EXHIBIT 10.2
SHARE ACQUISITION AGREEMENT BETWEEN PIONEER OIL, LLC
AND GALAXY ENERGY CORPORATION DATED DECEMBER 22, 2003
SHARE ACQUISITION AGREEMENT
THIS SHARE ACQUISITION AGREEMENT, made and entered into by and between PIONEER
OIL, LLC, a Montana Limited Liability Company ("PIONEER") and GALAXY ENERGY
CORPORATION, a Colorado corporation ("GALAXY");
WITNESSETH
WHEREAS, Dolphin Energy Corporation ("DOLPHIN") is a wholly owned
subsidiary of GALAXY;
WHEREAS, PIONEER of even date herewith has assigned certain leases and
coalbed methane xxxxx to DOLPHIN in accordance with an "Assignment of Oil and
Gas Lease and Coalbed Gas Methane Xxxxx," dated December 19, 2003 (the "Lease
Assignment");
WHEREAS, GALAXY, in consideration of the Leases Assignment by PIONEER
to DOLPHIN, has agreed to issue 2,000,000 shares of its Common Stock, $.001 par
value, (the "GALAXY STOCK") to PIONEER;
WHEREAS, GALAXY and PIONEER intend to enter into a Registration Rights
Agreement (the "REGISTRATION RIGHTS AGREEMENT"), of even date herewith, with
respect to the registration of the resale of 1,000,000 shares of the Common
Stock under the Securities Act of 1933 (the "ACT"); and
NOW, THEREFORE, the parties hereto, in consideration of the mutual
premises and covenants contained herein, agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK
1.1 DELIVERY OF COMMON STOCK.
At Closing GALAXY will issue or caused to be issued to PIONEER
2,000,000 shares of the GALAXY STOCK by delivering to PIONEER, certificates
representing all of such shares, duly endorsed in blank for transfer by the
record holder thereof.
1.2 CONSIDERATION.
The consideration to GALAXY for the assignment of the GALAXY STOCK
to PIONEER is the assignment of the leases and coalbed methane gas xxxxx to
DOLPHIN by PIONEER, in accordance with the Lease Assignment, which assignment
DOLPHIN has acknowledged.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PIONEER.
2.1 INVESTMENT INTENT.
Other than as provided in the Registration Rights Agreement
referenced above, PIONEER has entered into this Agreement, accepted the GALAXY
STOCK and agrees that it has acquired the GALAXY STOCK for its own account for
the purpose of investment and not with a view to the distribution or resale
thereof. Further, PIONEER shall not transfer, pledge or otherwise dispose of any
of the GALAXY STOCK without registration under the ACT or without delivering to
GALAXY a legal opinion, in form and substance satisfactory to GALAXY and
GALAXY'S counsel, to the effect that such transfer, pledge or other disposition
is exempt from registration under the Act .
2.2 PIONEER'S FINANCIAL EXPERIENCE.
PIONEER and its management have such knowledge and experience in
financial and business matters that they are capable of evaluating GALAXY and
the merits and risks of PIONEER'S investment in the GALAXY STOCK.
2.3 ECONOMIC RISK.
PIONEER understands that, it will be required to bear the economic
risk of its investment in the GALAXY STOCK for an indefinite period of time
because the GALAXY STOCK has not been registered under the Act and, therefore,
cannot be sold unless it is subsequently registered under the Act or an
exemption from registration is available.
2.4 INSTRUCTION TO TRANSFER AGENT.
PIONEER understands that where appropriate, GALAXY will issue stop
transfer instructions to its transfer agent with respect to the GALAXY STOCK.
2.5 CORPORATE RECORDS.
GALAXY has made available to PIONEER, and PIONEER has reviewed,
the Articles of Incorporation and Bylaws of GALAXY, GALAXY'S Annual Report on
Form 10-KSB and Annual Report to Shareholders for the fiscal year 2002, GALAXY'S
Information Statement issued for the Annual Meeting of its Shareholders held in
May 2003, Quarterly Reports on Form 10-QSB for the quarters ended February 28,
2003, May 31, 2003, and August 31, 2003, Current Reports on Form 8-K dated May
7, 2003, June 2,
2003, August 5, 2003, September 2, 2003, and October 7, 2003, and GALAXY'S
offering documents for the offering of Convertible Debentures concluded in
October of 2003 ( collectively the "GALAXY PUBLIC DOCUMENTS").
2.6 ADDITIONAL INFORMATION.
PIONEER has had an opportunity to ask questions of and receive
answers from GALAXY and persons acting on its behalf concerning the GALAXY STOCK
and to obtain any additional information about GALAXY or about matters contained
in the documents referred to in Paragraph 2.5 hereof. Moreover, PIONEER
acknowledges that there is no affirmative obligation on GALAXY to furnish any
other information to PIONEER at this time.
2.7 LEGENDS ON CERTIFICATES.
PIONEER understands that GALAXY will place a legend on the stock
certificate(s) given to PIONEER that the GALAXY STOCK has not been registered
under the Act and setting forth or referring to the restrictions on
transferability and sale of the GALAXY STOCK.
2.8 FURTHER ASSURANCES.
PIONEER will use reasonable efforts to cause all of the conditions
of this Agreement to be satisfied and to remain satisfied during the term
hereof.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF GALAXY.
GALAXY represents and warrants to PIONEER as follows:
3.1 VALIDITY OF CORPORATE EXISTENCE.
GALAXY is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado.
3.2 LEGALITY OF TRANSACTION.
The execution of this Agreement and the consummation of the
transactions contemplated herein will not violate or breach any provisions of
GALAXY'S Articles of Incorporation or Bylaws or any agreement to which GALAXY is
a party or by which any of its assets is bound.
3.3 CORPORATE AUTHORIZATION.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein have been duly authorized by GALAXY by
all necessary corporate action; GALAXY has full power and lawful authority to
make and perform this Agreement; and this Agreement is valid and binding upon
GALAXY in accordance with its terms.
3.4 GALAXY STOCK.
All shares of the GALAXY STOCK will be duly authorized, validly
issued, fully paid, nonassessable and free and clear of any lien, claim, pledge,
encumbrance or security interest.
3.5 GALAXY PUBLIC DOCUMENTS.
The GALAXY PUBLIC DOCUMENTS, as of the date hereof and as amended
or supplemented to date, do not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
3.6 RULE 144 RESALE.
GALAXY will make any necessary blue sky or state securities law
filings and registrations necessary for any transfer of the GALAXY STOCK in
accordance with applicable law. If and when the GALAXY STOCK is eligible to be
resold by PIONEER in the open market, GALAXY shall cause the GALAXY STOCK to be
listed on each exchange or automated quotation system on which the Common Stock
of Galaxy is then listed.
3.7 FURTHER ASSURANCES.
GALAXY will use its reasonable efforts to cause all of the
conditions of this Agreement to be satisfied and remain satisfied during the
term hereof.
ARTICLE IV
CONDITIONS
4.1 GALAXY'S OBLIGATIONS.
The obligations of GALAXY to consummate the transactions
contemplated by this Agreement shall be subject to the following conditions:
4.1.1 Except as expressly permitted by this Agreement, the
representations and warranties of PIONEER herein contained are true in
all material respects as of the date hereof; and PIONEER has performed
in all
material respects all obligations and complied with all covenants
required by this Agreement to be performed or complied with by it or
GALAXY shall have waived such compliance.
4.1.2 Any and all permits, approvals and other actions of any
jurisdiction or authority required in the reasonable opinion of counsel
for GALAXY for the lawful consummation of the transactions contemplated
by this Agreement have been obtained, and no such permit, approval or
other action contains any provision which in the judgment of GALAXY
shall be unduly burdensome.
4.2 PIONEER'S OBLIGATIONS.
The obligations of PIONEER to consummate the transactions
contemplated by this Agreement shall be subject to the following conditions:
4.2.1 Except as expressly permitted by this agreement, the
representations and warranties of GALAXY herein contained are true all
material respects as of the date hereof; and GALAXY has performed in
all material respects all obligations and complied with all covenants
required by this Agreement to be performed or complied with by it.
4.2.3 GALAXY shall have duly executed and delivered the
REGISTRATION RIGHTS AGREEMENT in form acceptable to PIONEER.
ARTICLE V
CLOSING
5.1 The closing (herein referred to as the "Closing") for the purchase
and sale of the GALAXY STOCK pursuant to this Agreement shall be held at the
offices of Xxxxxxxxx and Xxxxx, Xxxxx 000, 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx 00000 on the date hereof or at such other time and place as the parties
may commonly agree.
ARTICLE VI
TERMINATION
6.1 GENERAL
Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated herein abandoned at any time (whether before or after the approval
or adoption thereof by GALAXY or by PIONEER) prior to the Closing:
(i) By common consent of the parties;
(ii) By PIONEER, if any of the conditions set forth herein have
not been met and have not been waived;
(iii) By GALAXY, if any of the conditions set forth in Section 4.1
hereof have not been met and have not been waived;
(iv) By any party if the Closing is not consummated on or before
December 31, 2003.
6.2 CONSEQUENCES OF TERMINATION.
In the event of the termination and abandonment of this Agreement
pursuant to the provisions of this Articles, this Agreement shall become void
and have no effect, without any liability on the part of any party or the
directors, officers, shareholders, heirs, devisees or personal representatives
of any party in respect of this Agreement, other than the liability on the part
of each party for its or their own expenses incurred in connection with the
transactions contemplated by this Agreement.
ARTICLE VII
SURVIVAL OF REMEDIES
7.1 All terms, conditions, warranties, representations and covenants
contained in this Agreement and any document delivered pursuant to this
Agreement shall remain effective as of the Closing and shall survive the Closing
hereunder and any investigations made by or on behalf of GALAXY or PIONEER.
ARTICLE VIII
REGISTRATION RIGHTS
8.1 REGISTRATION.
GALAXY has agreed to file with the Securities and Exchange
Commission under the Securities Act of 1933, a registration statement covering
the resale of 1,000,000 shares of the GALAXY STOCK within thirty (30) days after
the Closing. The terms of the registration are stated more fully in the
REGISTRATION RIGHTS AGREEMENT referred to herein above.
8.2 GENERAL PROVISIONS.
Until the first anniversary of the Closing, PIONEER shall not
resell to the public in the open market (in transactions registered under the
Act or in transactions exempt from registration under the Act pursuant to Rule
144 under the Act), during any single trading day, a number of shares of GALAXY
STOCK that is greater than the lesser of (x) 250,000 shares or (y) one quarter
of the average daily trading volume (as reported on by Bloomberg Financial
Markets, or an alternative reasonably acceptable to the parties) for the 30
trading days preceding such trading day, in each case, as adjusted equitably for
stock splits, combinations, stock dividends, reclassifications, share exchanges,
recapitalizations and similar transactions, provided however, that the total
number of shares which PIONEER may resell to the public under this Agreement
during any single trading day shall not be less than 50,000 shares, as adjusted
equitably for stock splits, combinations, stock dividends, reclassifications,
share exchanges, recapitalizations and similar transactions.
ARTICLE IX
GENERAL PROVISIONS
9.1 CONFIDENTIALITY.
All information ("CONFIDENTIAL INFORMATION") disclosed by any
party hereto to the other party shall be considered confidential and shall be
used only for the purposes intended. If the Closing shall not take place, all
CONFIDENTIAL INFORMATION that has been disclosed to another party (together with
any summaries, analyses, reports, extracts or other derivations thereof) shall
be returned to the disclosing party, and shall, for a period of two years after
termination of this Agreement, be treated as confidential and not disclosed to
third parties except insofar as such data or information is required to be
disclosed by legal process. Notwithstanding the foregoing, CONFIDENTIAL
INFORMATION shall not included any information if such information (a) becomes
generally available to the public other than as a result of a disclosure by the
receiving party, (b) was available to the receiving party on a non-confidential
basis prior to its disclosure by the disclosing party or (c) becomes available
on a non-confidential basis from a source other than the disclosing party or its
Representatives, provided such source was entitled to make such disclosure.
Notwithstanding anything herein to the contrary, each of the parties
hereto agrees that any party may disclose to any and all persons, without
limitation of any kind the tax treatment and tax structure of the transactions
contemplated by this Agreement,, and all materials of any kind (including
opinions or other tax analyses) related to such tax treatment and tax structure;
provided that this sentence shall not permit any person to disclose the name of,
or other information that would identify, any party to such transactions or to
disclose confidential commercial information regarding such transactions. This
Section 9.1 shall not prohibit the issuance of a customary press release
by either or both of the parties regarding the completion of or terms of the
transactions contemplated by this Agreement, the MASTER AGREEMENT, the LEASE
ASSIGNMENT, the ROYALTY ASSIGNMENT and the REGISTRATION RIGHTS AGREEMENT.
9.2 GOVERNING LAW.
This Agreement shall be construed and performed in accordance with
the laws of the State of Wyoming.
9.3 SURVIVAL.
The rights and liabilities of the present parties shall bind and
inure to their respective heirs, devisees, personal representatives, successors
and assigns.
9.4 MODIFICATION AND WAIVER.
This Agreement and the REGISTRATION RIGHTS AGREEMENT constitutes
the entire agreement between the parties pertaining to its subject matter and
supersedes all prior and contemporaneous agreement and understandings of the
parties in connection with it. No covenant or condition not expressed in this
Agreement shall affect or be effective to interpret, change or restrict this
Agreement. No change, termination or attempt to waive any of the provisions of
this Agreement shall be binding on GALAXY unless in writing signed by its
President or one of its Vice Presidents, or as to PIONEER unless in writing and
signed by one of its officers. No modification, waiver, termination rescission,
discharge or cancellation of this Agreement and no waiver of any provision of or
default under this Agreement shall effect the right of GALAXY or PIONEER
thereafter to enforce any other provision or to exercise any right or remedy in
the event of any other default, whether or not similar.
9.5 FURTHER AGREEMENT.
Upon request from time to time, PIONEER or GALAXY shall execute
and deliver all documents, make all rightful oaths, testify in any proceedings
and do all other acts that may be necessary or desirable in the opinion of
counsel for a party to carry out the intentions of the parties hereunder.
9.6 MUTUALITY OF OBLIGATIONS.
The obligation of each party hereunder is expressly conditions on
the performance by all of the other parties of all their obligations undertaken
herein.
9.7 EXPENSES.
Each party shall bear his or its own expenses in connection with
this Agreement and the transactions herein contemplated.
9.8 NOTICES.
Any notice or other communication under or in connection with this
Agreement shall be in writing and shall be addressed to each party at its
respective address as shown below and shall be effective when delivered to that
address; or in the case of notices or communications to any party, to such other
address as it shall have designated in written notice to the others:
Xxxx X. Xxxxxx Xxx Xxxx
President Pioneer Oil, LLC
Galaxy Energy Corporation 0000 Xxxxxxx Xxxxx, Xxxxx X
0000 Xxxxxxxx Xxx Xxxxx Xxxxxxxx, Xxxxxxx 00000
Suite 2202 Tel. (000) 000-0000
Xxxxx, XX 00000 Fax. (000) 000-0000
Tel. (000) 000-0000
Fax. (000) 000-0000
9.9 CAPTIONS.
Captions and headings in this Agreement are for convenience only
and have no legal force or effect.
9.10 ELECTRONIC MEANS.
Delivery of an executed copy of this Agreement by facsimile
transmission or other means of electronic communication capable of producing a
printed copy will be deemed to be execution and delivery of this Agreement on
the date of such communication by the party so delivering such copy.
9.11 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each of the parties hereto and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
____ day of December 2003.
GALAXY ENERGY CORPORATION
By: ________________________________
PIONEER OIL, LLC
By: ________________________________
