ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement"), dated as of September ___, 2006
between Nova Leasing, LLC ("Seller"), and Sun River Energy, Inc., a Colorado
Corporation ("Buyer")
RECITALS:
WHEREAS, Seller holds certain mineral lease interests listed on Exhibit
A for the exploration of minerals in Wyoming ("Assets") hereafter;
WHEREAS, Seller desires to convey such assets to Buyer subject to
certain conditions, and Buyer desires to acquire such assets, upon the terms and
subject to the conditions herein set forth; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Seller and Buyer agree as follows:
ARTICLE 1
TERMS OF TRANSACTION
1.1 Assets to be Transferred. At the Closing, and on the terms and
subject of the conditions set forth in this Agreement, Seller
shall sell, assign, transfer, deliver and convey to Buyer, and
Buyer shall purchase from Seller, the assets listed on Exhibit
A.
1.2 Purchase Price and Payment. In consideration of the transfer
by Seller to Buyer of the assets, Buyer shall provide to
Seller the consideration as follows: $6,600,000; $3,300,000 in
the form of a Promissory Note bearing interest at 7.5%, due in
three payments: $1,100,000 March 15, 2007 at closing,
$1,100,000 by November 30, 2007 and $1,100,000 by November 30,
2008, notes to be secured by assets listed on Exhibit A, and
880,000 shares of restricted common stock of Buyer with
registration rights to be distributed pro-rata to holders of
interests in Seller.
ARTICLE 2
CLOSING
2.1 Closing; Closing Date. The closing of the transactions
contemplated hereby (the "Closing") shall occur on or before
October 15, 2006
At the Closing, each of the parties hereto shall make the following
deliveries or such deliveries in substitution therefore as are satisfactory to
the indicated recipient:
2.2 Deliveries by Seller.
(1) Seller shall deliver to Buyer: Assignment of Leases to the assets as is
appropriate.
(2) The assignments shall contain reverter clauses in the event of non
exploration and development as contained on Exhibit B hereto.
2.3 Deliveries by Buyer.
(1) Buyer shall issue a Promissory Note payable to Seller in the amount of
$3,300,00 as required herein and a Mortgage, Security and Pledge Agreement
and UCC - 1 securing the note against the assets assigned and held by
Buyer.
ARTICLE 3
WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.l Authority Relative to this Agreement. Seller has full power and authority
to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
3.2 Title to Assets. Seller is the owner of, and has good and indefeasible
title to the fee minerals and valid leases on the mineral leases.
3.3 Seller's. Seller has no knowledge of any facts or circumstances the
existence or absence of which are reasonably likely to cause assets to be
valueless.
3.4 The assets will be delivered free and clear of liens and encumbrances
except those required in this contract.
ARTICLE 4
ADDITIONAL AGREEMENTS & WARRANTIES OF BUYER
4.1 Buyer agrees to the terms of Reverter Clauses as listed on Exhibit B.
4.2 Fees and expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses, including fees and expenses of counsel,
financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fee or expense.
ARTICLE 5
TERMINATION
5.1 Termination. This Agreement may be terminated and the transaction
contemplated hereby abandoned at any time prior to the Closing in the
following manner:
(a) by Seller, if Buyer shall have failed to fulfill in any material respect
any of its material obligations under this Agreement; or
(b) by Buyer, if Seller shall have failed to fulfill in an material respect any
of its material obligations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement, or caused this
Agreement to be executed by their duly authorized representatives, all as of the
day and year first above written.
SELLER:
Nova Leasing, LLC
By: __________________________________
Title:_________________________________
Date: _________________________________
BUYER:
Sun River Energy, Inc.
By: ___________________________________
Title: __________________________________
Date: __________________________________
EXHIBIT A
A conditional assignment of 80% NRI in and to the following described
mineral leases (and seller shall receive and retain a 15% carried working
interest in the xxxxx through completion.):
(to be inserted)
Condition subject to a drilling and development commitment as follows:
At least 4 xxxxx shall be drilled on or before _______________________,
or all undrilled acreage (each well holds 160 acres) shall revert to Seller.
Thereafter at least 8 xxxxx per year shall be drilled on the acreage in order to
continue to hold.
The leases for which the assignment is made, have specific limitations,
and the assignment is made subject to those limitations.
