EXHIBIT 2.1
PARTIAL ASSIGNMENT OF CONTRACT AND GUARANTEE BETWEEN
PETROHUNTER ENERGY CORPORATION, PETROHUNTER OPERATING COMPANY
AND MAB RESOURCES LLC, DATED MARCH 21, 2007
PARTIAL ASSIGNMENT OF CONTRACT
AND GUARANTEE
THIS PARTIAL ASSIGNMENT OF CONTRACT AND GUARANTEE ("Agreement") between
PetroHunter Energy Corporation ("PetroHunter"), PetroHunter Operating Company
("PetroHunter Operating") (collectively, the "Assignor") and MAB Resources LLC
("Assignee") is dated March 21, 2007, to be effective January 1, 2007 (the
"Effective Date"). The Assignor and the Assignee may be referred to singly or
collectively herein as the "Parties."
RECITALS
WHEREAS the Assignor has entered into a Purchase and Sale Agreement
with Dolphin Energy Corporation ("Dolphin") and Galaxy Energy Corporation
("Galaxy") (Galaxy and Dolphin being collectively referred to herein as
"Sellers") dated December 29, 2006 (the "PSA") to acquire all of the Seller's
interests in the Properties (as such term is defined in the PSA); and
WHEREAS the Assignor desires to make a partial assignment of the PSA as
set forth in this Agreement, and the Assignee agrees to accept such partial
assignment, in order for the Assignee to acquire an assignment from Sellers of
an undivided forty-five percent (45%) interest in the Properties pursuant to the
PSA.
NOW, THEREFORE, based on the above and in consideration of the
covenants and agreements contained herein, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1. ASSIGNMENT.
1.1 PARTIAL ASSIGNMENT OF RIGHTS AND OBLIGATIONS.
(a) ASSIGNMENT. In consideration for: (i) Assignee's acceptance and
assumption of the entirety of the Assignor's obligation pursuant to Section
2.2(b) of the PSA, as well as Assignee's assumption of all other obligations
related thereto; (ii) Assignee's indemnification of the Assignor as set forth in
this Agreement; (iii) Assignee's guaranty of certain of Assignor's obligations
to third parties; and (iv) other valuable and adequate consideration, Assignor
hereby agrees to assign to Assignee, and Assignee hereby accepts, the assignment
of that portion of the PSA to the extent of Assignor's right to purchase an
undivided forty-five percent (45%) of the Sellers' interest in the Properties
pursuant to Section 2.1(a) of the PSA, to be assigned to Assignee in the form of
Exhibit C to the PSA. Assignee shall assume and indemnify and hold Assignor
harmless for, and shall be responsible and liable to Sellers for, the
obligations of Assignor under the PSA for Assignor's performance under Section
2.2(b) of the PSA and to the extent of said 45% undivided interest.
(b) CONSENTS. As a condition precedent to this Agreement being
effective, the Parties shall obtain all necessary regulatory approvals, if any,
prior to the Closing under the PSA.
2. REPRESENTATIONS AND WARRANTIES
2.1 EACH PARTY. Each Party represents to the other Parties that:
(a) AUTHORITY. They each have the authority to enter into this Agreement
in the name, title and capacity herein stated with full and lawful authority on
behalf of their respective principals including a current authorization by their
respective boards of directors or managers approving the execution and delivery
of this Agreement;
(b) NO DEFAULT. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, nor the compliance
with the terms hereof, will result in any default under any agreement or
instrument to which a Party is a party, nor violate any order, writ, injunction,
decree, statute, rule or regulation applicable to a Party;
(c) NO ACTION. No order has been entered, or remains in effect at the
Effective Date, in any court or governmental agency having jurisdiction over the
Parties or the subject matter of this Agreement that restrains or prohibits the
assignment of the Assignor's obligations and rights pursuant to the PSA, or the
assignment and acceptance by Assignee of the Assignor's contractual rights
pursuant to this Agreement, and no order has been entered, or remains in effect
at the Effective Date which seeks to recover damages from the Assignor or the
Assignee resulting therefrom; and
(d) ENFORCEABILITY. This Agreement constitutes the legal, valid and
binding obligation of the Party, enforceable in accordance with its terms,
except as limited by bankruptcy or other laws applicable generally to creditor's
rights and as limited by general equitable principles.
3. RECORDS; JOINT OPERATING AGREEMENT.
3.1 INSPECTION OF FILES. Prior to the Closing of the PSA, the Assignor
shall provide cooperation and assistance to the Assignee, as required, in order
for the Assignee to conduct a full inspection of the Records (as such term is
defined in the PSA) of Sellers. Xxxxxxxx agrees that Assignor will retain
custody of the Records, and Xxxxxxxx agrees to give full access to the Records
during such time that the Records are in the Assignor's custody.
3.2 JOINT OPERATING AGREEMENT. Simultaneously with the Closing under
the PSA the Parties shall execute and deliver the form of AAPL 610-1989 Model
Form Operating Agreement (the "Operating Agreement") attached hereto as Exhibit
A. The Operating Agreement shall constitute the Parties exclusive agreement in
regard to the operation of the Properties. In the event of any conflict between
this Agreement and the Operating Agreement, this Agreement shall prevail to the
extent of any such conflict.
4. TERMINATION
4.1 BREACH. If any Party breaches this Agreement, the non-breaching Party shall
notify the breaching Party in writing of the breach, including all particulars
regarding the alleged basis for the breach. The notified Party shall have thirty
(30) days from receipt
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of such written notice to cure or correct the alleged breach. Such notified
Party shall commence all reasonable and necessary steps to correct the breach
within the thirty (30) day period and shall thereafter diligently pursue the
matter until the breach has been corrected. If at the end of such period the
alleged breach has not been adequately corrected, then this Agreement shall be
subject to termination by written notice from the non-breaching Party, and the
non-breaching Party shall have the right to take appropriate action to recover
damages and seek other remedies available at law or equity.
5. INDEMNIFICATION AND GUARANTY.
5.1 ASSIGNEE INDEMNIFICATION OF ASSIGNOR. Assignee shall fully protect,
indemnify, and defend Assignor, its officers, agents and employees and hold them
harmless from any and all claims, losses, damages, demands, suits, causes of
action, and liabilities (including attorneys' fees, costs of litigation and
investigation costs associated therewith) (collectively referred to as "Claims")
relating to or arising out of: (a) the Seller's breach of the PSA, including any
breach of representation or covenant of the Seller; (b) the termination of the
PSA, inasmuch as such Claims are not included within the Assignee's guaranty in
Section 5.2 herein; (c) the Assignor's obligations to "Buyers" (as such term is
defined in the Registration Rights Agreement) pursuant to the "Registration
Rights Agreement" (as such term is defined in the PSA); and (d) the Assignor's
obligations to the "Lenders" (as such term is defined in the Subordination
Agreement) with respect to the "Subordination Agreement" (as such term is
defined in the PSA).
5.2 ASSIGNEE GUARANTY OF NOTE. In the event Assignor receives the Note pursuant
to Section 2.3 of the PSA, the Assignee hereby guarantees the payment of
principal and interest payable to Assignor pursuant to the Note. The guarantee
provided pursuant to this Section is provided solely for the benefit of the
Assignor as consideration given pursuant to this Agreement, is not intended to
benefit any third party, and is not assignable to any third party.
6. MISCELLANEOUS
6.1 TERM. This Agreement shall continue in effect until the obligations of the
Parties pursuant to this Agreement have been fully performed, unless the context
of a particular provision indicates by its context that it should survive such
termination. The termination of this Agreement shall not relieve any Party of
any expense, liability or other obligation, or any remedy therefor, which has
accrued or attached prior to the date of such termination
6.2 PRESS RELEASES; CONFIDENTIALITY. The Parties shall consult each other with
respect to any press release or public announcement concerning this Agreement
and the transaction contemplated hereby, and, except as required by, or pursuant
to applicable law, or the applicable rules and regulations of any governmental
body or stock exchange, neither Party shall issue any press release or public
announcement without the prior written consent of the other Party, and each
Party shall keep this Agreement and its contents confidential.
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6.3 ASSIGNABILITY. This Agreement is personal in nature and may not be assigned
by a Party or Parties without the prior written consent of the non-assigning
Party or Parties, which consent shall not be unreasonably withheld. Any
assignment of this Agreement shall be made specifically subject to the terms and
conditions of this Agreement and any assignee shall agree in writing to be bound
by the terms of this Agreement.
6.4 SUCCESSORS AND ASSIGNS. This Agreement, and all the rights, titles,
interests, requirements, covenants, obligations, terms and conditions set forth
herein, shall be binding upon, and inure to the benefit of, the Parties hereto
and their respective partners, parties of interests, beneficiaries, heirs,
representatives, trustees, and permitted successors and assigns.
6.5 COUNTERPARTS. This Agreement may be executed in multiple counterparts, by
facsimile or by delivery of original copy, no one of which need be executed by
all the Parties hereto.
6.6 PARTIAL INVALIDITY. The invalidity or unenforceability of any particular
provision of this Agreement or any of the documents collateral to it will not
affect the other provisions hereof or thereof, and the Agreement and any of the
documents collateral to it will be construed in all respects as if such invalid
or unenforceable provisions were omitted.
6.7 NOTICES. Except as otherwise provided above, all notices required under this
Agreement will be given in writing and delivered in person, by United States
certified mail return receipt requested, courier service, facsimile, telecopy or
e-mail addressed to each of the Parties at the addresses listed below:
PetroHunter Energy Corporation MAB Resources LLC
0000 Xxxxxxxx, Xxxxx 0000 0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Vice Attention: Xxxx X. Xxxxxx, Managing
President and General Counsel Member
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
PetroHunter Operating Company
1875 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Vice
President and General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Any notice delivered in person, by courier service, facsimile or telecopy shall
be deemed given when received by the Party to whom it is addressed. Each Party
has the right to change its address by giving written notice thereof to the
other Parties.
6.8 GOVERNING LAW. The laws of the State of Colorado shall govern the validity
of this Agreement, the construction of its terms, and the interpretation of the
rights and duties of the Parties, without regard to the principles of conflicts
of laws, including, but
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not limited to, matters of performance, non-performance, breach, remedies, and
procedures. The laws of the State of Colorado shall govern the validity,
construction and interpretation of any conveyances executed pursuant to this
Agreement. Forum and venue shall be exclusively in state or federal court in
Denver, Colorado.
6.9 ENTIRE AGREEMENT. The Parties agree and understand that this Agreement and
all of its exhibits constitute their entire agreement among the Parties
respecting the subject matter of the transactions contemplated hereby and that
there are no other agreements among them other than the terms and conditions
contained herein.
6.10 NO THIRD PARTY BENEFICIARIES. This Agreement is intended to benefit only
the Parties hereto and their respective successors and assigns.
6.11 NECESSARY DOCUMENTS. The Parties further agree to prepare, execute and
deliver all such other documents that may be reasonably necessary to fully
effectuate all the terms and conditions herein required.
THIS PARTIAL ASSIGNMENT OF CONTRACT AND GUARANTEE is executed by each
Party to be in effect upon the Effective Date.
PETROHUNTER ENERGY CORPORATION MAB RESOURCES LLC
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, CFO Xxxx X. Xxxxxx, Managing Member
PETROHUNTER OPERATING COMPANY
By: /s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx, Vice President
and General Counsel
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