms and conditions
hereof to be performed by it. The execution and delivery of this Agreement by
Purchaser, the performance by Purchaser of all the terms and conditions herein
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
Purchaser. This Agreement has been duly executed and delivered by Purchaser and
constitutes the
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valid and binding obligation of Purchaser, enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency or other laws relating to or affecting the enforcement of creditors'
rights generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).
3.2 No Violations. This Agreement and the execution and delivery
hereof by Purchaser do not, and the fulfillment and compliance with the terms
and conditions hereof and the consummation of the transactions contemplated
hereby will not conflict with, or require the consent of any person under, any
of the terms or conditions of the certificate of incorporation, or bylaws of
Purchaser, or any material agreement or other written obligation by which
Purchaser is bound or to which any material portion of its assets is subject.
3.3 No Default. Purchaser is not in default under any material
agreement or other written obligation by which it is bound or to which any
material portion of its assets is subject.
3.4 No Undisclosed Benefits. To Purchaser's knowledge, there is
nothing in respect of the Partnership or its properties that is of material
benefit to the value of Seller's Partnership Interest which has not been
disclosed previously to Seller in writing.
ARTICLE 4
MUTUAL RELEASES
4.1 RELEASE OF PURCHASER BY SELLER. SELLER HEREBY RELEASES AND FOREVER
DISCHARGES PURCHASER FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES,
COSTS, EXPENSES, CAUSES OF ACTION AND JUDGMENTS OF ANY KIND OR CHARACTER WITH
RESPECT TO, ARISING OUT OF OR IN CONNECTION WITH THE PARTNERSHIP, INCLUDING BUT
NOT LIMITED TO THOSE WITH RESPECT TO, ARISING OUT OF OR IN CONNECTION WITH ANY
AND ALL ACTS OR OMISSIONS OF PURCHASER OR ANY OF THE ASSETS, LIABILITIES, OR
OBLIGATIONS OF THE PARTNERSHIP AND INCLUDING BUT NOT LIMITED TO THOSE ARISING
OUT OF CONTRACT, TORT OR THE SOLE OR CONCURRENT NEGLIGENCE OF PURCHASER, STRICT
LIABILITY OR ANY OTHER LEGAL THEORY, EXCLUDING, HOWEVER, ANY CLAIMS ARISING OUT
OF PURCHASER'S BREACH OF ANY OF ITS REPRESENTATIONS OR WARRANTIES IN ARTICLE
III ABOVE OR OUT OF PURCHASER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
4.2 RELEASE OF SELLER BY PURCHASER. PURCHASER HEREBY RELEASES AND
FOREVER DISCHARGES SELLER FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES,
COSTS, EXPENSES, CAUSES OF ACTION AND JUDGMENTS OF ANY KIND OR CHARACTER WITH
RESPECT TO, ARISING OUT OF OR IN CONNECTION WITH THE PARTNERSHIP, INCLUDING BUT
NOT LIMITED TO THOSE WITH RESPECT TO, ARISING OUT OF OR IN CONNECTION WITH ANY
AND ALL ACTS OR OMISSIONS OF SELLER OR ANY OF THE ASSETS, LIABILITIES, OR
OBLIGATIONS OF THE
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PARTNERSHIP AND INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF CONTRACT,
TORT OR THE SOLE OR CONCURRENT NEGLIGENCE OF SELLER, STRICT LIABILITY OR ANY
OTHER LEGAL THEORY, EXCLUDING, HOWEVER, ANY CLAIMS ARISING OUT OF SELLER'S
BREACH OF ANY OF ITS REPRESENTATIONS OR WARRANTIES IN ARTICLE II ABOVE OR OUT
OF SELLER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
ARTICLE 5
MISCELLANEOUS
5.1 Survival. This Agreement and the representations, warranties and
covenants contained herein shall survive consummation of the transactions
contemplated hereby.
5.2 Exclusive Agreement. This Agreement supersedes all prior written
or oral agreements between the parties with respect to the transactions
contemplated herein, and is intended as a complete and exclusive statement of
the terms of the agreement between the Purchaser and Seller with respect to the
transactions contemplated herein.
5.3 Choice of Law; Choice of Forum; Amendments; Headings. This
Agreement shall be governed by the internal laws of the State of Texas, without
giving effect to principles of conflicts of laws. This Agreement may not be
changed or terminated orally. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Terms such a "herein," "hereby," "hereto,"
and "hereof" refer to this Agreement as a whole. The term "include" and
derivatives thereof are used in an illustrative sense and not a limitative
sense.
5.4 Assignments and Third Parties. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No such assignment shall release any party of any of
its obligations under this Agreement. Nothing in this Agreement shall entitle
any person other than the parties hereto or their respective successors and
assigns to any claim, cause of action, remedy or right of any kind.
5.5 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon any binding determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely possible in an acceptable
and legally enforceable manner, to the end that the transactions contemplated
hereby may be completed to the extent possible.
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5.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute but one and the same agreement.
5.7 Further Assurances. Seller shall, and shall cause its affiliates
to, execute, acknowledge and deliver all such further conveyances, transfer
orders, division orders, notices, assumptions, releases and acquittances, and
such other instruments, and shall take such further actions as may be necessary
or appropriate to assure fully to Purchaser, its successors or assigns, all of
the Seller's Partnership Interest intended to be conveyed to Purchaser by this
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
--SELLER--
TORCH ENERGY FINANCE FUND LIMITED
PARTNERSHIP I
By: TORCH ENERGY FINANCE COMPANY,
GENERAL PARTNER
By:
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Name:
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Title:
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--PURCHASER--
SOUTHERN MINERAL CORPORATION
By:
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Name:
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Title:
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