Purchase and Sale Agreement between PRB Energy, inc and Arête Industries, Inc.. Effective: September 1, 2006 PURCHASE AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY, INC. EFFECTIVE SEPTEMBER 1, 2006
Exhibit
10.1
between
PRB
Energy, inc
“Seller”
and
Arête Industries,
Inc..
“Buyer”
Effective:
September 1, 2006
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
This
Purchase and Sale Agreement (the “Agreement”)
entered into this 1st day of September, 2006, is the agreement between PRB
Energy, Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the
"Seller")
and
Arête Industries, Inc., 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000 (the
“Buyer”)
concerning the sale and purchase of certain coal bed methane gas gathering
pipeline and compressor station-related assets described below. For purposes
of
this Agreement, the effective date of the purchase and sale shall be 12:01
a.m.
Mountain Time on September 1, 2006 (the “Effective
Date”).
Seller and Buyer shall close the transaction contemplated by this Agreement
on
or before September 13, 2006, (the “Closing
Date”.)
RECITALS:
A. Buyer
and
Seller desire to enter into an agreement whereby the Seller seeks to sell and
the Buyer seeks to buy the coal bed methane gas gathering pipeline and
compressor station-related assets currently associated with the TOP Gathering
System in Xxxxxxxx County, Wyoming (hereinafter referred to as the "TOP");
and
B. Buyer
and
Seller desire to enter into this Agreement to complete said
transaction.
Now
therefore, in consideration of the mutual agreements and covenants contained
herein, Buyer and Seller agree as follows:
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1.
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Purchase
and Sale of Assets.
Subject to the terms, conditions and exclusions of this Agreement,
Seller
agrees to sell and Buyer agrees to purchase Seller’s right, title and
interest in and to "TOP" located in Xxxxxxxx County, Wyoming as depicted
on Exhibit A
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| 12. |
a.Real
Property.
All easements, rights of way, permits, licenses, prescriptive rights
structures or other interests in real property associated with or
relating
to the Assets as listed on Exhibit
A-1;
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| 13. |
x.Xxxxxxxxx.
All pipelines, equipment, valves, vessels, fittings, meters or other
measurement facilities, operational and control equipment, pig launchers,
pig catchers, tanks and all other personal property, as depicted
on
Exhibit A (one
dehydration unit & one ecology pot currently on site are excluded from
the purchase and sale) ;
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| 14. |
c.Contracts
et al. All contracts and agreements relating to the use of the assets,
as
depicted on Exhibit A-1;
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d.
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Other
Interests in the Assets.
All other rights, titles and interests in and to the Assets as described
above are part of the Assets, it being the purpose and intent of
this
Agreement that Seller sell and Buyer purchase all of Seller’s right, title
and interest in and to the
Assets.
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2
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
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2.
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Purchase
Price.
In consideration of the conveyance of the Assets, upon execution
of this
Agreement, Buyer shall pay to Seller the sum of Three Hundred and
Thirty
Thousand Dollars and no cents ($330,000.00) (the “Purchase
Price”)
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3.
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Seller's
Representations and Warranties.
Seller represents and warrants, to the best of its knowledge, the
following to Buyer as of the Closing
Date:
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a.
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Preferential
Rights to Purchase.
No third party holds any preferential right to purchase, right of
first
offer, right of last refusal or other preferential right to purchase
the
Assets.
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b.
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Signatory
for Seller.
The signatory for Seller has the full power and authority to bind
the
Seller to the terms hereof, and to complete the sale contemplated
hereby.
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c.
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Agreement
Represents.
This Agreement represents the valid and subsisting agreement of Seller,
fully binding upon Seller and subject only to general principles
of equity
and bankruptcy laws.
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d.
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No
Abandonment.
Seller has taken no actions that demonstrate an intent to abandon
the
Assets, or released of record any rights of way pertaining to the
Assets.
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e.
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Fees.
Seller has incurred no liability, contingent or otherwise, for broker's
or
finder's fees in respect to this transaction for which Buyer shall
have
any responsibility whatsoever.
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4.
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Buyer's
Representations and Warranties.
Buyer represents and warrants, to the best of Buyer’s knowledge, the
following to Seller as of the Closing
Date:
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a.
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Consents
and Approvals.
No
consent, approval, authorization, license, order or permit, or
declaration, filing or registration with, or notification to any
governmental authority or any other person, is required to be obtained
by
the Buyer in connection with the execution and delivery of this Agreement
by the Buyer or the performance of the Buyer's obligations
hereunder;
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b.
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Fees.
Buyer has not incurred any liability, contingent or otherwise, for
brokers' or finders' fees relating to the transactions contemplated
by
this Agreement for which Seller shall have any responsibility
whatsoever;
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| 1. |
c.Restoration.
Buyer has the sole responsibility to determine the necessary measures
and
to perform all necessary restoration of the
Assets.
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5.
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WARRANTY.
BUYER ACKNOWLEDGES AND AGREES THAT THE ASSETS LISTED IN EXHIBITS
A, A-1
AND B ARE BEING TRANSFERRED, ASSIGNED AND CONVEYED FROM SELLER TO
BUYER
"AS IS, WHERE IS AND WITH ALL FAULTS" IN THEIR PRESENT CONDITION
AND STATE
OF REPAIR. SELLER HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS AND
WARRANTIES
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3
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
CONCERNING
THE ASSETS, EXPRESS OR IMPLIED, WHETHER ARISING IN CONTRACT, TORT OR ANY OTHER
THEORY OF LAW, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE,
MERCHANTABILITY OR FITNESS FOR A GENERAL OR PARTICULAR PURPOSE. FURTHER, BUYER
SPECIFICALLY AGREES THAT SELLER IS MAKING NO REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, AS TO THE ADEQUACY OR COMPLETENESS OF THE UNDERLYING REAL
PROPERTY INTERESTS ASSOCIATED WITH OR USED IN CONNECTION WITH THE ASSETS,
INCLUDING BUT NOT LIMITED TO EASEMENTS AND RIGHTS OF WAY.
6. Indemnification.
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a.
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By
Seller.
Seller agrees to indemnify, defend and hold Buyer harmless on account
of
all debts, liabilities or causes of action attributable to Buyer’s
ownership of the property and to transactions applicable to the Contracts
which accrued prior to the date of Closing except as otherwise set
forth
below; and
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b.
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By
Buyer.
Buyer agrees to indemnify, defend and hold Seller harmless on account
of
all debts, liabilities or causes of action attributable to Seller’s
ownership of the property and to transactions applicable to the Contracts
which accrued after to the date of
Closing.
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c.
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All
indemnities of or by the parties under this Agreement shall survive
the
Closing Date hereof.
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7.
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Conveyance
Documents.
At Closing, Seller shall execute and deliver an Assignment, Conveyance,
and Xxxx of Sale in the form of which is attached as Exhibit
B.
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8.
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Conditions
to Closing - Seller.
The Seller’s obligations at Closing are subject, at Seller’s option, to
the satisfaction at or prior to the Closing Date of the following
conditions precedent:
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a.
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All
representations and warranties of Buyer contained in Paragraph 4
of this
Agreement shall be true and correct in all material respects, and
Buyer
shall have performed and satisfied all covenants and agreements required
by this Agreement to be performed and satisfied by Buyer at or prior
to
the Closing Date in all material
respects;
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| 2. |
b.Buyer
shall have executed and delivered to Seller all of the documents
that are
contemplated to be executed and delivered pursuant to this Agreement
prior
to or at the Closing Date.
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9.
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Conditions
to Closing - Buyer.
The Buyer’s obligations at Closing are subject, at Buyer’s option, to the
satisfaction at or prior to the Closing Date of the following conditions
precedent:
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a.
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All
representations and warranties of Seller contained in Paragraph 3
of this
Agreement shall be true and correct in all material respects, and
Seller
shall have performed and
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4
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
satisfied
all covenants and agreements required by this Agreement to be performed and
satisfied by Seller at or prior to the Closing Date in all material
respects;
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b.
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Seller
shall have executed and delivered to Buyer all of the documents that
are
contemplated to be executed and delivered pursuant to this Agreement
prior
to or at the Closing Date.
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10. Termination.
This
Agreement may be terminated in accordance with the following
provisions:
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a.
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By
Seller if the conditions set forth in Paragraph 8 are not satisfied,
through no fault of the Seller, or waived by Seller in writing, as
of the
Closing Date; or
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b.
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By
Buyer if the conditions set forth in Paragraph 9 are not satisfied,
through no fault of the Buyer, or waived by Buyer in writing, as
of the
Closing Date.
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11.
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Confidentiality.
Unless required by applicable law, rules or regulations, neither
party
hereto shall make a public announcement or communication to any third
party concerning this Agreement or the transactions contemplated
hereby
without the express written consent of the other party. Notwithstanding
any of the foregoing, Buyer and Seller shall be permitted to communicate
as deemed necessary in its sole discretion regarding change of ownership
of Property.
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12.
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Entire
Agreement.
This Agreement, together with Exhibits “A”, “A-1” and “B” attached hereto
and data delivered hereunder, shall constitute the complete agreement
between the parties hereto and shall supersede all prior agreements,
whether written or oral, and any representations or conversations
with
respect to the purchase and sale of the Assets.
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13.
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Binding
Effect.
This Agreement shall be binding upon and shall inure to the benefit
of the
parties hereto, and their successors and assigns. This Agreement
may be
assigned to a party’s parent, subsidiary, member or affiliate without the
consent of the other party provided notice of such assignment is
provided
to the other party. No other assignment by either party shall be
made
without the express written consent of the other party, which shall
not be
unreasonably withheld.
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14.
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Counterparts.
This Agreement may be executed in any number of counterparts each
of which
shall be considered an original and each of which shall be an enforceable
agreement.
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15.
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Law
Applicable.
This Agreement shall be governed by and construed in accordance with
the
laws of the State of Wyoming applicable to contracts made and performed
entirely therein.
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16.
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Joint
Draft.
This Agreement was drafted and prepared by Seller and Buyer with
each
party having access to their own legal counsel. Seller and Buyer
each
waive any position or claim that it may now have or may have in the
future
based on the argument that the Agreement was drafted by only one
of the
parties and not jointly prepared by Seller and
Buyer.
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5
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
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17.
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Severability:
Each and every provision of this Agreement is intended to be severable.
If
any term or provision is held to be invalid or illegal for any reason
whatsoever, all other conditions and provisions of this Agreement
shall
nevertheless remain in full force and effect so long as the economic
or
legal substance contemplated by this transaction is not affected
in a
materially adverse manner with respect to either
party.
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18.
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Mediation:
No civil action with respect to any dispute, claim or controversy
arising
out of or relating to this Agreement may be commenced until the matter
has
been submitted to a mediator for mediation. Either Party may commence
mediation by providing to the other party a written request for mediation,
setting forth the subject of the dispute, claim or controversy and
the
relief requested. It is hereby agreed that the Parties, upon occasion
that
such a notice is delivered, shall endeavor for a period of thirty
(30)
days to reach an accord on the disputed matter prior to going to
formal
mediation. Should the Parties fail to reach such an accord, the Parties
agree to cooperate and act in good faith in the selection of a mutually
agreed to mediator and in scheduling the mediation proceedings. The
Parties further covenant that they will participate in the mediation
in
good faith, and that they will share equally in its costs. All offers,
promises, conduct and statements, whether oral or written, made in
the
course of the mediation by any of the Parties, their agents, attorneys,
employees, or experts, and by the mediator and the mediator’s employees,
are confidential, privileged and inadmissible for any purposes, including
impeachment, in any litigation or other proceeding involving the
parties,
provided that evidence that is otherwise admissible or discoverable
shall
not be rendered inadmissible non-discoverable as a result of its
use in
the mediation. Either Party may seek equitable relief prior to the
mediation to preserve the status quo pending completion of the mediation
process. Except for an action to obtain equitable relief, neither
party
may commence a civil action with respect to the matters submitted
to
mediation until after the completion of the initial mediation session,
or
45 days after the date of filing of the written request for mediation,
whichever occurs first. Mediation may continue after the commencement
of a
civil action, if the Parties so desire. The provisions of this clause
may
be enforced by any Court of competent jurisdiction in the State of
Wyoming, and the Party seeking enforcement shall be entitled to an
award
of all costs, fees and expenses, including attorneys’ fees, to be paid by
the Party against whom the enforcement is
ordered.
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19.
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Attorney's
Fees.
The prevailing party in any dispute hereunder shall be entitled to
recover
its reasonable attorneys' fees and costs. In addition, should either
party
decline to complete the closing and associated transaction, the declining
party shall pay all attorney's fees and costs of the party seeking
to
close the transaction.
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20.
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Waivers.
No party’s rights hereunder will be deemed waived except by a writing
signed by such party.
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21.
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Incorporation
of Exhibits.
All exhibits and schedules referred to herein are attached hereto
and are
made a part hereof by this reference. This Agreement shall be the
controlling document to the extent there is any conflict between
the
language of this Agreement and any of the
exhibits.
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22.
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Survival.
Except as otherwise provided herein, the representations and warranties
contained in
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6
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
this
Agreement shall not survive the closing.
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23.
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Further
Assurances and Agreements.
Seller and Buyer each agree that it will take such further or other
action(s) and to execute or deliver such other documents necessary
to
carry out the purposes and intent of this Agreement or any document
delivered pursuant to this
Agreement.
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IN
WITNESS WHEREOF, the Parties to this Agreement have executed this Agreement
as
of the Effective Date first above written.
ARETE
INDUSTRIES, INC.
By:
/s/
Xxxxxxx Xxxxxx
Name: Xxxxxxx
Xxxxxx
Title: CEO/President
PRB
ENERGY, INC.
By
:
/s/
Xxxx Xxxxxxxx
Name: Xxxx
Xxxxxxxx
Title: President
7
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
EXHIBIT
A
ATTACHED
TO AND MADE A PART OF THAT CERTAIN
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN
ARETE
INDUSTRIES, INC. and PRB ENERGY, INC.
DESCRIPTION
OF ASSETS
Pipelines
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·
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4.5
Miles 8” coated steel pipe, hydro-tested, welds x-rayed and cathodically
protected
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·
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Pig
launcher/receiver
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Interconnect
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·
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Building
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·
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Slug
catcher
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·
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Level
Controller/Scrubber pot
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·
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400
BBL Tank
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·
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Pig
launcher/receiver
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Buff
Station
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·
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Inlet
Separator
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·
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Separator
flash tanks (2)
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·
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400
BBL Tank
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·
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Various
Piping and various valves - heat traced and
insulated
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·
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Emergency
shut down system - fire eyes (4), gas detectors
(4)
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·
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Meter
houses (3) - Xxxxxx Chart meter, Total Flow
Meters
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·
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Oxygen
analyzer
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·
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Suction
control valves (4)
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·
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Regulators
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·
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Buildings
(4)
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PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 2006
EXHIBIT
A-1
ATTACHED
TO AND MADE A PART OF THAT CERTAIN
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN
ARETE
INDUSTRIES, INC. and PRB ENERGY, INC.
Real
Property and Leasehold Interests
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·
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Compressor
Site Agreement by and between the WYO Xxxxx Family Limited Partnership
and
PRB Gas Transportation, Inc. successor to TOP Gathering LLC, dated
June 3,
2002
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·
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Pipeline
Right-of-Way Grant by and between Ohmans, Inc. a Wyoming Corporation
and
PRB Gas Transportation, Inc. successor to TOP Gathering LLC, dated
September26, 2001
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·
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Receipt
Point Site Lease by and between Ohmans, Inc., a Wyoming Corporation
and
PRB Gas Transportation, Inc. successor to TOP gathering, LLC dated
December 31, 2001
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·
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Gas
Compressor Equipment Master Rental Agreement by and between Universal
Compression and PRB Gas Transportation, Inc. successor to TOP Gathering
LLC, dated December 17, 2001
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Governmental
Authorizations
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·
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State
of Wyoming, Department of Environmental Quality Air Quality Permit
CT-2598, Buff Compressor Station, dated November 23, 2001 as modified
by
Permit No. MD-837, dated December 17,
2002
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Contracts
and Agreements
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·
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Gathering
Services Agreement by and between Bear Paw Energy, LLC and PRB Gas
Transportation, Inc. successor to TOP Gathering LLC, dated September
20,
2001
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·
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Gathering
Services Agreement by and between PRB Gas Transportation, Inc. successor
to TOP gathering LLC and United Energy Trading, dated July 18,
2002
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·
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Gathering
Services Agreement by and between PRB Gas Transportation, Inc. successor
to TOP Gathering LLC and Natural Gas Fuel Company, Inc. dated October
15,
2001
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·
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Gathering
Services Agreement by and between PRB Gas Transportation, Inc. successor
to TOP Gathering LLC and Natural Gas Fuel Company, Inc. - Emerald
dated
July 18, 2002 (Expired)
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·
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Operating
Agreement of TOP Gathering LLC dated October 15, 2001
(Expired)
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·
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Contribution
Agreement dated October 15, 2001, by and among Xxxx Xxxxx, Knorstar
Energy, LLC, data management Consultants, Inc. and Crescent Holding,
LLC
(Expired)
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·
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Letter
Agreement dated June 12, 2002 by and between TOP Gathering LLC and
Global
Vision Solutions LLC for an internet based monitoring system
(Expired)
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EXHIBIT
B
ATTACHED
TO AND MADE A PART OF THAT CERTAIN
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN
ARETE
INDUSTRIES, INC. and PRB ENERGY, INC.
ASSIGNMENT,
CONVEYANCE, and XXXX OF SALE
| STATE OF WYOMING | ) | |
| ) | ||
| COUNTY OF XXXXXXXX | ) |
THIS
ASSIGNMENT, CONVEYANCE, AND XXXX OF SALE (the "Assignment") dated as of
September 13, 2006 is entered into between ARETE INDUSTRIES, INC. ("Assignee")
and PRB ENERGY, INC. ("Assignor").
WITNESSETH:
FOR
TEN
DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby GRANTS, CONVEYS,
QUITCLAIMS and ASSIGNS to Assignee all of Assignor's right, title and interest
in and to the following properties (real, personal, or mixed) and rights
(contractual or otherwise) unless expressly reserved or excluded herein:
together with all rights incident thereto as set forth in Exhibits A and A-1.
All properties, real, personal, or mixed and rights (contractual or otherwise)
included hereinabove are sometimes referred to hereinafter as the "Property"
or
"Properties".
TO
HAVE
AND TO HOLD the Properties subject to the following terms and
conditions:
1. The
terms, covenants, and conditions hereof bind and inure to the benefit of the
parties hereto and their respective successors and assigns. All future
conveyances of any portion of the Properties and/or their associated facilities
and equipment shall recognize and perpetuate the rights and obligations set
out
herein.
2. ASSIGNEE
ACKNOWLEDGES AND AGREES THAT THE ASSETS LISTED IN EXHIBITS A and A-1 ARE BEING
TRANSFERRED, ASSIGNED AND CONVEYED FROM ASSIGNOR TO ASSIGNEE "AS IS, WHERE
IS
AND WITH ALL FAULTS" IN THEIR PRESENT CONDITION AND STATE OF REPAIR. ASSIGNOR
HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES CONCERNING THE
ASSETS, EXPRESS OR IMPLIED, WHETHER ARISING IN CONTRACT, TORT OR ANY OTHER
THEORY OF LAW, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE,
MERCHANTABILITY OR FITNESS FOR A GENERAL OR PARTICULAR PURPOSE. FURTHER ASSIGNEE
SPECIFICALLY AGREES THAT ASSIGNOR IS MAKING NO REPRESENTATION OR WARRANTY,
EITHER EXPRESS OR IMPLIED, AS TO THE ADEQUACY OR COMPLETENESS OF THE UNDERLYING
REAL PROPERTY INTERESTS ASSOCIATED WITH OR USED IN CONNECTION WITH THE ASSETS,
INCLUDING BUT NOT LIMITED TO EASEMENTS AND RIGHTS OF WAY.
3. This
Assignment and its performance shall be construed in accordance with, and
governed by, the laws of the State of Wyoming without regard to the choice
of
law rules of any jurisdiction, and Assignor and Assignee submits to the
exclusive jurisdiction of State Courts located in Gillette, Xxxxxxxx County,
Wyoming.
EXECUTED
this 13th day of September, 2006.
ASSIGNOR:
PRB
Energy, Inc.
/s/
Xxxx Xxxxxxxx
Xxxx
Xxxxxxxx
President
ASSIGNEE:
Arête
Industries, Inc.
/s/
Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxx
CEO/President
PURCHASE
AND SALE AGREEMENT BY AND BETWEEN ARETE INDUSTRIES, INC. and PRB ENERGY,
INC.
EFFECTIVE
SEPTEMBER 1, 0000
| XXXXX XX XXXXXXXX | ) | |
| ) | ||
| COUNTY OF DENVER | ) |
The
foregoing instrument was acknowledged before me this 13 day of September, 2006,
by Xxxx Xxxxxxxx on behalf of PRB Energy, Inc.
Witness
my hand and official seal.
/s/
Xxxx X. McKinezy
Notary
Public
My
Commission Expires: 11/21/2009
| STATE OF COLORADO | ) | |
| ) | ||
| COUNTY OF DENVER | ) |
The
foregoing instrument was acknowledged before me this 13th day of September,
2006, by Xxxxxxx Xxxxxx on behalf of Arête Industries, Inc.
Witness
my hand and official seal.
/s/
Xxxx X. McKinezy
Notary
Public
My
Commission Expires: 11/29/2009
