FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
Exhibit 2.2
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
This First Amendment to Purchase and Sale Agreement (this “Amendment”) is made and entered into on
this 7th day of February, 2011, by and between Katy Resources ETX, LLC, a Delaware limited
liability company (“Seller”), and Sun River Energy, Inc., a Colorado corporation (“Purchaser”).
WHEREAS, Purchaser and Seller are parties to that certain Purchase and Sale Agreement dated
October 19, 2010 (the “Agreement”).
WHEREAS, the parties hereto desire to amend and supplement the Agreement as set forth herein.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Agreement, except where the context otherwise requires.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
AMENDED PROVISIONS
1.1 Restatement of Section 2.1(a). Section 2.1(a) of the Agreement is hereby amended
and restated in its entirety to read as follows:
The purchase price for the Assets (the “Purchase Price”) shall consist of (i) One Million
and No/00 Dollars ($1,000,000.00) (the “Cash Consideration”), (ii) an amount of Purchaser
Common Stock equal to the Share Amount to be issued by Purchaser to Seller (the “Stock
Consideration”), which as of the date of this Agreement is deemed to have an aggregate value
of $3,500,000 and (iii) the Promissory Note issued by Purchaser to Seller; provided,
however, that the Cash Consideration and Stock Consideration portions of the Purchase Price
shall be adjusted as provided in Sections 2.2 and 2.3 (the “Adjusted Purchase Price”).
1.2 Restatement of 2.1(b)(ii). Section 2.1(b)(ii) of the Agreement is hereby amended
and restated in its entirety to read as follows:
| “Share Amount” means 1,583,710 shares of Purchaser Common Stock. |
1.3 Additional Definitions. The following definitions are hereby added to Article 13
of the Agreement for all purposes:
“Deed of Trust” means that certain DEED OF TRUST, MORTGAGE, SECURITY AGREEMENT, FINANCING
STATEMENT AND ASSIGNMENT OF PRODUCTION AND REVENUES in the form attached hereto as Exhibit
D.
“Promissory Note” means that certain promissory note in the principal amount of $4,000,000
issued by Purchaser to Seller in the form attached hereto as Exhibit E.
1
“UCC Financing Statement” means that certain UCC1 financing statement in the form attached
hereto as Exhibit F.
1.4 Additional Exhibits. Exhibits D, E and F attached hereto are hereby attached to
and incorporated into the Agreement for all purposes as Exhibit D, Exhibit E and Exhibit F,
respectively.
1.5 Section 7.16. The following provision is hereby inserted as 7.16 to the Agreement
immediately after Section 7.15 of the Agreement:
Purchaser shall perform, observe and comply with all of the covenants and obligations of
Purchaser under the Deeds of Trust and Promissory Note in accordance with their terms.
1.6 Restatement of Section 9.1(a). Section 9.1(a) of the Agreement is hereby amended
and restated in its entirety to read as follows:
Consummation of the purchase and sale transaction as contemplated by this Agreement (the
“Closing”), shall, unless otherwise agreed to in writing by Purchaser and Seller, take place
at the offices of DLA Piper LLP (US) at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx,
at 10:00 a.m., local time, on (i) February 7, 2011 or (ii) if all conditions in Article 8 to
be satisfied prior to Closing have not yet been satisfied or waived, as soon thereafter as
such conditions have been satisfied or waived, subject to the rights of the parties under
Article 10.
1.7 Section 9.3(g). The following provision is hereby inserted as Section 9.3(g) to
the Agreement immediately after Section 9.3(f) of the Agreement:
(g) a counterpart of the Promissory Note and Deed of Trust duly executed by Purchaser, and a
copy the UCC Financing Statement which may be filed by Seller.
1.8 Preliminary Settlement Statement. Seller and Purchaser agree that the preliminary
settlement statement to be delivered pursuant to Section 9.4(a) of the Agreement is attached hereto
as Exhibit A.
ARTICLE II
REGISTRATION RIGHTS
2.1 Piggyback Registrations. If at any time the Purchaser proposes to register
(including for this purpose a registration effected by the Purchaser for stockholders) any of its
securities under the Securities Act (other than pursuant to a registration solely in connection
with an employee benefit, stock ownership plan or similar plan) and the registration form to be
used may be used for the registration of the common stock of Purchaser (the “Registrable
Securities”) (a “Piggyback Registration”), the Purchaser shall give prompt written notice to the
Seller of its intention to effect such a registration (each, a “Piggyback Notice”). Subject to
Sections 2.1.1 and 2.1.2 of this Amendment below, the Purchaser shall include in such registration
all shares of Registrable Securities that Seller requests the Purchaser to include in such
registration by written notice given to the Purchaser within 30 days after the date of sending of
the Piggyback Notice. The Purchaser shall have the right to terminate or withdraw any registration
initiated by it under this Section 2.1 of this
Amendment prior to the effectiveness of such registration whether or not Seller has elected to
include Registrable Securities in such registration.
2.1.1 If a Piggyback Registration relates to an underwritten public offering of equity
securities by the Purchaser and the representative of the underwriters advises the Purchaser
in writing that in its opinion marketing or other factors require (i.e., because the
marketing, pricing or other results could be adversely affected) a limitation of the number
of securities to be included in the Piggyback Registration, the Purchaser shall include in
such registration (i) first, the securities proposed to be sold by the Purchaser, (ii)
second, the Registrable Securities requested to be included in such registration by Seller
(provided that, notwithstanding subsection (i) above, Seller shall be allowed to include in
such registration the lesser of the following: (A) the total number of Registrable
Securities or (B) a number of Registrable Securities equal to 10% of the total number of
shares to be included in such registration), and (iii) third, other securities requested to
be included in such registration.
2.1.2 If a Piggyback Registration relates to an underwritten public offering of equity
securities by holders of the Purchaser’s securities and the representative of the
underwriters advises the Purchaser in writing that in its opinion marketing or other factors
require (i.e., because the marketing, pricing or other results could be adversely affected)
a limitation of the number of securities to be included in the Piggyback Registration, the
Purchaser shall include in such registration (i) first, the securities requested to be
included in such registration by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration by Seller (provided
that, notwithstanding subsection (i) above, Seller shall be allowed to include in such
registration the lesser of the following: (A) the total number of Registrable Securities or
(B) a number of Registrable Securities equal to 10% of the total number of shares to be
included in such registration), and (iii) third, other securities requested to be included
in such registration.
2.1.3 The Purchaser shall not be required to include any of the Seller’s securities in
such registration unless they accept the terms of the underwriting as agreed upon between
the Purchaser and its underwriters, and then, subject to Sections 2.1.1 and 2.1.2, only in
such quantity as the underwriters determine in their sole discretion will not jeopardize the
success of the offering by the Purchaser; provided, that Seller shall not be required to
make any representations or warranties to the Purchaser or the underwriters other than
representations and warranties regarding Seller and Seller’s intended method of distribution
and other representations and warranties customarily made by sellers as determined by the
underwriters. Seller shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected by the Purchaser for such underwriting; provided, that
Seller shall not be required to make any representations or warranties to the Purchaser or
the underwriters other than representations and warranties regarding Seller and Seller’s
intended method of distribution and other representations and warranties customarily made by
sellers as determined by the underwriters.
2.2 Registration Procedures. Whenever required to effect the registration of any
Registrable Securities under this Agreement, the Purchaser shall, as expeditiously as reasonably
possible:
2.2.1 Prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use all reasonable efforts to cause such registration statement
to become effective; provided, that before filing a registration statement or prospectus or
any amendments or supplements to a registration statement or prospectus, the Purchaser shall
furnish to counsel selected by the Seller copies of all such documents proposed to be filed.
2.2.2 Cause all such Registrable Securities registered pursuant to such registration
statement to be listed on each securities exchange or trading or quotation system on which
similar securities issued by the Purchaser are then listed.
2.2.3 Provide a transfer agent and registrar for all Registrable Securities registered
pursuant to such registration statement and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.
2.2.4 If any such registration or comparable statement refers to Seller by name or
otherwise as the holder of any securities of the Purchaser and if, in the sole and exclusive
judgment of Seller, Seller is or might be deemed to be a controlling Person of the
Purchaser, Seller shall have the right to require (i) the inclusion in such registration
statement of language, in form and substance reasonably satisfactory to Seller and
Purchaser, to the effect that the holding of such securities by Seller is not to be
construed as a recommendation by Seller of the investment quality of the Purchaser’s
securities covered by such registration statement and that such holding does not imply that
Seller shall assist in meeting any future financial requirements of the Purchaser or (ii) in
the event that such reference to Seller by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion of the reference
to Seller; provided, that with respect to this clause (ii) Seller shall furnish to the
Purchaser an opinion of counsel to such effect, which opinion of counsel shall be reasonably
satisfactory to the Purchaser.
2.2.5 Expenses of Registration. All expenses incurred in effecting any
registration pursuant to this Amendment incurred in connection with any registration,
qualification, or compliance pursuant to Sections 2.1 or 2.2 of this Amendment (including
without limitation Seller’s attorney’s fees) shall be borne by the Purchaser, provided that
all underwriting discounts, selling commissions, and stock transfer taxes relating to
securities so registered shall be borne by Seller on a pro rata basis based of the number of
shares of securities so registered on their behalf, as shall any other expenses in
connection with the registration required to be borne by the holders of such securities.
2.3 Indemnification by Purchaser. If any Registrable Securities are included in a
registration statement under this Article II, to the extent permitted by law, the Purchaser shall
indemnify and hold harmless Seller, the partners, managers, officers, and directors of Seller, any
underwriter (as defined in the Securities Act) for Seller, and each Person, if any, who controls
Seller or underwriter within the meaning of the Securities Act or the Exchange Act, against any
Damages insofar as such Damages arise out of or are based upon any of the following:
2.3.1 any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final prospectus
contained in such registration statement;
2.3.2 the omission or alleged omission to state in any such registration statement a
material fact required to be stated or necessary to make the statements in such registration
statement not misleading; or
2.3.3 any violation or alleged violation by the Purchaser of the Securities Act, the
Exchange Act, any federal or state securities law, or any rule or regulation promulgated
under the Securities Act, the Exchange Act, or any federal or state securities law in
connection with the offering covered by such registration statement.
and the Purchaser shall reimburse Seller, or Seller partner, officer, director, underwiter or
controlling Person for any legal or other expenses reasonably incurred by them, as incurred, in
connection with investigating or defending any such loss, claim, damage, liability or action;
provided that the indemnity agreement contained in this Section 2.3 shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Purchaser (which consent shall not be
unreasonably withheld), nor shall the Purchaser be liable in any such case for any such loss,
claim, damage, liability, or action to the extent (and only to the extent) that it arises out of or
is based upon one of the indemnifiable events listed in Sections 2.3.1-2.3.3 which occurs in
reliance upon and in conformity with written information furnished expressly for use in connection
with such registration by such Seller, partner, manager, officer, director, underwriter, or
controlling Person of Seller.
2.4 Indemnification by Seller. To the extent permitted by law, Seller shall indemnify
and hold harmless the Purchaser, each of its directors, each of its officers who have signed the
registration statement, each Person, if any, who controls the Purchaser within the meaning of the
Securities Act and any underwriter, against any Damages to which the Purchaser or any such
director, officer, controlling Person, underwriter, or other such holder, partner, director,
officer, or controlling Person of such other holder may become subject under the Securities Act,
the Exchange Act, or other federal or state law, insofar as such Damages (or actions in respect to
such Damages) arise out of or are based upon one of the indemnifiable events listed in Sections
2.3.1-2.3.3, in each case to the extent (and only to the extent) that such event occurs in reliance
upon and in conformity with written information furnished by Seller expressly for use in connection
with such registration; and Seller shall reimburse any legal or other expenses reasonably incurred
by the Purchaser or any such director, officer, controlling Person or underwriter in connection
with investigating or defending any such Damage; provided that the indemnity agreement contained in
this Section 2.3.2 shall not apply to amounts paid in settlement of any such Damage if such
settlement is effected without the consent of Seller, which consent shall not be unreasonably
withheld, nor shall the total amounts payable in indemnity by Seller under this paragraph in
respect of any indemnifiable event exceed the net proceeds received by Seller in the registered
offering out of which such event arises.
2.5 Notice. Promptly after receipt by an indemnified party under Section 2.3 or 2.4
of notice of the commencement of any action (including any governmental action), such indemnified
party shall, if a claim in respect of such action is to be made against any indemnifying party
under Section 2.3 or 2.4, as applicable, deliver to the indemnifying party a written notice of the
commencement of such action and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense of such action with counsel mutually satisfactory to the
parties; provided that an indemnified party shall have the right to retain its own counsel (limited
to one counsel for the Holders, unless due to an actual or potential conflict of interest among the
Holders),
with the fees and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential conflict of interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such action, if prejudicial
to the indemnifying party’s ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under Section 2.3 or 2.4, as applicable (but only to the
extent of such prejudice), but the omission so to deliver written notice to the indemnifying party
shall not relieve the indemnifying party of any liability that it may have to any indemnified party
otherwise than under Section 2.3 or 2.4, as applicable.
2.6 Contribution. In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (1) Seller exercising rights under
this Agreement, or any controlling Person of Seller, makes a claim for indemnification pursuant to
Section 2.3 but it is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of the last right of
appeal) that such indemnification may not be enforced in such case notwithstanding the fact that
Section 2.3 provides for indemnification in such case or (2) contribution under the Securities Act
may be required on the part of Seller or any such controlling Person in circumstances for which
indemnification is provided under Section 2.3 or 2.4, as applicable, then, and in each such case,
the Purchaser and Seller shall contribute to the aggregate losses, claims, damages, or liabilities
to which they may be subject (after contribution from others) in such proportion as is appropriate
to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified
party, on the other hand, in connection with the act or omission that resulted in such losses,
claims, damages, or liabilities, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be determined by a
court of law by reference to, among other things, whether the untrue or alleged untrue statement of
a material fact or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, number
of securities, access to information and opportunity to correct or prevent such statement or
omission; provided, that (A) in no event shall any contribution by Seller hereunder exceed the net
proceeds from the offering received by Seller and (B) no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation.
2.7 Furnish Information. It shall be a condition precedent to the obligations of the
Purchaser to take any action pursuant to Article II that the Seller shall furnish to the Purchaser
such information regarding itself, the Registrable Securities held by it, and the intended method
of disposition of such securities as shall be requested by the Purchaser in connection with the
registration of their Registrable Securities.
2.8 Delay of Registration. Seller shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this Article II.
2.9 Survival. Unless otherwise superseded by an underwriting agreement entered into
in connection with any underwritten public offering, the obligations of the Purchaser and Seller
under Article II shall survive the completion of any offering of Registrable Securities in a
registration
statement and shall survive the termination of the Agreement (as amended and supplemented by
this Amendment).
2.10 Termination of the Purchaser’s Obligations. The Purchaser shall have no
obligations pursuant to Article II with respect to any Registrable Securities proposed to be sold
by Seller in a Piggyback Registration if, in the opinion of counsel to the Purchaser, all such
Registrable Securities proposed to be sold by Seller may be sold without registration under the
Securities Act pursuant to Rule 144 promulgated under the Securities Act.
ARTICLE III
MISCELLANEOUS
3.1 No Further Amendments. Except as amended or supplemented by this Amendment, the
Agreement shall remain in full force and effect in accordance with its terms.
3.2 Limitation on Agreements. The modifications set forth in this Amendment are
limited precisely as written and shall not be deemed (a) to be a consent under or a waiver of or an
amendment to any other term or condition in the Agreement, or (b) to prejudice any right or rights
which the parties now have or may have in the future under or in connection with the Agreement, as
amended hereby, or any of the other documents referred to herein or therein.
3.3 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF THE
LAW OF ANOTHER JURISDICTION. THE VENUE FOR ANY ACTION BROUGHT UNDER THIS AGREEMENT SHALL BE XXXXXX
COUNTY, TEXAS.
3.4 Assignment. No party shall assign all or any part of this Agreement, nor shall
any party assign or delegate any of its rights or duties hereunder, without the prior written
consent of the other party and any assignment or delegation made without such consent shall be
void.
3.5 Entire Agreement; Amendments. This Amendment, the Agreement (as amended hereby)
and the documents to be executed hereunder and thereunder and the Exhibits and Schedules attached
hereto and thereto constitute the entire agreement between the parties pertaining to the subject
matter hereof, and supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties pertaining to the subject matter hereof. This Amendment
may be amended or modified only by an agreement in writing executed by both parties.
3.6 Waivers. Any failure by any party or parties to comply with any of its or their
obligations, agreements or conditions herein contained may be waived in writing, but not in any
other manner, by the party or parties to whom such compliance is owed. No waiver of, or consent to
a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver
of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
3.7 Severability. If a court of competent jurisdiction determines that any clause or
provision of this Amendment is void, illegal, or unenforceable, the other clauses and provisions of
the Amendment shall remain in full force and effect and the clauses and provisions which are
determined to be void, illegal, or unenforceable shall be limited so that they shall remain in
effect to the maximum extent permissible by law.
3.8 Headings. The headings of the Articles and Sections of this Amendment are for guidance and convenience of
reference only and shall not limit or otherwise affect any of the terms or provisions of this
Amendment.
3.9 Counterparts. This Amendment may be executed by Purchaser and Seller in any number of counterparts, each of
which shall be deemed an original instrument, but all of which together shall constitute but one
and the same instrument.
3.10 Expenses, Fees and Taxes. Each of the parties hereto shall pay its own fees and
expenses incident to the negotiation and preparation of this Amendment and consummation of the
transactions contemplated hereby. Purchaser shall be responsible for the cost of all fees for the
recording and filing of the Deed of Trust and UCC Financing Statement. All other costs shall be
borne by the party incurring them.
3.11 Venue; Waiver of Jury Trial. Each party consents to personal jurisdiction in any action brought in the state or United States
federal courts located within Xxxxxx County, Texas with respect to any dispute, claim or
controversy arising out of or in relation to or in connection with this Amendment, and each of the
parties hereto agrees that any action instituted by it against the other with respect to any such
dispute, controversy or claim will be instituted exclusively in the United States District Court
for the Southern District of Texas, Houston Division or in the state courts in Xxxxxx, County,
Texas. The parties hereby waive trial by jury in any action, proceeding or counterclaim brought by
any party against another in any matter whatsoever arising out of or in relation to or in
connection with this Amendment.
[Signature Page Follows]
Executed as of the date set forth above.
| PURCHASER | ||||||
| SUN RIVER ENERGY, INC. | ||||||
| By: Name: |
/s/ Xxxxx X. Xxxxxxx, Xx.
|
|||||
| Title: | President and CEO | |||||
| SELLER | ||||||
| KATY RESOURCES ETX, LLC | ||||||
| By: Name: |
/s/ Xxxxxxx X. Xxxxx
|
|||||
| Title: | Manager | |||||
Signature Page to First Amendment to Purchase and Sale Agreement
EXHIBIT A
PRELIMINARY SETTLEMENT STATEMENT
EXHIBIT D
FORM OF DEED OF TRUST
EXHIBIT E
FORM OF PROMISSORY NOTE
EXHIBIT F
FORM OF UCC FINANCING STATEMENT
