Exhibit 10.2
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
(Niobrara Shallow Gas Project)
THIS FIRST AMENDMENT PURCHASE AND SALE AGREEMENT (the "Amendment") is made April
13, 2005, by and among ATEC Energy Ventures, LLC ("ATEC"), a Texas limited
liability company whose address is 000 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxx 00000
and Apollo Energy, LLC ("Apollo"), a Colorado limited liability company whose
address is 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, as sellers, and
Teton Petroleum Company or its designee ("Teton"), a Delaware corporation whose
address is 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, as buyer. ATEC and
Apollo are collectively referred to as ATEC/Apollo, while ATEC, Apollo and Teton
are sometimes referred to individually as a "Party" or collectively as the
"Parties."
1. Background. Since execution of the Purchase and Sale Agreement (the
"Agreement") dated January 5, 2005, ATEC/Apollo has acquired Additional Leases
covering ___ net acres, as identified in Appendix 1 to this Amendment. In
addition, Teton has delivered to Apollo a written notice of Defects in
accordance with Section 3.3 of the Agreement, and the Parties have identified
leasehold interests covering a total of ___ gross acres (as identified in
Appendix 2 to this Amendment) that will be excluded from the purchase because of
Defects that will not be cured by ATEC/Apollo and that will not be waived by
Teton. As currently written, the Agreement contemplates that the purchase will
close on April 15 as to all of the Additional Leases and the remaining leasehold
interests, with the understanding that the transaction will be unwound as to any
acreage subject to Defects that are not later cured or waived. This Amendment is
entered into to change that closing procedure in view of the greater knowledge
the Parties now have concerning the Additional Leases, excluded interests, and
remaining Defects.
2. Amendment. The Parties hereby amend the Agreement by deleting Section 7 and
replacing it with the following:
7.1 First Closing Date and Time. The first closing ("First Closing")
will occur in Teton's Denver office at 5 p.m. on Thursday, April 14, 2005,
or at such other place and time agreed by the Parties.
7.2 First Closing Obligations. At the First Closing, ATEC/Apollo will
sell, and Teton will purchase, all of the leasehold interests that are
identified by Teton as being free of Defects as of 5:00 p.m. on Wednesday,
April 13, 2005, or such specific time on Thursday, April 14, as the Parties
may agree. The purchase price for each net acre covered by these leasehold
interests will be equal to (i) $16.00 and (ii) 2.285703 shares of
unregistered Teton common stock and (iii) warrants to purchase 1.142852
shares of Teton unregistered common stock. Consequently, all of the
following events will occur at the First Closing, each being a condition
precedent to the others and each being deemed to have occurred
simultaneously with the others:
(a) ATEC/Apollo shall execute, acknowledge and deliver to Teton
(or a subsidiary of Teton if Teton so desires), two assignments and
bills of sale covering these leasehold interests identified by Teton
(one covering the Leases, without any overriding royalty reservation,
and the other covering the Additional Leases, with the overriding
royalty reservation provided by Section 8.2 of the Agreement)
substantially in the form attached as Appendix 5 to the Agreement and
conveying the Leases to Teton with a special warranty of title by,
through and under ATEC/Apollo, but not otherwise;
(b) ATEC/Apollo shall deliver to Teton copies or originals of all
land, technical and other data, files and records in their possession
or their control relating to the leases being assigned to Teton at the
First Closing and to the unleased lands in the AMI, including without
limitation the Petra data set, Power Point Presentation and other
technical data, but only to the extent that such transfer is permitted
by applicable licensing agreements;
(c) Teton shall send to its bank by facsimile transmission wire
transfer instructions directing the transfer to an account designated
by Apollo an amount equal to the product of $16 multiplied by the
number of net acres being assigned at the First Closing, minus the
$347,354 that was previously paid by Teton as the initial binder and
xxxxxxx money;
(d) Teton shall send to its stock transfer agent by facsimile
transmission instructions directing the issuance of two certificates
evidencing a total number of unregistered Teton common shares equal to
the product of 2.285703 shares multiplied by the number of net acres
being assigned at the First Closing, specifying that one certificate
be issued in the name of Apollo covering 40% of the total shares being
issued and the other being issued in the name of ATEC covering the
remaining 60% of the shares, in each case rounded to the nearest whole
share so that no fractional shares are issued;
(e) Teton shall deliver two unregistered warrants allowing the
purchase of a total of a number of shares of unregistered Teton common
stock equal to the product of 1.142852 shares multiplied by the number
of net acres being assigned at the First Closing at any time during
the three-year period following the First Closing at a purchase price
of $1.75 per share, one issued in the name of Apollo allowing the
purchase of 40% of the total shares and one in the name of ATEC
allowing the purchase of 60% of the total shares, in each case rounded
to the nearest whole share so that no fractional shares are covered by
either warrant; and
(f) Teton shall deliver one registration rights agreement for the
benefit of Apollo and ATEC, which shall confer the registration rights
described in Section 2.4(b) of the Agreement, but with the
understanding that the phrase "shares issued in Respect of the
Purchase Price and any shares issued to date upon the exercise of the
Warrants" appearing in Section 2.4(b)(1) shall refer only to the
shares and Warrants issued at the First Closing.
7.3 Second Closing Preparation, Date and Time. Following the First
Closing, ATEC/Apollo must continue to use its commercially reasonable best
efforts to cure all Defects that remain in respect of the leasehold
interests that were not assigned to Teton at the First Closing. The second
closing ("Second Closing") will occur in Teton's Denver office at 1:00 p.m.
on Monday, May 16, 2005, or at such other place and time agreed by the
Parties.
7.4 Second Closing Obligations. At the Second Closing, ATEC/Apollo
will sell, and Teton will purchase, all of the remaining leasehold
interests that are identified by Teton as being free of Defects as of 5:00
p.m. on Friday, May 13, 2005, or such specific time on Saturday, May 14, as
the Parties may agree. The following events will occur at the Second
Closing, each being a condition precedent to the others and each being
deemed to have occurred simultaneously with the others:
(a) ATEC/Apollo shall execute, acknowledge and deliver to Teton
(or a subsidiary of Teton if Teton so desires), two assignments and
bills of sale covering these leasehold interests identified by Teton
(one covering the Leases, without any overriding royalty reservation,
and the other covering the Additional Leases, with the overriding
royalty reservation provided by Section 8.2 of the Agreement)
substantially in the form attached as Appendix 5 to the Agreement and
conveying the Leases to Teton with a special warranty of title by,
through and under ATEC/Apollo, but not otherwise;
(b) ATEC/Apollo shall deliver to Teton copies or originals of all
land, technical and other data, files and records in their possession
or their control relating to these leases;
(c) Teton shall send to its bank by facsimile transmission wire
transfer instructions directing the transfer to an account designated
by Apollo an amount equal to the product of $16 multiplied by the
number of net acres being assigned at the Second Closing;
(d) Teton shall send to its stock transfer agent by facsimile
transmission instructions directing the issuance of two certificates
evidencing a total number of unregistered Teton common shares equal to
the product of 2.285703 shares multiplied by the number of net acres
being assigned at the Second Closing, specifying that one certificate
be issued in the name of Apollo covering 40% of the total shares being
issued and the other being issued in the name of ATEC covering the
remaining 60% of the shares, in each case rounded to the nearest whole
share so that no fractional shares are issued;
(e) Teton shall deliver two unregistered warrants allowing the
purchase of a total of a number of shares of unregistered Teton common
stock equal to the product of 1.142852 shares multiplied by the number
of net acres being assigned at the Second Closing at any time during
the three-year period following the Second Closing at a purchase price
of $1.75 per share, one issued in the name of Apollo allowing the
purchase of 40% of the total shares and one in the name of ATEC
allowing the purchase of 60% of the total shares, in each case rounded
to the nearest whole share so that no fractional shares are covered by
either warrant; and
(f) Teton shall deliver one registration rights agreement for the
benefit of Apollo and ATEC, which shall confer the registration rights
described in Section 2.4(b) of the Agreement, but with the
understanding that the phrase "shares issued in Respect of the
Purchase Price and any shares issued to date upon the exercise of the
Warrants" appearing in Section 2.4(b)(1) shall refer only to the
shares and Warrants issued at the Second Closing.
7.5 Third Closing Preparation, Date and Time. Following the Second
Closing, Teton may use such efforts as it in its sole discretion believes
appropriate to cure any Defects that remain in respect of the leasehold
interests that were not assigned to Teton at the First and Second Closings.
The third closing ("Third Closing") will occur in Teton's Denver office at
1:00 p.m. on Thursday, June 16, 2005, or at such other place and time
agreed by the Parties.
7.6 Third Closing Obligations. At the Third Closing, ATEC/Apollo will
sell, and Teton will purchase, all of the remaining leasehold interests
that are identified by Teton as being acceptable to Teton (either because
the Defects were cured or because Teton then chooses to waive particular
Defects) as of 5:00 p.m. on Tuesday, June 14, 2005, or such specific time
on Saturday, May 14, as the Parties may agree. The following events will
occur at the Third Closing, each being a condition precedent to the others
and each being deemed to have occurred simultaneously with the others:
(a) ATEC/Apollo shall execute, acknowledge and deliver to Teton
(or a subsidiary of Teton if Teton so desires), two assignments and
bills of sale covering these leasehold interests identified by Teton
(one covering the Leases, without any overriding royalty reservation,
and the other covering the Additional Leases, with the overriding
royalty reservation provided by Section 8.2 of the Agreement)
substantially in the form attached as Appendix 5 to the Agreement and
conveying the Leases to Teton with a special warranty of title by,
through and under ATEC/Apollo, but not otherwise;
(b) ATEC/Apollo shall deliver to Teton copies or originals of all
land, technical and other data, files and records in their possession
or their control relating to these leases;
(c) Teton shall send to its bank by facsimile transmission wire
transfer instructions directing the transfer to an account designated
by Apollo an amount equal to the product of $16 multiplied by the
number of net acres being assigned at the Third Closing;
(d) Teton shall send to its stock transfer agent by facsimile
transmission instructions directing the issuance of two certificates
evidencing a total number of unregistered Teton common shares equal to
the product of 2.2857 shares multiplied by the number of net acres
being assigned at the Third Closing, specifying that one certificate
be issued in the name of Apollo covering 40% of the total shares being
issued and the other being issued in the name of ATEC covering the
remaining 60% of the shares, in each case rounded to the nearest whole
share so that no fractional shares are issued;
(e) Teton shall deliver two unregistered warrants allowing the
purchase of a total of a number of shares of unregistered Teton common
stock equal to the product of 1.14285 shares multiplied by the number
of net acres being assigned at the Third Closing at any time during
the three-year period following the Third Closing at a purchase price
of $1.75 per share, one issued in the name of Apollo allowing the
purchase of 40% of the total shares and one in the name of ATEC
allowing the purchase of 60% of the total shares, in each case rounded
to the nearest whole share so that no fractional shares are covered by
either warrant; and
(f) Teton shall deliver one registration rights agreement for the
benefit of Apollo and ATEC, which shall confer the registration rights
described in Section 2.4(b) of the Agreement, but with the
understanding that the phrase "shares issued in Respect of the
Purchase Price and any shares issued to date upon the exercise of the
Warrants" appearing in Section 2.4(b)(1) shall refer only to the
shares and Warrants issued at the Third Closing.
7.7 No Contravention. ATEC/Apollo shall not take any action prior to
June 17, 2005 that might result in encumbering or transferring any interest
in any Lease, other than transfers to Teton as contemplated in the
Agreement, as amended.
3. No Other Amendments. While any provision of the Agreement conflicting with
the foregoing amendment shall be deemed amended to conform with the new closing
procedures set forth above, no other amendments or changes are intended by this
Amendment.
IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of
the date first above written.
APOLLO ENERGY, LLC ATEC ENERGY VENTURES, LLC
By: _________________________ By: _________________________
Xxxxx X. Xxxxxx, III, Manager Xxxxxx X. Xxxxxx, President
By: _________________________
Xxxx X. Xxxxxx, Vice President
TETON PETROLEUM COMPANY
By: _______________________________
Xxxx X. Xxxxxx, President
Appendix 1: Additional Leases
Appendix 2: Excluded Leases
